KION : remains on course for profitable growth in third quarter despite headwinds

• Total value of order intake grows to EUR1.847 billion for the period July to September
• Revenue increases to EUR1.847 billion
• Adjusted EBIT margin improves from 9.9 to 10.5 percent despite higher cost of materials
• Net income for the period increases to EUR80.2 million
• Free cash flow of EUR119.9 million in the first nine months
• Outlook slightly adjusted after weaker growth in the Supply Chain Solutions segment

Wiesbaden, October 26, 2017 - The KION Group has remained on course for profitable growth in the third quarter of 2017 despite headwinds. Following last year's acquisition of Dematic, a specialist in automation and supply chain optimization, the total value of order intake rose to EUR1.847 billion in the period July to September 2017, an increase of 39.2 percent on the corresponding prior-year period. At EUR2.186 billion, the order book was at a similarly high level to that reported at the end of 2016 (EUR2.245 billion). In the third quarter, revenue improved by 44.0 percent to EUR1.847 billion, while adjusted EBIT grew by 53.6 percent to EUR194.7 million. Despite the higher cost of materials and currency effects related to pound sterling, the Group increased its adjusted EBIT margin from 9.9 percent in the corresponding period of the previous year to 10.5 percent.

Net income improved by 19.0 percent in the third quarter to EUR80.2 million. Earnings per share for the period amounted to EUR0.68. The Group achieved a free cash flow of EUR119.9 million between January and September (Q3 2017: EUR19.3 million).

Looking at the first nine months of this year, the total value of order intake increased by 40.7 percent to EUR5.699 billion compared to the same period of the previous year, while revenue improved by 47.5 percent to EUR5.675 billion over the same period. Adjusted EBIT climbed by 53.4 percent to EUR561.8 million between January and September. Net income rose by 40.2 percent to EUR230.4 million.

'Despite headwinds we continued to grow profitably, benefitting from the opportunities arising from e-commerce and the megatrends of automation and digitalization across both our business segments', commented Gordon Riske, CEO of the KION Group, at the presentation of the final results for the quarter and the first nine months of 2017. 'Also thanks to our acquisition of Dematic, we are very well positioned in this respect.'

The global market for forklift trucks and warehouse technology recorded further growth in the third quarter of 2017. The number of new orders increased year on year by 15.5 percent to around 332,500 units, driven mainly by particularly strong gains in China and ongoing growth in Europe.

Segment performance in detail

Following the strong growth in the Industrial Trucks & Services segment of the past quarters, growth is returning to normal. In the third quarter of 2017, the order intake, measured in terms of units, saw a year-on-year increase of 11.3 percent to around 45,300 units. In the first nine months of 2017, the segment reported an increase of 13,8 percent to 147,700 units. The total value of order intake grew by 5.2 percent to EUR1.352 billion in the third quarter, and by 9.2 percent to EUR4.280 billion for the period January to September. Revenue rose by 6.2 percent year on year to EUR1.330 billion in the third quarter (Q1-Q3 2017: EUR4.070 billion, up 8.2 percent), with the new truck business in western Europe making a particularly strong contribution to this increase. By far the biggest share of this increase in revenue was attributable to electric forklift trucks and warehouse equipment. The adjusted EBIT for the third quarter came to EUR152.5 million, a year-on-year increase of 6.1 percent (Q1-Q3 2017: EUR448.3 million, up 8.9 percent). The adjusted EBIT margin remained high at 11.5 percent in the third quarter (Q1-Q3 2017: 11.0 percent).

The Supply Chain Solutions segment, which has only included Dematic since November 2016, reported an order intake of EUR492.7 million in the third quarter of 2017, compared to EUR38.1 million in the corresponding period of the previous year. The segment's order intake between January and September was EUR1.406 billion, up from EUR117.9 million for the nine-month period in 2016. It posted revenue of EUR514.2 million in the third quarter in comparison with EUR27.2 million a year earlier (Q1-Q3 2017: EUR1.593 billion; Q1-Q3 2016: EUR74.8 million). In the period July to September 2017, adjusted EBIT stood at EUR58.7 million, whereas the segment had reported an operating loss of EUR0.8 million in the corresponding period of the previous year (Q1-Q3 2017: EUR154.2 million; Q1-Q3 2016: loss of EUR3.3 million). The adjusted EBIT margin in the third quarter of 2017 was a healthy 11.4 percent (Q1-Q3 2017: 9.7 percent).

Outlook

On October 19, 2017, the KION Group has slightly adjusted its outlook for the current financial year on the basis of its preliminary results for Q1-Q3 2017.

While the year-on-year growth in the value of order intake and in revenue in the Industrial Trucks & Services segment was stronger than anticipated, order intake and revenue in the Supply Chain Solutions segment fell short of expectations. The weaker performance in the Supply Chain Solutions segment is mainly attributable to customers' hesitation to invest and delayed project decisions by customers.

A subsequent adjustment of the outlook for both segments for the fiscal year 2017 leads to a slightly adjusted outlook for the Group:

Order intake in the KION Group is now expected to be between EUR7.550 and EUR7.900 billion (previously EUR7.800 to EUR8.250 billion). The target figure for consolidated revenue is in the range of EUR7.400 to EUR7.700 billion (previously EUR7,500 to EUR7.950 billion). The target range for adjusted EBIT is between EUR715 and EUR765 million (previously EUR740 to EUR800 million). Free cash flow is expected to be in a range between EUR320 and EUR380 million (previously EUR370 to EUR430 million). The target figure for ROCE is in the range of 9.0 to 10.0 percent (previously 9.5 to 10.5 percent).

The bottom end of the range has thus been lowered by between 1.3 and 3.4 percent for order intake, revenue, and EBIT.

Order intake in the Industrial Trucks & Services segment is expected to be between EUR5.650 and EUR5.800 billion (previously EUR5.450 to EUR5.600 billion). The target figure for revenue is in the range of EUR5.450 to EUR5.600 billion (previously EUR5.300 to EUR5.450 billion). The target range for adjusted EBIT remains unchanged at EUR605 to EUR630 million.

The order intake of the Supply Chain Solutions segment is expected to be between EUR1.900 and EUR2.100 billion (previously EUR2.350 to EUR2.650 billion). The target figure for revenue is in the range of EUR1.950 to EUR2.100 billion (previously EUR2.200 to EUR2.500 billion). The target range for adjusted EBIT is between EUR170 and EUR195 million (previously EUR195 to EUR230 million).

The outlook is based on the assumptions that material prices will not increase any further and that the exchange rate environment will remain stable.

Website: kiongroup.com/mediasite

Twitter: @kion_group

The company

The KION Group is a global leader in industrial trucks, related services, and supply chain solutions. Across more than 100 countries worldwide, the KION Group designs, builds and supports logistics solutions that optimize material and information flow within factories, warehouses and distribution centers. The company is the largest manufacturer of industrial trucks in Europe, the second-largest producer of forklifts globally, and a leading provider of warehouse automation.

The KION Group's world-renowned brands are clear industry leaders. Dematic, the newest addition to the KION Group, is a global leader in automated material handling providing a comprehensive range of intelligent supply chain and automation solutions. The Linde and STILL brands serve the premium industrial truck segment. Baoli focuses on industrial trucks in the economy segment. Among its regional industrial truck brands, Fenwick is the largest supplier of material handling products in France, OM STILL is a market leader in Italy, and OM Voltas is a leading provider of industrial trucks in India.

With a global installed base of more than 1.2 million industrial trucks and over 6,000 installed systems, KION Group's customer base includes companies in all industries and of all sizes on six continents. The KION Group has more than 30,000 employees and generated revenue of around EUR5.6 billion in 2016.

Disclaimer

This document and the information contained herein are for information purposes only and do not constitute a prospectus or an offer to sell or a solicitation of an offer to buy any securities in the United States or in any other jurisdiction.

This release contains forward-looking statements that are subject to various risks and uncertainties. Future results could differ materially from those described in these forward-looking statements due to certain factors, e.g. changes in business, economic and competitive conditions, regulatory reforms, results of technical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. We do not undertake any responsibility to update the forward-looking statements in this release.

Further information for the media

Michael Hauger
Head of Corporate Communications
Tel.: +49 (0)611 770 655
Mobile: +49 (0)151 16 86 55 50
michael.hauger@kiongroup.com

Frank Brandmaier
Head of Corporate Media Relations
Tel.: +49 (0)611 770 752
frank.brandmaier@kiongroup.com

Further information for investors

Dr Karoline Jung-Senssfelder
Head of Investor Relations and M&A
Tel.: +49 (0)611 770 450
karoline.jung-senssfelder@kiongroup.com