Kion Group (KGX) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw solid year-over-year profitability improvements in both operating segments, with group revenues at €2.9 billion and adjusted EBIT at €220 million, driven by segment gains and margin expansion to 7.7%.

• Order intake reached €2.6 billion, down 8% year-over-year but up 8% sequentially, reflecting seasonal improvement in ITS and continued lumpiness in SCS.

• Free cash flow was positive at €137 million, supported by improved adjusted EBIT and stable net working capital.

• Earnings per share were €0.52, slightly down from €0.54 in Q2 2023.

• Sustainability efforts were recognized, with the group named one of Europe's climate leaders and winning the IFOY Award for STILL.

Financial highlights

• Adjusted EBIT margin improved to 7.7% year-over-year, with adjusted EBIT at €220 million (+15% year-over-year).

• Net income attributable to shareholders was €68 million for the quarter.

• Non-recurring items included a -€14 million impact from a legal dispute resolution.

• A €22 million goodwill impairment was recorded for ITS Americas due to a sharper than expected market decline.

• Leverage ratio on industrial net operating debt increased slightly to 1.5x, while net debt rose by €51 million due to dividend payments and factoring unwind.

Outlook and guidance

• 2024 revenue guidance narrowed to €11.3–11.7 billion; adjusted EBIT guidance narrowed to €830–950 million.

• ROCE guidance range updated to 7.7%–8.7%.

• Free cash flow guidance for 2024 is €550–670 million and remains unchanged.

• ITS revenue guidance upper end reduced by €300 million; SCS revenue and EBIT guidance lower ends increased due to H1 performance.

• Macroeconomic uncertainties and customer reluctance to invest are expected to persist, especially in the Americas.