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what do you think of Kion?
Considering buying, positive trend, chart signals +
Kion is one of the global key players in logistics. After a few difficult years, there is much to suggest an upswing in demand and profitability.
Logistics is the backbone of the global economy. It ensures that raw materials, goods and products arrive exactly when they are needed. But the industry is under pressure: it needs to become more climate-friendly, more digital and more resilient. Low-carbon transportation, smart automation, robotics and artificial intelligence are in demand.
Kion, one of the world's leading providers of industrial trucks and supply chain solutions, is right in the middle of it all. The product range includes forklift trucks and warehouse trucks as well as integrated automation technologies and software solutions for optimizing supply chains, including the associated services. Its business activities are divided into two segments, Industrial Trucks & Services (ITS) and Supply Chain Solutions (SCS), which together will generate revenue of EUR 11.5 billion in 2024.
At the heart of the MDAX Group is the traditional forklift and service business (ITS), which generated around 75% of revenue in the previous year. The Hesse-based company is the global number 2 in this business, generating almost half of the segment's turnover from new business with industrial trucks and individual automation solutions. The global vehicle fleet of more than 1.9 million industrial trucks forms a broad basis for the service business, which helps to reduce dependency on market cycles and strengthen customer relationships in the long term. The correlation between new business and the development of the global economy is still high, even though long-term drivers such as sustainability and electrification are becoming increasingly important.
Complete solutions from a single source
What makes Kion special is its fully integrated approach with traditional forklift trucks, software and automation solutions. The focus is on customized complete solutions, which is particularly relevant for major customers with complex logistics. To this end, the SCS segment (approx. 25% of Group sales) offers complex technology and software solutions for optimizing supply chains. In addition to general merchandise and food retailers, important customer sectors include the manufacturing industry, food and beverage producers as well as parcel service providers and pure e-commerce providers. Jungheinrich is also increasingly offering automation and software solutions, but does not have the same depth and global scaling as Kion with SCS/Dematic. Toyota Material Handling (part of Toyota Industries) is a leading global provider with a similar breadth but partly different strategic orientation (e.g. focus on lean management and production logistics).
There are many indications that the demand side will also pick up noticeably in the coming year at the latest. Although the German government's infrastructure programs are not creating any direct orders, they are opening up considerable indirect growth potential thanks to an improved market environment. Germany accounts for around 20% of Kion's sales - a market that is likely to receive new impetus from the planned expansion and digitalization of freight transport centers and the electrification of industrial processes. The establishment of semiconductor and high-tech factories such as Intel in Magdeburg and TSMC in Dresden, which require highly automated logistics and production solutions, will provide additional momentum.
Room for improvement in profitability
In the medium term, more than 10% could well be possible for Kion, although this will require an economic recovery and a return to former strength in the SCS segment (adjusted EBIT margin 2021: 10.8%). The global supply chain crisis in 2021/2022 led to an explosion in costs, which has weighed on profitability ever since. This is because the SCS segment often involves long-term projects for which the prices were set before the start of the project. In addition, rapid growth has led to problems in project management and the scaling of internal processes. However, numerous measures are being taken to counteract this, with the result that a positive trend can now be seen again and a margin of 3.8% was achieved in 2024; in the ITS segment, this figure was already 10.7% in the previous year. A further cost-cutting program has also been underway since February, which is expected to save between EUR 140 and 160 million annually from 2026.
