Kion Finishes the Year With Strong Orders but Also Margin Pressure

Kion wrapped up 2021 with a continuation of double-digit order and revenue growth helped by e-commerce warehouse expansion, but also posted historically low margins. Relative to our forecasts revenue and profitability were roughly in line. Orders were up 32% year over year, spurred by above-market growth in the industrial trucks and services (forklift) division and beat the company-provided consensus forecast. Shares were up 5% at the time of writing, partially rebounding from underperforming the German DAX Index year to date. We see further upside potential relative to our EUR 95 fair value estimate. With 2022 EBIT guidance somewhat more optimistic than our forecasts, implying a greater margin recovery, we expect to make changes to our forecast but not enough to materially change our fair value estimate. Our narrow moat rating remains intact.