Margins Are Beginning To Improve, but Project Business Will Take a While To Fix

Kion Group has excellent growth prospects. Its main challenge will be investing efficiently to support growth without undercutting the business' potential to reach optimal margins and returns. Kion's opportunity lies with the growth in e-commerce and e-procurement, which is driving demand for warehouse equipment, including forklifts, but even more so warehouse automation equipment. Despite rapid growth, e-commerce still accounts for well below half of global retail sales, around 15% in the United States, 20% in the United Kingdom, and roughly 25% in China. The low penetration levels suggest a long runway for growth, as we believe demand for forklifts and warehouse equipment will naturally follow the expansion of warehouses needed to support an e-commerce supply chain.