Overall assessment of the economic situation
The KION Group continued along its path of profitable growth in 2019, successfully consolidating its position despite very challenging market conditions. Order intake rose by 5.3 per cent from €8,656.7 million to €9,111.7 million and revenue by 10.1 per cent from €7,995.7 million to €8,806.5 million. Both these KPIs were therefore higher than in 2018. Adjusted EBIT also went up, increasing by 7.7 per cent to €850.5 million (2018: €789.9 million). Earnings in 2019 were helped not only by the healthy revenue growth but also by the fact that material prices rose only moderately. The adjusted EBIT margin contracted by 0.2 percentage points year on year, from 9.9 per cent to 9.7 per cent. This was because the two operating segments saw disproportionately strong growth in their lower-margin businesses – new trucks and business solutions – compared with the growth of the service business.
At €444.8 million, net income was up by 10.7 per cent (2018: €401.6 million). This improvement can primarily be explained by better operating profit and declining purchase price allocation effects. Basic earnings per share attributable to the shareholders of the KION Group came to €3.86 in 2019 (2018: €3.39) based on a weighted average of 117.9 million no-par-value shares outstanding during the reporting year. KION GROUP AG will propose a dividend of €1.30 per share to the 2020 Annual General Meeting (2018: €1.20), which is a rise of 8.3 per cent.
Free cash flow increased significantly year on year to reach €568.4 million (2018: €519.9 million), largely thanks to the higher level of earnings. Net financial debt equated to 1.0 times adjusted EBITDA, representing a further year-on-year improvement (2018: 1.2 times).
In the Industrial Trucks & Services segment, the KION Group was able to stand up to fierce competition and again recorded increases in order intake and revenue compared with the previous year. Key factors in its competitiveness were a product portfolio that is geared to customers’ needs and a broad range of services. The growth in revenue enabled the segment to further improve its operating profit in 2019. Over the course of the year, the segment also overcame the negative effects of the bottlenecks that had occurred at individual suppliers.
The Supply Chain Solutions segment capitalised on the still favourable market conditions and, bolstered by the high level of orders received in 2018, notched up significant gains in revenue and earnings. Dematic secured major orders in important customer segments throughout the reporting year. This was partly thanks to the addition of new fully automated solutions and systems to the product portfolio that enable even simpler and faster processes. Product innovation also helped the segment to further strengthen its position in the most promising functional areas of warehouse automation, for example micro-fulfilment solutions.