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KION Group: From German Engineering to Global Intralogistics Powerhouse
Introduction: The Invisible Backbone of Global Commerce
Walk into any Amazon fulfillment center, any DHL logistics hub, or the vast distribution networks that power Walmart, Alibaba, or Zalando, and you'll encounter an intricate ballet of machinery that most consumers never see. Robotic arms dance through aisles. Automated guided vehicles navigate invisible highways on warehouse floors. Massive conveyor systems sort millions of packages daily. And at the heart of this invisible infrastructure, there's a strong chance you'll find equipment bearing the names Linde, STILL, or Dematic—all brands belonging to a company most people have never heard of: KION Group.
KION Group AG is a German multinational manufacturer of materials handling equipment, headquartered in Frankfurt, Hesse, Germany. Its principal products are intralogistics, warehouse automation equipment, and industrial (forklift) trucks. It is the world's second-largest manufacturer of forklifts measured by revenues, after Toyota Industries.
The group currently has more than 42,000 employees and generated revenue of approximately €11.5 billion in the 2024 financial year. But these numbers only hint at something far more interesting: how a corporate carve-out backed by private equity transformed into a global leader in warehouse automation and became an essential pillar of modern e-commerce logistics.
The name "KION" itself reveals the ambition embedded in this company from day one—it's an invented name derived from the Swahili word "Kiongozi," which means "leader." This wasn't a company born modest. It was created to win.
This is the story of how German engineering heritage, private equity discipline, Chinese strategic capital, and a prescient bet on automation came together to build an intralogistics powerhouse. It's also a case study in how industrial companies transform themselves across technology cycles—and what happens when external shocks test even the most carefully constructed strategies.
Heritage Brands: The Deep Roots (1904–2006)
Before there was KION, there were the heritage brands that would form its foundation—companies with histories stretching back over a century, each bringing distinctive engineering DNA to the eventual combination.
The Linde Material Handling Origins
The story begins in Munich in 1904, when Carl von Linde—the German engineer who had revolutionized refrigeration technology—partnered with Hugo Güldner and Georg von Krauss to found the Güldner-Motoren-Gesellschaft. The company relocated to Aschaffenburg three years later, and in 1929 was acquired by Gesellschaft für Linde's Eismaschinen AG, formally bringing it into the Linde industrial family.
The Aschaffenburg plant has been manufacturing forklift trucks since 1959, but the company's defining technological breakthrough came with the Hubtrac—the first forklift truck with hydrostatic transmission. Powered by a diesel engine, this innovation could carry loads of 2 tonnes, later upgraded to 2.5 tonnes. It represented a fundamental rethinking of how industrial vehicles could be designed and operated.
In the decades that followed, Linde Material Handling accumulated more than 120 years of company history and became one of the world's largest manufacturers of forklifts and warehouse equipment. Innovations such as the hydrostatic drive and highly effective assistance systems established the brand as the technology leader in the industry.
The Porsche Connection: Design Meets Industry
Perhaps nothing better illustrates Linde's commitment to premium positioning than its unusual partnership with Porsche. In 1985, the Linde 351 came onto the market—the first truck that Porsche Customer Development designed for Linde. The sleek, purposeful design was so striking that it took pride of place in the departure hall at Frankfurt Airport.
The 351 became the iconic forklift truck and altered the course of the entire industrial truck industry. It demonstrated that industrial equipment could be both functionally superior and aesthetically distinguished—a combination that would become central to Linde's brand identity and premium pricing strategy.
This wasn't industrial design for its own sake. The collaboration signaled to customers that Linde viewed forklifts not as commodities but as sophisticated machines worthy of the same design attention as sports cars. It was a branding masterstroke that separated Linde from competitors focused purely on specifications and price.
Global Expansion Before KION
By the time KION was formed, the heritage brands had already built significant international presence. Linde had acquired Fenwick, making it the largest French forklift manufacturer. The company had also acquired Baker Material Handling Corporation, expanding its footprint in the American market. Linde (China) Forklift Truck Corp., Ltd. was established in Xiamen in 1993, positioning the company in what would become the world's largest forklift market.
Meanwhile, STILL—founded in Hamburg—had built its own reputation for innovation in electric trucks and warehouse technology. OM Carrelli Elevatori in Italy added Mediterranean manufacturing expertise. Together, these brands represented a formidable collection of engineering capabilities and market positions.
But they were scattered across Linde AG's corporate portfolio, mixed in with industrial gases and engineering businesses. The brands were strong. The question was whether they could become stronger still if allowed to operate as a focused, dedicated entity.
The Birth of KION: The Linde-BOC Catalyst (2006)
The creation of KION Group wasn't a gradual evolution—it was a dramatic corporate restructuring driven by the logic of another major deal entirely.
The Strategic Logic of the Spin-off
On September 6, 2006, Linde AG announced a new structure following the completion of its acquisition of BOC, with the gas and engineering businesses of the combined entity operating as The Linde Group and the materials handling businesses (Linde Material Handling, STILL, and OM Carrelli Elevatori S.p.A.) operating as KION Group from then on.
The acquisition of BOC—the British oxygen company—was a transformative deal for Linde AG's industrial gases business. But it created a focus problem. Linde's leadership recognized that managing a world-class gases business alongside a world-class materials handling business meant neither would receive the singular attention needed to maximize their potential. The materials handling operations, while excellent, were a strategic distraction from the core gases business.
This is a pattern familiar to students of corporate strategy: conglomerates periodically shed divisions to sharpen focus, and the shed divisions often thrive once freed from corporate-parent constraints. What made KION's birth distinctive was who bought it—and how they intended to transform it.
The Private Equity Play
Linde AG sold KION Group to a partnership of KKR and Goldman Sachs Capital Partners for approximately €4 billion. KKR and Goldman Sachs Capital Partners would also assume the balance of the unit's pension obligations, net lease obligations and net liquidity, which together came to another €400 million, bringing the total enterprise value of the deal to €4 billion.
This was classic private equity playbook: acquire a non-core asset from a strategic seller distracted by other priorities, professionalize operations, invest in growth, and prepare for eventual exit. KKR's then-head of European operations, Johannes Huth, was explicit that the firm's medium-term objective was an IPO.
The private equity backing provided several immediate advantages. First, KION received access to capital for investment and acquisitions. Second, the company gained freedom from Linde AG's competing priorities and capital allocation decisions. Third, KKR and Goldman Sachs brought operational expertise and governance rigor that would prepare the company for public markets.
But the PE sponsors also understood that KION wasn't a turnaround story—it was a growth story. The heritage brands were already profitable. The opportunity was to accelerate expansion, particularly in high-growth markets like China, and to invest in next-generation technology.
The Multi-Brand Strategy
From its inception, KION pursued a differentiated multi-brand strategy that persists to this day. The KION Group includes brands like Linde and Baoli, offering a diverse range of forklifts including electric counterbalanced trucks, internal combustion trucks, and narrow aisle forklifts. KION has a strong presence in Europe and is expanding its reach in North America and Asia.
Linde and STILL serve the market for industrial trucks in the higher price category, targeting customers who value German engineering, innovation, and total cost of ownership over upfront price. Baoli focuses on the economy segment, competing on value in markets where customers prioritize capital conservation. Fenwick remains the largest supplier of industrial trucks in France, OM STILL leads in Italy, while OM Voltas serves the Indian market.
This architecture resembles what automakers like Volkswagen have done with their brand portfolios—offering distinct brands for different market segments while sharing platforms, components, and back-office functions. The economics work because development costs can be spread across higher volumes while brands maintain distinct market positions.
For investors, the multi-brand structure provides some insulation against market segment fluctuations. When premium demand weakens, economy segments often strengthen, and vice versa. The portfolio approach also positions KION to serve a wide range of customer needs, from small businesses requiring a single forklift to multinational logistics operators standardizing on a single supplier.
Inflection Point #1: The China Entry & Weichai Investment (2009–2013)
If the PE buyout was KION's creation story, the Weichai investment was its coming-of-age moment—a strategic partnership that would reshape the company's ownership, capabilities, and global ambition.
Building the China Presence
In January 2009, KION Group formed a China-based forklift manufacturing joint venture, KION Baoli (Jiangsu) Forklift, with Jiangsu Shangqi Group and Jingjiang Baoli Forklift. In May 2010, KION Group acquired full management control of KION Baoli.
Linde Material Handling had begun production in China as part of a joint venture in Xiamen, Fujian Province, over 25 years before KION was formed, acquiring all company shares in 1999. But the formation of KION Baoli represented a different approach—a dedicated value brand specifically designed for the price-sensitive Chinese market and eventual export to other emerging markets.
China wasn't just another market for KION. It was becoming the center of gravity for global forklift demand. Gordon Riske, who became CEO in 2008, noted that China accounts for roughly 30 percent of the global industrial truck market and that this share was set to increase. For KION to achieve its "leader" ambitions encoded in its very name, it needed to win in China.
The Weichai Power Game-Changer (2012)
The deal that truly transformed KION's strategic position came in 2012. The partnership was a landmark transaction as it was the largest Chinese direct investment in Germany to date. Under the terms of the agreement, Weichai Power would invest a total of EUR 738 million: EUR 467 million to acquire a 25 percent stake in KION via a capital increase and EUR 271 million for a 70 percent majority stake in KION's hydraulics business.
Weichai Power, headquartered in Weifang, Shandong Province, is part of the Shandong Heavy Industry Group—a Chinese industrial conglomerate manufacturing commercial vehicles, construction machinery, power systems, and auto parts. The company had previously acquired Moteurs Baudouin in France and Ferretti Group in Italy, demonstrating a pattern of acquiring Western industrial technology.
Tan Xuguang, Chairman and CEO of Weichai Power, said, "This partnership is an important step in our five-year strategy to globalise and expand our business activities into new markets and products. With this partnership, we will leverage KION's strong position and utilise growth opportunities for KION and Weichai Power to further enhance the competitive edge of both companies. KION has a long and successful history of operating in its markets, and we are strongly committed to its highly qualified and motivated employees and management."
For KION, the strategic rationale was equally compelling. The strategic partnership with Weichai Power provides additional access to key Asian growth markets as it will leverage Weichai Power's strong local roots and relationships. KION Group will also have access to a larger supplier base throughout China and Europe.
Affiliates of KKR and Goldman Sachs Capital Partners retained their existing investment in KION and did not receive any proceeds from this transaction, and would continue their full support of KION. This was unusual—typically PE firms look to exit when strategic investors enter. But KKR and Goldman recognized that Weichai's investment strengthened rather than compromised their exit strategy.
Why This Partnership Worked
German CEO Gordon Riske later noted that the cooperation with Chinese Weichai Power should be one of the best examples of win-win result of Chinese investments in German companies. Weichai Power started to invest in KION in 2012 and eventually grew to hold more than 43 percent of the stake. KION maintained very close personnel exchanges with its Chinese shareholder, keeping the corporate governance structure in good condition.
The Weichai relationship differed from other Chinese investments in German industry, which sometimes became contentious over technology transfer and governance. Several factors contributed to the partnership's success:
First, Weichai gained what it wanted—access to world-leading high-end hydraulics technology—through its 70% stake in Linde Hydraulics, rather than extracting technology from KION itself. Second, the governance structure preserved KION management's operational independence while giving Weichai board representation appropriate to its ownership stake. Third, the partnership created genuine commercial synergies, with Weichai providing distribution and supplier relationships in China while KION provided technology and operational expertise.
Weichai Power Co., Ltd., Weifang, People's Republic of China, indirectly held a 46.5 percent stake in KION GROUP AG via Weichai Power (Luxembourg) Holding S.Ă r.l., Luxembourg as at June 30, 2024. This stake has remained remarkably stable, reflecting a patient, strategic investor rather than a financial holder looking to exit.
Inflection Point #2: The IPO (June 2013)
With the Weichai partnership in place, KION had assembled the ownership structure for its next transformation: going public.
Going Public
The shares of KION GROUP AG were listed in the Prime Standard section of the Frankfurt Stock Exchange for the first time on 28 June 2013. Following a periodic review of market indices on 23 September 2013, they were also included in the SDAX, the index of Deutsche Börse.
The KION Group announced its intention to float on 3 June 2013 and, together with its shareholders and underwriters, published the prospectus containing the general parameters for the IPO on 14 June 2013. The price range was between €24.00 and €30.00 per share. At the end of the subscription period, which ran from 17 to 26 June 2013, the issue price was set at €24.00 per share. Despite the challenging situation in the capital markets, the offering was significantly oversubscribed at the offer price. Trading began in the Frankfurt Stock Exchange's Prime Standard segment on 28 June 2013.
CEO Gordon Riske later reflected: "On 28 June 2013 we were able to celebrate the fact that the shares of KION GROUP AG had been successfully listed on the Frankfurt Stock Exchange. Both for our staff and for me personally this day was one of the most moving professional events of the past financial year."
The IPO raised significant capital. Overall, 19.8 million shares with a total issue amount of €475.4 million were placed with new investors, of which 17.2 million new shares originated from a capital increase in June 2013 (€413.4 million) and 2.6 million shares were from the stake held by existing shareholder Superlift Holding S.à r.l., Luxembourg, as an over-allotment (€61.9 million).
Weichai Power (Luxembourg) Holding S.à r.l., which is a strategic anchor shareholder of KION GROUP AG, acquired 13.7 million new shares at a price of €24.00 per share immediately before the offer closed. This provided the Company with a total of approximately €328.4 million.
The Capital Structure Reset
The IPO was designed not just to provide an exit path for PE investors but to fundamentally restructure KION's balance sheet. The Company used EUR 1,080 million to repay in full its bank term debt under the amended Senior Facilities Agreement. The repayment was funded with a combination of proceeds from the IPO, the capital increase subscribed by Weichai Power Co. Ltd. in the context of the IPO, as well as available cash and drawings under a new Revolving Credit Facility.
As a result of the improved credit profile, the KION Group's credit rating went up in July 2013. Moody's upgraded the Corporate Family Rating by three notches, from B3/positive to Ba3/stable, while Standard & Poor's also significantly improved its credit rating for the KION Group, from B/stable to BB–/positive.
The three-notch Moody's upgrade was exceptional—rating agencies rarely move so dramatically in a single step. It reflected recognition that KION had transformed from a highly-leveraged PE portfolio company into a conservatively-financed public company with strategic backing from one of China's largest industrial groups.
The deleveraging also positioned KION for transformative M&A. With a clean balance sheet and access to public equity markets, the company could pursue larger acquisitions than would have been possible under PE ownership. This capability would prove essential in the years ahead.
In September 2014, KION was admitted to the MDAX, the index of mid-cap German stocks, further raising its visibility among institutional investors.
Inflection Point #3: The Dematic Acquisition — Becoming an Automation Giant (2015–2016)
If the Weichai investment positioned KION for the Chinese market and the IPO provided financial flexibility, the Dematic acquisition redefined the company's very identity—from forklift manufacturer to intralogistics solutions provider.
Building Toward Automation
The Belgian company Egemin was acquired in 2015, followed by the US-based company Retrotech in 2016. These acquisitions signaled KION's strategic intent to move beyond industrial trucks into warehouse automation. Egemin brought expertise in automated guided vehicles. Retrotech added retrofit and upgrade capabilities for automated systems.
But these were warm-up acts for the main event.
The Dematic Deal
In June 2016, KION Group acquired Dematic for €1.9 billion. The KION Group expected the purchase price for the shares to amount to approximately USD 2.1 billion, based on an enterprise value of Dematic of USD 3.25 billion.
Dematic began in 1819 in Wetter, Germany with the founding of Mechanische Werkstätten Harkort & Co, which was incorporated into Deutsche Maschinenbau-Aktiengesellschaft (Demag) in 1910, then acquired by Mannesmann in 1973. After the acquisition of U.S. Rapistan, Mannesmann Demag Fördertechnik AG was established in 1992. In 1993, Australian racking and shelving manufacturer Colby was added, and in 1997 the company was renamed to Mannesmann Dematic AG. Four years later, Siemens bought the company and merged it with its own logistics activities to form Siemens Dematic AG. In 2006, Siemens carved out the industrial and distribution logistics portion as Dematic GmbH & Co. KG.
On December 28, 2012, AEA Investors LP and Teachers' Private Capital, the private investment division of the Ontario Teachers' Pension Plan, completed their acquisition of Dematic from private equity firm Triton. Under their ownership, Dematic accelerated growth significantly.
Dematic had been growing annually by more than 12 percent since 2013. It generated approximately USD 1.8 billion in revenue and achieved an adjusted EBIT of USD 166 million during the calendar year 2015. Dematic employs almost 6,000 skilled logistics professionals—including over 3,000 engineers in software development, R&D, engineering, project management and customer service.
The deal was completed on 1 November 2016. On 21 June 2016, the KION Group reached agreement with funds managed by AEA Investors and the Ontario Teachers' Pension Plan to acquire 100 per cent of the capital and voting shares in DH Services Luxembourg Holding S.Ă r.l., Luxembourg.
The Strategic Transformation
"Today marks the dawn of a new era for the KION Group, Dematic and our customers," said chief executive officer of the KION Group, Gordon Riske. "The transaction brings together the world's most profitable manufacturer of forklift trucks and warehouse technology with one of the largest and fastest-growing warehouse automation and software solutions providers. Our combined global presence, intelligent and tailored material handling as well as comprehensive automation and software technology solutions, plus now more than 30,000 dedicated and highly skilled employees will enable us to deliver even more value for our customers."
The acquisition was transformative in multiple dimensions:
The purchase of Dematic established the KION Group as a leader in Intralogistics 4.0. Leveraging its sales and service networks, technologies and resources, the enlarged company would be able to offer the full material handling product and service offering to customers of all sizes in a broad range of industries across the world. This material handling solutions offering ranges from manually operated industrial trucks to complete fully automated warehouses. The KION Group would thus enhance its position as supplier for intelligent supply chain and automation solutions and is now positioned for attractive and profitable growth driven by megatrends like Industry 4.0, digitalization and e-commerce.
As a result of the transaction, the KION Group would start managing its business and reporting financials by three segments: Industrial Trucks and Services, Supply Chain Solutions and Corporate Services. The Industrial Trucks and Services segment represents KION's business up to the acquisition and consists of four operating units: Linde Material Handling EMEA and STILL EMEA, which each concentrate on Europe, the Middle East and Africa, plus KION APAC and KION Americas, which hold cross-brand responsibility for the Asia-Pacific region and the Americas, respectively. The Supply Chain Solutions segment comprises Dematic, Egemin Automation and Retrotech.
Why Dematic Was Transformative
The Dematic acquisition represented KION's recognition that the future of intralogistics wasn't just about moving things with forklifts—it was about orchestrating entire supply chains with software, sensors, and autonomous systems.
With a growth rate of 21.2% in 2021, Dematic was listed as the world's second-largest materials handling systems supplier with a revenue of $3.2 billion USD. The company now employs over 10,000 people and has engineering centres and manufacturing facilities in the United States, Germany, United Kingdom, Mexico, Australia, Belgium, China, Italy, Spain, France, Lithuania and Czech Republic.
With Weichai Power's support, KION accomplished the Dematic acquisition, which contributed to significant revenue growth—up almost sixfold—in the supply chain solutions segment. The deal aligned KION with the megatrends driving modern logistics: e-commerce growth, labor scarcity, the rise of same-day delivery expectations, and the Amazon-era standard for warehouse efficiency.
The transaction was funded initially with a bridge loan facility of €3.0 billion which had been firmly committed by a group of KION Group's core relationship banks. KION Group intended to permanently refinance the acquisition through equity, long-term capital markets and bank debt. The equity issuance of up to 10 per cent of new shares would utilize the entire currently existing authorized share capital and was fully supported by KION Group's major shareholder Weichai Power.
Weichai's continued backing through the Dematic acquisition demonstrated the value of having a patient, strategic anchor shareholder—one willing to support transformative investments rather than demanding immediate returns.
Scaling & Global Expansion (2017–2021)
With the Dematic acquisition complete, KION entered a period of rapid scaling and geographic expansion.
Manufacturing Footprint Expansion
In 2017, the Group headquarters with around 200 employees was relocated from Wiesbaden to a new development area at Frankfurt Airport. The move signaled KION's evolution from a domestic German company to a globally-oriented corporation—Frankfurt's airport location facilitated connections to operations worldwide.
In July 2021, KION opened an industrial truck plant in Kołbaskowo near Szczecin, Poland, where counterbalance trucks for all brands in the KION Industrial Trucks & Services segment are produced. The Polish facility added manufacturing capacity in an EU location with competitive labor costs.
In December 2021, KION opened a counterbalance truck plant for Linde Material Handling and Baoli in Jinan, China on an area of around 223,000 square metres. The company invested approximately EUR 100 million in the new facility. KION Group expected to create over 800 jobs by 2025 with its new facility in eastern China. The Jinan plant was strategically located in Shandong Province—Weichai's home territory—demonstrating how the ownership relationship created operational synergies.
Strategic Partnerships & Technology
In July 2019, KION Group and BMZ Holdings announced a 50/50 joint venture to manufacture lithium-ion batteries (80V, 48V) for the KION Group's trucks at BMZ's manufacturing facility. The electrification of forklifts represented both an environmental opportunity and a competitive necessity as customers increasingly demanded zero-emission equipment for indoor operations.
In August 2020, KION entered into a strategic partnership with Quicktron Intelligent Technology Co., Ltd for autonomous mobile robots. In March 2020, KION acquired the UK-based company Digital Applications International Limited (DAI) for around €123 million. The acquisition added logistics software capabilities to complement Dematic's automation hardware.
China Market Position
By the early 2020s, KION had established itself as a uniquely positioned Western player in China. As CEO Rob Smith later noted: "We are the only western player in the China market at this point in time."
Based on revenue for the year 2022, the KION Group is the leading overseas manufacturer in China, and including domestic manufacturers, the third-largest supplier there. This position was remarkable given the intensity of competition from domestic Chinese manufacturers like Hangcha and Anhui Heli, who compete aggressively on price.
KION's Chinese success derived from its multi-brand strategy—Linde and STILL for premium applications where reliability and total cost of ownership justified higher prices, Baoli for price-sensitive applications where Chinese customers demanded value. The Weichai relationship provided distribution advantages and local credibility that other Western competitors lacked.
The 2022 Crisis: Testing Resilience
The years 2022-2023 tested KION's resilience in ways that management couldn't have anticipated when they unveiled their long-term strategy.
The Perfect Storm
KION GROUP AG finished 2022 with order intake at a high level in a challenging macroeconomic and geopolitical environment. The global intralogistics Group recorded an increase in revenue compared to the previous year, including clearly positive currency effects. Sharply rising costs for materials, energy, and logistics coupled with ongoing supply chain disruptions had a significant impact on both operating segments in the last year, which was reflected in a decline in adjusted EBIT and a clearly negative free cash flow for the Group.
KION Group's adjusted EBIT fell to €292.4 million, significantly below the 2021 comparable figure (€841.8 million), as a result of significant cost increases and supply chain disruptions. KION Group's adjusted EBIT margin totaled just 2.6 percent compared to 8.2 percent the previous year.
The numbers were stark: a 65% decline in adjusted EBIT despite revenue growth. Net income fell to €105.8 million from €568.0 million in 2021. Free cash flow swung dramatically negative to -€715.6 million from positive €543.8 million the prior year.
Multiple factors combined to create this perfect storm:
Supply chain disruptions: The semiconductor shortage that plagued the global economy affected KION's ability to deliver trucks and automation systems on schedule. Components that had been routine to procure became scarce, forcing production delays and inefficient manufacturing.
Energy costs: As a German manufacturer, KION was directly exposed to the European energy crisis that followed Russia's invasion of Ukraine. Natural gas prices spiked, increasing both direct energy costs and the prices of energy-intensive materials.
Inflation: Raw material costs—steel, copper, electronics—all increased dramatically, compressing margins on orders that had been booked at pre-inflation prices.
Russia exposure: The KION Group announced its intention to exit its Russian business in October 2022. On 16 June 2023, the Group signed a contract to sell the ITS segment's Russian business as part of a management buyout. The transaction was subject to approval by the Russian authorities. The negative extraordinary effects from the Russian business reduced the Group's net income.
Management Response
New CEO Rob Smith, who had taken the helm in January 2022 after a distinguished career including the CEO role at Konecranes, faced an immediate crisis. "We faced a great deal of challenges in 2022. In light of this, we are focusing on the systematic implementation of the numerous measures we have introduced to strengthen our resilience and profitability. We are already in a far more agile and resilient position than we were this time last year. Our innovation pipeline is full and we invest in our sites worldwide. Furthermore, global growth drivers at KION Group such as digitalization, automation, and alternative energy systems remain intact."
Smith's response combined immediate cost actions with operational restructuring. The company implemented commercial agility measures—essentially repricing new orders to reflect current costs and shortening the time between order and delivery. Production was adjusted to match available components. Procurement was diversified to reduce single-source dependencies.
The Recovery & Current State (2023–2025)
The 2022 crisis proved temporary. KION's underlying business model remained sound, and management's response proved effective.
Turnaround Execution
KION has made very good progress in both operating segments and at the KION level since the difficult year of 2022, which was characterized by high inflation and disruptions to global supply chains. The measures to increase operational and commercial agility have proven successful and 2024 was a strong year for the company.
The 2023 results demonstrated the turnaround's effectiveness. Adjusted EBIT at Group level more than doubled to €790.5 million from €292.4 million in 2022. The adjusted EBIT margin improved significantly to 6.9% from 2.6%. Net income tripled to €314.4 million from €105.8 million. Free cash flow swung dramatically positive to €715.2 million from -€715.6 million—a nearly €1.5 billion improvement.
2024 Results & 2025 Outlook
The KION Group finished the financial year 2024 with strong results: With slightly improved revenue of €11.503 billion (2023: €11.434 billion), adjusted EBIT significantly increased to €917.2 million (2023: €790.5 million).
The adjusted EBIT margin rose to 8.0 percent (2023: 6.9 percent). Free cash flow was €702.0 million (2023: €715.2 million), driven by the strong results and a substantial decrease in net working capital. Net income increased year on year to €369.2 million (2023: €314.4 million).
Earnings per share rose by 18% to €2.75, and a dividend of €0.82 is proposed, maintaining a payout ratio of approximately 30%.
"With our recently launched efficiency initiatives and consistent strategy, we are on track to achieve an EBIT margin of more than 10% for KION Group and both operating units by the end of our current strategic plan, which is 2027," said Rob Smith, CEO of KION Group.
However, management recognized that European economic headwinds required additional action. The efficiency programme aims to achieve sustainable cost savings of around €140 million to €160 million per year, fully effective in the 2026 financial year. The implementation of the cost-saving measures will incur one-off expenses of approximately €240 million to €260 million in the financial year 2025, with the majority expected to be cash-effective in 2025.
The efficiency programme addresses developments in the macroeconomic environment, particularly as European economies struggle to gain momentum. This affects key customer industries in the industrial trucks and services segment, where Chinese competitors have been improving their market position post-pandemics.
Leadership Continuity
In May 2024, the Supervisory Board of KION GROUP AG extended Chief Executive Officer Rob Smith's contract by five years, ensuring his leadership until December 31, 2029.
"On behalf of the Supervisory Board I am glad that we can continue our trusted relationship with Rob Smith. I am confident that under Rob's proven leadership we will open the next chapter of the success story of KION," said Hans Peter Ring, Chairman of the KION Supervisory Board.
Smith's background made him well-suited for KION's challenges. Before joining KION, Rob Smith was President & CEO of the publicly listed Finnish group Konecranes, a leading international manufacturer of industrial cranes and container port automation. From 2013 to 2019, he was Senior Vice President & General Manager Europe, Africa and Middle East of the global agricultural machinery company AGCO Corporation. Prior to that, he held management positions in automotive supply and capital goods companies in the U.S., France and Germany. Smith holds a BSE in Systems Engineering from Princeton University, an MBA in International Operations & Finance from the University of Texas at Austin – Red McCombs School of Business.
The NVIDIA Partnership: Warehouse of the Future
In January 2025, KION GROUP AG, the Supply Chain Solutions Company, announced it is working with Accenture to optimize supply chains using NVIDIA's advanced AI and simulation technologies. At the Consumer Electronics Show (CES) in Las Vegas, the three companies showcased how clients can both define ideal set-ups for new warehouses and continuously enhance existing facilities with Mega, an NVIDIA Omniverse blueprint for large-scale industrial digital twins. This includes a digital twin powered by physical AI—AI models that embody principles and qualities of the physical world—to improve the performance of intelligent warehouses that operate with automated forklifts, smart cameras and the latest automation and robotics solutions.
"At KION, we leverage AI-driven solutions as an integral part of our strategy to optimize our customers' supply chains and increase their productivity," said Rob Smith. "With NVIDIA's AI leadership and Accenture's expertise in digital technologies, we are reinventing warehouse automation. Bringing these strong partners together, we are creating a vision for future warehouses that are part of a smart agile system, evolve with the world around them, and can handle nearly any supply chain challenge. This collaboration underscores our commitment to innovation and pushing the boundaries of industrial automation to usher in a new era of supply chain efficiency."
KION stated it is the first in the industry to work with NVIDIA's physical AI, creating the warehouse of the future and reshaping the industry.
Market Position & Competitive Landscape
Understanding KION's competitive position requires examining both the forklift market, where it ranks second globally, and the warehouse automation market, where Dematic positions it among the leaders.
The Forklift Market
Global leadership remains with Toyota Industries Corporation, KION Group AG, and Jungheinrich AG, which collectively hold roughly 53% of the 2024 market. Toyota's 28% slice underscores its broad product span from pallet jacks to fuel-cell heavy trucks and its dense dealer network on five continents. KION and Jungheinrich AG differentiate through integrated automation, robotics, and fleet-management software suites.
The global forklift market is a consolidated market with the presence of some major market players, such as Toyota Industries Corporation, KION Group AG, Jungheinrich AG, Mitsubishi Logisnext Co., Ltd., and Crown Equipment Corporation. These players hold approximately 55–60% of the market share and have a well-established global presence, supply chain, and strong product portfolio.
The market is growing attractively. The global forklift market is projected to grow from USD 85.2 billion in 2024 to USD 125.4 billion by 2030 at a compound annual growth rate (CAGR) of 6.7%.
Chinese challengers Hangcha and Anhui Heli deliver competitive pricing and increasingly sophisticated electric offerings, expanding overseas via distributorships in Europe, MENA, and South America. This Chinese competition represents KION's primary competitive threat in the industrial trucks segment.
The Warehouse Automation Market
KION Group and Daifuku retain scale advantages in multi-technology bids, buoyed by established service networks. Symbotic's USD 22.4 billion backlog underscores the value of proprietary AI and high-velocity pallet shuttle systems.
KION Group, Daifuku, and Symbotic collectively controlled approximately 22% of global revenue in 2024, underscoring a moderately consolidated field.
Dematic claimed to have made over $2.5 billion in 2024. Its focus on real-time analytics, AI-driven logistics, and modular automation places it in a leading position to revolutionize warehouse operations and lessen reliance on manpower.
The warehouse automation market size was valued at USD 20.19 Billion in 2024 and is projected to reach USD 54.05 Billion by 2031, growing at a CAGR of 14.45%.
Bull Case vs. Bear Case: A Strategic Analysis
The Bull Case
1. Structural Tailwinds in Both Segments: KION benefits from powerful secular trends. E-commerce growth drives demand for warehouse automation. Labor shortages make automation increasingly necessary rather than optional. Electrification of forklifts plays to KION's technology leadership. The company isn't just riding a cycle—it's positioned at the intersection of multiple growth vectors.
2. Dematic Transformation: The Dematic acquisition transformed KION from a premium forklift manufacturer into an integrated supply chain solutions provider. This higher-value positioning supports better margins and creates customer switching costs through software and systems integration.
3. China Position: KION's unique status as the only significant Western player in China, combined with Weichai's continued support, provides access to the world's largest forklift market and fastest-growing automation market. Competitors cannot easily replicate this relationship.
4. Service Revenue Stability: KION's service business continues to be a bright spot, growing to 49% of total revenue in Q2 2025, up from 45% in the prior year. This shift toward higher-margin service revenue is part of the company's strategy to improve overall profitability and reduce cyclicality.
5. Proven Management: Rob Smith has navigated the 2022 crisis effectively, demonstrating operational capability. His contract extension through 2029 provides leadership continuity.
The Bear Case
1. Chinese Competition: European economies are struggling to gain momentum—this affects industries in Industrial Trucks & Services, where Chinese competitors have been improving their market position in the aftermath of recent pandemics. Chinese manufacturers like Hangcha and Anhui Heli are moving upmarket with increasingly sophisticated products at lower prices.
2. Cyclicality: Despite service revenue stability, KION remains exposed to industrial capital expenditure cycles. When customers reduce investment, forklift and automation orders decline.
3. European Manufacturing Base: KION's significant European manufacturing footprint exposes it to higher energy costs and labor costs relative to competitors with more Asian production.
4. Project Execution Risk: The Supply Chain Solutions segment involves large, complex projects where execution challenges can compress margins. The 2022 crisis revealed vulnerability to supply chain disruptions affecting project delivery.
5. Weichai Dependency: While Weichai's 46.5% stake provides stability, it also creates concentration risk and potential governance concerns for some Western investors.
Porter's Five Forces Analysis
Buyer Power: Moderate. KION serves a diverse customer base from small businesses to multinational corporations. Large customers have bargaining power, but switching costs (training, parts inventory, service relationships) create friction.
Supplier Power: Moderate-High. The 2022 crisis demonstrated vulnerability to component suppliers, particularly semiconductors. The lithium-ion battery joint venture with BMZ represents efforts to reduce supplier dependency.
Threat of Substitutes: Low. Material handling is essential for modern logistics. While specific technologies evolve, the fundamental need for moving goods within facilities isn't going away.
Threat of New Entrants: Low-Moderate. High capital requirements, brand relationships, and service network requirements create barriers. However, Chinese manufacturers have demonstrated ability to enter Western markets with competitive products.
Competitive Rivalry: High. The market features several well-capitalized competitors (Toyota, Jungheinrich, Hyster-Yale, Crown) plus emerging Chinese players. Competition is intense in all segments.
Hamilton Helmer's 7 Powers Analysis
Scale Economies: KION benefits from R&D scale (spreading development costs across high volumes) and manufacturing scale. However, these advantages are shared with Toyota and other large competitors.
Network Effects: Limited direct network effects in hardware. Software platforms like Dematic's warehouse management systems have modest network effects through integration with customer systems.
Counter-Positioning: KION's multi-brand strategy (premium + economy) creates counter-positioning challenges for competitors focused on single market segments.
Switching Costs: Moderate-to-high switching costs exist through training, parts inventory, service relationships, and (for automation) software integration. The Dematic segment has higher switching costs than Industrial Trucks.
Branding: The Linde brand carries significant premium positioning in Europe. However, brand loyalty is weaker in forklift markets than consumer markets.
Cornered Resource: No obvious cornered resource. The Weichai relationship provides advantages but isn't exclusive.
Process Power: KION's hydrostatic drive technology and other engineering innovations represent process advantages, though these erode over time through competition and technology diffusion.
Key Performance Indicators for Monitoring
For investors tracking KION's ongoing performance, three metrics deserve particular attention:
1. Adjusted EBIT Margin
KION has targeted 10%+ adjusted EBIT margin by 2027 for both the Group and individual operating segments. This metric captures both revenue quality (pricing power, mix) and operational efficiency. The margin declined to 2.6% during the 2022 crisis but recovered to 8.0% in 2024, demonstrating management's execution capability.
Watching the quarterly trajectory of this margin provides insight into whether KION is successfully implementing price increases, controlling costs, and improving project execution. A sustained margin below 8% would suggest structural competitive pressure; sustained margins above 10% would validate the premium positioning strategy.
2. Service Revenue as Percentage of Total Revenue
Service business grew to 49% of total revenue in Q2 2025, up from 45% in the prior year.
This metric matters because service revenue is more stable, more recurring, and generally higher-margin than new equipment sales. Rising service penetration reduces cyclicality and improves earnings quality. The installed base of over 1.9 million industrial trucks creates a large addressable market for parts, maintenance, and fleet management services.
3. Supply Chain Solutions Order Intake
The SCS segment's order intake serves as a leading indicator of automation demand and future revenue. SCS Segment Order Intake was €624 million in Q4 2024, impacted by customer hesitancy. Large automation projects have long lead times, so order intake today translates to revenue and earnings 12-24 months later.
Customer hesitancy in automation spending reflects broader uncertainty about economic conditions and interest rates. When customers gain confidence, SCS order intake should accelerate. Watching this metric provides early signal of the automation growth story's validation.
Conclusion: The Supply Chain Solutions Company
KION's journey from a Linde AG carve-out to a global intralogistics leader encapsulates several enduring themes in industrial transformation.
First, private equity can genuinely add value—not just through financial engineering but through governance rigor and strategic focus. The KKR/Goldman ownership established KION as a dedicated, independent entity with the mandate to invest in growth.
Second, patient strategic capital enables transformative moves. Weichai's continued support through multiple market cycles—including providing backing for the Dematic acquisition—demonstrates how aligned ownership can be a competitive advantage.
Third, industrial evolution requires anticipating technology shifts. KION's move from forklifts to automation wasn't obvious or inevitable—it reflected management's recognition that the future of intralogistics was software and systems, not just trucks. The Dematic acquisition positioned KION for where the industry was going, not where it had been.
Fourth, crises test but don't necessarily destroy. The 2022 shock revealed vulnerabilities but also demonstrated organizational resilience. Management's response—commercial agility, cost discipline, operational restructuring—provides a template for navigating future disruptions.
At the end of 2024, more than 1.9 million industrial trucks of the KION Group were in use by customers from all manner of sectors and of varying sizes on six continents.
That installed base—nearly two million machines powering global commerce—represents both KION's achievement and its opportunity. Every forklift needs maintenance. Every warehouse can be more automated. Every supply chain can be more intelligent.
As CEO Rob Smith declared at CES 2025: "We're leveraging physical AI—making supply chains smarter, faster, and ready for the future." Whether KION can deliver on that vision will determine whether its ambitious name—"Leader"—remains justified in the decades ahead.
Myth vs. Reality Box
| Myth | Reality |
|---|---|
| "KION is just a forklift company" | Since acquiring Dematic in 2016, KION derives substantial revenue from warehouse automation and software, positioning it as an integrated supply chain solutions provider |
| "Chinese ownership means technology transfer to China" | Weichai gained hydraulics technology through its 70% stake in Linde Hydraulics—a separate entity. KION's core forklift and automation technology remains within the listed company |
| "The 2022 crisis reflected structural problems" | 2022's challenges were largely external (supply chains, energy costs, Russia). The 2023-2024 recovery demonstrates the business model remained sound |
| "European industrial companies can't compete with Chinese manufacturers" | KION's multi-brand strategy—premium brands for value-focused customers, Baoli for price-sensitive markets—allows competition across segments. KION remains the leading foreign manufacturer in China itself |
Regulatory and Accounting Considerations
- KION reports under IFRS, with purchase price allocation effects from acquisitions (particularly Dematic) creating differences between reported and adjusted EBIT
- The company carries significant goodwill and intangible assets from acquisitions; impairment testing under IAS 36 could affect reported earnings if market conditions deteriorate
- German co-determination law requires employee representation on the Supervisory Board, affecting governance dynamics
- Weichai's 46.5% stake subjects certain related-party transactions to enhanced disclosure requirements
- The company's sustainability reporting follows CSRD requirements, with Science Based Targets initiative commitments for emissions reduction
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