Capital Markets Day 2020 KION - Leading the Industry - Frankfurt - March 5, 2020 - KION Group
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Capital Markets Day 2020 KION – Leading the Industry Frankfurt – March 5, 2020
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
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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
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adjusted EBITDA, adjusted EBITDA margin, adjusted EBIT, adjusted EBIT margin, adjusted net profit, free cash flow, operating cash flow, gross debt, and net debt, industrial net operating debt, order intake, order book
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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.
2 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.
Capital Markets Day 2020 KION – Leading the Industry Frankfurt – March 5, 2020
Capital Markets Day 2020
Experienced and committed Management Team
Gordon Riske Anke Groth Andreas Krinninger
Chief Executive Officer Chief Financial Officer President Linde Material
KION Group KION Group Handling EMEA
Dr. Eike Böhm Ching Pong Quek Hasan Dandashly
Chief Technology Officer Chief APAC & President & Chief
KION Group Americas Officer Executive Officer
KION Group Dematic
4 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.
Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update GordonD
Riske 10:30-11:10
CFO: Financial Agenda Anke Groth 11:10-11:30
Q&A 11:30-11:50
Break 11:50-12:35
IT&S Value Drivers Andreas Krinninger 12:35-13:10
Deep Dive: Growing in China Ching Pong Quek 13:10-13:30
SCS Value Drivers Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
5 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.
Value Creation
Proven value creation since IPO
Revenue growth Adj. EBIT growth Total shareholder
return
6.6% p.a. 7.9% p.a. 182%
CAGR since 2014, CAGR since 2014, Return since IPO2,
incl. Dematic1 incl. Dematic1 incl. dividends
1CAGR excluding one-time Dematic acquisition effect
2Return calculated from IPO in June 2013 to 31 Dec 2019
6 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.
Value Creation
The journey continues: strategic investments to position KION for the future
Mid-term
2020-2021
Shaping the future of
2018-2019 material handling
Strategic investments
2016-2017 Focus on and performance
2013-2015 strategic
Dematic
IPO and de- integration
fields of ✓ More global coverage
action
leveraging and setup
✓ Focus on innovation,
software, and digital
✓ Next-level efficiency
7 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.
Attractive Market
Material handling industry benefits from attractive macro-drivers
Megatrends E-commerce Urbanization Digitization Sustainability
− Smaller order sizes − Denser population in − Increasing − Increasing demand
cities connectivity and big for green supply
− More frequent orders
data capabilities chains
Implications − Smaller warehouses
− Need for efficient,
for material − Demand for con- − Demand for electric
automated − Need for micro-
nected vehicles and vehicles with Li-Ion
handling solutions fulfillment and
systems, predictive batteries or Fuel-
smaller trucks
maintenance Cells
E-commerce Micro-fulfillment Mobile robot Li-Ion battery pow-
Material automation market growth2
1 market2 ered truck market3
handling
trends1
+14% +58% +54% +42%
1CAGR 2019-2027, KION market model
2CAGR 2019-2023, Interact Analysis 2019
3CAGR 2019-2027, Interact Analysis 2019 and KION market model
8 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.
Attractive Market
Material handling is changing at high pace – on its path to lights-out
Software & Lights-out
connected
Micro- solutions
Fleet fulfillment Big data and
management New energy Autonomous analytics
sources
Assistance vehicles Advanced
systems
Sustainable robotics
products
Industrial trucks & Automation systems
Material handling – technology trends (illustrative)
9
Yesterday
Capital Markets Day 2020
Today Tomorrow
© 2020 KION GROUP AG. All rights reserved.
Attractive Market
Continued strong long-term growth in global material handling market
Material handling – total addressable market, Long-term growth,
in EUR bn CAGR 2019-27e
115
59
+8%
72
Automation 32
systems
Industrial 56 +4%
trucks
40
0
2019 2027e
Source: KION market model, including service revenues. Serial/hybrid mobile automation solutions included in industrial trucks, remaining bespoke mobile automation solutions in
automation systems
10 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Attractive Market
Strong growth across all regions expected in material handling market
Material handling – total addressable market, Long-term growth,
in EUR bn CAGR 2019-27e
115
+6%
43
72
EMEA 27 36 +6%
Americas 23
APAC 36
21 +7%
2019 2027e
Source: KION market model, including service revenues. Serial/hybrid mobile automation solutions included in industrial trucks, remaining bespoke mobile automation solutions in
automation systems. Numbers may not add up to total due to rounding
11 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Attractive Market
E-trucks and e-commerce automation strongly contribute to global growth
Industrial trucks, Automation systems,
Market revenue mix by product1 CAGR, Market revenue mix by vertical1 CAGR,
2019-27e 2019-27e
+9% +14%
E-trucks +9%
E-comm. +7%
-1% Grocery
IC-trucks Gen. merch.
+8% +6%
WH-rider Other
WH-ped +11%
2019 2027e 2019 2027e
1Excludingservice revenues, Source: KION market model, excluding service revenues. Serial/hybrid mobile automation solutions included in industrial trucks, remaining bespoke mobile
automation solutions in automation systems
12 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.More Global Coverage and Setup
KION with an increasingly non-cyclical and more global profile
KION Group 2014 2019 2027e2
revenue split
New- New- New-
Non-cyclical 32%
trucks 53% 47% Non- trucks 39% 61% Non- trucks 68% Non-
Business1 cyclical cyclical cyclical
Americas 6% 11% APAC Americas 22% 11% APAC Americas 14% APAC
23%
Regional
Split
EMEA 83% EMEA 68% EMEA 63%
1Non-cyclical business calculated as IT&S services plus SCS new businesses and services
2Indicative, without further M&A activity, based on organic growth
13 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.More Global Coverage and Setup
Strategic investments to grow in China
− China is the single largest forklift market with
significant growth potential
− KION is the leading foreign player in China with
Growth longstanding experience
in China − Comprehensive growth strategy including
development of new products, expansion of the local
sales network, and a new industrial truck plant
Focus on growing
1. value-segment and electrification
Strategic
Rationale 2. Ensure production capacity
3. Increase market coverage
14 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.More Global Coverage and Setup
KION continuously broadening geographical footprint
KION IT&S production capacity by region IT&S footprint development
4%
Footprint restructuring
32% in WEU after financial
5% crisis
Americas 4% 18%
APAC 16% 7% 11% Capacity expansion in
EEU 0% APAC and EEU
countries:
New plants in India
80% 70% 53% and China (Xiamen
WEU
and Jinan)
New plants in Czech
Republic and Poland
2014 2019 2022e
15 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Focus on Innovation, Software, and Digital
A unique, leading player in Intralogistics 4.0
Industrial trucks1 + Automation systems2
Top 6 suppliers Top 6 suppliers
Unique
1 Toyota 1 KION
intralogistics
2 KION 2 SSI Schäfer
offering
3 Mitsubishi Logisnext 3 Toyota (Vanderlande)
4 Jungheinrich 4 Daifuku Market-leading
5 Crown 5 Honeywell (Intelligrated)
positions
6 Hyster-Yale 6 Knapp
globally
1Based on revenue for 2018 for industrial trucks, Börsen-Zeitung, 26 April 2019
2Based on revenue for 2018 excluding revenue from non-automation businesses, Börsen-Zeitung, 26 April 2019
16 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Focus on Innovation, Software, and Digital
KION leads with innovation to drive customer centricity
Innovation
Industrial New truck generations introduced
IT&S
Trucks Focus on new technologies: Li-Ion batteries and
connectivity
Mobile Global offering based on serial trucks
Automation Shared technology between trucks and systems
SCS
New vertical solutions, e.g. Micro-Fulfillment,
Automation returns handling
Systems
Robotic picking integration
17 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Focus on Innovation, Software, and Digital
Advancing digital transformation across entire group
Group-wide digital transformation Recent examples
Enterprise and
operations
Nov 2019: Mar 2019:
Solutions and Linde H20- Dematic
services
35 series iQ Virtual
Customer
interaction with as
New business digital twin digital twin
models
18 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Focus on Innovation, Software, and Digital
DAI acquisition strengthens software offering as differentiating factor
− Dematic acquires
Digital Applications International (DAI)
− Proven partner for 20 years
Acquisition
− DAI offers logistics automation software and employs
Case ~240 people, most of whom software engineers
1. Expanded offering
Strategic
Goals 2. Cross-selling
3. Strengthened software expertise
19 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Focus on Innovation, Software, and Digital
KION fully committed to sustainable material handling
Electrification of products, Clear sustainability strategy,
KION IT&S order intake units, FY 2019 KION achievements, selection
Received B score in 2019, placing
IC-trucks
E-trucks KION in top 23% of all companies
14% 25%
ISS ESG Prime Rating in 2018,
61%
86%
Electrified products
equivalent to top 20% of
companies in machinery
ESG score of 71, considered
E-warehouse outperformer in its industry
trucks
Inclusion in FTSE4Good index
Total: 214k
Source: WITS/FEM
20 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Focus on Innovation, Software, and Digital
Strong R&D commitment with increased spend in clear focus areas
Commitment to R&D,
KION R&D spend1, in % of revenue
~3.0% Increased R&D spend
2.8% 2.8% 2.7% ~2.8%
2.6% 2.6% 2.6% in 2020 in particular in the areas of
New energy (Li-Ion batteries)
Mobile automation
Digital, especially connectivity
2014 2015 2016 2017 2018 2019 2020e mid-
1R&D expenditures (P&L) + capitalized development costs = R&D spend term2
2Absolute R&D spend will further grow, however below revenue growth
21 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Next-level Efficiency
Continued focus on efficiencies in R&D and production
Efficient product development Efficient manufacturing setup
Drive axles Masts Batteries
− Continued implementation of module strategy − Efficiency program ongoing across European
resulting in increased number of shared parts IT&S plants
− Application of agile product development − Opening of new production facility in India and
processes resulting in faster time-to-market extension of facility in China (Xiamen)
− Announcement of new IT&S plants in Poland
and China (Jinan)
22 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Next-level Efficiency
Group-wide performance program (PEx) in place to drive efficiencies
Program objectives Example initiatives
Compensate Price assertion
cost inflation Material cost savings
✓Group-wide
program launched
Capture additional Productivity improvements
savings potential Indirect procurement
savings ✓Sponsored and steered by
top management
Improve cost Shared service center
flexibility Process automation
23 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Leading the Industry
KION investment highlights
1│ Attractive markets
KION best positioned to benefit from global mega-trends and will
grow at least in line with its above-GDP growth markets
A global leader in
2│
KION leads with innovation and customer centricity and
material handling shapes the industry with investments into new technologies
Resilient business
3│
KION has an integrated business model with high contribution
model from services, automation systems, and software
Capitalize on attractive
4│
KION with strategic investments to capture
areas of growth value creation potential, including China and software
Integrated group with
5│
KION driving value creation across the group through
scale and synergies R&D, production, and further scale and efficiencies
24 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Mid-term Targets
Strategy KION 2027 for continued profitable growth
Mid-term Aspiration
Targets 2022 KION 2027
Growth
EUR 10bn revenue by 2022, EUR
growing above material handling market 10bn
Capital Profitable Profita-
efficiency growth bility
Profitable growth with Adj. EBIT 10-12%
Margin in the double-digit range
Resilience
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Disclaimer: Performance depends on industry-specific conditions and may be negatively affected by increasing uncertainty or worsening of the economic and political situation
25 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update Gordon Riske 10:30-11:10
CFO: Financial Agenda D
Anke Groth 11:10-11:30
Q&A 11:30-11:50
Break 11:50-12:35
IT&S Value Drivers Andreas Krinninger 12:35-13:10
Deep Dive: Growing in China Ching Pong Quek 13:10-13:30
SCS Value Drivers Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
26 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Guidance Delivery
Year-end guidance was achieved every year since IPO
Guidance delivery on group level – all metrics (in EUR mn)
2019
2018
9,112
8,807
2017
1
2016 851
568
2015
2014 Order intake Net sales Adj. EBIT FCF
Guidance lower range Guidance upper range
1FCF adjusted by Dematic acquisition effect
27 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.2019 Results Overview
Strong topline development 2019 – but slight decrease of Adj. EBIT Margin
Selected financials, in EUR Change 2018-2019
2018 2019
Revenue 5.9bn 6.4bn +8.2% − Strong revenue growth in
New Business
ITS Adj. EBIT 655mn 695mn +6.1%
− Margin impacted by mix effects
Adj. EBIT
Margin 11.1% 10.8% -0.3pp. and R&D spend
Revenue 2.1bn 2.4bn +15.8% − Strong revenue growth in
Project Business
SCS Adj. EBIT 180mn 220mn +22.2% − Improved project execution
Adj. EBIT
8.8% 9.6% +0.8pp. drives margin improvement
Margin
Revenue 8.0bn 8.8bn +10.1%
KION Adj. EBIT 790mn 851mn +7.7%
Adj. EBIT
Margin 9.9% 9.7% -0.2pp.
28 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.CFO Priorities
Value creation through investments and profitability program
Focused Investments
1
APAC stays growth
engine in IT&S
to Strengthen Leadership
Shift from IC- to
E-trucks
Strong growth in
automation
Growing service
2 Strategic Investments
into Areas of Growth
demand
Growing mobile
automation sector 3 Relentless
Focus on Profitability
29 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.1 | Focused Investments to Strengthen Leadership
New products and electrification
Financial benefits
Rationale Short-term impact Mid-term
mid-termimpact
R&D Slight increase in 2020 Revenue Growth above market
spend (~3.0% of revenue) – mid- in core business
R&D − New truck generation introduced term target of ~2.8%
spend and
− R&D spend in strategic action fields of
new
automation, energy, and connectivity COGS/ Higher depreciation and Adj. Profitability in target
product
R&D lower capitalization due to EBIT range within next 2
launches
recent product launches years
Capex ~EUR 15mn investment Revenue Significant growth in Li-
IT&S: − Cost optimization through bundling of Ion battery segment
Li-Ion volumes
battery JV
− Secure Li-Ion cell access Adj. Positive impact on Adj.
with BMZ
EBIT EBIT due to full
consolidation
30 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.1 | Focused Investments to Strengthen Leadership
Enhanced capacity in EEU and IT architecture
Financial impact Financial benefits
Rationale Short-term
short-termimpact Mid-term
mid-termimpact
Capex ~EUR 80mn, thereof Revenue Growth enabler
~EUR 50mn in 2020
− Capacity increase
IT&S: New − Increase in flexibility and productivity
Poland by product shifts Adj. Initial setup expenses Adj. Improvement through
Plant EBIT affecting margin EBIT efficiency and scale
in counterbalance
trucks
− Global harmonization of IT landscape Adj. Higher expenses for IT Adj. Improvement through
to drive efficiency EBIT projects EBIT efficiency
IT − Preparation of S/4HANA roll-out
enablement − Digitalization of internal processes
spend
31 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.2 | Strategic Investments into Areas of Growth
China and DAI – capturing value potential from growth areas
Financial impact Financial benefits
Rationale Short-term
short-termimpact Mid-term
mid-termimpact
Capex ~EUR 100mn for new Revenue Additional sales of
plant, thereof ~EUR 45mn ~EUR 500mn p.a. by
in 2020 2025
Growing − New value product range (2022)
in China − High productivity due to automation
Adj. Initial setup expenses Adj. Improvement towards
EBIT affecting margin EBIT IT&S average
FCF Cash-out in 2020 of Revenue Growth driven by
− Software as differentiating factor in ~EUR 97mn software capabilities
DAI automation business
acqui- − Attractive business and transaction
structure Adj. Fully consolidated, DAI
sition
EBIT with attractive Adj. EBIT
Margin
32 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.3 | Relentless Focus on Profitability
Group-wide performance program (PEx) in place to drive efficiencies
Program objectives Financial impact (Adj. EBIT), in EUR mn
Headwinds1
Program gross effect
− Compensate cost inflation1
Gross Adj. EBIT impact in 2021
− Capture additional savings potential ~EUR 150mn, net impact ~EUR 50mn with
~EUR 100mn headwinds
2019 2020e 2021e
− Improve cost flexibility
Group-wide program
Steered by top management
PEx program compensated 2019 headwinds and is expected to deliver
~EUR 50mn net Adj. EBIT impact in 2021
1Wage increases and inflation effects
33 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Summary Perspective on KION’s Adj. EBIT
Short-term margin impact to position KION for the future
Short-term Mid-term
2020e CapEx 2020e Adj. EBIT Margin Revenue Adj. EBIT Margin
New New truck generations, Margin
products new technologies1 dilutive
~EUR 15mn No major
Li-Ion JV Cost optimization
in 2020 impact
Focused
investments EUR 50mn Margin
Poland Capacity increase
in 2020 dilutive
Total impact:
IT Margin ~0.5 - 0.8pp.
Efficiency and must-do dilutive
enablement margin
dilutive
EUR 45mn Margin
China Growing in China
in 2020 dilutive
Strategic
Investments ~EUR 97mn No major
DAI Strengthening software
in 2020 impact
Focus on Margin
PEx Program Efficiency increase accretive
Profitability
~0.5 - 0.8pp. of Adj. EBIT Margin “invested” for growth prospects and
KION Group
1Higher depreciation and lower capitalization
efficiencies supporting mid-term top-line and Adj. EBIT Margin targets
34 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.COVID-19 – Implications and Situation for KION
Status as of today
Potential implications and risks Current situation at KION
− Epidemic assumed to peak in H1 2020, − No KION employee infected so far
normalization towards year-end1 − All plants are running; plants in China slightly
− GDP impact visible for China in 20201; below planned capacity and with temporary
IT&S market in China consequently production delay due to closures
expected to decline on a full year basis − Q1 results in APAC will be negatively
COVID-19
− Risk for health situation of workforce, impacted, catch up seems feasible until year
potentially leading to closure of production, end depending on further development of
sales & services branches, or challenges in epidemic
global supply chain − Nearly no impact on supply chain in EMEA so
far, mitigation efforts ongoing
KION-wide “taskforce” installed
Guidance for 2020 does not include any impact from COVID-19
1Oxford Economics
35 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Guidance 2020
We are on track to deliver mid-term revenue and margin targets 2022
Revenue / Adj. EBIT
Guidance Revenue and Adj. EBIT1, in EUR mn
6,410 Revenue: slower truck sales from reduced 2019
6,450 / +1%
6,150 / -4% order intake expected to be partly compensated by
higher service revenue
6.4 Adj. EBIT: spend related to areas of growth and
695 short-term effects from depreciation / R&D
650 / -6%
IT&S 610 / -12% capitalization expected to reduce Adj. EBIT in 2020
2019 2020e
2,800 / +18%
2,379 Revenue: strong growth in project business
2,500 / +5%
6.4 expected based on order intake growth in 2019;
280 / +23% service business growing
228
SCS 240 / +5% Adj. EBIT: increase due to improved project
execution and scale
2019 2020e
1Exluding potential COVID-19 impacts
36 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Guidance 2020 and Mid-term Targets 2022
We are on track to deliver mid-term revenue and margin targets 2022
xx% Adj. EBIT Margin
Guidance Revenue and Adj. EBIT1, KION, in EUR mn
Revenue / Adj. EBIT
10-12%
>10,000
We are confident we will
8,807 9,250 / +5% achieve our 2022 targets
8,650 / -2% due to
− Continued SCS revenue growth
and accelerating IT&S revenue
growth following 2020
− Relentless focus on profitability
851 850 / 0% − Reversal of investment- and
770 / -10% depreciation / R&D capitalization
effects
2019
1Exluding
2020e 2021e 2022e
potential COVID-19 impacts
37 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Free Cash Flow 2020
Free cash flow impacted by higher cash-outs for capex and acquisitions
Key FCF drivers, in EUR mn
Adj. EBIT 2019 851
2020e 770-850
1 Depreciation 1 Higher depreciation primarily due to new product launches
2 Delta Trade Working Capital 2 Lower working capital increase compared to prior year
3 Taxes 3 Higher tax payments due to profit increase in 2019
Operating CF 2019 846 Operating cash flow in 2020 expected
2020e to be on 2019 level
4 Capex 4 Investments into new plants in Poland and China
5 Acquisitions 5 Acquisition of DAI
FCF 2019 568
2020e 270-370
38 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Financial Performance
Strong cashflow performance enables dividend growth and deleveraging
Op. Cashflow Conversion Dividend Leverage
Op. Cashflow / Adj. EBIT EUR / share INOD2 / Industrial Adj. EBITDA
99%
operating cashflow
24% CAGR p.a. 2.0x INOD in 2019
1
conversion in 2019 1.2 1.3 3.4
1.0 2.5 2.3
0.8 0.8 2.0
0.6
0.4
13 14 15 16 17 18 19 16 17 18 19
Strong operational performance and Steady dividend growth since IPO Continuous deleveraging following
rigid cash management drive cash Dematic acquisition
conversion
1Subject to approval at AGM
2Industrial Net Operating Debt
39 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Value Creation Through 2022 and Beyond
Focus on disciplined execution and further profitable growth
1 We have delivered and demonstrated resilience
2 We will deliver a solid performance in 2020
3 We embark on the next phase of value creation through
focused investments and performance improvements
4 Our strong operational performance and cash flow enable
investments, dividends and deleveraging
40 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update Gordon Riske 10:30-11:10
CFO: Financial Agenda Anke Groth 11:10-11:30
Q&A D 11:30-11:50
Break 11:50-12:35
IT&S Value Drivers Andreas Krinninger 12:35-13:10
Deep Dive: Growing in China Ching Pong Quek 13:10-13:30
SCS Value Drivers Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
41 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Questions
& Answers
42 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update Gordon Riske 10:30-11:10
CFO: Financial Agenda Anke Groth 11:10-11:30
Q&A 11:30-11:50
Break D 11:50-12:35
IT&S Value Drivers Andreas Krinninger 12:35-13:10
Deep Dive: Growing in China Ching Pong Quek 13:10-13:30
SCS Value Drivers Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
43 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update Gordon Riske 10:30-11:10
CFO: Financial Agenda Anke Groth 11:10-11:30
Q&A 11:30-11:50
Break 11:50-12:35
IT&S Value Drivers AndreasDKrinninger 12:35-13:10
Deep Dive: Growing in China Ching Pong Quek 13:10-13:30
SCS Value Drivers Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
44 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Industrial Trucks and Services
Highlights
Exposure to attractive markets with products and services addressing
1 core needs of customers
New business growth driven by technology leadership of new
2 product platforms, safety, energy and automation solutions
Resilient services growth through full life-cycle offering enhanced by
3 digitalizing processes
4 Continuous efficiency improvements, e.g., R&D, production
footprint, operations set-up, sales & service processes
5
45 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Total Addressable Market
Continued growth across regions
Market Size, in EUR bn CAGR Market Size by Region, in EUR bn
2019
2027e
56
40 22
19
16
14 13
11
2019 2027e EMEA Americas APAC
Source: KION market model, numbers may not add up due to rounding
46 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Market Drivers
KION’s answers shape the market and address customer needs
Our customers need to…
…move more SKUs1 at higher …while fulfilling sustainability
throughput, with less space… expectations … …and reducing accidents
Warehouses must be close to Regulatory pressure and social Safety is a significant concern
Industry customers offering high flexibility, awareness to reduce carbon for material handling
Trends responsiveness and throughput footprint operations
Customer Higher Increased
Needs efficiency Greater safety
sustainability
KION‘s Highly efficient and innovative New safety features and
Broad Li-Ion and Fuel-Cell
Answers products and services automation
product portfolio for a green
1Stock Keeping Unit
supply chain
47 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Competitive Advantage
Three pillars driving profitable growth of KION’s IT&S segment
Best operational Covering full life-cycle with Modularizing products
performance of trucks innovative offering Optimizing plant footprint
Energy solutions offering Growing continuously with Efficient & flexible
Safety solutions offering resilient services operations setup
Mobile Automation Digitalizing Improving sales & services
customer-facing processes processes
Technology Resilient Efficiency
Leadership Services Improvement
48 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Technology Leadership
KION’s new truck platforms enable future growth
New truck platforms
with 10-15 year lifecycle –
Productivity Performance
derivatives in next years
Digital twin
allowing new feature sales
and efficiencies
Design to
Service Efficiency Enablers
for expansion
of market share
Safety R&D depreciation
increases due to product
Connectivity launches
49 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Technology Leadership
KION’s safety offering reduces accidents in material handling
Truck accidents, KION’s safety offering
in Germany
Benefits to customers:
Structural
safety ✓ Less accidents and collisions
equipment ✓ Lower downtime,
> 36,000Accidents p.a.
Load Assist Active Stability Control higher productivity
✓ Improved safety awareness
✓ Legal protection of general
with industrial trucks1 Surroundings
managers
safety
5
equipment
Curve Speed Control Surround View Benefits to KION:
✓ New way to approach customers
✓ Focus topic for customers
Fatal accidents p.a. – Safety
all with forklift trucks1 ✓ Sale of higher specified trucks
assistance
systems ✓ High margin business
Safety Guard Safety Consulting
1Accident statistics of the German statutory accident insurance (DGUV) of 2018
50 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Technology Leadership
Li-Ion growth driving revenue and profit expansion
Shift from IC to E, Growing Li-Ion share,
Global units CAGR Electrified products, market mix by battery technology
2019-27
-1% 7%
24%
IC-trucks 36%
Li-Ion
70%
44% +6% trucks
WH ped. 37% 93%
WH rider 9% +4% Other
9%
23% +8% 30% electric trucks
E-trucks 17%
2019 2027e 2019 2027e
✓ Similar new business margin for E- and IC- ✓ Higher absolute gross profit of Li-Ion due to
trucks higher price
✓ Aftersales profitability similar across ✓ No impact on aftersales revenue
products
Source: KION market model, numbers may not add up due to rounding
51 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Resilient Services
Covering full life-cycle allows growing with customers' businesses
Aftersales Revenue share Rental
High availability for customers FY19 Superior flexibility with Short-Term Rental
− >18,0001 highly qualified experts globally − Largest fleet in EMEA
− Remote condition monitoring with ~90,0001 trucks
− Densest network − Flexibly adjust truck fleet to customer
− High first-time-fix rate demand
30%
− In-van delivery of
parts 52%
− Shared distribution
centers 18%2
Used Trucks
− High performance and quality Resilience from Long-Term Rental
− Dedicated refurbishment centers − High share of Long-Term Rental; most
− Online shop3 with full-service contract
1Directand Indirect Network
2Used Trucks including Others
2Currently piloted in Germany and France
52 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Resilient Services
Digitalization supports customers’ productivity and KION’s efficiency
Remote health monitoring Remote technician support Benefits to customers:
− Truck stops from wear & − Efficiency increase through
tear are avoided multimedia dialogue of on-site ✓ Less downtime
− Repairs and service technician and back-office ✓ Higher productivity
maintenance planned specialist ✓ Lower aftersales cost
more efficiently − Reduces downtime for customers
Benefits to KION:
through improved first-time-fix rate
Digital service ordering (app) ✓ Higher first-time-fix
− Request service support & rate
monitor status ✓ Lower repair time
− Improve convenience and ✓ Higher aftersales
transparency profitability
− Developed inhouse at KION’s ✓ Higher customer
Digital Campus satisfaction
53 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Efficiency Improvement
Modularizing products for efficient R&D and reducing complexity
✓ Scaling innovation
Drive axles Masts Batteries Chargers across all KION
brands
✓ Allowing efficient
procurement
through larger scale
✓ 15% less part
numbers reducing
Modular concept: commonality complexity
across new truck platforms
54 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Efficiency Improvement
Growing capacity in lower-cost countries and increasing automation
2022e
Eastern Europe 17%
Production 2014
Capacities
EMEA Western Europe 83%
for Counterbalance- /
Warehouse- Trucks
(w/o components)
Single-Brand
Factories 5 2
Multi-Brand
Factories 1 5
Degree of
Automation Low High
55 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Efficiency Improvement
Increasing efficiency and flexibility of operations setup
Flexibility Capacity
✓ One mixed-model line ✓ New greenfield site
Kołbaskowo
for E- and IC-trucks Hamburg ✓ Annual volume of
✓ High flexibility for >12,000 units
changing demand Aschaffenburg
Stříbro ✓ Cost structure enables
Reutlingen
new products for price-
Efficiency sensitive markets
✓ Fully automated welding Châtellerault ✓ Attractive labor rates
robots line
Luzzara
✓ Automated powder-
coating
✓ Further automation of
logistics and assembly
lines
56 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Efficiency Improvement
Multiple initiatives increasing sales and services efficiency
CRM Introducing new groupwide CRM
Harmonization Digitalizing for process efficiency
Consolidating back-office support in
Backoffice Germany and United Kingdom
Consolidation Reducing cost
Delivering parts overnight
Spare parts into service vans
In-Van Delivery
Focusing technicians’ time
Measures tracked as part of PEx program
57 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.IT&S Financials
Margin dip in 2020 to reverse after initial short-term investments
Revenue and Adj. EBIT1, in EUR mn Revenue / Adj. EBIT Mid-Term outlook
Revenue: Revenue:
6,410 6,450 / +1% Impacted by lower New business ex-
order intake in 2019 pected to grow again
6,150 / -4% from 2021 onwards
Partly compensated by
higher services Growth in services
revenue revenue will continue
Adj. EBIT: Adj. EBIT:
695 Short-term effects from Short-term effects will
650 / -6% depreciation / R&D reverse mid-term
610 / -12% capitalization Performance program
Setup costs for will drive profitability
investments
2019
1Exluding
2020
potential COVID-19 impacts
58 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update Gordon Riske 10:30-11:10
CFO: Financial Agenda Anke Groth 11:10-11:30
Q&A 11:30-11:50
Break 11:50-12:35
IT&S Value Drivers Andreas Krinninger 12:35-13:10
Deep Dive: Growing in China D Quek
Ching Pong 13:10-13:30
SCS Value Drivers Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
59 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.KION in China at a Glance
Strongly positioned to enter a new era in China
27years No. 1 ~3,700
in China in foreign brand dedicated employees
market share1 (~1,900 in sales &
services and ~350 in R&D)
2 unique
brands
(Linde, Baoli) with
~90%
of products and
~300
Sales and/or
comprehensive components locally services locations
product portfolio manufactured and
sourced
1Share amongst foreign (non-domestic) brands in China, according to CITA industry data
60 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.A New Era in China
Highlights
Chinese market with unrivaled growth potential – KION with a
1 comprehensive strategy for growing in China
Longstanding experience, trusted brands and shareholder support –
2 KION ready to compete successfully with incumbents in China
3 New products, go-to-market strategy, new factory and R&D
footprint – will also enable customer wins in European markets
Investments of ~EUR 100mn financed from cash flow –
4 KION setting the course for profitable growth
61 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.A New Era in China
Significant upside potential for KION in China
Global GDP 2019 Industrial Truck Market 2019 KION 2019 (Order Intake1)
(Order Intake1)
China China 14% China
17%
>30%
83%China Forklift Market Growth
Single largest forklift market with attractive growth outlook
Chinese forklift market, CAGR
order intake (in k units)
− Single largest forklift market
covering >30% of world market
473 − Rapid market growth
in last five years
274 − Optimistic outlook, yet at a
normalized rate
driven by slow-down of economy
and maturing market
2014 2019
Source: WITS/FEM
63 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Key Trends in China
Trend towards value-for-money and electrification
Growing “Value”-Segment Accelerating Electrification
− No longer pure cost focus for customers − Stricter environmental regulations
− Comprehensive buying decisions (i.e. TCO1) − Improving TCO1 due to declining cost
by customers are increasing of Li-Ion batteries
− Brand and customer experience − Warehouse truck segment continuously
becoming more important growing at double-digit rate
− 2025: ~40-50% of new counterbalance
1Total Cost of Ownership
truck sales forecasted to be electric trucks2
2Based on KION internal estimates
64 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.China Growth Strategy
Comprehensive product, go-to-market, and production strategy
New Sales Network New Plant and
Products Expansion R&D-Center
New developments with focus on Increased market coverage and State-of-the art factory and R&D-
value-segment and ECB1 trucks synergies with Weichai “Global Center of Excellence for
Value”
1Electric Counterbalance
65 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.New Products
Four key enablers to ensure competitiveness of future products
1 3
Electric Forklift Competence Modular Platform Design
− Technology leader − Cost-efficient platform with
in electric powertrain common modules to derive new
− Local Li-Ion battery development products
in cooperation with Weichai New − Enabler for economies of scale
Energy Key
Enablers
2 4
Experience in Value Market “Tailor-made” Local Organization
− Linde Smartline with strong brand − Local organizational setup to meet
position and awareness introduced requirements in Chinese market
− Baoli “value ECB1 line” − Local development and local
well received by market supply chain – “from China, for
China and the World”
1Electric Counterbalance
66 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Sales Network
Significant network expansion and synergies with Weichai
Sales Channels Synergies
Circum-bohai
− Market coverage − Cross-selling by
Jing-Jin-Ji zone Sea zone
increased leveraging access to
geographically Weichai customer base
One Belt
− Key economic − Leveraging existing
One Road development areas service points, parts
in focus distribution centers and
− KION dealer approach dealerships
Yangtze River Yangtze River (multi-brand)
Basin zone Delta zone
67 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.New Plant
State-of-the-art production plant and R&D center
New Plant R&D Center
− Production capacity for − Future “Global Center of
Jinan
future growth Excellence for Value”
− Located in Jinan Lai Wu for counterbalance products
(Shandong province) − Complementing current
− 223,000 m² – equivalent to APAC R&D centers
more than 31 soccer fields in Xiamen, Jingjiang, and
− ~EUR 100mn investment Pune
− Production start in 2022,
construction start in late 2020
− Joint venture between KION
(95%) and Weichai (5%)
68 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.China Growth
Clear aspiration to more than double volume and revenue in China by 2025
2019
by 2025
Double-digit Market Share,
growing from single-digit
Double Volume & Revenue
Double-digit EBIT Margin,
growing from single-digit
69 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Capital Markets Day
Agenda
Speaker Time
CEO: Strategy Update Gordon Riske 10:30-11:10
CFO: Financial Agenda Anke Groth 11:10-11:30
Q&A 11:30-11:50
Break 11:50-12:35
IT&S Value Drivers Andreas Krinninger 12:35-13:10
Deep Dive: Growing in China Ching Pong Quek 13:10-13:30
SCS Value Drivers D
Hasan Dandashly 13:30-14:05
Mobile Automation Dr. Eike Böhm 14:05-14:20
Q&A 14:20-14:40
70 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Supply Chain Solutions
Highlights
1 Steady growth as automation transforms supply chains and empowers
new business models
2 Extensive vertical depth and global scale to support our customers
3 Standardization and execution speed allow us to outpace market growth
4 Services enable lifelong partnership with our customers
5 Technology and software driving intelligent supply chains;
DAI furthers Dematic’s competitive position
71 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Trends and Impacts
The future of supply chain requires speed, flexibility, and accuracy
Urbanization Speed Variety Omni-channel Automation
55% 2.5 350mn USD 6.5tn 10%
Of global population Days max. accepted SKUs handled Retail e-commerce Fully automated
lives in cities1 shipping time2 by large e-commerce spend by 20234 warehouse globally5
player3
1U.N. World Urbanization Prospects Report, 2018; 2Dimensionsmail Research, 2019; 3Dematic Estimates; 4National Retail Federation, 2019; 5THLee & Partners, 2019
72 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Total Addressable Market
Industry trends driving strong automation growth across regions
Market Size, EUR bn CAGR Market Size by Region, EUR bn
EMEA Americas APAC
59
28%
26% 35%
36%
32 32 59
38%
37%
2019 2027e 2019 2027e
Source: KION Market Model
73 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Dematic at a Glance
Leading automation solution industry with hardware and software
Mission: Provide best-in-class vertical market-based, intelligent supply chain solutions, by integrating our
hardware and software capabilities to deliver market leading flexibility, reliability, and throughput
Vertical Markets
Software & IoT Mechatronics
Dematic
Project Global Engineering
Management & Manufacturing
Lifecycle Services
Dematic helps to deliver ~18.5 million parcels worldwide every day
74 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Dematic Product Portfolio
Helping customers with the best solutions
Conveyor Systems Storage Systems
Dependable, cost-effective product Storage, retrieval and sequencing;
transport buffering, racking and shelving
Sortation Systems Robotic Palletizing &
Diverse product handling, high Depalletizing
throughput
Automated and ergonomic palletizing
and depalletizing
AGV Systems Workstation Systems
Lights-out order fulfillment, and reliable, High-speed, high-volume designs
autonomous mobile robotic solutions for worker efficiency
75 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Global Capability
Our global presence enables us to be where our customers need us
AMERICAS
EUROPE
18 Locations >8,900 Employees
~2,800 Employees
Countries with active
29 presence
AMERICAS 11 Manufacturing locations
26 Locations
~4,900 Employees
Key
>3,000 Engineers
• Global Head Office
APAC
• Regional Head Office
13 Locations
>50 Service locations
• Sales/Services location ~1,200 Employees
APAC
• Country with Sales/Services
presence >6,000 Installed projects
76 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Execution Excellence
Regionalization and standardization drive speed, growth & profitability
Upfront Engagement Standardized Solutions Regionalized Fulfillment
Sizing
Modelling
Concepting
Simulation
Extensive upfront customer Integrated range of high-mid Rapid on-site readiness by
engagement in simulating automation and software delivering all products from
and concepting the right solutions (pre-configured) regional sources
solution
77 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Vertical-based Value Enablement
We have a clear view of customers and their vertical challenges
E-commerce Apparel Grocery / Food & General
Verticals
Beverage Merchandise
SCS Market
+14% +6% +7% +7%
CAGR
(’19-’27e)1
− Omni-channel fulfillment − Subscription & rental − Click & collect and − Multi-format distribution
− Speed & accuracy business models growing trend of edge- model
Drivers − Returns − Omni-channel fulfillment − Omni channel fulfillment
− Inventory optimization − Second-hand/re-sale − Network optimization
− Chill & Freeze
− mPick / AutoStore GTP − Pouch / Garment on − Micro-Fulfillment − Robotic Picking
Key − Pouch / Garment on Hanger − AMCAP − Micro-Fulfillment
Technology Hanger − mPick GTP − Freezer AGVs − Pouch / Garment on
− Crossbelt Sorters − Crossbelt Sorters − Pallet AS/RS Hanger
Customer
Examples
1Source: KION market model
78 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Growth Across Verticals
Customer Example: Execution at scale for omni-channel fulfillment
− Omni-channel fulfillment from >10mn units in inventory that
Leading represents >700,000 SKUs
− State-of-art pouch solution, return solution along with a
Luxury
comprehensive annual service contract
Store
Retailer Complex integration with comprehensive software
& service capability
Account Overview
− Solution: Omni-Channel
Distribution Center 40% >50 aisles 500,000
− Size: >1.0mn ft2 / >90k m2 e-commerce largest DMS units to be
return processing installation in Dematic shipped per day
history
79 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Growth Across Verticals
Customer Example: Micro-Fulfillment enabling click & collect in grocery
Speed The Dematic Micro-Fulfillment system is our
latest solution to help our customers meet
aggressive growth strategies for omni-
channel product distribution
Micro-Fulfillment supports their new ‘click &
collect’ customer program
Standar-
dization
Account Overview
− Client since: 2010 15 Min 12 weeks 3,500
− Solution: Grocery order fulfillment installed & store orders handled
− Size: 15,000 ft2 / 1,400 m2 time ready per week
80 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Lifecycle Services
Comprehensive value based life-cycle partnership
Expand Margin by Improving Service Mix Drive Customer Outcomes
Life-cycle based offering for customers Modernization & upgrades for a
major retailer
Remote Digital Consultancy
Services Services & Training
Resident 43 +26% +7%
Services Sites Parts spend Throughput
Modernization
Field Spare & Upgrades Predictive IIoT1 based
Services Parts
maintenance for a fortune 500
Large installed base Outpace market growth
industrial
CAGR
>6,000 Installed projects (2019-2022e) ✓ Systematically growing the service
40% 50%
17,000 Multi-Shuttle systems +9%
mix with focus on value creation for
customers Unplanned Cost of
5 weeks
downtime inventory Pay-back
1,000 Mini-loads ✓ Complementing our service offering
Services
Market with advanced digital capabilities
12,000 Cranes
1Industrial Internet of Things
81 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Supply Chain Solutions Ecosystem
Software is driving the on-demand economy
Digital Portfolio Digital Twins, Predictive Models, … Digital / ERP
Supply Chain
Enterprise Resource Planning (ERP) Business, Accounting, Procurement, …
Order & Demand Management,
Supply Chain Execution Transportation & Retail Management
Warehouse Management System (WMS) Labor, Inventory, Operations Mgmt. …
Warehouse Control System (WCS) Material Flow, Execution Optimization, …
Warehouse
Programmable Logic Controller (PLC) Sensors, Actuators, … Market Demand
Not only moving items, but more and more moving data
82 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.Deep-Dive Software – Dematic’s New Offering
Furthering competitive positioning with the acquisition of DAI
Software Portfolio Competitive Position
Software
Digital Portfolio
Providers ✓ Integrated software
portfolio, one provider
Supply Chain Execution
✓ Complete visibility
Integration
Required ✓ Real-time connected
Warehouse Management System (WMS)
software
Warehouse Control System (WCS)
✓ Enhanced operational
Logistics
Automation efficiency
Programmable Logic Controller (PLC) Providers
83 Capital Markets Day 2020 © 2020 KION GROUP AG. All rights reserved.You can also read
