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• Revenue: EUR2.8 billion for the third quarter.

• Adjusted EBIT: EUR220 million with an adjusted EBIT margin of 8.1%.

• Free Cash Flow: Positive EUR229 million.

• Earnings Per Share: EUR0.55.

• Order Intake: EUR2.4 billion, reflecting seasonal softness.

• ITS Segment Revenue: Nearly EUR2 billion, with a 4% decline in new trucks business and 2% growth in service business.

• SGS Segment Adjusted EBIT: EUR28 million with a margin of 4%.

• Net Income Attributable to Shareholders: EUR72 million.

• Net Debt Reduction: EUR163 million decrease in net debt.

• Guidance for Full Year Revenue: Between EUR11.4 billion and EUR11.6 billion.

• Guidance for Full Year Adjusted EBIT: Between EUR859 million and EUR1,110 million.

• Warning! GuruFocus has detected 7 Warning Signs with KIGRY.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• KION GROUP AG (KIGRY) reported stable adjusted EBIT and EBIT margins despite tough comparisons, indicating strong operational performance.

• The company successfully narrowed its guidance ranges for the full year, reflecting confidence in its financial outlook.

• KION GROUP AG (KIGRY) opened a new Center of Excellence for Automation in Antwerp, enhancing its R&D capabilities in automated solutions.

• The service business demonstrated resilience with significant growth, contributing to the stability of the company's business model.

• Free cash flow was positive at EUR229 million, driven by strong EBIT and improvements in net working capital.

Negative Points

• Order intake was impacted by seasonal softness and customer hesitation due to macroeconomic and political uncertainties.

• Higher net financial and tax expenses negatively affected net income, despite nearly unchanged adjusted EBIT.

• The ITS segment experienced a decline in new truck business revenue, partially offset by growth in the service business.

• The company faces ongoing challenges in the supply chain solutions segment due to subdued demand and tough comparisons.

• The North American market is under pressure due to dealer destocking, which is expected to continue affecting demand.

Q & A Highlights

Q: With the order intake and revenue now more closely correlated, what measures can KION Group take to mitigate potential revenue decline next year as the backlog normalizes? A: Richard Smith, CEO: We remain committed to achieving and maintaining more than 10% margins in both segments and the KION Group by the end of our planning period in 2027. Lower revenues next year would be a temporary challenge, requiring cost adjustments to return margins above 10%. We have flexibility in our cost base and are prepared to make necessary adjustments. Further details will be shared with our full-year 2024 financials and outlook in February.