Kion revises outlook due to Ukraine war

by Emily Atkins

Material handling integrator and forklift manufacturer Kion Group AG announced it is revising its 2022 fiscal outlook to take account of deteriorating market conditions.

In a statement, the company said uncertainties in procurement markets, which are being significantly exacerbated by the military conflict in eastern Europe as well as by recent Covid-19 lockdowns, the board decided to revise the outlook which was originally published on March 3, 2022.

“Because of the bottlenecks in the procurement markets, which are likely to last much longer than previously anticipated, as well as sharply increasing material and logistics costs and recent Corona-lockdowns which particularly affect the Asian market, the outlook for the fiscal year 2022 is no longer sustainable,” said Rob Smith, CEO of Kion.

From the current perspective, it is impossible to reliably assess how the military conflict in eastern Europe will unfold or what its economic impact will be. “There are significant uncertainties in evaluating the group’s business performance for the further course of the fiscal year,” Smith added.

Rising costs

The group has forecast lower than expected profits due to rising costs and parts shortages. It also said it expects losses in the significant double-digit million euro range as a result of “possible write-downs of assets” used for business conducted with Russia.

In its March 2022 forecast, Kion said it expected revenue to rise sharply on the strength of orders received at the end of 2021. It also said its bottom line would be enhanced through the consolidation of manufacturing as new facilities in China and eastern Europe came on line.

A record 2021

In 2021 Kion reported record revenues, led by the industrial truck segment of its business, which grew by more than 40 percent in the year. The company also produced 24.5 percent gross margin inspite of 2021’s “greatly increased material prices and logistics costs as well as inefficiencies resulting from supply and resource bottlenecks,” it said.

The company will post its first quarter of 2022 financial report on April 28, 2022. A new yearly outlook will also be produced, but the timing was not specified.

“The fundamental drivers of our industry are well intact,” Smith said.

Kion is the largest manufacturer of industrial trucks in Europe, by units sold in 2021. In China, it is the leading foreign manufacturer (as measured by revenue in 2020) and number three overall.

Kion makes Linde, Still, Baoli, OM and Fenwick branded industrial trucks and AGVs, and has owned Dematic since 2016.

At the end of 2021, more than 1.6 million Kion-made industrial trucks and more than 8,000 of its installed systems were in use by customers of various sizes and in numerous industries on six continents. The group currently has around 40,000 employees and generated revenue of around €10.3 billion in 2021.