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Introduction & Market Context
KION Group AG (ETR:KGX) presented its Q1 2025 financial results on April 30, 2025, describing a "good start to the year" despite mixed performance metrics. The industrial truck and supply chain solutions provider reported results amid what it characterized as "increasing global geopolitical uncertainties" that have intensified risks to the company’s value chain and markets.
The company’s stock closed at €36.16 on April 29, 2025, representing a 1.47% decline ahead of the earnings presentation. Despite this recent dip, KION shares have shown strong momentum in 2025, with year-to-date returns of nearly 24% according to previous reports.
Quarterly Performance Highlights
KION reported a notable 11% year-over-year increase in order intake to €2.7 billion for Q1 2025, while revenue declined slightly by 2% to €2.8 billion. The company’s adjusted EBIT fell 14% to €196 million, resulting in an adjusted EBIT margin of 7.0%, down 90 basis points from the previous year.
The quarter’s results were significantly impacted by €191 million in expenses related to an efficiency program, which contributed to a negative EPS of -€0.36 compared to €0.83 in the same period last year.
As shown in the following comprehensive overview of key financial metrics:
Service revenue continues to be a bright spot for KION, accounting for 49% of total revenue in Q1 2025. This reflects the company’s ongoing strategy to build recurring revenue streams alongside its equipment sales.
Segment Performance Analysis
KION’s performance showed a clear divergence between its two main business segments. The Industrial Trucks & Services (ITS) segment, which includes forklifts and warehouse equipment, reported a 9% increase in order intake to €1.96 billion, but saw its adjusted EBIT decline by 23% to €186 million. This resulted in an adjusted EBIT margin of 8.8%, down 240 basis points year-over-year.
The company attributed the ITS segment’s profitability decline primarily to lower volumes, though it noted that order intake in units increased year-over-year despite typical seasonal effects.
The ITS segment’s detailed performance is illustrated here:
In contrast, the Supply Chain Solutions (SCS) segment, which focuses on warehouse automation and software, demonstrated remarkable improvement in profitability. Despite a 4% decline in revenue to €688 million, the segment’s adjusted EBIT nearly doubled (+98%) to €36 million, resulting in an adjusted EBIT margin of 5.3%, up 270 basis points year-over-year.
The SCS segment benefited significantly from strong growth in its service business, with service revenue increasing by 14% year-over-year. E-commerce represented 42% of the segment’s order intake.
The following chart details the SCS segment’s performance:
The consolidated view of KION’s financial performance highlights the company’s overall position:
Financial Position and Cash Flow
KION reported free cash flow of €30 million in Q1 2025, down €36 million from the previous year. The company noted that cash flow was impacted by the usual seasonal increase in net working capital, though higher provisions for the efficiency program (not cash-effective in Q1) more than compensated for the payout of bonuses related to the prior year.
The company’s leverage ratios remained stable despite a slight increase in net financial debt to €949 million as of March 31, 2025. The total leverage ratio stood at 1.3x, which KION described as unchanged from the previous period.
The following chart illustrates the progression from EBIT to free cash flow:
Outlook and Strategic Initiatives
KION confirmed its outlook for fiscal year 2025, projecting group revenue between €10.9 billion and €11.7 billion, and adjusted EBIT between €720 million and €870 million. This guidance is consistent with what the company previously communicated in its Q4 2024 results.
The company characterized 2025 as a "look-through" year for the ITS segment while expecting the SCS segment to improve further through self-help measures. KION remains committed to its 2027 targets, which include achieving an adjusted EBIT margin greater than 10%.
At industry trade fairs during Q1, KION showcased its innovations in physical AI and mobile automation solutions. The company presented an AI Control Tower at NVIDIA (NASDAQ:NVDA) GTC in San José and featured innovative Supply Chain Solutions at ProMat in Chicago, highlighting its continued focus on technological advancement.
The detailed outlook for fiscal year 2025 is presented here:
KION’s key takeaways emphasize the company’s preparedness for shifting geopolitical scenarios and its continued innovation in AI and automation solutions:
While KION faces challenges in its ITS segment and has incurred significant expenses for its efficiency program, the company’s strong order intake and improved performance in the SCS segment suggest potential for recovery as the year progresses. The confirmation of its full-year outlook indicates management’s confidence in achieving its financial targets despite the mixed start to 2025.
Full presentation:
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