Business performance in the Group
Encouraging business performance continues in the second quarter
The KION Group’s earnings and margins continued to hold up well in the second quarter of 2024. In the first half of 2024, the increase in the gross margin in both operating segments led to a marked improvement in profitability compared with the prior-year period; from revenue of €5,736.2 million (H1 2023: €5,617.4 million), the Group achieved an adjusted EBIT margin of 7.8 percent, which was 1.6 percentage points higher than in the first six months of 2023.
Revenue in the Industrial Trucks & Services (ITS) segment increased in the first half of 2024 thanks to a small rise in the volume of unit sales and the higher sales prices that were achieved. Coupled with the continued stability of material prices, this helped the segment to record an improved gross margin and an adjusted EBIT margin in double digits in both the first and the second quarters of the year. Orders of industrial trucks held steady at the high prior-year level in the first six months of 2024. The service business also continued to perform very well.
In the Supply Chain Solutions (SCS) segment, the amount of revenue generated in the first six months of the year fell short of the level achieved in the corresponding period of 2023. This was due to the decline in order intake in the project business (business solutions) during preceding quarters. The order situation in the second quarter of 2024 was again adversely affected by customers’ ongoing reluctance to invest. Revenue from the higher-margin service business was up significantly year on year, however. Better project implementation, the efficiency measures carried out and, above all, the growth of the service business meant that the SCS segment was able to improve its earnings and margins during the reporting period.
Investment in the implementation of growth plans in selected regions of the KION Group continue to be delivered as planned. The further expansion of the new Supply Chain Solutions plant in Jinan, China, is progressing on schedule too. 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 in Europe to customers of both operating segments. In recent years, the KION Group has invested in preparations for the rollout of the SAP S/4HANA system. The aim is to transform its internal business processes (‘Business Transformation’) and establish an optimized and standardized process and IT landscape across the Group. An initial migration milestone was reached in the second quarter of 2024 when the system was successfully implemented at the subsidiaries in Italy.
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. The process of liquidating the Supply Chain Solutions segment’s Russian entity, which had already closed down, was largely completed by the end of the second quarter.
In the second quarter, the German statistics company Statista and the Financial Times, one of the world’s leading business newspapers, named the KION Group one of Europe’s 600 Climate Leaders for 2024. This is an initial sign of the progress made by the KION Group in establishing a comprehensive system of climate management. Back in July 2023, following the principles of the Science Based Targets initiative (SBTi), the KION Group set itself a long-term climate goal of achieving net-zero greenhouse gas emissions throughout its value chain before 2050.