Kion Group Ag · XETR:KGX
Kion — Investor Day (November 2021)
70 slides from Kion's investor day presentation, Nov 3, 2021
Slide 1: Accelerating profitable growth
Analyst & Investor Event 2021 Accelerating profitable growth Frankfurt / Main – November 03, 2021
Slide 2: Disclaimer
Disclaimer This document has been prepared by KION GROUP AG (the “Company”) solely for informational purposes. This disclaimer shall apply in all respects to the entire presentation (including all slides of this document), the oral presentation of the slides by representatives of the Company (or any
Slide 3: Agenda: Accelerating profitable growth
Analyst & Investor Event 2021 Agenda: Accelerating profitable growth Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks an
Slide 4: Our management team
Analyst & Investor Event 2021 Our management team Gordon Riske Anke Groth Andreas Krinninger Chief Executive Officer Chief Financial Officer President KION KION Group KION Group ITS EMEA Dr Henry Puhl CP Quek Hasan Dandashly Chief Technology Officer President KION ITS President KION KION Group Asia
Slide 5: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 5 Analyst & Investor Event
Slide 6: Key Messages
Key Messages Highly attractive long-term market outlook driven by continued megatrends Strong rebound and accelerated growth in 2021, raising our medium-term targets KION 2027 strategy: continued strategic investments and sustainability as new field of action 6 Analyst & Investor Event 2021
Slide 7: Megatrends and Expected Market Developments
Megatrends and Expected Market Developments Material handling industry benefits from attractive macro-drivers Megatrends & demand implications Medium-term market growth E-commerce Demand for automated warehouse solutions Warehouse automation market +13%1 Emerging markets Demand for (value) trucks in
Slide 8: Material Handling Market Overview
Material Handling Market Overview Both industrial truck & automation markets expected to grow substantially Material handling – total addressable market Long-term growth Revenue in €bn, CAGR in % CAGR in % Automation systems Industrial trucks 41 43 35 +13% 30 30 49 49 52 +9% 40 40 2019 2020 2021e 20
Slide 9: Performance Development and Outlook
Performance Development and Outlook Strong rebound and accelerating growth in 2021 KION Group revenue and adj. EBIT in €m 9,700 – 10,300 8,807 8,342 810 – 890 851 547 FY 2019 FY 2020 FY 2021 Outlook Revenue Adj. EBIT 9 Analyst & Investor Event 2021
Slide 10: Development of Business Model Resilience
Development of Business Model Resilience Resilient share of revenue expected to increase further 2014 2019 2023e1 7% ~ 9% 20% 38% ~ 31% 46% ~ 30% 54% 35% ~30% 46% 62% ~ 69% Share of resilient business ITS - New trucks ITS - Services SCS - Business solutions SCS - Services 1. KION internal estimate N
Slide 11: KION 2027 Strategy
KION 2027 Strategy Focus on continued profitable growth Aspiration KION 2027 Sustainability as new Strategic investments maintains focus strategic field of action accelerate growth Sustai- nability Inno- Perfor- vation mance Auto- Energy Digital mation 11 Analyst & Investor Event 2021
Slide 12: Sustainability Acknowledgements
Sustainability Acknowledgements KION fully committed to sustainable material handling S&P Global Received first ESG1 risk ISS ESG In top quartile EcoVadis Member of the A- score for score of 24.7, Prime Rating of machinery Gold DAX® 50 ESG climate ranking within confirmed industry group sustainabili
Slide 13: Strategic Investments
Strategic Investments Accelerating profitable growth ITS investments executed SCS investments next up Acquisition of an Indian New ITS plant in warehouse automation Kołbaskowo (PL), Site company, strengthening start of production in for SCS competitive position in July 2021 plant India & APAC1 New I
Slide 14: Medium-term Targets
Medium-term Targets Raising our 2023 revenue target and confirming margin outlook Surpassing €12bn revenue fueled by expected continued > €12bn strong SCS growth and ITS recovery Focused on profitability striving for double-digit 10% – 12% adj. EBIT margin 14 Analyst & Investor Event 2021
Slide 15: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 15 Analyst & Investor Even
Slide 16: Key Messages
Key Messages Sound financial profile as basis for execution of key investments Increasing revenue target and stable margin outlook introducing segment targets Investment focus on rapidly growing SCS business in preparation for next growth phase 16 Analyst & Investor Event 2021
Slide 17: Financial Performance
Financial Performance Strong cash conversion and deleveraging lead to investment grade rating Cashflow Conversion1 Leverage3 Credit Rating Operating Cashflow / Adj. EBIT IND4 / Industrial Adj. EBITDA 80% 2.2x Investment Cashflow conversion LTM2 September 2021 Leverage as of September 20215 Grade 77.
Slide 18: Review of Investments Announced in 2020
Review of Investments Announced in 2020 All initiatives supporting growth executed despite the pandemic Investments presented in 2020 Specific projects New products 12XX series, ITS value series Li-Ion battery supply KION Battery Systems Joint Venture Focused investments Growth in EMEA New ITS plant
Slide 19: Revenue Potential From New ITS Plants
Revenue Potential From New ITS Plants Executed investments support medium- and long-term growth plans Kołbaskowo (PL) Jinan Key (CN) Considerations Revenue potential in €m Revenue potential in €m • xxx 170 90 110 50 50 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2021e 2022e 2023e 2024e 2025e 2026e 202
Slide 20: Medium-term Targets – KION Group
Medium-term Targets – KION Group Increased revenue target and stable margin outlook > €12bn We are confident to reach our medium-term targets: • Continued SCS and ITS revenue growth beyond 2021 €10.3bn €9.7bn • New capacities and products 10% – 12% supporting growth • Leveraging of scale effects €89
Slide 21: Medium-term Targets – SCS
Medium-term Targets – SCS Focus on execution, cost control and scale key to achieve 12% – 14% margin Revenue Gross profit levers Pursue strongly growing verticals to access fast growth environments as well as differentiate through technology €3.75bn > €4.5bn €3.45bn Grow customer services with struc
Slide 22: Medium-term Targets – ITS
Medium-term Targets – ITS Profitable growth key to return to double-digit margin Revenue Gross profit levers > €7.5bn New offerings and products to cover strongly growing value segment and €6.55bn capture market growth €6.25bn New production facilities to expand capacities and support future growth
Slide 23: Summary of Medium-term Targets for FY 2023
Summary of Medium-term Targets for FY 2023 Increased targets support raise in dividend policy KION Group Supply Chain Solutions Industrial Trucks & Services Revenue > €12bn > €4.5bn > €7.5bn Adj. EBIT margin 10% – 12% 12% – 14% > 10% Dividend payout 25% – 40% ratio1 1. Target, subject to availabilit
Slide 24: Development of R&D Spend
Development of R&D Spend Preparing for growth – shifting R&D spend towards SCS R&D1 spend in % of total Key considerations: 2020 2023e SCS • Relative shift in R&D spend from SCS ITS to SCS • Strong growth of SCS R&D spend 30% in particular driven by software ~ 45% development ~ 55% • Stable R&D spen
Slide 25: Development of Strategic Investments
Development of Strategic Investments Next growth investments lined up Strategic investments excl. R&D and SAP S4/HANA in €m Acquisitions ITS Capex excl. R&D 316 300 - 350 SCS Capex excl. R&D CS1 Capex excl. R&D 2020 2021e 2022e 2023e Jinan ~ €100m ITS North America expansion Kołbaskowo ~ €80m Capaci
Slide 26: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 26 Analyst & Investor Even
Slide 27: Trends and Impacts
Trends and Impacts Post-COVID world requires speed, flexibility and accuracy Urbanization Skill Shortage Speed Logistics Expenditure 55% 60% 80% 10% of world’s population lives turnover in warehousing in of shoppers want rate of logistics costs to in cities1 the US up 150% over past same-day shippin
Slide 28: Market Growth
Market Growth Robust market fundamentals & COVID-accelerated market demands Market size Market size by region Revenue in €bn and CAGR in % Revenue in €bn and CAGR in % 2020 2023e 43 17 30 15 12 11 10 7 2020 2023e EMEA APAC Americas Source: Management assumptions based on internal KION Market Model a
Slide 29: Landmark Group & SCS Solution – Key Facts & Figures
Landmark Group & SCS Solution – Key Facts & Figures Largest and the most sophisticated distribution center in the Middle East Highly Intelligent & networked solution The largest retail group in the Middle East, Africa, and India, with a growing presence across Southeast Asia 74,000 2,200 3 boxes pro
Slide 30: SCS – Medium-term Targets
SCS – Medium-term Targets Driving growth and margin enhancement – poised to exceed 12% adj. EBIT margin Revenue Adj. EBIT / adj. EBIT margin Revenue in €bn Adj. EBIT in €m and adj. EBIT margin in % 14% €425m 12% €385m €3.75bn > €4.5bn €3.45bn 2021e 2023e 2021e Gross SG&A1 2023e profit1 1. Expected 3
Slide 31: SCS Framework
SCS Framework Targeting accelerated growth with clear EBIT improvement focus Focus on high Lead with differentiated Drive a life-cycle based Deliver on growth & growth segments technology service approach execution at scale Purposeful global growth in Continued focus on delivering Drive customer out
Slide 32: Focus Verticals, Drivers and Solutions
Focus Verticals, Drivers and Solutions Purposeful growth on verticals with highest growth potential Share of total market CAGR Selected revenue 2020 2020-23e Value drivers SCS solutions (selected solutions only) clients (%) 1 (%)1 mPick / GTP3 General 30% +17% Merchandise Speed of Flexible Decentral
Slide 33: Ecosystem-based Solutions (Grocery Example)
Ecosystem-based Solutions (Grocery Example) SCS innovates at all levels of a customer ecosystem Software & data + Simulation Optimization Execution Network connectivity SCS Solution Planning Maintenance Connect Approach & Portfolio Automation Micro- Robot Shuttle ML2 AMCAP1 AMR AGV3 Fulfillment Pick
Slide 34: Grocery Case Study
Grocery Case Study Enabling grocery e-Commerce fulfillment for Americold Intelligent & integrated solution with high degree of automation driving customer productivity 183 >1bn ft3 temp.-controlled refrigerated Forecasting Storage warehouses storage product 2 temperature sequence controlled and 5 7
Slide 35: Software-defined Automation Journey and Capabilities
Software-defined Automation Journey and Capabilities SCS enables the autonomous supply chain of the future Customers today Supply chain of tomorrow SCS driving customer outcomes Productivity Customer fulfillment Ability to maximize throughput Fully Autonomous journey Manual Warehouse / Semi-automate
Slide 36: Software Vision and Footprint
Software Vision and Footprint Software is core to SCS’s portfolio and value proposition SCS’s digital To provide vertical ecosystem based highly intelligent solutions that combine our software / digital capabilities with automation vision & robotics technology to deliver increased productivity flexi
Slide 37: Service Footprint
Service Footprint Unparalleled installed base and operational footprint in the industry1 ~ 8,000 > 1,000 installed systems service technicians > 2,300 > 130 resident maintenance service employees locations 35 > 2,050 modernizations and countries cut-ins per year 70 > 98% service locations average up
Slide 38: Lifecycle-based Service Approach
Lifecycle-based Service Approach Reducing total cost of ownership & driving value-based service offering Customer intimacy across project journey (20+ years) Driving business outcomes with combined offerings Start up Evolution for Design Operation Spare parts Ramp up optimization Consultative 3 Expe
Slide 39: Global Operational Footprint
Global Operational Footprint Global reach with a local presence in over 35 countries Europe ~ 3,900 employees Americas ~ 11,000 Employees ~ 5,600 employees Countries with 35 active presence Manufacturing 12 locations ~ 4,000 Engineers Key APAC Operations ~ 1,300 employees ~ 3,750 personnel Global He
Slide 40: Emerging Markets Footprint
Emerging Markets Footprint Driving cost leverage through low-cost country presence Additional SCS APAC plant in China Bettering global cost position and scale • Creating a new manufacturing facility at Jinan • Will become the largest plant (28,000 m2) for SCS in China • Regionalized manufacturing fo
Slide 41: Standardization and Execution Benefits
Standardization and Execution Benefits Standardization is key to improve profitability and speed Benefits of standards: Increasing standards: % of standards as part of SCS “Infinite” Scalability overall order intake1 solutions Standardization helps to reduce 11 manufacturing costs and production tim
Slide 42: Supply Chain Solutions
Supply Chain Solutions Growing the business substantially, increasing the margin to 12% – 14% Accelerated market fundamentals expected to drive 1 strong growth of warehouse automation market Accelerated Capture market growth in promising verticals 2 through an ecosystem based on intelligent and conn
Slide 43: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 43 Analyst & Investor Even
Slide 44: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 44 Analyst & Investor Even
Slide 45: Market Growth
Market Growth Global truck markets rebound after turbulent COVID impact Market size Market size by region Revenue in €bn and CAGR in % Revenue in €bn and CAGR in % 2020 2023e 52 40 20 15 16 16 13 11 2020 2023e EMEA APAC Americas Source: Management assumptions based on internal KION Market Model as o
Slide 46: ITS – Medium-term Targets
ITS – Medium-term Targets Profitable growth key to return to double-digit adj. EBIT margin Revenue Adj. EBIT / adj. EBIT margin Revenue in €bn Adj. EBIT in €m and adj. EBIT margin in % €6.55bn > €7.5bn €6.25bn > 10% €565m €525m 2021e 2023e 2021e Gross SG&A 2023e profit 46 Analyst & Investor Event 20
Slide 47: ITS Framework
ITS Framework Key goals are capturing growth while returning to double-digit adj. EBIT margin Growth framework Resilient services Efficiency improvement Combining new Covering the full Consistently addressing offerings and products asset lifecycle margin improvement with enlarged as well as new from
Slide 48: KION Group Global Value Platform
KION Group Global Value Platform Introducing a completely new approach targeting the value segment Key features Multi-brand product platform for Baoli, Linde Material Handling and STILL Modular platform for IC1- and E2-trucks Platform offers various truck configurations ranging from eco to value Pro
Slide 49: Important Features of the Value Platform
Important Features of the Value Platform Using modular platform and scaling drives price competitiveness Winning selling proposition • Increased price competitiveness through modular platform Truck architecture using • Reduced service time versus Chinese competitors1 modular components • Optimized p
Slide 50: Overview of New Production Plants
Overview of New Production Plants Expansion of production capacities in Poland and China New plant in Jinan, CN • One of the largest KION Group plants with annual capacity of 40,000 units • Broad level of automation with integrated equipment & software systems for productivity and cost efficiency •
Slide 51: Overview of KION Installed Truck Base
Overview of KION Installed Truck Base Solid basis for continued growth in highly profitable services business Development of KION installed truck base1 (Installed truck base in m units, aftersales revenue in €m) Installed truck base Aftersales revenue 1,523 Continuously growing installed truck base
Slide 52: Active Industrial Truck Lifecycle Management
Active Industrial Truck Lifecycle Management Substantial additional revenue pools after first life 1st life: ~ 5 years 2nd & 3rd life: ~ 10 years Revenue pools Refurbishment Existing revenue pools Used truck sale Rental actively addressed Aftersales through various initiatives Recycling targeting se
Slide 53: Efficiency Improvement
Efficiency Improvement Profitability focus on top and bottom-line initiatives Product cost Structural program Standardization Building a reach truck compe- Streamlining management Industrializing production of tence center in Stříbro, CZ structures mobile automation solutions Optimizing capacity uti
Slide 54: Building a Reach Truck Competence Center
Building a Reach Truck Competence Center Creating a strong product for resilient industries and targeting cost benefits Overview • Consolidating all steps from design to production to one plant, targeting cost benefits • Freeing up capacities in Hamburg, GER plant for production of new truck variant
Slide 55: Industrializing Production of Mobile Automation Solutions
Industrializing Production of Mobile Automation Solutions Taking the necessary steps for anticipated strong market growth Pallet stacker Quicktron LoadRunner • Manual assembly replaced by • AMRs for Dematic, Linde Material • Development of high-speed, small- automated production with start of Handli
Slide 56: Industrial Trucks & Services
Industrial Trucks & Services Accelerate volume growth and return to double-digit adj. EBIT margin Global truck expected to 1 grow strongly in the medium-term Clear framework capturing growth via Harvest on 2 new products and increased production footprint investments Accessing greater profit pools t
Slide 57: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 57 Analyst & Investor Even
Slide 58: Sustainability Topics and Targets
Sustainability Topics and Targets KION sets itself ambitious sustainability targets 2020 KION Group Sustainability Report1 Selected sustainability targets1 People Occupational Health & Safety: 100% certification rate ISO 45001 by sites by 2024 Products ITS & SCS: Development towards an electric focu
Slide 59: People | Occupational Health & Safety and Board Remuneration
People | Occupational Health & Safety and Board Remuneration Promoting employee health & safety and strengthening board ESG focus Achievements 2020 (selected)1 ESG-linked board remuneration of Occupational Health & Safety ESG-linked board remuneration introduced 42% Management Systems at all sites i
Slide 60: Products | Product Electrification & Efficiency
Products | Product Electrification & Efficiency Combining electrification & efficiency focus enables client emission reduction Electrified product portfolio1 Energy efficient solutions IC-trucks Linde X20 – X35 E-truck series with minimized 13% E-trucks energy consumption yet IC-truck 24% 87% equiva
Slide 61: Products | Resource Efficiency and Product Health & Safety
Products | Resource Efficiency and Product Health & Safety Longevity, efficient resource use and health & safety as key parameters Using trucks & resources efficiently Health & Safety at customer site Up to recyclability1 of trucks Noise abatement Ergonomics 99% ensured through ecological, modular d
Slide 62: Processes | Greenhouse Gas Reduction & Supply Chain Transparency
Processes | Greenhouse Gas Reduction & Supply Chain Transparency Improving own operations and transparency across the supply chain Reducing our impact on climate change1 Transparency along the supply chain1 Energy-related GHG emissions of own operations in kt CO2e2 Target originally -32% set for 202
Slide 63: Processes | Sustainable Financing
Processes | Sustainable Financing Evolving KION finance structure with first ESG-linked revolving credit facility • Total credit volume of €1 billion Key features • 5-year maturity (until Q4 2026) with market standard option to extend twice for one year • +/- 2.5 basis points interest rate adjustmen
Slide 64: Agenda
Analyst & Investor Event 2021 Agenda Speaker Welcome Sebastian Ubert CEO: Market & Strategy Gordon Riske CFO: Financials Anke Groth SCS: Segment Update Hasan Dandashly Break ITS: Segment Update Andreas Krinninger & CP Quek CTO: ESG Dr Henry Puhl CEO Closing Remarks and Q&A 64 Analyst & Investor Even
Slide 65: Investment Highlights
Investment Highlights Key reasons for an investment in KION Group KION benefits from ITS market rebound, E-commerce acceleration and energy & 1 Attractive markets automation trends KION is well positioned to grow above the material handling market by One of the global 2 One of the global leaders
Slide 66: Development of KION Group Shares Since the IPO
Development of KION Group Shares Since the IPO Significant outperformance against the market 100,00 90,00 +303% KION 80,00 70,00 60,00 +157% MDAX 50,00 40,00 30,00 +100% DAX 20,00 10,00 0,00 28.06.2013 28.06.2014 28.06.2015 28.06.2016 28.06.2017 28.06.2018 28.06.2019 28.06.2020 28.06.2021 Note: DAX
Slide 67: New KION Group CEO as of January 2022
New KION Group CEO as of January 2022 Rob Smith to succeed Gordon Riske Gordon Riske Dr Rob Smith will step down as CEO appointed as CEO on December 31, 2021 from January 01, 2022 67 Analyst & Investor Event 2021
Slide 68: Questions & Answers
Questions & Answers 68 Analyst & Investor Event 2021
Slide 69: Analyst & Investor Event 2021
69 Analyst & Investor Event 2021
Slide 70: KION Group
GRO U P