Letter to shareholders

Dear shareholders, customers, partners, and friends of the KION Group,

in 2023, the KION Group benefited from a year of delivering on our strategy as we took further significant steps along our path to sustainable and profitable growth. I am glad to say that we improved profitability in both our business segments and for KION. The substantial progress in our results, on both financial and operating metrics, demonstrates that the commercial and operational agility measures we initiated in 2022 are delivering sustainable business performance.

We achieved double-digit profitability in our Industrial Trucks & Services (ITS) segment, the highest level since 2019, and stabilized our Supply Chain Solutions (SCS) segment, where we worked through and completed a substantial number of remaining low margin projects.

The progress we have made in delivering on our business priorities is supported by a commitment to capitalize on the opportunities offered by sustainability and technological innovation. We are building a more resilient business, better adapted for a fast-changing world and more able to respond to rapidly evolving client demands.

Shaping the future of supply chains globally

KION Group continues to develop its leading position in the intralogistics industry. We are creating fully integrated solutions for automated, sustainable warehouse systems, supported by intelligent material handling equipment and technology. To this end, we invest around three percent of our revenue each year in research and development, backed by a strong global CTO organization with around 2,800 colleagues worldwide.

Accelerating with sustainability

We invest in sustainability, reflecting our commitment to a carbon-neutral future and our customers’ increased demand for green solutions. In July 2023, the KION Group committed to achieving the "Net Zero" pledge of the Science-Based Targets Initiative (SBTi). In fall 2023, we launched a recycling program for end-of-life lithium-ion batteries with our strategic partner, Li-Cycle. We also launched the commercial production of our own hydrogen fuel cell systems for industrial trucks. The leading index provider MSCI raised the KION Group’s ESG rating to AAA in recognition of our commitment to sustainability, placing us in the top 10 percent of the industry.

Investing across the globe

KION Group is investing worldwide to extend our leadership in the intralogistics industry. Following the global roll-out of a new family of trucks last year, we are further strengthening our production site in Jinan, China, with a new plant for the Supply Chain Solutions segment that is expected to create more than 300 new jobs by the end of 2024. KION North America is investing in production and assembly lines in the Industrial Trucks & Services segment with an expanded plant in Summerville, South Carolina, that will create around 450 new jobs when it opens in spring 2024.

In Aschaffenburg, Germany, Linde Material Handling (LMH) opened its state-of-the-art Experience Hub in fall 2023. The new customer center will support a range of occasions – from group product demonstrations to major customer events and functions for LMH’s European and global sales and service organization.

Positioning for the future

As we pursue our ambitious vision for fully integrated, automated and sustainable intralogistics solutions, we reshaped the Executive Board, effective January 2024, to drive KION’s 2027 profitable growth strategy. The Supervisory Board of KION GROUP AG has appointed Michael Larsson as the Executive Board member responsible for the Supply Chain Solutions segment globally and the Industrial Trucks and Services business in the Americas. It has also entrusted Executive Board member Ching Pong Quek with additional responsibilities as the new KION Group Chief Technology Officer.

Our strong performance in 2023 is clear evidence that KION Group is firmly back on track. That success is attributable first and foremost to the dedication, experience and expertise of our more than 42,000 colleagues around the world. We also thank our loyal customers and business partners.

Looking ahead, our robust 2023 financial and operational performance has created a strong momentum for 2024. ITS will continue to build on its strong 2023 performance and is expected to remain in the double-digit margin territory. SCS will further improve project management processes and resolve legacy projects to return to double digit profitability by the end of 2027.

Having demonstrated agility and resilience in 2023, we enter 2024 with confidence. We offer customers the latest integrated material handling solutions, backed by strong and well-known brands. We are investing in our innovation pipeline to deliver the next generation of sustainable technologies. I am convinced that 2024 will be another successful year for the KION Group and our shareholders, our employees, our customers, our business partners, and for the communities in which we operate.

With best wishes,

Rob Smith
Chief Executive Officer
KION GROUP AG