Automation solutions up over 100 percent from last year, while industrial trucks segment fell
FRANKFURT, Germany – Kion Group’s Supply Chain Solutions (SCS) segment, which specializes in automation solutions, saw accelerated growth in Q2 2020, driven by demand from e-commerce customers.
Conversely, the pandemic-induced reluctance to invest that is currently being experienced in many industries hit new business in the Industrial Trucks & Services (IT&S) segment particularly hard.
Overall order volume rose by over 11 percent to around €2.3 billion. While orders in the Industrial Trucks & Services (industrial trucks, warehouse technology, and related services) segment declined by around 20 percent, the Supply Chain Solutions segment saw orders double.
“As a Group, we have succeeded in compensating, at least in part, for the very difficult market conditions in the industrial trucks business through growth in our Supply Chain Solutions systems business. We have generated an operating profit, in terms of adjusted EBIT, in both segments,” said Gordon Riske, Kion Group CEO,
The company’s revenue fell by more than 16 percent to just under €1.9 billion (Q2 2019: €2.281 billion), primarily as a result of extensive lockdown measures in a number of the company’s geographical markets in April and May.
The decline in revenue and earnings was driven primarily by the growing impact of the global spread of the coronavirus pandemic. In the Industrial Trucks & Services segment, this caused huge damage to business operations, in terms of both procurement and sales, especially in Europe, the company said.
In the Industrial Trucks & Services segment, the Kion Group’s brand companies (Still, Linde and Baoli) took orders for just over 43,000 new trucks in the period April to June. This represented around 23 percent fewer orders than in the prior-year period. In China, however, there are now clear signs of recovery in the truck market as the country emerges from the coronavirus pandemic. Toward the end of the quarter, there were also emerging signs of recovery in European countries.
The value of order intake in the Supply Chain Solutions segment (represented by Dematic in North America) was a record close to €1.1 billion in the second quarter of 2020, an increase of more than 100 percent on the corresponding prior-year period (Q2 2019: €506 million). This was due in large part to big-ticket orders from e-commerce customers, including companies in North America and Europe.
Segment revenue was virtually unchanged on the prior-year period at approximately €635 million versus Q2 2019 at €642 million. Adjusted EBIT for the segment was in excess of €50 million, which represented a decline of approximately
16 percent from Q2 2019’s €64 million) as a result of inefficiencies caused by the difficult circumstances for delivering projects under restrictions imposed to contain the pandemic.
All figures for the second quarter 2020 in this release are based on preliminary financial results.