Business performance in the Group
In the first six months of 2023, the KION Group continued to systematically implement its operational and commercial agility measures in the operating segments. Conditions along the supply chain improved further, which had a positive effect in the reporting period. This helped to accelerate production and delivery in the Industrial Trucks & Services (ITS) segment in the first half of 2023, which meant that the segment’s revenue and margins saw an uplift from orders that had been placed after price increases were implemented in 2022.
Based on this positive trend, the Executive Board of KION GROUP AG has decided to again raise the outlook for 2023 for Industrial Trucks & Services and the Group (see the outlook).
In the Supply Chain Solutions (SCS) segment, the focus in the reporting period remained on the efficient management of project delivery across all phases of the project cycle. Conditions in the supply chain for components in the customer project business remained fraught in the first six months of 2023, which caused delays to certain customer projects. Delays in the placement of customer orders for business solutions in recent quarters have also had an adverse impact on revenue and profit in the Supply Chain Solutions segment. Thanks to the timely implementation of measures in 2022 aimed at improving project execution and project management, the segment’s adjusted EBIT was just into positive territory both in the first and in the second quarter of 2023.
Investment in the implementation of growth plans in specific regions served by the KION Group was delivered as planned. In Jinan, China, works to complete the new SCS plant are progressing on schedule. The ITS plant in Jinan has been able to increase its capacity utilization substantially within a very short period of time thanks to high demand from customers. In the US, work has commenced on expansion of the industrial truck assembly plant in South Carolina. And in Kahl am Main, Germany, the KION Group has been constructing a state-of-the-art distribution center for both operating segments since February 2023 for the efficient delivery of spare parts to customers. This highly automated center will be equipped with innovative warehouse technology solutions from SCS.
Initiatives launched to enhance performance and agility also yielded further tangible results in the first half of 2023, especially in the Industrial Trucks & Services segment. One of the priorities was the development of a global platform for the value segment. In the reporting period, the KION Group launched new trucks under the Baoli brand. These trucks are built with a modular configuration and are designed for load capacities up to 3.5 tonnes.
In addition, the KION Group announced in January 2023 that it would be setting up a production facility for fuel cell systems for industrial trucks – initially warehouse trucks – at its Hamburg site. Going forward, the KION Group will also recycle lithium-ion batteries from its own brands’ electric-powered industrial trucks with the help of Canadian specialist Li-Cycle Holdings Corp.
At the start of July 2023, the KION Group signed up to the Science Based Targets initiative (SBTi) in order to provide transparency regarding its efforts to reduce greenhouse gas emissions. In line with the SBTi principles, the KION Group has set itself the goal of operating on a net-zero emissions basis along its entire value chain by 2050. The commitment to climate-neutral business practices is based on a fundamental scientific framework and is designed to help achieve the objective of the United Nations Paris climate agreement of limiting the rise in global temperature to 1.5°C.
On June 16, 2023, the KION Group signed an agreement for the sale of the ITS business in Russia as part of a management buyout. The transaction is still subject to approval by the Russian authorities.