The KION Group has closed the first half of the 2022 financial year with good order intake and revenue. However, the operating result was impacted in the first six months of this year by the sharp rise in materials, energy and logistics costs and the ongoing disruptions in supply chains.
In addition, there have been more COVID lockdowns, which affected the Asian region in particular.
The war in Ukraine also further exacerbated the situation in the second quarter of 2022. The group completely halted all product deliveries to Russia and Belarus in both operating segments in the first quarter, including the supply of spare parts and related services.
"In order to actively counter the current challenges - especially supply bottlenecks and increased material, energy and logistics costs - and to sustainably strengthen the resilience of our business, we have taken numerous substantial measures in both operating segments," says Rob Smith, group chief executive officer. "These include strengthening our supplier network, dynamic pricing, extending leases to ensure the continued availability of industrial trucks for our customers, and even more flexible production processes at our plants."
In the first half of 2022, KION’s order intake rose by 13.1% and the momentum continued in the second quarter—not least due to the continuation of strong growth trends in the intralogistics industry (online trade, urbanisation, demographic change and increasing customer requirements in terms of delivery speeds).
Group revenue was 11.4% higher than at mid-2021, largely from the order book of the previous year and positive development within the service business. However, margins fell to 5.6% (previous year: 9.3%).
According to the KION Group, the global materials handling market grew moderately in the first half of 2022. As such, demand for industrial trucks in KION’s sales markets was still above the previous year’s level. As a result of the significant macroeconomic uncertainties and the considerable supply restrictions, according to the KION Group, momentum declined in all sales regions in the second quarter.
In a half-year comparison, the order figures in the EMEA region are likely to be slightly higher than in the previous year, while KION estimates stronger growth in the Americas region. In the APAC region, order numbers are unlikely to reach those achieved in the previous year, due in part to measures taken to contain the coronavirus pandemic in Asia.
In view of the ongoing and substantial uncertainties in the procurement markets, which are being significantly exacerbated by the war in Ukraine and renewed coronavirus lockdowns, especially in Asia, the executive board of KION GROUP AG decided on April 4, 2022 to withdraw the outlook for 2022 that had been published in the 2021 annual report.
Although the KION Group believes that the fundamental driving factors in the intralogistics industry remain intact, there are still significant uncertainties with regard to evaluating the group’s business performance over the further course of the year.
For the remainder of 2022, the ongoing disruption to supply chains and further rises in the already high costs of materials, energy, and logistics will continue to have a negative impact on adjusted EBIT and related key performance indicators, and on free cash flow. As a result, the figures for 2022 as a whole are expected to fall short of the levels achieved in the prior year.
The KION Group intends to issue a new outlook later in the year.