Summary of business performance
Sales markets
According to the KION Group, order numbers in the global market for industrial trucks increased moderately year on year in the first nine months of 2024. Official figures (World Industrial Trucks Statistics, October 2024) for the first half of the year show that order numbers rose significantly in the EMEA and APAC regions but fell sharply in the Americas region. In the counterbalance truck market, the volume of orders for electric forklift trucks was at roughly the same level as in the prior-year period, whereas orders for IC trucks decreased by 15.2 percent. Warehouse trucks registered strong growth of 11.9 percent, mainly due to exceptional demand for entry-level models. Overall, order numbers in the worldwide market were thus slightly higher in the first half of 2024 than in the prior-year period. Official figures for the growth trend in the overall market for industrial trucks in the third quarter of 2024 were not yet available at the time this report was published. However, the KION Group estimates that order numbers in the third quarter of 2024 went up moderately year on year.
According to the KION Group, and backed up by data from market research institute Interact Analysis, the global market for supply chain solutions continued to be subdued in terms of revenue during the reporting period. The small decrease in demand in the EMEA region can be attributed to a weakening of the general economic situation, driven by geopolitical risks and persistently high interest rates. Demand was also muted in the Americas region. Meanwhile, in the APAC region, lackluster economic growth resulting from declining consumer demand and China’s real-estate crisis caused customer investment in warehouse automation to slow (Interact Analysis, September 2024).
Business performance in the Group
The KION Group recorded significant growth in earnings in the first nine months of 2024. An improvement in the gross margin in both operating segments meant that profitability in this period was higher year on year. Based on revenue of €8,435.3 million (Q1–Q3 2023: €8,347.3 million) and adjusted EBIT of €666.7 million (Q1–Q3 2023: €571.9 million), the adjusted EBIT margin came to 7.9 percent, which was 1.0 percentage points above the figure for the first three quarters of 2023.
The Industrial Trucks & Services segment saw a year-on-year increase in revenue in the first nine months of 2024 thanks to a slight rise in the volume of unit sales, success in pushing through higher prices, and growth in the service business. This revenue increase, coupled with the continued stability of the cost of materials, was the main reason for the improvement in adjusted EBIT in the year to date. In the third quarter too, the segment once again achieved an adjusted EBIT margin in double digits. Although the number of industrial trucks ordered was comparable with the prior-year period, the value of the Industrial Trucks & Services segment’s new orders fell year on year in the reporting period because of changes in the product and country mix. Orders in the service business saw further encouraging growth.
The revenue of the Supply Chain Solutions segment was slightly below the level of the prior-year period in the first nine months of 2024. This was due to the subdued order situation in the project business (business solutions) in preceding quarters, which resulted from the general reluctance to invest that was observable in the market. Revenue from the higher-margin service business was up significantly year on year, however. Despite the decline in revenue, the segment’s earnings and margins improved considerably in the reporting period, helped not only by the increased revenue contribution from the service business but also by efficiency gains across all areas of project implementation and by the progress made in working through lower-margin legacy orders.
Investment in the implementation of growth plans in selected regions of the KION Group continue to be delivered as planned. This includes the further expansion of the new Supply Chain Solutions plant in Jinan, China, and the construction of a state-of-the-art distribution center in Kahl am Main, Germany, which aims to raise the efficiency of parts delivery in Europe to customers of both operating segments. The KION Group has invested in the rollout of the SAP S/4HANA system across the organization in recent years, with the objective of transforming its internal business processes (Business Transformation project). An initial milestone was reached in mid-2024 when the system went live at the subsidiaries in Italy.
As well as projects focused on organic growth, the KION Group is using strategic acquisitions in order to further strengthen its market position. In August 2024, for example, the Industrial Trucks & Services segment purchased a controlling interest (51.0 percent) in the Spanish dealer Sociedad Gallega de Carretillas, S.A., which will bolster the regional sales and service network operating under the Linde Material Handling brand. Meanwhile, in September 2024, agreement was reached on the acquisition of a German distributor of industrial trucks. Completion of the transaction was still pending as at the reporting date. The total amount invested in these two acquisitions will be in the low-double-digit millions of euros.