Kion Group Ag · XETR:KGX
Kion — Q3 2022 Earnings Presentation
30 slides from Kion's earnings presentation, Oct 27, 2022
Slide 1: KION GROUP AG Q3 2022 Update Call
KION GROUP AG Q3 2022 Update Call Rob Smith (CEO and CFO ad interim) Frankfurt, 27 October 2022
Slide 2: New KION Group CFO and CPSO
New KION Group CFO and CPSO Marcus A. Wassenberg to join as CFO, Valeria Gargiulo to join as CPSO1 Marcus A. Wassenberg Valeria Gargiulo appointed as CFO appointed as CPSO from April 1, 2023 at the latest from May 1, 2023 at the latest 1. Chief People and Sustainability Officer 2 KION GROUP AG | Q3
Slide 3: Agenda
Agenda 1. Highlights 2. Market & Financial Update 3. FY 2022 Outlook and Key Takeaways 4. Appendix 3 KION GROUP AG | Q3 2022 Update Call | 27 October 2022
Slide 4: Q3 2022 Key Financial Figures
Q3 2022 Key Financial Figures Project business impacted order intake − adj. EBIT at higher end of Sept indication Order intake Revenue Adj. EBIT1 Free cash flow EPS €2.5bn €2.7bn -€101m -€380m -€0.73 -19% yoy +5% yoy <-100% yoy -€214m yoy <-100% yoy -33% qoq -3% qoq <-100% qoq -€222m qoq <-100 % qoq
Slide 5: Q3 2022 Strategic Highlights
Q3 2022 Strategic Highlights Product portfolio expanded with automated and sustainable solutions 1 1 Dematic partners with Dexterity to improve supply chains by deploying full-task robotics 2 Linde Material Handling expands its AMR portfolio fulfilling new demanding applications 3 STILL presents int
Slide 6: Agenda
Agenda 1. Highlights 2. Market & Financial Update 3. FY 2022 Outlook and Key Takeaways 4. Appendix 6 KION GROUP AG | Q3 2022 Update Call | 27 October 2022
Slide 7: Industrial Truck Market and ITS Order Intake
Industrial Truck Market and ITS Order Intake KION gained market share in Q2 2022 − order intake in Q3 2022 normalized as expected Industrial Truck Market Development of KION ITS segment Region Q1 Q2 Q3 Regional growth Q3 Q4 Q1 Q2 Q3 1 2 (Change in units yoy) 2022 2022 2022 (Change in units yoy) 2021
Slide 8: ITS – Key Financials
ITS – Key Financials Strong shipments at the end of the quarter support sequential margin improvement 1 Change Change (in €m) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 yoy qoq Order intake 1,710 2,435 2,082 2,745 1,905 +11% -31% Order backlog 2,316 2,878 3,193 4,220 4,258 +84% +1% Revenue 1,630 1,764
Slide 9: ITS – Actively Working Against a Challenging Environment
ITS – Actively Working Against a Challenging Environment Addressing higher procurement costs and supply chain disruptions Commercial agility Operational agility AGILE PRICING ENHANCING PRODUCTION FLEXIBILITY ‒ 4th price increase effective October 2022 ‒ Successfully reduced semifinished trucks to ‒
Slide 10: SCS – Market Growth and Pipeline
SCS – Market Growth and Pipeline Market remains attractive despite anticipated below-average growth in 2023 Total Warehouse Automation Market1 Comments on market and project pipeline2 Revenue in €bn and CAGR in % Fundamental drivers remain intact > +10% Trends towards automation ~63 Speed of ful
Slide 11: SCS – Key Financials
SCS – Key Financials Project business impacted order intake − adj. EBIT in line with September indication 1 Change Change (in €m) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 yoy qoq Order intake 1,399 1,062 843 1,022 614 -56% -40% Of which E-Commerce (%)2 50% 38% 16% 21% 1% Order backlog 3,671 3,792 3,6
Slide 12: SCS – Typical Project Timeline
SCS – Typical Project Timeline Solution development and project implementation typically last 24 months and more Solution development Project implementation Life cycle services ~ 2-24 months ~ 6-24 months ~ 15-30 years Order Project revenue Commis- Service revenue intake recognition sioning recognit
Slide 13: SCS – Measures to improve profitability
SCS – Measures to improve profitability Strengthening business processes for a volatile environment Interface with customers and suppliers Internal process improvement DE-RISKING CONTRACTS REFINING PROJECT EXECUTION ‒ Including price adjustment clauses ‒ Improving the interfaces between critical in
Slide 14: KION Group – Key Financials
KION Group – Key Financials Project business impacted order intake − adj. EBIT at upper end of Sept indication 1 Change Change (in €m) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 yoy qoq Order intake 3,107 3,493 2,900 3,755 2,517 -19% -33% Order backlog 5,981 6,658 6,855 7,941 7,697 +29% -3% Revenue 2,5
Slide 15: Adjusted EBITDA to Net Income
Adjusted EBITDA to Net Income Net loss due to cost catch-ups in project business Change Change (in €m) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 yoy qoq Comments Adj. EBITDA 442 376 391 368 135 -70% -63% 1 NRI included additional ~ -€5m write-offs related to Russian D&A -213 -225 -221 -227 -236 -11% -
Slide 16: Cash Flow Statement
Cash Flow Statement FCF remains impacted by NWC build-up Free cash flow Q3 2022 Comments (in €m) 1 NWC build-up mainly caused 120 -265 by stockpiling of components, -131 2 increase in trade receivables at 8 -26 ITS as well as temporarily -295 -86 further increased working 1 1 -38 -380 -10 capital ne
Slide 17: Net Debt
Net Debt Increased net financial debt partially offset by lower pension liabilities Indebtedness and leverage1,2 ratios as at 30 September 2022 Comments (in €m) 2 3 3.8x2 1 Negative free cash flow increased net financial debt 2.3x1 3,590 by €428m in Q3 22 648 2 RCF-relevant leverage 2,942 calculatio
Slide 18: Leverage Development and Maturity Profile
Leverage Development and Maturity Profile Leverage increased due to higher NWC needs from supply chain disruptions Leverage development1 Maturity profile and free liquidity4 as at 30 Sept 2022 (in €m) 4.4x 3.8x 3.2x 3.3x 3.2x 1192 3.0x 3.1x 5 1000 323 2.3x 2.7x 2.0x 2.0x 1.9x 132 1.6x 1.5x 20 1.4x 1
Slide 19: Financial profile
Financial profile More than enough liquidity to cover NWC driven temporary higher financial needs Cash preserving measures Financing measures NET WORKING CAPITAL MANAGEMENT ESG-LINKED €1BN RCF ‒ Enhancing production flexibility ‒ Prolonged until 2027 ‒ Overall inventory management ‒ €132m drawn at t
Slide 20: Agenda
Agenda 1. Highlights 2. Market & Financial Update 3. FY 2022 Outlook and Key Takeaways 4. Appendix 20 KION GROUP AG | Q3 2022 Update Call | 27 October 2022
Slide 21: FY 2022 Outlook
FY 2022 We confirm the outlook provided in September KION Group Industrial Trucks & Services Supply Chain Solutions Order intake €11,600m to €12,500m €8,200m to €8,600m €3,400m to €3,900m Revenue €10,450m to €11,250m €6,800m to €7,200m €3,650m to €4,050m Adj. EBIT €200m to €310m €360m to €410m -€60m
Slide 22: Key Takeaways
Key Takeaways New management (CFO & CPSO) to join KION in 2023 We are implementing measures to strengthen our business resilience and financial performance in a volatile macroeconomic environment We have a solid financial profile. Available liquidity more than covers temporarily higher NWC needs We
Slide 23: Q & A Session
Q & A Session 23 KION GROUP AG | Q3 2022 Update Call | 27 October 2022
Slide 24: Agenda
Agenda 1. Highlights 2. Market Update 3. Financial Update 4. FY 2022 Outlook and Key Takeaways 5. Appendix 24 KION GROUP AG | Q3 2022 Update Call | 27 October 2022
Slide 25: Key Financials
Key Financials Group figures Industrial Trucks & Services Supply Chain Solutions Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 Q3 Q2 Q1 FY Q4 Q3 Q2 Q1 (in €m) 2022 2022 2022 2021 2021 2021 2021 2021 2022 2022 2022 2021 2021 2021 2021 2021 2022 2022 2022 2021 2021 2021 2021 2021 Order intake 2,517
Slide 26: FY 2022 Expectation – Housekeeping Items
FY 2022 Expectation – Housekeeping Items Non-recurring items1 Operating Capex2 … between -€40m to -€43m … between -€375m to -€425m PPA R&D spending3 … around -€93m to -€96m … around 3% of group revenue Net financial expenses Dividend policy … between -€17m to -€27m … subject to availability of distr
Slide 27: POC Accounting – Examples of a simplified project running for 10 quarters
POC Accounting – Examples of a simplified project running for 10 quarters Timing of cost catch-up has a big impact (Q4 vs Q9 in a project) Project – no change AS-sold Update Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Total Revenue 100 100 10 10 10 10 10 10 10 10 10 10 100 COGS 80 80 8 8 8 8 8 8 8 8 8 8 80 Cumul
Slide 28: POC Accounting – Project delays and loss-making projects
POC Accounting – Examples of a simplified project running for 10 quarters Project delays and loss-making projects Project change in Q9 AS-sold Update Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Total Revenue 100 100 10 10 10 10 10 10 10 10 -4 8 8 8 100 COGS 80 95 8 8 8 8 8 8 8 8 8 8 8 8 95 Cumulative cos
Slide 29: Financial Calendar
Financial Calendar Date Event 14-17 November 2022 KION @ Baader Helvea Roadshow, Canada and USA 29 November 2022 KION @ KeplerCheuvreux One-Stop-Shop Madrid 1 December 2022 KION @ Société Générale Premium Review Conference, Paris 7 December 2022 KION @ Goldman Sachs Annual European Conference, Londo
Slide 30: Disclaimer
Disclaimer This document has been prepared by KION GROUP AG (the “Company”, and together with its consolidated subsidiaries, the "KION Group") solely for informational purposes. This disclaimer shall apply in all respects to the entire presentation (including all slides of this document), the oral p