Kardex Holding AG: Financial Results 2022

Media information – Financial Results 2022

Zurich, 2 March 2023

Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
 

Financial Year 2022

• Kardex experienced record demand in all industry segments and regions
• Bookings significantly above the previous year and 55% above 2019 (pre-COVID)
• Net revenues increased by around 24% compared to the previous year
• Cautiously optimistic with a full order backlog well beyond middle 2023
   

Kardex posted record high bookings of EUR 698.6 million in 2022, 15.9% above the already strong financial year 2021 and approximately 55% above 2019, the last "pre-COVID-19” year. The trend towards automation continued across all industry segments and regions served by Kardex. Demand is additionally supported by the Group's expanded solution portfolio. Bookings in New Business increased by 16.9% and in Life Cycle Services (LCS) by 12.8%. The order backlog as of 31 December 2022, amounted to EUR 510.5 million, 39.3% higher than at the beginning of the year.

Net revenues of EUR 565.6 million were 24.2% higher than the previous year mainly due to strong demand. The revenue mix changed in the year under review with 71.1% (68.2%) of net revenues generated by New Business and 28.9% by LCS (31.8%).

Gross profit increased by only 8.8% to EUR 177.7 million which corresponds to a gross profit margin of 31.4%, down 4.5 margin points from previous year. The gross profit was severely impacted by supply chain issues, material cost increases, project delays by customer and production inefficiencies being based on missing parts, and a high sickness absence rate due to influenza and COVID-19 in German factories.

Operating costs increased less than net revenues by 19.3% to EUR 121.9 million, reflecting in particular the growing employee base, performance-based sales commissions, slightly increased marketing expenses and the partial return of travel expenses after the pandemic. In addition, development expenses, especially in the area of software, were increased in a targeted manner and the sale of Robomotive shares resulted in a low single-digit million euros write-off.

In total, EBIT amounted to EUR 55.8 million. This is 8.7% lower than in the previous year (EUR 61.1 million) and corresponds to an EBIT margin of 9.9%. Net profit amounted to EUR 38.6 million (EUR 43.7 million) being 11.7% lower, due to a likewise weaker financial result.

Challenging year for Kardex Remstar
Bookings at Kardex Remstar developed well in all main markets and were particularly strong again in the US. With EUR 509.8 million, Kardex Remstar exceeded the previous year level by 10.9%, surpassing the EUR 500 million mark for the first time. At 14.7%, LCS grew even faster than New Business. The order backlog at the end of the period was high with EUR 322.2 million, 35.2% higher than at the beginning of the year.

Net revenues of EUR 436.6 million (EUR 365.5 million) increased substantially by 19.5%. On the other hand, gross profit margins were severely under pressure due to the profound global supply chain issues, which led to significant challenges and higher costs across the entire supply chain. In addition, the ramp up of the new US plant including issues with the implementation of the new ERP software, negatively impacted the result by around EUR 10 million. Kardex expects the plant to achieve the targeted stability, capacity, and efficiency in the second half of 2023.

As a result of these additional costs and production challenges, Kardex Remstar's EBIT declined by 7.3% to EUR 56.1 million, corresponding to an EBIT margin of 12.8% (16.6%).

Kardex Mlog grows
Kardex Mlog was able to benefit from the positive market environment and, with bookings of EUR 125.4 million, again slightly exceeded the leap achieved in the previous year (EUR 124.5 million). The order backlog remained at a comforting high level with EUR 130.5 million (EUR 110.7 million) at the end of the year. Cooperation with the Corporate Ventures, Kardex AutoStore and Rocket Solution, further strengthened Kardex Mlog's market position in the area of lightgoods solutions.

Net revenues increased substantially by 18.7% to EUR 105.6 million (EUR 89.0 million), but also the gross profit margin of this division was heavily impacted by negative supply chain issues and project delays by customers.

As a result of these cost increases and project challenges the EBIT declined compared to previous year by EUR 0.8 million to EUR 5.1 million corresponding to an EBIT margin of 4.8%.

Kardex AutoStore gains momentum
Kardex AutoStore further strengthened the organization and established a strong presence in Europe and the US, supported by the market’s high acceptance of the technology and the expertise of the rapidly growing team. Bookings of EUR 63.3 million were well above expectations. The recorded net revenues of EUR 23.7 million still lagged behind bookings due to the normal ramp-up of the current projects. This business nevertheless achieved a balanced operating result already in its second year of incorporation and will contribute positively to the group result from 2023 onwards. Cooperation with the two divisions is also well established.

Securing supplies requires more NWC
The inventory levels deliberately increased and the trade accounts receivable rose substantially based on the very strong net revenues by the end of the year under review, leading to a further increased net working capital. In combination with the ongoing investments and the reduced cash flow from operating activities, a negative free cash flow of EUR -15.2 million resulted. The ROIC amounted to 27.5% (32.7%). However, the balance sheet remains debt-free and solid. The equity ratio decreased slightly to 56.2% (57.4%).

ESG activities intensified
After Kardex became a member of the UN Global Compact in 2021, activities in the ESG Mangagement Team, which consists of members of the Board of Directors and the Group Management, were structured and intensified. Among other things, the materiality assessment was carried out according to the concept of double materiality and the 15 material topics to Kardex were identified.

Change in Group Management
Jens Fankhänel left Kardex at the end of February 2023 to take on a new professional challenge. He joined the Group in 2011 as Head of Division Kardex Remstar and took over the role as Group CEO in April 2016. He has contributed significantly to the dynamic development of Kardex over the last 12 years. The Board of Directors and the Group Management thank him for his great and successful commitment and also wish him every success in his new role. Until a successor is appointed, Chairperson of the Board of Directors, Felix Thöni, who already led Kardex as Executive Director from 2012 - 2016, will lead the Group through the transition phase.

Motions for the General Meeting
In line with the dividend policy of distributing up to 75% of the net profit generated from operations, the Board of Directors will propose a dividend of CHF 3.50 per share (CHF 4.30) to the Annual General Meeting of 20 April 2023. All current members of the Board of Directors, except for Jakob Bleiker, are standing for re-election at the Annual General Meeting. The Board of Directors thanks Jakob Bleiker for his 11 years of dedicated service and contributions and wishes him all the best for the future. Newly proposed for election is Maria Teresa Vacalli. With her proven industry and digitalization expertise, the seven-member Board of Directors further diversifies and expanded its competencies.

Outlook
The Board of Directors and the Group Management remain confident about the future of Kardex based on the comfortable visibility due to the high backlog and despite isolated signs of a general slowdown in the markets. The order backlog is full until well beyond the middle of 2023. The current supply chain inefficiencies are expected be overcome in the course of 2023. This, combined with the implemented market price increases, should positively impact the gross profit margin. Kardex expects to develop again in line with its communicated financial targets during the current financial year.

Key figures
in EUR million

¹ Definition according Alternative Performance Measures (APM) see note 1 of the Annual Report.

² 2022: Distribution of a dividend as proposed to the Annual General Meeting to be held on 20 April 2023.

Annual Report
A PDF version of the Annual Report 2022 of Kardex is available on our website.

Contact for media and investors
Alexandre Müller; investor-relations@kardex.com
Mobile: +41 (0)79 635 64 13
 

Kardex – Corporate Profile
Kardex is a global industry partner for intralogistic solutions and a leading supplier of automated storage solutions and material handling systems. The Group consists of two entrepreneurially managed divisions, Kardex Remstar and Kardex Mlog. Kardex Remstar develops, produces and maintains dynamic storage and retrieval systems and Kardex Mlog offers integrated materials handling systems and automated high-bay warehouses. The two divisions are partners for their customers over the entire lifecycle of a product or solution. This begins with an assessment of customer requirements and continues via the planning, realization and implementation of customer-specific systems through to ensuring a high level of availability and low lifecycle costs by means of customer-oriented lifecycle management. Around 2’100 employees in over 30 countries work for Kardex.

Disclaimer
This communication contains statements that constitute “forward-looking statements”. In this communication, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations and business and certain of our strategic plans and objectives. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors which are beyond Kardex’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors detailed in Kardex’s past and future filings and reports and in past and future filings, press releases, reports and other information posted on Kardex companies’ websites. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication. Kardex disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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