Kion revenue in 5.2% boost to almost 8bn euros in 2018

Revenues at the Kion Group rose by 5.2% to almost EUR8 billion in 2018.

The trend towards global value chains and supply chains, combined with the rapid growth of eCommerce, has resulted in extensive capital expenditures on warehousing and logistics facilities worldwide, the Group said. Wide-ranging automation is becoming an important feature of supply chain solutions. 

The statement said: “The KION Group is excellently positioned in this area because it is one of the world's leading providers of automated systems and automated guided vehicle systems.”

It continued: “The fundamental growth indicators for the global material handling market are still intact. Capital expenditure on warehouse capacity is expected to continue at a high level worldwide. Value chains are becoming increasingly fragmented and consumers are increasingly opting to buy online. These are the factors that are continuing to drive the intralogistics market.”

The KION Group wants to invest heavily in expanding its production capacity in the years ahead so that it can fully exploit the anticipated demand and further increase the flexibility of its production operations. The main areas of capital expenditures are planned to be implemented and processes are being improved. Furthermore, the Group wants to establish a new plant in Poland and add to its existing capacity in the fast-growing Indian as well as Chinese market.

Under its KION 2027 strategy, the KION Group is focusing on energy, digitalisation and automation since these areas have a significant influence on intralogistics. 

In addition to creating the new position of Chief Digital Officer on the Executive Board and establishing the KION Digital Campus, the Group made significant progress on developing a variety of new products and solutions in 2018, some of which have now been launched on the market. 

The latest examples include the Dematic iQ Virtual software for simulating future warehouse management solutions as well as the app-enabling Linde technicians to manage service orders from their smartphones and STILL's fleet optimisation app.

The Robotics Center of Excellence has been established in the United States. Robotic picking module, a software-controlled robot designed to speed up warehouse processes. It is equipped with sensors and visual processing capabilities and can grip objects. The KION Group's medium-term objective is its digitalisation and automation strategy. With its automated solutions, the KION Group is helping customers move closer to the goal of a 'lights-out' warehouse.

Gordon Riske, CEO of Kion Group, said: “In the medium term, we predict that the global demand for industrial trucks will go up by 4% annually and that growth in demand for supply chain solutions will be in the high single digits.”

Industrial Trucks

The Industrial Trucks & Services segment (ITS) registered a year-on-year increase in orders across all sales regions from 7.6 percent to around 216,700 trucks. The total value of intake in 2018 rose by 6.0 percent to EUR6.21 billion, despite negative currency effects of EUR98.5 million. In addition to new truck orders, the expanding service business also contributed to this growth. Revenue went up by 6.3 percent to EUR5.92 billion. The segment's adjusted EBIT increased to EUR655.4 million (2017: EUR642.7 million). The adjusted EBIT margin fell from 11.5 percent to 11.1 percent, mainly due to higher material prices, increased wage costs and production inefficiencies caused by temporary bottlenecks at suppliers.

Supply Chain Solutions

The Supply Chain Solutions segment (SCS) saw a significant year-on-year improvement of 15.5 percent in its order intake to EUR2.43 billion in 2018. Following a restrained start to the year, the segment was awarded some major projects, especially in the second and third quarters. The segment's revenue increased moderately, by 2.3 percent, to reach EUR2.06 billion. Adjusted EBIT came to EUR180.2 million, which is below the figure for the prior year of EUR188.7 million. This was predominantly due to the temporary underutilisation of personnel capacity. Consequently, the adjusted EBIT margin is declined from 9.4 percent to 8.8 percent.