KION GROUP AG: KION Group expects a loss in the third quarter 2022; KION Group provides new outlook for 2022
DISCLOSURE OF INSIDE INFORMATION PURSUANT TO ARTICLE 17 OF REGULATION (EU) NO. 596/2014
Keywords: Profit Warning, Guidance
KION GROUP AG
60549 Frankfurt am Main
KION GROUP AG: KION Group expects a low triple digit million EUR loss in the third quarter 2022 on KION Group level and in its Supply Chain Solutions segment due to cost increases in project business; order intake, adjusted EBIT and free cash flow in the third quarter of 2022 are substantially impacted; KION Group provides new outlook for 2022 and continues to review the time frame for achievement of its medium-term targets
Frankfurt/Main, September 13, 2022
Based on current estimates of the expected key financial figures, the Executive Board of KION GROUP AG expects a low triple digit million EUR loss for the third quarter of 2022 on KION Group level and in its Supply Chain Solutions (SCS) segment due to intensifying supply chain shortages as well as significantly higher cost increases for materials, energy and logistics.
On KION Group level, the third quarter 2022 adjusted EBIT is anticipated to be in the range of ? -100 to ? -140 million (Q3 2021: ? 228.9?million). Order intake is expected to be significantly below the third quarter 2021 (Q3 2021: ?3.107?billion), with the Supply Chain Solutions segment substantially below the record level of the third quarter 2021 (Q3 2021: ? 1.399 billion). Free cash flow will continue to be negative and is expected to be significantly lower than the previous quarter (Q2 2022: ? -158.9 million).
The Supply Chain Solutions (SCS) segment is driving much of this development. The adjusted EBIT of the third quarter 2022 in this segment is expected in a range between ? -160 and ? -190 million (Q3 2021: ? 109.3 million). Strong new business inflow in combination with a highly volatile macro-economic environment have intensified internal process inefficiencies. According to initial assessment, root causes for negative impacts on profitability are significantly increased costs of materials, components, labor and logistics for SCS? multiyear projects which only to a minor portion could be passed on to customers, as well as supply chain disruptions causing delays and reducing the availability of critical parts on project sites. This results in labor inefficiencies and significantly higher total project costs. The availability of skilled labor has increasingly become a limiting factor. These effects are expected to have a significant negative impact on the financial results of the third quarter 2022. SCS? order intake in the third quarter 2022 is affected by reduced demand from e-commerce customers. Moreover, SCS saw selective order cancellations by customers in July and August. SCS is intensifying its initiatives and adding further substantial steps to improve end-to-end project management processes and project execution to deal with significant volatility in the supply chain. With the long-term nature of the project business, it will take time for these measures to take full effect.
In the Industrial Trucks & Services (ITS) segment, adjusted EBIT in the third quarter 2022 is expected to be close to prior quarter (Q2 2022: ? 83.6 million). Shortages of parts and components are expected to continue. The existing measures in ITS, like agile pricing and strengthening the supplier network,?have already started to show effect.
Based on current expectations regarding the financial performance of the KION Group in the remainder of the third quarter and the rest of the year, the Executive Board of KION GROUP AG today, September 13, 2022, provided a new outlook for 2022. The previous outlook was withdrawn on April 4, 2022, due to macro-economic uncertainties. The Executive Board currently expects that the key performance indicators of the KION Group and its segments for 2022 will be within the following ranges:
? million KION Group Industrial Trucks & Services Supply Chain Solutions Order intake1 11,600 ? 12,500 8,200 ? 8,600 3,400 ? 3,900 Revenue1 10,450 ? 11,250 6,800 ? 7,200 3,650 ? 4,050 Adjusted EBIT1 200 ? 310 360 ? 410 -60 ? 0 Free cash flow -950 ? -700 ? ? ROCE 2.5 % ? 3.3 % ? ? 1 Disclosure for the Industrial Trucks & Services and Supply Chain Solutions segments also include intra-group cross-segment order intake, revenue and effects on EBIT
Given the ongoing deterioration in the macro-economic environment, the escalating energy crisis as well as persistent supply chain shortages and the risk of further rising procurement costs, the assessment of the performance of the KION Group and its segments over the remainder of the year continues to be subject to considerable uncertainty.
Due to the volatile macro-economic environment, the KION Group is in the process of reviewing the time frame for achieving its medium-term targets.
KION GROUP AG will announce the final results for the third quarter of 2022 as planned on October 27, 2022.
Explanations and reconciliations of the key financial figures used can be found in the Annual Report 2021 of KION GROUP AG (available at https://www.kiongroup.com/en/Investor-Relations/Publications/), in particular on pages 70 et seq.
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13-Sep-2022 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.Archive at www.dgap.deLanguage: English Company: KION GROUP AG Thea-Rasche-Stra?e 8 60549 Frankfurt/Main
Germany Phone: +49 69 20110-0 E-mail: email@example.com Internet: www.kiongroup.com ISIN: DE000KGX8881 WKN: KGX888 Indices: MDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange EQS News ID: 1441769 ? End of Announcement DGAP News Service