Kion Group meets forecast with record figures

CEO Riske: "Results a great basis for a new era"

"Our very good results in 2016 are a great basis for a new era with Dematic, KION's newest brand," said Gordon Riske, CEO of the Kion Group, when presenting the figures. "Since the acquisition was completed in November, we have already made very good progress with the integration of Dematic," he emphasized. "The key task this year is to continue to drive this process forward in order to fully exploit the opportunities offered by the rapidly growing market for automated supply chain solutions. At the same time, we will continue to benefit from the strong market development in our other core business with forklift trucks, warehouse technology and related services."

If Dematic's results for the last two months of 2016 are included, the value of incoming orders rose by 11.8% to EUR 5.833 billion. Meanwhile, the order backlog - including Dematic - amounted to EUR 2.245 billion at the end of the year. Turnover increased by 9.6% to EUR 5.587 billion. The adjusted operating result (EBIT) grew by 11.3% to EUR 537.3 million. The adjusted EBIT margin increased accordingly from 9.5% to 9.6%. Consolidated net profit rose by 11.3% to EUR 246.1 million.

Unbroken momentum in the core market of Western Europe

In the Industrial Trucks & Services segment (forklift trucks, warehouse technology and related services), order intake improved by 4.6% to EUR 5.383 billion in 2016, with both the new truck business and the service area growing. At the same time, turnover rose by 3.1% to EUR 5.203 billion. The main driver here was the new vehicle business, which benefited above all from sales in Germany, France and Italy as well as in Eastern Europe. The adjusted operating result (EBIT) grew by 10.8% to EUR 586.9 million, while the adjusted EBIT margin rose significantly from 10.5% to 11.3%.

The KION Group's orders for new trucks increased by 7.5 per cent in the past financial year, thanks in particular to the unbroken momentum in the core market of western Europe, but also to the positive trend in China. The Group thus benefited fully from the growth of the global market, which also increased by 7.5 per cent in 2016. Almost 1.2 million trucks were ordered worldwide, compared with around 1.1 million in the previous year. The Kion Group's Industrial Trucks & Services segment received around 178,300 orders (2015: around 165,800 orders), more than ever before in a single financial year. The Kion Group benefited in particular from the growth in electric forklift trucks and warehouse trucks, which already account for over 80 percent of incoming orders.

The Supply Chain Solutions segment, which comprises the Dematic, Egemin and Retrotech brands, achieved an order intake of EUR 431.2 million in 2016, although Dematic only contributed two months and Retrotech ten months. There were significant projects with new customers in Europe, among other places. The segment's revenue increased to EUR 366.0 million as a result of the acquisition. Here too, Dematic and Retrotech are only included on a pro rata basis. North America accounted for almost half of sales. The adjusted operating result (EBIT) amounted to EUR 6.0 million (previous year: EUR 2.0 million). The segment's adjusted EBIT margin amounted to 1.6% (previous year: 6.1%).

With the presentation of the figures for 2016, the Kion Group is reporting according to its new segmentation for the first time. In addition to Industrial Trucks & Services and Supply Chain Solutions, the Group is also managed according to the Corporate Services segment. It comprises holding and other service companies that provide cross-segment services such as IT and logistics.

Forecast for 2017: increase in incoming orders, sales and adjusted EBIT

In the 2017 financial year, the Kion Group aims to build on its successful performance in the reporting year and, based on the forecast market development, further increase both order intake and revenue as well as adjusted EBIT.

The Kion Group's order intake is expected to be between EUR 7.800 and 8.250 billion. The target value for Group sales is between EUR 7.500 and 7.950 billion. The target range for adjusted EBIT is EUR 740 to 800 million. The adjusted EBIT margin is expected to increase compared to the margin of 9.6% achieved in the 2016 financial year. Free cash flow is expected to be in the range of EUR 370 million to EUR 430 million. The target value for ROCE is between 9.5% and 10.5%.

Order intake for the Industrial Trucks & Services segment is expected to be between EUR 5.450 and 5.600 billion. The sales target is between EUR 5.300 and 5.450 billion. The target corridor for adjusted EBIT is between EUR 605 million and EUR 630 million. The adjusted EBIT margin is expected to increase slightly compared to the margin of 11.3% achieved in the 2016 financial year.

Order intake for the Supply Chain Solutions segment is expected to be between EUR 2.350 and 2.650 billion. The sales target is between EUR 2.200 and 2.500 billion. The target corridor for adjusted EBIT is between EUR 195 million and EUR 230 million. The adjusted EBIT margin is expected to increase significantly compared to the margin of 1.6% achieved in the 2016 financial year, although this only includes two months of Dematic.

Milestones 2016

• Financing: In February, the Kion Group renews its financing structure on terms that are customary for established large companies. It replaces the last bond from the time before the IPO and refinances a bank loan from the same period at significantly improved conditions with investment grade characteristics.
• Production: The Kion Group also opens its most modern plant near the Czech city of Stříbro near Pilsen in February. At the site, the Group focuses on the concept of a "smart factory" with digitally networked systems.
• Acquisition: In June, the Kion Group announces its intention to acquire Dematic, a leading specialist in automation and supply chain optimization. This makes the Wiesbaden-based company one of the world's leading providers of intelligent intralogistics solutions.
• Capital increase: A few weeks later, the Group completes a capital increase to partially refinance the purchase of Dematic. 9,890,000 new shares are placed at a price of 46.44 euros each.
• Acquisition: The purchase of Dematic is successfully completed in November.
• Rating: Two months after the acquisition of Dematic, the leading specialist for automation and supply chain optimization, the Kion Group receives an investment grade rating for the first time. The international agency Fitch Ratings gives the Group a long-term issuer rating of BBB- with a stable outlook.
• Promissory bill: At the beginning of 2017, the Kion Group successfully issues a promissory note loan for the first time. The proceeds of around one billion euros are used to refinance the bridge loan that the company received from its core banking group for the acquisition of Dematic.

[1] EBIT/EBITDA adjusted for effects from purchase price allocations as well as one-off and special effects

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