Ladies and gentlemen, dear shareholders, I'm very pleased to welcome you to this year's annual general meeting of KION Group AG. My name is John Feldman. As the Chairman of the Supervisory Board, I will preside as Chairman of this general meeting. I have the pleasure of declaring this year's ordinary general meeting of the KION Group AG open. Mr. Ring, who's been appointed Deputy Chairman, is sitting here right behind me. Please allow me to note that all of the members of the Supervisory Board are attending the meeting today, except for Mr. Caspar, who's unfortunately in hospital. We wish him a good recovery. Also, except for Mr. Chang, who sends his apologies because he has to attend other urgent meetings in China. He's very sorry that he is unable to attend the AGM. All of the members of the Executive Board are in attendance.
I would like to welcome the Chief Executive Officer, Mr. Gordon Riske, on my left, as well as the other members of the Executive Board, Ching Pong Quek and Dr. Ike Burn. Ladies and gentlemen, as you might have noticed, some of the members of the Executive Board and of the Supervisory Board are wearing headsets. Do not worry, they are not listening to some music, but this is simply because we are providing a simultaneous translation of the AGM for our non-German members into English and Chinese. Do not worry about this. If you would like to listen to the Mandarin translation, for example, as well, you can get a headset at the information desk in the foyer, ladies and gentlemen. I would like to point out that the translation is not legally binding.
The German original of the explanations given by management, as well as of the contributions of shareholders, will be provided. Ladies and gentlemen, let's deal with a couple of formalities first. I'm pleased to welcome Mr. Gerns, the notary who's sitting next to me on my right and who will prepare the notarized record of the meeting. Hello, Mr. Gerns. Today's annual general meeting was called in due form and time by means of publication of the agenda in the German Federal Gazette on the 26th of March, 2018. The printout of the publication has been handed to the notary, Mr. Gerns. Printed copies of the agenda are also available at the registration desk for speakers, which you can find on the left side of this room.
The invitation and the agenda were made available in due time and form to the shareholders, the banks, and shareholder associations pursuant to section 125 of the German Stock Corporation Act. The documents, which are to be made available, were published on the company's web page since the moment of the invitation. Furthermore, the documents are available today at the speakers' registration desk for inspection and can be handed to shareholders either there or at the information desk in the foyer. We have not received any requests to supplement the agenda, nor any counter motions or election proposals. The list of participants is in preparation. It will be available before the general debate at the latest before we proceed to voting. I will then announce today's attendance. A copy of the list of participants will then be available for inspection at the registration desk.
To establish the presence of those participating in the adoption of resolutions, an addendum to the list of participants will be prepared if necessary. A copy of the addendum will be made available for inspection at the registration desk. Before we proceed to the agenda, I would like to make some general remarks. The entry and exit checkpoints will be in the entrance area up until the end of the AGM. The area of attendance consists of this hall, the foyer, next to the hall, the restrooms in the basement, and the entrance area up until the entry and exit checkpoints. The annual general meeting will be transmitted by loudspeakers in these rooms, and therefore you will be able to follow the meeting there as well in German. Please note that voting will take place in this assembly room only, the so-called Festsaal.
If you would like to participate in the vote later on, please make sure to be in this room. At the entrance, you registered with your combined admission ticket and voting card. If you have various admission tickets and voting cards, please check whether you have registered all of them. If you have not, please make sure to do so at the entrance. This is the only way to ensure that all of the shares which you represent are counted during the vote. If you intend to leave the annual general meeting early, please fill in a proxy form and hand it to another participant or third party. You will find the necessary form on your voting card. This is necessary for us to be able to update the attendance. If you wish to grant a proxy to another participant or third party, please give them their voting card.
Please hand the proxy form to one of our attendants at the exit. Alternatively, you may also appoint the company's proxies to vote on your behalf. If you would rather grant authorization to the proxies of the company, please fill in the form with the title "Proxy Authorization" on your voting card and give your proxy instructions on how you would like to vote. Please hand the voting card to one of our attendants at the exit. The company proxies are only entitled to vote on your behalf if you have instructed them explicitly on how you would like to vote on the agenda items. Without a clear instruction, they will abstain from their vote. Please understand that you cannot instruct the company proxies to speak on your behalf, to file an objection, to ask questions, or to present motions.
All agenda items of today's AGM will be discussed during one general debate. I kindly ask any shareholders who would like to speak to submit their requests at the registration desk for speakers as soon as possible. The registration desk is still here on the left, as I pointed out earlier on. When you take the floor, please use the lectern on the right or the left in front of the podium only. Should you wish to raise a point of order, I would also ask you to complete a speaker's registration form. Please also mark your registration form with an appropriate keyword. This will help me to decide whether your procedural motion should be given preferential treatment and, if so, when it should best be heard. Ladies and gentlemen, before we proceed to the vote, I will announce the type and form of the vote.
Please note that I have granted my approval for the speech of the CEO and for my speech to be shown live on the company's homepage. After the CEO's speech, transmission will end. There will not be any video or audio recordings made of your statements, ladies and gentlemen. The cameras, which have been set up in this assembly hall, are only used to show images within this hall and to transmit the proceedings to the back office. Before you take the floor, please let us know if you would not like your face to be shown on the big screen here. In the back office, there are stenographers who help take down your questions. They will not prepare a verbatim record of the proceedings. Private video or audio recordings of the events at this meeting are prohibited.
We'd also kindly ask you to turn your mobile phones off during the meeting or to switch them to silent mode. Otherwise, there might be technical interferences. With this, we have completed the formalities as requested. I would now like to turn to our agenda. The agenda was published together with the proposed resolutions of management in the Federal Gazette on the 26th of March, 2018, and is available today for inspection. I now turn to agenda item one, presentation of the annual financial statements and the consolidated financial statements, as well as the combined management report. I note the following: the financial statements, the consolidated financial statements, and the combined management report of KION Group AG, as well as the group, were reviewed by the independent auditor who issued an unqualified audit opinion.
The Supervisory Board agreed with the audit result and approved the annual financial statements and the consolidated financial statements. This means that the annual financial statements were adopted. The consolidated financial statements and the combined management report of KION Group AG and of the group are printed in the annual report 2017. The annual report 2017, as well as the financial statements of KION Group AG, have been published on the company's homepage since the day on which the AGM was called. The documents are also available today at the speaker's desk and at the information counter in the foyer. Ladies and gentlemen, one of the topics of agenda item one is the Supervisory Board report. First of all, I would like to refer you to pages 16 through 25 of the annual report. On those nine pages, we report in detail about our work.
I will touch now upon the most important aspects, however. However, before I do that, I would like to extend a very warm welcome to Ms. Anke Groth. We are delighted that we've managed to win Ms. Groth over as a new member of the KION Executive Board. As of the 1st of June, Ms. Groth will be KION's Chief Financial Officer. She will be responsible for the following areas: controlling, accounting, tax, corporate finance, as well as investor relations and M&A activities, financial services, IT, and legal. Apart from this, Ms. Groth will take on the position of Labor Director and will therefore be responsible for HR, health and safety, and environmental management, as well as data protection. Therefore, a very broad portfolio for this company. I would like to give Ms. Groth the opportunity to introduce herself briefly to you as the shareholders of our company. Ms. Groth, you have the floor.
Good morning, ladies and gentlemen, and thank you very much, Dr. Feldman, for allowing me to introduce myself briefly to you, ladies and gentlemen. Dr. Feldman just mentioned which areas I will be responsible for in the KION Executive Board. I'm looking forward to each and every one of these important areas, and I'm looking forward to continuing the success story of KION together with all of the KION staff, with the managers and executives, as well as my colleagues within the Executive Board. My entire professional background has been in the energy sector, and I spent most of my years with E.ON. E.ON is, of course, an energy group, and KION is an intralogistics company. This might sound quite different. However, there are many commonalities. For many years, the energy sector has been undergoing a process of profound transformation.
In the energy sector, disruptive changes have already occurred. Continuous change and renewal are a constant need. Placing the customer at the heart of your activities, tapping growth potentials in the area of customer solutions, and making customer experiences and internal processes more and more digital. All of these topics are highly relevant also for KION. After having touched upon the comparison of the industries, let me now tell you a little bit more about my professional career and what qualifies me for the position of KION. When I laid the foundation with my degree in business administration, with a focus on controlling and finance. However, I learned most on the job in the various positions I held. First of all, in the two positions as CFO for two big E.ON subsidiaries in the U.K. and Spain.
Beyond my strong customer focus, these years certainly helped me to sharpen my perception for performance and cost efficiency. Just as important was my post as Head of Investor Relations at the E.ON headquarters. I was responsible for E.ON's capital market presence, as well as for the communication with analysts and investors. These were the years where the company was split and where there was a lot of change. Efficient capital allocation, profitable growth, and an attractive dividend are very important criteria for you as shareholders, and they will be for me as well. I started my professional career in the areas of mergers and acquisitions and internal management consultancy. Here, I had to focus on the strategic search for partners, buying and selling companies, and integrating companies within the group.
When fulfilling all of these managerial roles, I had a chance to work with fantastic teams and many talented people. My teams were very international indeed, with people from many different cultural backgrounds. However, with all of this diversity, there was always one thing that united us. We were always one team. I'm delighted that apart from my position as CFO at KION, I will now also be responsible for human resources and will therefore participate in shaping essential aspects of the world of work of 32,000 employees. This also means that in my role as Labor Relations Director, I will try to enhance and intensify the constructive dialogue with the social partners at company level and with other partners. These are new roles and tasks for me. I'm fully aware of the responsibility in this area, especially in times of change.
I'm very much looking forward to dedicating, as of June, therefore in just a few weeks from now, fully my experience, energy, and passion to KION, its employees, and shareholders. Thank you very much. Thank you very much, Ms. Groth. I'm absolutely convinced that we've chosen an excellent new CFO, and we're very much looking forward to cooperating with you, to your energy, to your passion. We're wishing you the best of luck and success for your new position. Ladies and gentlemen, the Supervisory Board would like to thank its CFO, Dr. Töpfer, who left the company on the 31st of March of this year at his own request, and I'm sure I'm speaking also on your behalf. The Supervisory Board wishes Dr. Töpfer a lot of success for his new job, as well as luck, which is also useful when mastering new challenges. Dr.
Töpfer did an excellent job for this company. Certainly, the executive board will carry on along these lines. With that, ladies and gentlemen, I would like to get back to the work of the supervisory board in 2017. Again, in 2017, the supervisory board oversaw the work of the executive board and advised the executive board. I would like to highlight two themes in particular, which strongly influenced the supervisory board in its activity. Firstly, the strategy KION 2027, and secondly, the sustainability report. An important focus of the supervisory board's work in 2017 was its involvement in refining the strategy for the KION Group following the acquisition of Dematic. The acquisition of Dematic has changed the company. For this reason, the corporate governance structure was adjusted. Today, the KION Group is composed of the segments industrial trucks and services ITS, supply chain solutions SCS, and corporate services.
Apart from this new segmentation, KION's management structure was changed as well. The group is now led by five global operating units, which are supported by the central CTO organization, as well as the functional units. We are confident that thanks to this advanced management structure, the company is very well positioned to not only tackle future market challenges, but to assume a leading role in actively shaping them. This is indeed the fundamental intention of the new strategy KION 2027. Following the acquisition of Dematic, with its know-how and experience, we want to position KION as the global leader in intralogistics.
We will use our experience, our competencies, and our ability to innovate in the areas of industrial trucks and supply chain management, in digitalization, in the increased networking and automation of value-added chains, in order to lead the shaping of future intralogistics processes at our big accounts, just like with small and medium-sized enterprises. Excellent performance, safety, and energy efficiency will be important goals in this regard. The Supervisory Board met on several occasions to discuss these topics extensively, also together with the Executive Board. At our meeting on the 25th of November 2017, we gave our approval to the strategy 2027. We are convinced that with its strategy KION 2027, the group will be able to further expand its leading position in the area of intralogistics and to unlock its full potential across the entire group. Another focus of the Supervisory Board work was the company's sustainability report.
We are convinced that sustainable action will be an essential basis for the company's success and that it represents the license to operate for companies. This is why we believe that KION has embarked upon the right path by placing a prominent focus on sustainability and by considering forward-looking and value-conscious actions as solid pillars of our operations. The company already published a voluntary sustainability report for 2016. For the first time, the sustainability report for the reporting year 2017 contains the KION Group non-financial declaration according to the new legal requirements. Apart from the requirements of the law, the sustainability report follows the guidelines of the Global Reporting Initiative. This is a leading organization which defines standards regarding the content of sustainability reports. The KION sustainability report contains detailed information on KION's sustainable corporate development.
It describes in particular the aims, measures, and processes which are important in the KION Group in order to act sustainably in the sense of a balance between the environment, economic, and social aspects. The 2017 report received the quality seal of the Global Reporting Initiative. Last year, the Supervisory Board discussed the reporting regarding sustainability during various meetings and shared its views with management, also regarding the sustainability report. The Supervisory Board reviewed the sustainability report 2017 and approved it. Apart from the topics which I've just mentioned, the Supervisory Board continued to analyze corporate governance. In 2017, the new requirements of the German corporate governance code were reviewed in detail. They require for the first time to publish skills profiles for the Supervisory Board. With its 17 skills areas, our Supervisory Board offers a very broad profile.
I guess we're the only one to have such a detailed skill set. It covers the areas of experience and knowledge as important skill profiles for our Supervisory Board. The requirements defined in the skills profile will be crucial in order to define the criteria for selecting new Supervisory Board members in future. The details of the new skills profile are described on page 19 of the annual report. As every year, the Supervisory Board discussed the accounting documents which had been presented by the Executive Board and audited by the independent auditors, and it approved the separate financial statements and consolidated financial statements. The Supervisory Board also examined the report concerning relationships with affiliated enterprises in fiscal 2017, which the Executive Board had presented. The auditors reviewed the so-called dependency report and issued an unqualified audit opinion based on their audit, which they completed without identifying any deficiencies.
Based on the outcome of its own review, the Supervisory Board agreed with the findings of the audit and did not raise any objections against the report. Before I close, I would like to make a couple of personal comments. During last year's AGM, we only obtained an approval rate of 72% approximately regarding the Executive Board's remuneration system. We are obviously not satisfied with this result. In the run-up to this AGM, we held various talks regarding this topic. Our understanding is that the criticism is mainly about the question of transparency, and our impression is that there were also a few misunderstandings. I would therefore like to clarify some aspects which will also be included in future remuneration reports.
The amount of our executive board members' fixed remuneration, as well as the target values for the variable performance-based remunerations STI and LTI, were derived from benchmark analyses for executive board remuneration of MDAX companies. This analysis was performed by an independent consultancy firm on our behalf. We oriented ourselves on the positioning of our company in the upper quartile of the MDAX, which is where it belongs, considering its size, its market positioning, and its balance sheet result. Obviously, the Supervisory Board also defined a cap for the maximum possible remuneration of our executive board members, also taking into account their individual performance and possible individual salary adjustments. According to this formula, the executive board members cannot earn more than the total amount of their fixed salary plus twice the target STI and LTI.
For the STI, the one-year variable remuneration, the amount is determined by the achievement of the following targets: adjusted EBIT and free cash flow. For the long-term incentive LTI, the targets are return on capital employed ROCE and total shareholder return TSR. That is basically the return that you get as a result of any increases in the share price. The targets for adjusted EBIT, free cash flow, and ROCE are derived from the budget and defined in target agreements between the Supervisory Board and the Executive Board. We define these targets annually. We will not disclose the target values for obvious reasons. As a listed company, each year, KION will issue a guidance regarding the expected company results for its shareholders and the capital market. Target agreements between the Supervisory Board and the Executive Board will be more demanding than the guidance.
They are not published because otherwise our guidance could be called into question. I suppose that you agree with our intention of defining more ambitious targets for the executive boards than the ones which might be realistic from the point of view of a prudent merchant, which are therefore published as the basis for the guidance. For the total shareholder return TSR, the average performance of MDAX-listed companies is decisive. Our executive board members are not entitled to their variable remuneration if, compared to shares of MDAX-listed companies, the KION share has performed equally well or better. As far as the criteria EBIT, free cash flow, and ROCE are concerned, there's no entitlement to the variable remuneration if the agreed ambitious targets are missed by more than 30%. The individual performance is assessed by the supervisory board.
The Supervisory Board can decide to adjust variable pay based on criteria such as the market positions, successful innovations, the Organizational Health Index—I'm sorry, that's the name the system has—OHI. This is a system that we use in order to check motivation of staff in our company and the enhancement of the leadership culture in the company. Apart from this, there are agreements relating to special operational and, above all, strategic projects. Other possible targets can derive from the company's sustainability report. Naturally, we can neither communicate these targets beforehand, nor can we describe them in detail afterwards. If we did so, we would jeopardize the company's intentions and interests, and this is certainly something that neither of us would want. These are the criteria we will also report in future.
In fiscal year 2017, ladies and gentlemen, there were the following personnel changes in the Supervisory Board, which will become effective after the AGM on the 11th of May 2017. The staff representatives, Holger Brunn and Joachim Hartig, retired from the Supervisory Board. They have been replaced by Stefan Caspar and Frank Schepp, who are the new staff representatives within the Supervisory Board. As I said, unfortunately, Mr. Caspar isn't here. He's in hospital. The Supervisory Board would like to thank Mr. Brunn and Mr. Hartig for their long-standing, extremely dedicated service for the company within the Supervisory Board. Mr. Hartig was always my Deputy Chairman in the Supervisory Board, and he worked for a great many years, and we would like to thank Mr. Hartig in particular, and certainly the shareholders should also like to join in with a round of applause for these two gentlemen.
Ladies and gentlemen, dear shareholders, the Supervisory Board believes that the company is well on track to achieve the goals of the KION 2027 strategy. The Supervisory Board considers the KION Group to be ideally prepared for the future opportunities and challenges in the area of intralogistics. On behalf of my colleagues in the Supervisory Board, I would like to thank the members of the Executive Board, as well as the employees of KION Group AG and of its subsidiaries in Germany and abroad for their commitment and for their excellent work in the last fiscal year 2017. Indeed, thank you very much again for a round of applause. Ladies and gentlemen, I would now like to ask Mr. Riske, the Chief Executive Officer of KION Group AG, for his report. Before that, we'll see a little film.
[Foreign language]
Sustainability is very important for the KION Group for a wide range of reasons. Because we have a wide variety of stakeholders ranging from customers, shareholders, employees, and business partners to neighbors and the public. The idea behind our sustainability strategy is taking responsibility and that we also deliver value for society and our stakeholders. [Foreign language]
By aligning our actions with environmental, social, and economic aspects, we also support our customers in implementing their own sustainability programs, hence meeting a key prerequisite for their success. [Foreign language]
[Foreign language] . Ladies and gentlemen, Mr. Riske, the CEO of KION Group AG, has the floor. Damen und Herren, liebe Freunde, dear Mr. Feldman, ladies and gentlemen, shareholders, friends, and partners of the KION Group, on behalf of the executive board and our employees who now number 32,000, I would like to welcome you to the fifth annual general meeting of KION Group AG. This is the fourth time we have invited you here to Frankfurt, and Frankfurt is now also home to the company's head office. In November, we moved into the office building that we have leased at the airport.
Our company and even some of our products are now highly visible to many of our customers and to key investors arriving in Frankfurt. At today's meeting, we will be asking you to approve the change of registered office in the company's articles of incorporation from Wiesbaden to Frankfurt. There have also been changes at board level within the KION Group. I too would like to welcome Ms. Anke Groth very cordially, who will become our new Chief Financial Officer with effect from the 1st of June. My fellow Executive Board members and I very much look forward to working with you. I would also like to thank our outgoing CFO, Thomas Töpfer, for his valuable work at KION. He played a major role in shaping the company.
We wish him every success in his new role as CFO at Covestro and thank him very much for his activities with KION. Ladies and gentlemen, KION is currently enjoying something of a golden age. Rarely has there been a more exciting time to be fulfilling our customers' needs in connection with material handling and intralogistic solutions. Digitalization is becoming an increasingly prevalent part of our day-to-day lives. It has been firmly established in our industry for some time as well. E-commerce continues to boom. Automation is crucial to getting ahead of the competition nowadays. The material handling sector is evolving at a fast pace. Constantly changing requirements regarding the speed and efficiency of material handling are turbocharging the innovativeness, creativity, and dedication of the KION Group's employees who work day in, day out to find solutions for our customers worldwide. Dedication for you, our shareholders.
Response and responsibility is the title of our 2017 annual report. We chose it for good reasons. Firstly, because we produced our first group-wide sustainability report last year. The second report came out just a few days ago. It is a record of the progress that we have made in recent months. It proves that we do not merely pay lip service in our quest for greater sustainability. In fact, sustainability is a fundamental principle that we have put into practice throughout the group. The report also documents how everything we do is underpinned by a forward-looking and values-based approach to our business. Dr. Feldman has already talked about this in his presentation, and you saw some great examples of our work in the short video. It was a fast-running video, but there was a group of young women—I do not know whether you saw them—all in red gowns.
I saw them myself last Friday at our Pune, India, KION plant. An unbelievable story. Young women from all over India who come to us for three years of training and who are there to assemble these products. You can see we are taking this very seriously. You will see more examples on our website. Secondly, because KION is not only responsible but also responsive. Our acquisition of Dematic in 2016 was a very important response to the opportunities and challenges that we face in our industry. We can now offer everything that our customers need in terms of intralogistics, from hand-pallet trucks to highly complex automated material flow solutions. Today, a good 18 months since the acquisition of Dematic, our belief in the deal has been vindicated.
The integration of Dematic into the KION Group was exactly the right move in terms of defining the future direction of the group. Another equally important response comes in the form of our KION 2027 strategy. The continuation of our Strategy 2020. Strategy 2020 provided the basis for our very successful, profitable growth over the past few years. We aim to continue on this successful path with the KION 2027 strategy. We are focusing on the enormous opportunities offered by the digital revolution. Many of you invested in the KION Group five years ago when we went public. At that time, you were investing in a highly promising and robust German engineering company. Rightly. Today, you are shareholders of a company that is harnessing the potential offered by megatrends such as digitalization and automation, benefiting from them and using them to shape its future.
We are creating the foundations for business in the 21st century. With this in mind, I will be asking you under agenda item seven to approve a control and profit and loss transfer agreement between KION Group AG, the controlling company, and KION IoT Systems GmbH, the dependent company. KION IoT Systems GmbH is a wholly owned subsidiary of KION Group AG. IoT, and I'm sorry, I'll have to use a number of English language terms on and off, and I'll try and translate into German. IoT means the Internet of Things, the term used to describe the fusion of the physical and virtual worlds where objects begin to communicate with one another. In Germany, the Internet of Things is better known as Industry 4.0. It is part of a genuine technological revolution.
Under the agreement, KION Group AG is entitled to issue the management board of KION IoT Systems GmbH with instructions on how the subsidiary should be run, making it more practical and efficient. The agreement will also strengthen the existing VAT affiliation between KION Group AG and KION IoT Systems GmbH and makes them a single entity for income tax purposes. The agreement is therefore financially advantageous for the KION Group. In particular, it reduces the overall tax rate of the KION Group and reduces the risk of losses remaining unutilized for tax purposes. Further details of the control and profit and loss transfer agreement with KION IoT Systems GmbH can be found in the joint report prepared by the executive board of KION Group AG and the management board of KION IoT Systems concerning the conclusion and content of the control and profit and loss transfer agreement.
I will return to the subject of KION IoT Systems GmbH at the end of my presentation. However, before talking about the future, before I set out the fantastic opportunities and potential that automation and digitalization offer for our group, I would like to take a look back at the 2017 financial year. 2017 was another very successful year for the KION Group, a year full of change and dynamism. We matched our slightly adjusted outlook in full. This was the first year in which Dematic was consolidated for the full period. Organically and through the purchase of Dematic, our revenue, adjusted EBIT, and net income reached unprecedented levels, as did the value of our order intake. In 2017, we also focused on integrating Dematic. We have achieved this very effectively, as evidenced by many concrete examples from China to South America.
The acquisition of Dematic has opened up an important section of the material handling market for us. Our vision is very clear. We, as KION Group, are the best company in the world at understanding our customers' material handling needs and providing the right solutions. I have a number of highlights to report from last year and the start of this year. KION North America unveiled a comprehensive range of new trucks at the ProMat Trade Fair in Chicago in May 2017. This was also the first time that the KION brand companies Dematic, Linde, and Baoli exhibited to customers together. In the second half of the year, our brand company Linde launched its new electric forklift trucks that have a lifting capacity of 2 tons- 3 tons and are fitted with lithium-ion batteries.
We entered into an exclusive global partnership with EP Equipment in January of this year to service the fast-growing market for affordable warehouse trucks. EP is a leading Chinese manufacturer and exporter. We also have an agreement on a minority stake in EP. This three-born site in the Czech Republic has been expanded to include a second production hall for automated conveyor systems. The new facility has recently begun manufacturing modules for Dematic's automated storage and retrieval systems for the European market. In January 2017, we received an investment-grade rating for the first time. Fitch Ratings gave the group a long-term issuer rating of BBB minus with a stable outcome. One month later, we issued our first promissory note. Promissory notes are a particularly attractive form of corporate finance.
The proceeds of around EUR 1 billion were put towards refinancing the bridge loan for the acquisition of Dematic on very good terms. The gross proceeds from the capital increase in May amounted to approximately EUR 603 million, allowing us to partly refinance the Dematic acquisition. Part of the 2017 authorized capital was used for this. An Executive Board report on utilization of the 2017 authorized capital is printed in the notice of the annual journal. We notched up another great success just a few days ago when the new RX 20 electric forklift truck from STILL was crowned Best Counterbalance Truck at the illustrious International Intralogistics and Forklift Truck of the Year awards. Congratulations on that. Once again, all this was made possible by the 32,000 highly committed KION Group employees.
I would like to thank them very cordially for their incredibly hard work, and I'm happy to do so on your behalf as well. We really have to have a great success. Ladies and gentlemen, part of being an organization with a healthy corporate culture is having clear values. The process with which we developed our shared KION Group values is developed last year in role giving a voice to employees around the globe. These values represent the convictions of the entire KION Group. They are enshrined in our daily work. Integrity means doing the right thing. Collaboration requires us to believe in one another. We have the courage to embrace change and innovation and create outstanding value for our customers in everything we do. We live by these values and translate them into commercial success. Our figures for 2017 provide evidence of this.
This is the first full financial year to include the contributions of Dematic. 2017 was characterized by strong growth. The order intake value was close to EUR 8 billion. The KION Group brand companies that manufacture forklift trucks and warehouse trucks recorded more than 200,000 truck orders in one year for the first time. This equates to an increase of 13%. Revenue was around EUR 7.7 billion. We also increased our profitability again. The adjusted EBIT margin was 10%, into double figures for the first time for the group. We would like you, our shareholders, to share in the success we have achieved in recent years, as we did in previous years. At today's annual general meeting, the Executive Board and Supervisory Board are proposing a dividend of EUR 0.99 per share. That is a massive 24% more than last year.
With these record results, 2017 marked an excellent start to the new era of the KION Group. We want to build on this success in 2018. We are anticipating a positive economic climate overall in 2018 and therefore expect continued growth this year in the global market for industrial trucks and warehouse systems. In 2017, our new industrial truck business benefited from very strong growth in the global market. We expect growth rates to normalize in 2018 and be closer to the long-term trend of around 4%. Europe and North America are expected to register further moderate increases in orders. We anticipate the demand will carry on growing in China. Our supply chain solutions business is underpinned by the strong inclination to invest, seen in all the main customer industries in connection with multi-channel and e-commerce strategies. This is likely to have a positive effect on demand.
We aim to build on our successful performance of recent years in 2018. Based on the forecasts for market growth, we will be seeking to achieve further increases in order intake, revenue, and adjusted EBIT. Order intake is expected to be between EUR 8.05 billion and EUR 8.55 billion. The target figure for consolidated revenue is in the range of EUR 7.7 billion-EUR 8.2 billion. The target range for adjusted EBIT is EUR 770 million-EUR 835 million. Free cash flow is expected to be in the range between EUR 410 million and EUR 475 million. The target figure for ROCE is in the range of 8.7%-9.7%. This outlook is based on the assumption that material prices and the exchange rate environment will remain broadly the same as at the time the outlook was prepared.
Following the strong fourth quarter of 2017, the new financial year has also got off to a good start with profitable growth, despite the sizable negative currency effects. At one point, EUR 885 million, the value of order intake was high again in the first quarter of 2018. Adjusted for negative currency effects of EUR 74 million, order intake rose by 4.1%. At EUR 2.626 billion, the order book remained at the high level seen at the end of 2017. Revenue rose by 2.4% to EUR 1.843 billion in the first three months of 2018. Adjusted for negative currency effects of EUR 83 million, revenue increased by 7% and no less. Adjusted EBIT advanced by 4.2% to EUR 157.9 million. The adjusted EBIT margin improved from 8.4% - 8.6%. Net income increased substantially by more than 70% to EUR 68.4 million in the period January to March.
In the industrial trucks and services segment, orders for around 53,500 units were received in the first three months of the year. The highest total ever for a first quarter. We also significantly increased profitability in the supply chain solutions segment. The EBIT margin improved from 7.2%- 7.4% in spite of a slower start to the year and despite the massive, truly massive adverse effects caused by the movement in the dollar exchange rate. These results for the first quarter show that we are on track to achieve our targets for this year. We therefore confirmed our outlook for 2018 when we presented them on April 26. Ladies and gentlemen, the market for material handling remains a global growth market. It is expected to double in size over the next 10 years, in fact.
In the same period, the market for supply chain solutions is likely to grow to such an extent that it will overtake global forklift truck and warehouse technology business. We are benefiting from several trends here. One is the globalization of trade. This is driving demand for transport services. At the same time, it is increasing competitive pressure and encouraging companies to become more specialized, leading to more fragmented supply chains. Some of you may be asking whether this driver, which is so vitally important for KION, whether this driver could suffer as a result of the recent turmoil in trade policy. I firmly believe that no individual political player can curb global trade. It is the foundation on which growing global prosperity is built. It provides a livelihood for billions of people every single day. A further trend is digitalization.
This is making it possible to coordinate the flow of materials along the entire supply chain, turning production facilities and warehouses into intelligently networked systems and enabling limited warehousing and production spaces to be used much more efficiently. The digital revolution is particularly pronounced in retail. Above all, the e-commerce is an unending assortment of products. In the booming e-commerce sector, consumers not only want to see a wide range of products but also expect to receive their orders quickly, either the next day or, increasingly, the very same day. We all know this from our own personal experience. Where we choose to shop is no longer determined solely by price. Efficient and reliable supply chains are playing an increasingly important role in influencing where we as consumers spend our money. Efficient and reliable supply chains are therefore critical to the success of customers of KION's brand companies.
It's important to our customers that all processes, whether they are related to materials, products, or data, are optimally connected and coordinated. This way, companies are speeding up their processes and, in doing so, also saving valuable resources. Automation is crucial to getting ahead of the competition. Ladies and gentlemen, I began by saying how vital it is that we have the right responses to the questions and demands of our customers, to the enormous opportunities open to our industry. The purchase of Dematic in 2016 was one such response. Our KION 2027 strategy is another. It builds on the successful Strategy 2020 for long-term profitable growth that we launched four years ago. KION 2027 factors in the comprehensive changes that have taken place within the group.
Strategy 2020 enabled us to achieve profitable growth through efficient use of capital, and it made us resilient and better able to withstand economic downturns. With KION 2027, we are seeking to build on our leading position within the industry and do even better at unlocking our immense potential. Our focus is on a coordinated, customer-centric innovation, sales, and brand strategy, at the heart of which clearly lies further profitability. We want to grow at a faster rate than the material handling market. We want to remain the most profitable provider in our sector and build on this position. We want to remain profitable throughout whole economic cycles, and we want to offer our shareholders, meaning you, ladies and gentlemen, an attractive return on investment going forward as well. We have identified five areas of action that we believe will enable us to achieve these objectives.
All five have a common denominator: our aspiration to be the best at understanding our customers' requirements and offering them the perfect solution for their specific needs. That is why we are working to develop our capabilities in the areas of energy, automation, and digitalization on a basis of innovation and performance. What specifically do we mean by this? Let me start with a basis: innovation. We are driving innovation in the material handling market with an effective innovation ecosystem and cutting-edge, rapid development processes. We are entering into strategic partnerships with research institutes, universities, and innovative companies so that we can go to market quickly, more quickly, with new products and solutions. Performance. You all know how successful we've been in the years since our IPO. We are continually improving efficiency within the group. Every day, we work on making our products and services better for our customers.
We exploit synergies consistently, and we intend to continue this successful approach. Energy. We want to be leaders for energy-efficient intralogistics and supply chain solutions. One focus of our strategy will be to develop and commercialize new energy sources for industrial trucks. Customers are also increasingly turning to us for advice on energy matters. We are working to expand this line of business. Automation. I have already spoken about how automation is crucial for many of our customers. Our solutions enable particularly effective use of automation solutions. In many urban centers, it is becoming increasingly difficult to find staff to operate warehouses manually. We are helping our customers to achieve a lights-out warehouse, i.e., one in which light is no longer necessary because the operation is completely automated. Digitalization. We are aligning our business to an increasingly digital world and developing our digitalization strategy.
Our digital customer solutions span the whole spectrum, right up to fully automated warehouses, incorporating robotic solutions. Of course, we are pushing ahead with the digitalization of our internal processes at the same time. As you all know, everyone is talking about digitalization these days. We hear about the dawning of the digital age, although in reality, this began long ago. Digitalization is becoming an increasingly prevalent part of everyone's life. Even here at an event as traditional as an annual general meeting, you will be casting your votes digitally. Of course, the digital revolution is making itself felt in our industry too. It goes without saying that the products and services of the KION brand companies have long been digital. Examples include the new Truck Call app from Linde Material Handling, STILL's Next Fleet management system, and iQ Sprocket, the computer-aided maintenance system from Dematic.
Linde's Truck Call app assigns orders to trucks digitally. This simplifies communication between the fleet manager and driver. In smaller companies, in particular, fleet managers have a lot of responsibilities and therefore simply no time to be constantly looking for the right truck for a job. In the future, this app would enable them to do this from their desk. The Next Fleet system from STILL is setting new standards in terms of availability, ease of operation, and visualization in fleet management. The online portal presents all relevant data about the fleet in a clear and easy-to-read form and enables accurate analysis to optimize management of the fleet. Dematic Sprocket is a solution that assists customers with their maintenance requirements. Computer-controlled back-office processes reduce the administrative burden on companies, allowing technicians to concentrate on completing their work on the system. The management of maintenance tasks becomes more straightforward and transparent.
Within the KION Group, we see digitalization as a house built on four pillars: digital processes, digital products, digital customer solutions, and new digital business models. Digital processes. We are ensuring that we are ready to unlock the potential of the digital world by digitalizing our own processes in sales, in production, and in back-office functions. Digital products. Of course, this also applies to what we make. If our products are to be part of the digital economy, they must have connectivity. Digital customer solutions. We want to offer our customers more added value through digital products, services, and solutions, and new digital business models. This means developing new business models, whether it be with partners or even technology startups. We are serious about digitalization. Let me illustrate this with an exciting example when talking about digitalization.
At the beginning of this year, we opened our digital campus in Frankfurt. The aim is to provide an innovative working environment where we can drive forward the process of digitalizing the KION Group. Digital products are developed and implemented in what is called an agile working environment in direct collaboration with the customer, i.e., co-creatively. The KION teams are drawn both from the operating units and from cross-group functions. The campus provides a space where the teams can come together for a certain period and focus completely on a specific project. Innovative working practices are used in so doing, such as agile methods. The digital campus is also a place where we can host training courses to introduce new tools and agile methods and approaches. Members of project teams acquire relevant digital expertise that they can then use in their projects. This is made sure this way.
We firmly believe that the digital campus will help to anchor the idea of thinking in digital dimensions throughout our group. Our digital campus enables us to support digital projects through every stage of the process, from the initial idea through to market readiness. Work at the campus starts with the generation of ideas and ends with an analysis of the data relating to a product or a solution. In the future, we also aim to have workplaces at our customers' premises so that projects can be implemented locally. Campus teams will be embedded with our customers to work closely on developing solutions. A digital program office coordinates the projects, while the digital academy offers training and learning content. The interaction of these elements speeds up the development of digital products and harmonizes digital initiatives being carried out in different parts of the group.
I can give you another example of the digital initiatives being carried out in the KION Group. At the start of my presentation, I mentioned KION IoT Systems GmbH. This new company has more than a dozen digitalization experts who joined us as a complete team just a few months ago. The team comprises software and app developers, test engineers, and system architects, along with data security specialists. Together, they have all the skills and expertise required to develop innovative digital applications from the generation of ideas to the final implementation, all by themselves. The core task of the KION IoT Systems team will be to improve the connectivity of the KION brand company's products. In the future, our customers would expect all products to be connected to one another.
They will expect all performance data to be available in real time on a given day, and they will expect the data to be clear and readily understandable. We have already made a lot of progress in this regard. The addition of this team of specialists will take the connectivity of the products of the KION brand companies to a whole new level. Let me sum up. Over the past year, we have made good progress in securing the KION Group's future success. Our KION 2027 strategy lays the foundation for further profitable growth. Our most important action areas are digitalization, automation, and energy. We are continuing to extend our leadership position in these areas. It is our ambition to define the future course of our industry through our unique business performance and innovative strengths, with the best employees, the best ideas, and the best technologies.
With initiatives such as our digital campus and KION IoT Systems GmbH, they will help to consolidate the leading position of the KION Group in the digital age for the benefit of our customers, for the benefit of our 32,000 employees, and for the benefit of our shareholders. This means we can continue to do what we do best: come up with the right responses to the questions that matter to our customers, our industry, our society, and of course, to the questions that matter to you, our shareholders. Thank you very much for your attention.