[43] Segment report

The Executive Board, as the chief operating decision-maker (CODM), manages the KION Group on the basis of the following segments: Industrial Trucks & Services, Supply Chain Solutions, and Corporate Services. The segments have been defined in accordance with the KION Group’s organizational and strategic focus.

Since January 1, 2021, the Industrial Trucks & Services (ITS) segment has consisted of three Operating Units: KION ITS EMEA, KION ITS APAC, and KION ITS Americas. As part of this reorganization and based on the internal management structure, the logistics services companies were transferred from the Corporate Services segment to the Industrial Trucks & Services operating segment.

Description of the segments

Industrial Trucks & Services

So that it can fully cater to the needs of material handling customers worldwide, the business model of the Industrial Trucks & Services segment covers key steps of the value chain: product development, manufacturing, sales and service, truck rental and used trucks, fleet management, and financial services that support the core industrial truck business. The segment operates a multi-brand strategy involving the three international brands Linde, STILL, and Baoli plus the two local brands Fenwick and OM.

Supply Chain Solutions

The Supply Chain Solutions segment, featuring its Dematic Operating Unit, is a strategic partner to customers in a variety of industries, supplying them with integrated technology and software solutions with which to optimize their supply chains. Manual and automated solutions are provided for all functions along customers’ supply chains, from goods inward and Multishuttle warehouse systems to picking, automated palletizing, and automated guided vehicle systems. Featuring the Dematic brand, this segment is primarily involved in customer-specific, longer-term project business. With global resources, nine production facilities worldwide, and regional teams of experts, Dematic is able to plan and deliver logistics solutions with varying degrees of complexity anywhere in the world.

Corporate Services

The Corporate Services segment comprises holding companies and service companies that provide services such as IT and general administration across all segments. The bulk of the total revenue in this segment is generated by internal IT services.

Segment management

The KPIs used to manage the segments are order intake, revenue, and adjusted EBIT. Segment reporting therefore includes a reconciliation of externally reported consolidated earnings before interest and tax (EBIT) – including effects from purchase price allocations and non-recurring items – to the adjusted EBIT for the segments (‘adjusted EBIT’). Intra-group transactions are generally conducted on an arm’s-length basis. Segment information are prepared in accordance with the same accounting policies as the consolidated financial statements, as described in note [7].

The following tables show information on the KION Group’s operating segments for 2021 and 2020:

External revenue is allocated to the different regions on the basis of the customer’s location. The breakdown of external revenue by region is presented in the > tables ‘Disaggregation of revenue with third parties’. In 2021, revenue in the most significant countries was as follows: €1,620.3 million in Germany (2020: €1,458.0 million), €2,347.5 million in the US (2020: €1,636.0 million), and €985.2 million in France (2020: €937.6 million).

In 2021, revenue of €1,634.8 million (2020: €892.7 million) was generated from one single external customer and predominantly in the Supply Chain Solutions segment.

Net financial income and expenses, including all interest income and interest expense, are described in notes [13] and [14].

The non-recurring items recorded by the Group in the reporting year amounted to total income of €37.8 million. This included income of €32.7 million in connection with plan adjustments affecting defined benefit obligations. There was also income from the reversal of excess provisions that had been recognized for the capacity program; taking account of the ongoing program costs, the positive non-recurring items amounted to income of €8.2 million. In addition, the intra-group allocation of costs of KION GROUP AG to subsidiaries resulted in negative non-recurring items amounting to an expense of €18.3 million in the ITS and SCS segments.

In 2020, the non-recurring items had predominantly related to components of the capacity and structural program (expense of €45.8 million) that mainly impacted on the Industrial Trucks & Services segment. Non-recurring items had also included the impairment loss recognized on an equity-accounted investment (expense of €10.7 million) in the Industrial Trucks & Services segment and, in the Supply Chain Solutions segment, the impairment losses recognized on property, plant, and equipment, the use of which was customer-specific (expense of €13.6 million, including the effects of purchase price allocations).

The effects from purchase price allocations comprised net write-downs and other expenses in relation to the step-ups and charges identified as part of the acquisition processes.

The regional breakdown of non-current assets, excluding financial instruments, deferred tax assets, and assets relating to defined benefit pension plans, is as follows:

As at December 31, 2021, non-current assets attributable to Germany amounted to €3,372.4 million (2020: €3,362.6 million) and to the US €2,200.5 million (2020: €2,092.4 million).