KION GROUP AG (KIGRY) Q4 2024 Earnings Call Highlights: Record Revenue and Strategic ...

GuruFocus News

Mon, Mar 3, 2025, 6:00 PM 4 min read

Group Order Intake: EUR10.3 billion, a 5% decline compared to the prior year.
Revenue: Record EUR11.5 billion for the full year 2024.
Adjusted EBIT: Increased 16% to EUR917 million; margin improved by 110 basis points to 8%.
Free Cash Flow: EUR702 million, slightly below last year but exceeded market expectations.
Earnings Per Share: EUR2.75, an increase of 18%.
ITS Segment Revenue: EUR2.3 billion, a 1% decline year over year.
ITS Segment Adjusted EBIT: EUR245 million with a margin of 10.6%.
SCS Segment Order Intake: EUR624 million, impacted by customer hesitancy.
SCS Segment Adjusted EBIT: EUR42 million with a margin of 5.4%.
Group Adjusted EBIT for Q4: EUR250 million with a margin of 8.2%.
Net Income for Q4: EUR111 million, earnings per share of EUR0.85.
Free Cash Flow for Q4: Positive EUR271 million.
Net Financial Debt: Decreased by EUR202 million to less than EUR1 billion.
2025 Revenue Guidance: EUR10.9 billion to EUR11.7 billion.
2025 Group Adjusted EBIT Guidance: EUR720 million to EUR870 million.
2025 Free Cash Flow Guidance: EUR400 million to EUR550 million.

Warning! GuruFocus has detected 6 Warning Signs with KIGRY.

Release Date: February 27, 2025

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

Positive Points

KION GROUP AG (KIGRY) achieved a record revenue of EUR11.5 billion in 2024, with an adjusted EBIT increase of 16% to EUR917 million.
Earnings per share rose by 18% to EUR2.75, and a dividend of EUR0.82 is proposed, maintaining a payout ratio of approximately 30%.
The company has made significant progress in operational and commercial agility, focusing on innovation, digitalization, and artificial intelligence.
KION GROUP AG (KIGRY) is enhancing its presence in the growing automation market through strategic partnerships with NVIDIA and Accenture.
The company reported a strong free cash flow of EUR702 million, exceeding capital market expectations despite being slightly below the previous year.

Negative Points

Group order intake declined by 5% to EUR10.3 billion, reflecting subdued markets in both operating segments during 2024.
The ITS segment experienced a 1% revenue decline year over year, with a 4% decline in the new truck business.
Order intake for the SCS segment was impacted by customer hesitancy due to macro and political uncertainty, with a 28% decline in Business Solutions orders.
The company anticipates a temporary decline in adjusted EBIT and margins for the ITS segment in 2025 due to less favorable product and geography mix and intensifying competition.
Free cash flow for 2025 is expected to be substantially below the prior year due to cash outflows from an efficiency program.

Q & A Highlights

Q: Can you explain the assumptions behind the truck sales outlook for 2025, particularly regarding the order intake levels needed to achieve the high end of the guidance? A: Christian Harm, CFO: The revenue for 2025 is based on the order book we have so far. The normalization of the order book means revenue will follow the order intake throughout the year. We expect growth in ITS across different regions on a unit basis. On the upper end of the range, we anticipate an order intake similar to the prior year, while the lower end reflects a scenario where market revival does not occur as expected.

Q: Regarding the warehouse automation project pipeline, is customer hesitancy still a function of spare capacity, especially in e-commerce? A: Richard Smith, CEO: The e-commerce players have grown into the capacity built during COVID. We are returning to pre-COVID mid-term capacity planning with large e-commerce customers. This indicates that e-commerce players are coming back to the market, which is a positive sign for growth in the supply chain solutions market.

Q: Can you elaborate on the SCS revenue outlook, given the order intake in past years? A: Richard Smith, CEO: The SCS revenue outlook is supported by continued strong service growth and the ability to convert projects faster, particularly from large e-commerce players. This allows us to anticipate converting some orders within the year, supporting the upper end of the guidance.

Q: How should we view the quarterly trajectory of ITS margins in 2025? A: Christian Harm, CFO: The first quarter of 2025 is likely to have a relatively stronger margin for the ITS segment compared to subsequent quarters. The full impact of cost-efficiency measures will be realized in 2026, with Q1 potentially being stronger than the following quarters.

Q: What is the impact of intensifying competition, particularly from Chinese competitors, on your business? A: Richard Smith, CEO: We see increased competition, especially in Eastern Europe, from Chinese competitors entering the market at different pricing points. However, this is not a significant shift from previous quarters, as competition has always been strong in the market.

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

This article first appeared on GuruFocus.

Terms and Privacy Policy

Your Privacy Choices

Utah Privacy Notice

More Info