We Keep the World Moving Investor Relations Presentation. March 2018

Transcription

1 We Keep the World Moving Investor Relations Presentation March 2018

2 Agenda 1. Company Overview 2. Investment Highlights 3. Update on FY Appendix 2

3 KION Group at a Glance A world leader in industrial trucks and supply chain solutions World-leading positions European No. 1 and Global No. 2 in industrial trucks and services Global No. 1 in supply chain solutions Unique & complete material handling offering Multi-brand strategy with market leading brands No. 1 Strong global presence Present in more than 100 countries Dematic adds complementary regional footprint Over 30,000 employees Asia-Pacific 12% Revenue 1 by region EMEA 69% Americas 19% Resilient service business 1.3 million industrial trucks in the field >6,000 installed systems at customers Around 1,500 sales and service locations New business 61% Revenue 1 by product Attractive financial profile 7.7bn revenue in FY % adjusted EBIT margin in FY 2017 Growth drivers: E-commerce, digitalisation, Industry 4.0 Industrial Trucks and Services 74% Revenue 1 by segment Services 39% Supply Chain Solutions 26% 1. Based on financials for FY

4 Market-Leading Positions Globally A unique player in Intralogistics 4.0 Industrial trucks 1 Automation systems 2 Top 6 suppliers 2016 Top 6 suppliers Toyota + 1 KION (Dematic) 2 KION 3 Unicarriers 2 SSI Schäfer 3 Daifuku Unique combination of industrial trucks and automation systems 4 Jungheinrich 4 Vanderlande Market-leading positions globally 5 Crown 5 Knapp 6 Hyster-Yale 6 Intelligrated 1. Ranking by total company revenue Excluding revenue from non-automation businesses Source: Börsen-Zeitung

5 Solutions Offering Unique and complete material handling offering Material handling solutions for every part of the warehouse Supply chain SW 1 E-trucks WH-trucks IC-trucks AGVs Picking Palletising Sortation Storage 2 Conveyor Dematic offers best-in-class automation solutions Comprehensive range of high-end storage and material handling technology KION including Dematic is a unique fullspectrum one-stop supplier Acquisition of Dematic as transformational step towards Intralogistics 4.0 Offering ranges from manual industrial trucks to fully automated warehouses Topline upside from cross-selling as a onestop supplier Industrial Trucks & Services Supply Chain Solutions 1. SW = Software 2. Mainly AS/RS (AS/RS = Automated Storage & Retrieval Systems) 5

6 Segmentation KION divides its business into trucks and solutions Industrial Trucks & Services Supply Chain Solutions Corporate Services Industrial truck business including financial services activities Regional Operating Units LMH EMEA STILL EMEA KION APAC KION Americas Supply chain and warehouse automation Global Operating Unit including Dematic Egemin Retrotech Internal service entities Logistics IT Holdings with central functions 6

7 Industrial Trucks and Services A world leader in industrial trucks No.1 KION Group is European No. 1 and Global No. 2 Key financials (in m) Revenue by product 6 1.3m A well positioned global player with six unique brands Growing truck base worldwide supports aftersales business Order intake 5,859 5,383 5,146 Revenue 5,631 5,203 5,045 Adj. EBIT Margin 11.4% 11.3% 10.5% Services 44% New business 56% 1,400 >1/3 100 Close to 1,400 sales and/or service locations More than every third truck sold in growth markets Global presence in more than 100 countries Revenue by region South America 2% Rest of world 4% North America 2% Asia 10% Germany 24% EEU 9% France 16% Rest of WEU 15% UK 7% Spain 4% Italy 7% Truck order intake by industry 2 Other industries 22% Paper & print 3% Logistics 17% Metals 11% Construction 6% Beverage 6% Food 10% Automotive 7% Wholesale 8% Chemicals 10% 1. Adjusted for PPA items and non-recurring items 2. Calculation based on German customer base only 7

8 Industrial Trucks and Services Integrated business model New truck sales Technology and innovation leadership Tailor-made solutions and customer options Optimised total cost of ownership Multiple brands for multiple segments/markets ~48% of new truck sales carry financing contracts PRODUCTS Financial services Sales support vehicle with benefit for aftermarket and service activities Integrated within regular sales process Long-term customer relationships Ongoing customer relationship (e.g. short-term rental) triggers new truck sales Many customer and most financing contracts linked to service contracts Rental & used trucks Rental offering to match customers capacity needs SERVICES Service solutions & aftersales Proximity with global service network Integrated in industrial segments Linde and STILL Used truck sales from lease contracts After duration of financing, trucks are used in rental fleet or sold as used trucks Service contracts Proprietary spare parts Solutions approach including fleet data management, automation and intralogistics services 8

9 Supply Chain Solutions Leading in material handling automation solutions No. 1 10% 6,000 KION Group is global No.1 following acquisition of Dematic Automation systems market expected to grow at 10% p.a. ~6,000 integrated systems implemented at customers Key financials (in m) Order intake 2, Revenue 2, Adj. EBIT Margin 9.0% 1.6% 6.1% Revenue by product Services 25% Business solutions 75% 100 7, More than 100 locations globally Almost 7,000 employees incl. >3,000 engineers Global presence in 25 countries Source: Börsen-Zeitung Revenue by region Asia-Pacific 13% EMEA 30% Americas 57% Revenue by industry Other 14% Parcel 4% Grocery 5% Wholesale 7% Apparel 9% Food & beverage 11% E-commerce 32% General merchandise 18% 9

10 Supply Chain Solutions Comprehensive integrated range of high-end automation solutions Warehouse execution system Advanced real-time, knowledge-based logistics software beyond warehouse management & control software Conveyor Sortation Storage Picking Palletising All conveyor types for assembly, manufacturing and distribution Focus on fast, reliable sortation Full sortation technology range Complete storage range including AS/RS 1, shuttles and racking Voice-directed picking Pick and Put-to- Light systems Mixed case palletising solutions Customer service, upgrades and refurbishments 1. AS/RS = Automated storage and retrieval systems 10

11 Agenda 1. Company Overview 2. Investment Highlights 3. Update on FY Appendix 11

12 Investment Highlights Attractive market with growth profile above GDP Global leader strong home base and well positioned in growth markets Technology leadership with strong position in Intralogistics 4.0 Robust integrated business model with high contribution from services Profitability benchmark well prepared for future value creation Clear strategy KION 2027 for profitable growth Industrial Trucks and Services Supply Chain Solutions 12

13 1 Attractive market with growth profile above GDP benefiting from global mega trends Industrial trucks: Global new truck sales 1 Automation systems: Global new sales approx. 1.5x World GDP 2 8.4% 4.1% 3.3% 4.2% 2.8% 3.0% 2.5% 2.7% Top 20 suppliers revenue (in $bn) CAGR ~7% Global new trucks Global GDP Growth drivers Increasing fragmentation of supply chains E-commerce Automation Industrialisation Globalisation Industry 4.0 Digitalisation 1. Compound annual growth rate for new truck sales and GDP 2. Calculated based on CAGRs for new truck sales and GDP for Source: WITS/FEM (new trucks ), IMF 10/2017 (World GDP), Modern Materials Handling

14 1 Industrial trucks: Stability from mature markets replacement cycle Stability from replacement cycle Western Europe market order intake (in 000 units) Truck replacement demand from assumed 10-year average usage 1 Simplified replacement model Simplified installed base calculation assuming 10-year truck usage; actual average usage of new trucks may exceed 10 years Source: WITS/FEM 14

15 1 Automation systems: Attractive market development and growth Consumer expectations drive changes in retail and e-commerce Selected customers focused on supply chain Digitalisation drives growth in online sales Greater purchase variety Expectation for faster delivery Better return handling Convenience trend drives acceptance of smaller store formats E-commerce players shorten order cycles and increase SKU 1 availability Traditional players are catching up Changes require adaptations also by related manufacturers/suppliers and parcel carriers Move towards decentralised distribution centres Demand for continuously improved throughput performance Innovation shortens upgrade cycles Strong aftermarket due to increased complexity Supply chain solutions market expected to grow by around 10% in the years ahead 1. SKU = Stock keeping unit 15

16 2 Strong position in core markets based on successful multi-brand strategy Industrial Trucks and Services Market positions #1 Europe China Supply Chain Solutions Market positions 1 #3 #1 North America Europe top 3 Global and regional brands Global brands No. 2 worldwide Leading in intralogistics solutions Global economy brand No. 1 in France A leading player in Italy A leading manufacturer in India 1. No. 1 among international providers in China and No. 3 measured by the overall market position in China Source: Logistik Journal, Stratégies Logistique, WITS A leading manufacturer of material handling automation solutions A specialist for automation and supply chain optimisation 16

17 2 Well positioned to capture momentum in growth markets Strong position in growth markets Development potential in growth markets KION revenue FY 2017 by customer location (in %) Forklift penetration 2 per 1 million inhabitants 2017 Growth markets 21% Mature markets 1 79% India Brazil China Poland Japan United States Western Europe Growth markets Mature markets 1. Western Europe and North America 2. Number of trucks ordered in 2017 Source: WITS, IMF 17

18 3 Technology leadership drives premium positioning and pricing Commitment to R&D R&D spend¹ (in m and % of revenue) 2.5% 2.6% 2.6% 2.6% 2.8% Industrial truck efficiency supports premium pricing² Cost per lorry load cycle ~20% Industrial truck purchase price only ~7% of total costs Purchase price Service cost Energy cost Operator cost ~7% ~5% ~6% ~80% Competitive pricing Sources to maximise availability Design to lower operator and energy costs Linde truck Competitor Total operating cost for customer 3 1. R&D expenditures (P&L) - amortisation expense + capitalised development costs = total R&D spend 2. Application of KION developed methodology to compare the energy consumption and productivity (measured as time required per job) of industrial trucks which has been certified by TÜV (TÜV Nord certified testing methodology used by KION (2009)). Based on a self-conducted test of a typical 2.5 to 3 ton Linde industrial truck with equivalent trucks of competitors, which was based on the certified methodology, KION estimates that the total operating performance (comprising energy consumption, purchase cost, maintenance and labour cost) of such a Linde industrial truck is better than for an equivalent truck of tested competitors 3. Based on Western Europe according to company estimates 18

19 3 Strong E- and WH-offering benefits from growth in E-commerce KION product mix by truck type Order intake 2017 (in 000 units) IC-trucks 18% E-trucks 26% WH-trucks 56% >80% electrically driven E-commerce drives demand E-commerce growth drives required logistics fulfilment space Additional logistics space needs E- and WH-trucks Ongoing trend towards E- and WH-trucks Improved performance from enhanced battery technology Trend towards Li-ion batteries in indoor applications KION offers a balanced product portfolio Tailored solutions address customer needs across industries and regions Total 2017:

20 3 Intralogistics 4.0 How KION integrates supply chains Intelligent trucks Trucks equipped with electronic control unit Increased efficiency also from driver assistance systems Growth drivers Wage inflation Fleet data management Fleet data services connect trucks with management tool Optimise truck fleet usage Safety fewer accidents Automated trucks Full range of automated series trucks Enable automation of the entire material flow Increasing precision and reliability No Industry 4.0 without Intralogistics 4.0 Automated systems Customised integrated intralogistics solutions Automated trucks combined with further hard- and software Flexibility, esp. in handling complex material flows 20

21 3 Recent additions to KION s Intralogistics 4.0 solutions Intelligent trucks Fleet data management Automated trucks Automated systems Dynamic mast control Reduced mast oscillation Increased safety and efficiency Order management app Truck call app controls transport tasks Avoiding empty trips Extended range of robotic trucks New additions to Linde-MATIC truck series Dematic iq updates Enhancements support advanced E-commerce and omni-channel markets Safety guard Speed control and collision avoidance Using radio signal Expansion of autonomous igo range Award-winning order picker combined with Dematic pick-to-voice system New tugger train incl. automated loading AutoStore partnership Expanded offering with high density storage capability Blue spot Driving path warning system Higher operational safety New fleet management features Mobile phone app for connected pre-shift check Mobile automation center of excellence Combination of bestin-class AGV portfolios Robotic picking New developments for robotic piece picking 21

22 4 Strong global sales and service network provides unique access to a global customer base Americas EMEA Asia Pacific (APAC) ~350 sales and/or service locations ~720 sales and/or service locations ~490 sales and/or service locations More than 1,500 sales and/or service locations in over 100 countries with ~18,000 multi-skilled industrial trucks service staff 1 and >3,000 systems engineers 1. Includes direct and additional external service staff 22

23 5 Strategic focus on margin expansion EBIT benchmark EBIT margin 2017 (in %) 25 Actuals KION 1 Industrial trucks Median Material handling Range 7.0 German mid-caps 12.0 European engineers KION generates best-in-class EBIT margin 1 Scale and synergy benefits vs. competitors Strong service business with attractive margins Local sourcing and production in emerging markets Strategic focus on margin expansion Margin expansion targeted in line with European engineers peer group Specific measures in place to drive profitability 1. Based on adjusted EBIT Source: Capital IQ 23

24 5 Margin upside from continued execution of performance excellence programs Efficient manufacturing setup Efficient product development Continuous improvement Operational issues at Dematic plant in Monterrey resolved New plant for Dematic in CZ as of Q Efficiency programs ongoing across European IT&S plants Global module and platform strategy Clear integration roadmap for common modules in WEU Continued roll-out of global platforms in RoW Continuous review and implementation of efficiencies Examples: New cross-brand spare parts logistics Shared services in G&A functions 24

25 6 KION 2027 Strategy maintains aspiration for profitable growth Growth Grow above the material handling market Provide attractive return on capital for shareholders Capital efficiency Profitable growth Profitability Remain most profitable player in the industry Maintain profitability across business cycle Resilience 25

26 6 KION 2027 Strategic fields of action set priorities to achieve aspiration We transform our business into the digital world. For customers we develop digital solutions to improve their intralogistics efficiency. Internally we digitalise our processes to improve our performance. We are leading the material handling industry in the efficient use of energy through our products and solutions. We focus on new energy sources for industrial trucks and related services. Solutions for Material Handling Our solutions allow customers to benefit from automation effectively, supporting them on their journey to lights-out warehouses. We drive innovation in the material handling industry through an effective innovation ecosystem and a stateof-the-art development process & speed. Innovation Performance We continuously improve the efficiency in our group as well as the performance of our products. 26

27 Agenda 1. Company Overview 2. Investment Highlights 3. Update on FY Appendix 27

28 FY 2017 Strategic Highlights Continuous expansion of KION s offering ProMat trade show attended in the US Release of 5 new trucks adapted to US Joint showcasing of Dematic, Linde, Baoli Dematic agreement with AutoStore Expands offering to ultrahigh density storage Li-ion offering increased E-trucks with two to three tons load capacity Strategic partnership with EP 1 Exclusive global partnership and minority interest Focus on entry-level warehouse equipment Low-maintenance, long-life and energy-saving batteries Dematic production site in CZ completed KION awarded first investment grade rating (Fitch Ratings) Promissory note of ~ 1bn issued and successful capital increase of 603m 1. Strategic partnership agreed in January

29 FY 2017 Financial Highlights KION fully meets adjusted outlook, achieving record results Outlook Adjusted outlook for FY 2017 fully achieved across all KPIs Growth Profitability Indebtedness Dividend Order intake grew to 8.0bn, revenue to 7.7bn in FY 2017 IT&S 1 increased its full year order intake by 8.8% to 5.9bn and revenue by 8.2% to 5.6bn SCS 2 showed an order intake of 2.1bn and revenue of 2.0bn in FY 2017 Adj. EBIT 3 of 766m results in a margin of 10.0% in FY 2017 compared to 9.6% in FY 2016 IT&S showed a slight margin increase to 11.4%, while SCS expanded its margin to 9.0% Net financial debt lowered to 2.1bn as at Dec 2017, compared to 2.9bn in 2016 Free cash flow of 378m generated in FY 2017 Net income of 426m includes positive one-time non-cash effect from US tax reform Proposed dividend per share increases by 23.8% to 0.99 in FY Segment Industrial Trucks & Services 2. Segment Supply Chain Solutions 3. Adjusted for PPA items and non-recurring items 29

30 Industrial Truck Market Strong final quarter across all regions Order intake unit growth y-o-y (in %) Source: WITS/FEM North America Q1/17 Q2/17 Q3/17 Q4/17 6.6% 8.1% -0.9% 26.1% South/Central America Q1/17 Q2/17 Q3/17 Q4/ % 28.2% 32.4% 39.8% Western Europe Q1/17 Q2/17 Q3/17 Q4/ % 7.3% 8.9% 11.6% Eastern Europe Q1/17 Q2/17 Q3/17 Q4/ % 14.8% 14.1% 19.4% China Q1/17 Q2/17 Q3/17 Q4/ % 36.5% 39.0% 35.0% World Q1/17 Q2/17 Q3/17 Q4/ % 15.5% 15.5% 21.0% 30

31 Industrial Truck Market KION continues to benefit from strong market growth Industrial trucks: Regional development Order intake (in 000 units) and growth y-o-y (in %) Western Europe Eastern Europe China North America South/Central America World FY 2017 Q Market KION Market KION +9.7% +9.1% +11.6% +8.6% +21.6% +26.1% +19.4% +29.5% +39.1% +22.4% +35.0% +14.3% +10.2% +58.5% 26.1% +19.8% +29.8% +8.3% +39.8% +21.3% 1, % % % % Western Europe Market: Persisting growth momentum KION: Strong growth Eastern Europe Market: Steady growth in key markets KION: Above market growth China Market: Very strong dynamics KION: Record levels North America Market: Strong final quarter KION: Very good progress South/Central America Market: Recovery continues KION: Good finish below strong market Source: WITS/FEM 31

32 Supply Chain Solutions Market Growth drivers and trends remain intact Market growth drivers Growth proxies 2017 E-commerce Automation Digitalisation +17% Global +12% E-commerce growth 1 Growth in German logistics space 3 +9% Global warehouse capex 2 1. Outlook for global E-commerce growth in 2017; Ecommerce Foundation 9/ Growth in capital expenditure on enlarging and modernising warehouses and on the related technologies increased in 2017; Peerless Research Group Growth in demand for logistics premises in Germany in 2017; bulwiengesa AG Report 10/

33 FY 2017 Key Financials Continued strong profitable growth Order intake Revenue Adj. EBIT and margin Net Income (in m) (in m) (in m and %) (in m) +36.8% +37.0% 7,979 7,654 5,833 5, % 10.0% +42.5% % 426 FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 FY 2016 FY 2017 Negative FX translation effect of - 47m 1 Order book of 2.6bn above previous year Negative FX translation effect of - 48m 1 Book-to-bill ratio 1.04x Adj. EBIT margin improves despite material cost headwinds and FX transaction effects Positive effect of 92m from US tax reform Proposed dividend of 0.99, 35% payout ratio 2 1. Relating only to IT&S segment 2. Proposed dividend is based on pro forma EPS of 2.91 for FY 2017, which is adjusted due to the one-off non-cash effect resulting from the remeasurement of deferred taxes in connection with the corporate tax rate reduction approved in the US 33

34 Q Key Financials Margin improvement despite headwinds Order intake Revenue Adj. EBIT and margin Net Income (in m) (in m) (in m and %) (in m) +27.9% +13.7% 2,280 1,978 1,783 1, % 10.3% % >100% Q Q Q Q Q Q Q Q Negative FX translation effect of - 20m 1,2 Negative FX translation effect of - 21m 1,2 Book-to-bill ratio 1.15x Adj. EBIT margin improves despite material cost headwinds and FX transaction effects Positive effect of 92m from US tax reform 1. Calculated as delta between FX-effects for FY 2017 and Q1-Q Relating only to IT&S segment 34

35 Industrial Trucks & Services Continued growth and slight margin improvement in FY 2017 Key financials Revenue by category Order intake (in m) Revenue +8.8% 5,383 5,859 FY 2016 FY % 5,203 5, % 1,464 1,580 Q Q % 1,442 1,561 Based on FY 2017 financials Services 44% New business 56% (in m) FY 2016 FY 2017 Q Q Adj. EBIT and margin (in m and %) 11.3% 11.4% 12.2% 12.3% +9.1% +9.4% FY 2016 FY 2017 Q Q

36 Supply Chain Solutions First full year results of Dematic with margin improvement Key financials Revenue by category Order intake (in m) 431 FY , FY 2017 Q Q Based on FY 2017 financials Services 25% Business solutions 75% Revenue (in m) 2, FY 2016 FY 2017 Q Q Adj. EBIT and margin (in m and %) 1.6% 9.0% 3.2% 6.6% FY 2016 FY 2017 Q Q Segment composition Dematic: consolidated as of Nov 2016 Retrotech: consolidated as of Mar

37 Adjusted EBITDA to Net Income Net income increase includes one-time non-cash effect of US tax reform (in m) FY 2017 FY 2016 Change Q Q Change Adjusted EBITDA % % D&A % % Adjusted EBIT % % Non-recurring items (NRI) % % PPA items >100% % Reported EBIT % % Net financial expenses % % EBT % % Taxes % <-100% Net income % >100% Reported EPS Pro forma EPS Adjusted EBITDA margin 16.0% 16.7% 16.5% 16.0% Adjusted EBIT margin 10.0% 9.6% 10.3% 9.8% Explanations Non-recurring items result mainly from expenses relating to integration costs and the Monterrey ramp-up PPA in 2017 relates mainly to Dematic Net financial expenses reflect among others optimised financing structure Pro forma EPS adjusted for positive one-time non-cash effect of US tax reform 1. Pro forma EPS of 2.91 for FY 2017 is adjusted due to the one-off non-cash effect resulting from the remeasurement of deferred taxes in connection with the corporate tax rate reduction approved in the US 37

38 Free Cash Flow Statement Free cash flow supported by operating performance (in m) FY 2017 FY 2016 Change EBITDA 1, % Change in Net Working Capital (NWC) <-100% Taxes paid % Pension payments % Other >100% Rental capex (net) % Change in leased assets and lease receivables/liabilities % CF from operating activities % Operating capex % Acquisitions -13-2, % Other <-100% CF from investing activities , % Free cash flow 378-1,850 >100% Explanations Operating performance drives strong free cash flow NWC reflects higher business volume FY 2016 included cash outflows due to pre-contract expenses at Dematic in connection with the acquisition by KION 38

39 Net Debt Net debt and leverage significantly reduced Net debt as at 31 Dec 2017 (in m and leverage as multiple of LTM adjusted EBITDA) 1.7x 1 2.3x 2 3.2x 2 2,096 Net financial debt 29 Procurement leases -134 Net fin. liabilities from long-term leasing 512 Liabilities from short-term rental financing 2,503 Industrial net operating debt 979 Net pension liabilities 3,482 Industrial net debt Net debt development Group net financial debt significantly lowered by 808m compared to Dec 2016 as a result of capital increase in May 2017 and strong FCF generation Leverage on industrial net operating debt materially lower from 3.4x in Dec 2016 Net pension liabilities remained almost unchanged compared to Dec 2016 Long-term leasing business Assets for long-term leasing of 1,398m Correspondingly, funding via SALB of 1,131m 1. Based on pro-forma LTM adjusted EBITDA 2. Based on pro-forma LTM adjusted industrial EBITDA (excluding LTM EBITDA for long-term leasing) 39

40 Financing Structure Maturity profile significantly improved Financing Structure as at 31 Dec 2016 (in m) Financing Structure as at 31 Dec 2017 (in m) 1,543 1,000 1, SFA tranche Drawing under RCF Acquisition term loan Promissory note 1. In January 2018, the term of the RCF was extended by one year. The RCF can now be utilized until February

41 Pension Liabilities Increase driven by interest rate Net pension liabilities as at 31 Dec 2017 Net pension liabilities (in m) 1,200 1, % % 2.4% 2.4% 861 1, % 1.6% 1.4% 1.9% Discount rate (in %) Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec % 2.2% 2.1% % Net pension liabilities (in m) Discount rate (Germany, in %) Net pension liabilities mostly driven by German plans Large UK plans are fully funded, with offsetting pension assets US plans with minimum funding requirements Smaller plans in other countries German pay-as-you-go long-term pension plan liability Accrued on balance sheet Duration of German plan even above group-level weighted average Stable current cash outflows Cash payments amounted to 28m in FY

42 IFRS Impact New IFRS accounting mainly results in balance sheet extension New IFRS accounting standards applied as of 1 Jan 2018 Estimated one-time impact IFRS 9 (Financial instruments) IFRS 15 (Revenue from contracts with customers) IFRS 16 (Leases) Changes in classification requirements without material impact on KION s financial statements Expected loss model reduces loss provisions on financial assets Hedge relations are expected to be maintained For IT&S, no material changes in revenue recognition for sales & service contracts For SCS, revenue for selected construction contracts will be affected by timing shifts Transactions previously shown as outright sales to either refinancing or vendor partners will be classified as lease transactions Procurement leases will be on balance, in general, stating right-ofuse assets and liabilities from procurement leases (in m) Min Max Assets Equity (in m) Min Max Assets 0 50 Liabilities 0 50 (in m) Min Max Assets 900 1,000 Liabilities 1,070 1,230 Equity Including deferred taxes 42

43 FY 2017 Outlook Comparison Adjusted guidance achieved for all KPIs (in m) KION Group Industrial Trucks & Services Supply Chain Solutions Adj. Outlook 1 FY 2017 FY 2017 Adj. Outlook 1 FY 2017 FY 2017 Adj. Outlook 1 FY 2017 FY 2017 Order intake 7,550 7,900 7,979 5,650 5,800 5,859 1,900 2,100 2,099 Revenue 7,400 7,700 7,654 5,450 5,600 5,631 1,950 2,100 2,006 Adj. EBIT FCF ROCE 9.0% 10.0% 9.9% Achieved 1. Outlook for FY 2017 (in m) as published in Annual Report FY 2016: KION Group: Order intake 7,800 8,250; Revenue 7,500 7,950; Adj. EBIT ; FCF ; ROCE 9.5% 10.5%; Industrial Trucks & Services: Order intake 5,450 5,600; Revenue 5,300 5,450; Adj. EBIT ; Supply Chain Solutions: Order intake 2,350 2,650; Revenue 2,200 2,500; Adj. EBIT

44 FY 2018 Outlook Profitable growth set to continue (in m) FY 2017 KION Group Industrial Trucks & Services Supply Chain Solutions Outlook FY 2018 FY 2017 Outlook FY 2018 FY 2017 Outlook FY 2018 Order intake 7,979 8,050 8,550 5,859 5,950 6,150 2,099 2,100 2,400 Revenue 7,654 7,700 8,200 5,631 5,700 5,900 2,006 2,000 2,300 Adj. EBIT FCF ROCE 1 9.9% 8.7% 9.7% 1. FCF and ROCE for FY 2018 are adjusted by effects of new IFRS accounting standards Note: Please see disclaimer on last page regarding forward-looking statements 44

45 Agenda 1. Company Overview 2. Investment Highlights 3. Update on FY Appendix 45

46 Weichai Power Weichai Power is KION s strategic anchor shareholder Current ownership structure Free float Treasury shares 56.6% 0.1% 43.3% KION GROUP AG 30.0% 10.0% Linde Hydraulics GmbH & Co. KG Weichai Power Co., Ltd. 90.0% Weichai partnership KION investment Linde Hydraulics Cooperation Total investment of 2.1bn in KION and for Linde Hydraulics GmbH & Co. KG Strategic anchor shareholder Technical consolidation trigger under Chinese GAAP Partner and strategic supplier for hydraulic components Captive demand Weichai call option for remaining 10% in Linde Hydraulics GmbH & Co. KG 1 Initiatives targeted for near and mid term Joint purchasing initiatives under way Cross-supply of components (e.g. engines) Shared distribution network Cooperation with Strong Leasing Co. 1. Weichai may exercise a call option for the remaining 10% in Linde Hydraulics GmbH & Co. KG until three years after the put option has been exercised and implemented. Linde Material Handling and Weichai Power have agreed to not sell or purchase shares in Linde Hydraulics GmbH & Co. KG without the consent of the other party until August

47 Industrial Trucks Unique range of products serving customer needs worldwide Internal combustion (IC) counterbalance trucks Mainly used outside Example Electric (E) counterbalance trucks Mainly used inside Warehouse equipment: Rider trucks Faster transportation of loads Specially designed for warehouse requirements Warehouse equipment: Pedestrian trucks Transportation of loads at a walking pace Less electrical support than with ride-on industrial trucks Warehouse equipment: Tractors Industrial processes, train stations, airports Automated and autonomous vehicles Warehouse & distribution solutions Automated guided vehicle solutions Note: The products shown are a selection from KION Group s comprehensive product range 47

48 Global Manufacturing Network Production facilities for Industrial Trucks and Supply Chain Solutions Frankfurt, KION Group Head Office Holland Grand Rapids Suzhou Jingjiang Hamburg Bielefeld Salt Lake City Monterrey Summerville Pune Putian Xiamen Châtellerault Zwijndrecht Heusenstamm/ Offenbach Stříbro Českŷ Krumlov Indaiatuba Sydney Aschaffenburg Milan Reutlingen Luzzara Moravany 48

49 Long-Term Leasing Business Support function within integrated business model End customer sales by financing types KION end customer revenue 2017 by financing type (in %) Direct sale Indirect financing via partners Direct financing via KION 100% 52% 23% 25% Financing share 48% Higher customer sales and retention Financing as support for new truck sales Typical financing contract duration is 4 to 5 years Especially when financed via KION, higher retention due to long-term financing relationship Integrated service contracts Financing providers request service contracts Service contracts ensure that trucks are maintained on an ongoing basis Driving rental and used truck business Supply of serviced used trucks after the end of financing Sales by financing type 49

50 Key Financials Group figures by year (in m) Order intake 7,979 5,833 5,216 4, ,489 4,590 4,682 Revenue 7,654 5,587 5,098 4,678 4,495 4,560 4,368 Adjusted EBITDA 2 1, Adjusted EBITDA margin % 16.7% 16.7% 16.7% 16.1% 15.4% 15.2% Adjusted EBIT Adjusted EBIT margin % 9.6% 9.5% 9.5% 9.3% 9.0% 8.3% Net income ROCE 9.9% 6.9% 11.9% 11.4% Capital expenditures Total R&D spending Free cash flow 378-1, Net financial debt 2,096 2, ,790 2,631 Employees 4 31,608 30,544 23,506 22,669 22,273 21,215 21,862 Key performance indicators 1. Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011); Order intake, Revenue, adjusted EBIT and adjusted EBITDA were aligned due to the sale of the Hydraulic Business 2. Adjusted for PPA items and non-recurring items 3. Capital expenditures including capitalized R&D costs, excluding leased and rental assets 4. Incl. apprentices and trainees 5. Order intake for FY 2014 adjusted to new presentation 6. Dematic consolidated for 2 months in FY Net income includes one-off non-cash effect resulting from the remeasurement of deferred taxes in connection with the corporate tax rate reduction approved in the US 50

51 Key Financials Group figures by quarter (in m) Q Q Q Q Q Q Q Q Order intake 2,280 1,847 1,971 1,882 1,783 1,327 1,427 1,297 Revenue 1,978 1,847 2,016 1,811 1,740 1,283 1,344 1,221 Adjusted EBITDA Adjusted EBITDA margin % 16.8% 16.2% 14.5% 16.0% 17.5% 17.7% 15.7% Adjusted EBIT Adjusted EBIT margin % 10.5% 10.6% 8.4% 9.8% 9.9% 10.5% 8.1% Key performance indicators 1. Adjusted for PPA items and non-recurring items 2. Dematic consolidated for 2 months in Q

52 Key Financials Segment figures by quarter Industrial Trucks & Services (in m) Q Q Q Q Q Q Q Q Order intake 1,580 1,352 1,514 1,415 1,464 1,284 1,378 1,257 Revenue 1,561 1,330 1,417 1,323 1,442 1,252 1,312 1,197 Adj. EBITDA Adj. EBITDA margin 19.3% 19.3% 18.9% 17.2% 19.0% 18.9% 19.0% 16.8% Adj. EBIT Adj. EBIT margin 12.3% 11.5% 11.8% 9.8% 12.2% 11.5% 11.9% 9.3% Supply Chain Solutions (in m) Q Q Q Q Q Q Q Q Order intake Revenue Adj. EBITDA Adj. EBITDA margin 8.5% 12.8% 11.5% 8.5% 4.6% -1.9% -5.1% -3.2% Adj. EBIT Adj. EBIT margin 6.6% 11.4% 10.3% 7.1% 3.2% -2.9% -6.1% -4.2% Key performance indicators 52

53 Financial Calendar Date Event 6 March 2018 Capital Markets Day 26 April 2018 Quarterly statement for the period ended 31 Mar 2018 (Q1 2018) and analyst call 9 May 2018 Annual General Meeting 26 July 2018 Interim report for the period ended 30 Jun 2018 (Q2 2018) and analyst call 25 October 2018 Quarterly statement for the period ended 30 Sep 2018 (Q3 2018) and analyst call Subject to change without notice 53

54 IR Contacts Dr Karoline Jung-Senssfelder Vice President, Head of Investor Relations / M&A Phone: +49 (0) karoline.jung-senssfelder@kiongroup.com Marina König Assistant Investor Relations Phone: +49 (0) marina.koenig@kiongroup.com ir@kiongroup.com KION GROUP AG Thea-Rasche-Strasse Frankfurt am Main Germany 54

55 Disclaimer This document has been prepared by KION GROUP AG (the Company ) solely for informational purposes. This disclaimer shall apply in all respects to the entire presentation (including all slides of this document), the oral presentation of the slides by representatives of the Company (or any person on behalf of the Company), any question-and-answer session that follows the oral presentation, hard copies of the slides as well as any additional materials distributed at, or in connection with this presentation (collectively, the Presentation ). By attending the meeting (or conference call or video conference) at which the Presentation is made, or by reading the written materials included in the Presentation, you (i) acknowledge and agree to all of the following restrictions and undertakings, and (ii) acknowledge and confirm that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the Presentation. 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Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no assurance is given that such forward-looking statements will prove to have been correct. They speak only as at the date of the Presentation and the Company undertakes no obligation to update these forward-looking statements. IFRS financial information for any previous fiscal year figures is adjusted in the Presentation as necessary pursuant to changes to IFRS or other mandatory reclassifications. The addition of the totals presented may result in rounding differences. In addition to figures prepared in accordance with IFRS, the Presentation also includes certain non-gaap financial performance measures (e.g., EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted EBIT, adjusted net profit, free cash flow, gross debt, and net debt, order intake, order book and ROCE). These non-gaap measures have been included because we believe that investors may find them helpful to measure our performance as reported under the relevant IFRS measures. However, these non-gaap measures should be considered only in addition to, but not in isolation or as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles, and other companies that report similarly named non-gaap measures may define or calculate these financial performance measures in different ways. 55