Summary of business performance
Sales markets
According to the KION Group, the international industrial truck market saw a noticeable year-on-year fall in order numbers in the first quarter of 2024. The number of new truck orders was down significantly in the Americas region. Based on the KION Group’s estimates, this contrasted with a moderate decrease in the EMEA region and growth on a par with the prior-year period in the APAC region. In terms of units sold, the global market for industrial trucks contracted by 4.3 percent over the course of 2023 (World Industrial Truck Statistics, April 2024). Official figures for the growth trend in the overall market for industrial trucks in the first quarter of 2024 were not available at the time this report was published.
According to the KION Group, and backed up by studies from research institute Interact Analysis, the global market for supply chain solutions got off to a slow start in 2024 and continued to be adversely affected by the geopolitical and economic uncertainties. The continuing trend toward automation and the sustained demand for mobile automation had a positive impact on customers’ investment decisions. Of particular note was the increase in the number of projects involving the retrofitting of existing customer sites with automated warehouse equipment (Interact Analysis, April 2024).
Business performance in the Group
The KION Group has started 2024 with growth in revenue and a very encouraging rise in earnings. As a result of the enhanced gross margin in both operating segments, profitability improved significantly; the adjusted EBIT margin advanced accordingly, increasing by 2.3 percentage points relative to the first quarter of 2023 to 7.9 percent.
In the Industrial Trucks & Services (ITS) segment, healthy production output led to further progress in working through the sizeable order book from the previous year. In addition to the increased volume, higher sale prices were the main reason for the sharp rise in revenue on the already very high level of the prior year. Moreover, an improvement in the availability of materials coupled with the continued stability of material prices meant that the segment was able to record a much higher gross margin and an adjusted EBIT margin in double digits once again. Order numbers in the first three months of the year were at almost the same level as in the prior-year period. The service business expanded slightly overall.
In the Supply Chain Solutions (SCS) segment, the amount of revenue generated in the reporting period fell short of the level achieved in the first quarter of 2023. This was due to the decline in order intake in the project business (business solutions) during the preceding quarters. By contrast, revenue grew strongly in the high-margin service business (customer services). Despite the overall decline in revenue, the segment saw an increase in its earnings and margins thanks to improvements in the project execution, the sharp growth in the service business, and the efficiency measures that have been implemented. With regard to the level of orders on hand, the Supply Chain Solutions segment was boosted by the growing customer demand from the pure e-commerce and general merchandise and grocery retail sectors. However, the project business (business solutions) remained muted on the whole in the first three months of 2024 because of customers delaying the awarding of projects.
Investment in the implementation of growth plans in selected regions of the KION Group continued to be delivered as planned. In Jinan, China, works to complete the new Supply Chain Solutions (SCS) plant are progressing on schedule. Construction of a state-of-the-art distribution center in Kahl am Main is also on track and aims to raise the efficiency of parts delivery to customers of both operating segments.
The agreement that the KION Group had signed on June 16, 2023 regarding the sale of the ITS business in Russia as part of a management buyout was approved in writing by the Russian authorities on March 7, 2024. The sale transaction was completed on March 31, 2024.