Kardex Holding AG: Half Year 2022

Media information – Half Year Results 2022

Zurich, 28 July 2022

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

Half Year 2022

• The automation trend drives demand across all industry segments and regions
• Bookings develop positively with 6% above the strong H1 2021 and 34% above H1 2019
• Revenues 24% higher than H1 2021 but still impacted by missing components
• Gross profit up by 8% y-o-y but margin impacted by material cost increases and production inefficiencies

The first half of 2022 was very challenging for Kardex. On the one hand, the Company recorded continued demand for efficient intralogistics solutions. On the other hand, significant bottlenecks in the procurement market and challenges in staff recruitment negatively impacted Kardex Remstar's ability and efficiency in the order fulfillment processes. In addition, there were substantial cost increases for materials, energy, and freight, which will be offset over time by the already implemented multi-stage sales price adjustments. Despite a considerable increase in net revenues, this resulted in a lower gross profit margin in the first half of 2022, which was additionally impacted by the ramp-up costs of the new factory in the USA. On a positive note, the order backlog rose to a new record level at the end of the period.

Kardex recorded bookings of EUR 320.5 million in the reporting period, 6.0% above the strong first half of 2021 and around 34% above the "pre-COVID" half of 2019. The automation trend continues across all industry segments and regions served by Kardex. The Group's expanded solutions portfolio further creates demand. Bookings in New Business increased by 6.8% and in Life Cycle Service (LCS) by 4.0%. The order backlog as of 30 June 2022 was EUR 437.4 million, up 19.3% compared to the beginning of the year and 39.6% compared to the end of the same period last year.

A significant part of the high order backlog is due to reduced delivery capacity, especially at Kardex Remstar, and the resulting lagging net revenues development. Although net revenues of EUR 257.5 million were 24.3% higher than in the prior-year period, they were well below expectations and available capacity. The main reason for the lagging net revenues was missing components and resulting production and delivery delays. New Business accounted for 69.7% (63.2%) and LCS for 30.3% (36.8%) of net revenues. 

Gross profit increased by only 8.4% to EUR 81.5 million due to the various supply chain issues, representing a weak margin of 31.7%.

Operating costs rose under-proportionately by 19.5% to EUR 57.7 million, reflecting higher sales capacity and the normalization of trade show expenses following the pandemic and increased travel expenses.

Expenditures for development, especially in the software area, were raised in a targeted manner.

This resulted in an EBIT of EUR 23.8 million with an EBIT margin of 9.2%, 11.5% less than in the same period of the previous year (EUR 26.9 million). Net profit for the year's first half amounted to EUR 15.8 million (EUR 19.6 million).

Kardex Remstar experiences a challenging half-year

Bookings at Kardex Remstar developed well in all main markets. At EUR 254.6 million, they exceeded the prior-year period by 11.4%, with LCS growing slightly faster than New Business. The order backlog at the end of the period was a high EUR 300.2 million, up 26.0% from the beginning of the year.

Despite the 20.1% increase, net revenues of EUR 200.2 million (EUR 166.7 million) were significantly below expectations. This reflects the profound global supply chain issues, which led to significant inefficiencies and higher costs across the entire supply chain. In addition, the ramp-up of the new plant in the USA did not proceed as expected which impacted the results in the mid-single-digit million range. In the meantime, the plant is productive and will increase output and efficiency in the second half of the year.

Kardex Remstar's EBIT declined 10.9% to EUR 23.8 million, corresponding to a lower EBIT margin of 11.9% (16.0%).

Kardex Mlog holds up well in a challenging environment

Kardex Mlog developed positively in the first half of the year. At EUR 54.7 million (EUR 73.3 million), bookings were down on the strong prior-year period but still at a good level. Customer interest remains high and the sales funnel is well filled. The cooperation with the Corporate Ventures, Kardex AutoStore and Rocket Solution, has further strengthened Kardex Mlog's market position in lightgoods solutions.

At EUR 115.0 million, the order backlog was 3.9% higher than at the beginning of the year. Kardex Mlog increased its net revenues by 24.8% to EUR 50.4 million in the first half of the year.

EBIT amounted to EUR 2.8 million (EUR 2.1 million), 33.3% more than in the same period of the previous year, with an EBIT margin of 5.6% (5.2%).

Kardex AutoStore strengthens footprint and gains speed

Kardex AutoStore continued to develop the organization and to establish a strong footprint in Europe and the USA based on the great market perception of our team´s expertise. The team secured bookings of EUR 11.4 million, which are above expectations. Net revenues of EUR 6.9 million are lagging bookings due to some project postponements. Cost development is in line with the strategic plans and the cooperation with both divisions has been well established.

Deliberate increase in net working capital

In order to counteract bottlenecks in the supply chain, general inventory levels and specifically safety stocks were increased wherever possible. In addition, the accounts receivable rose as a result of the increased net revenues, which all led to an increased net working capital. In combination with the lower cash flow from operating activities and the continued investments, the free cash flow was negative at EUR -9.2 million. A ROIC of 32.5% was achieved but below previous year (35.7%).

Outlook

The Board of Directors and Group Management remain confident about the medium to long-term development of intralogistics. After the bottlenecks in the first half of the year, there are signs of a slight easing in the procurement market. Even if the current geopolitical situation should lead to a global weakening of the economy, Kardex is well-positioned to support its customers in maintaining and strengthening their competitiveness. Kardex Remstar will most probably not quite reach the communicated target range in 2022. Despite this situation, the Company expects to continue to develop in line with its communicated financial targets on Group level.

Key figures

in EUR million

Interim Report

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

Contact for media and investors
Edwin van der Geest; investor-relations@kardex.com
Tel. +41 (0)44 419 44 79 / Mobile +41 (0)79 330 55 22

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 2’000 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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