[34] Consolidated statement of cash flows

The consolidated statement of cash flows shows the changes in cash and cash equivalents in the KION Group resulting from cash inflows and outflows in the year under review, broken down into cash flow from operating, investing and financing activities. The effects on cash from changes in exchange rates are shown separately. Cash flow from operating activities is presented using the indirect method in which the profit or loss for the year is adjusted for non-cash operating items.

Cash flow from operating activities decreased by 18.9 per cent to €336.1 million in 2013 (2012: €414.0 million). EBIT fell sharply from €549.1 million in 2012 to €374.2 million in the reporting period, although EBIT in the previous year had included, among things, income of €211.8 million from the sale of the hydraulics business that did not impact on cash flow from operating activities. The significant year-on-year decrease was largely due to one-off tax payments of €57.7 million in connection with the sale of the hydraulics business in 2012.

Net cash used for investing activities amounted to €133.5 million. The net cash provided by investing activities in 2012 of €104.1 million included proceeds of €259.7 million from the sale of the hydraulics business. Cash payments for capital expenditure on non-current assets and property, plant and equipment came to a total of €125.8 million (2012: €155.1 million). In the Linde Material Handling and STILL operating segments, the volume of capital expenditure was below that of the comparable prior-year period because the hydraulics business (which had high levels of capital expenditure) in the LMH segment and the new plant in Brazil in the STILL segment had led to higher cash payments in 2012. The net cash used for the acquisition of the Arser Group in Turkey amounted to €3.9 million (after deduction of the cash received). The acquisition of 51 per cent of Willenbrock Fördertechnik Holding GmbH led to a further outflow of funds of €21.2 million in December 2013. In the previous year, €9.7 million of the outflow of funds was attributable to the acquisition of a majority stake in Linde Creighton.

The proceeds from the disposal of non-current assets primarily related to disposals of assets no longer required for the Group’s operating activities.

Cash flow from financing activities amounted to minus €538.6 million (2012: minus €330.1 million). Financial debt increased by €649.0 million due to the issuance of the senior secured bond in February 2013. In addition, €184.4 million had been drawn down from the new revolving loan facility totalling €1,045.0 million as at 31 December 2013. As a result of the capital increases from Weichai and the IPO at the end of June 2013, the capital contributions made up to 31 December 2013 totalled €741.8 million. In total, these transactions plus existing cash enabled the repayment of financial liabilities of €1,714.1 million relating to the Senior Facilities Agreement (SFA) as well as the early redemption of the 2011/2018 floating rate note amounting to €175.0 million. Gross repayments of all the KION Group’s financial liabilities (including PIK interest) amounted to a total outflow over the period as a whole of €2,201.6 million. This amount was partly offset by taking up financial debt of €1,095.9 million – including the corporate bond issued in 2013. The cash payments for costs incurred in connection with the debt and equity transactions mentioned above amounted to €56.3 million (2012: €15.6 million). In the third quarter, 200,000 treasury shares worth €5.6 million were purchased on the stock exchange for the new employee share programme. Regular interest payments were €10.1 million lower than in 2012 and amounted to €119.6 million in the reporting period. These interest payments included a non-recurring outflow of funds of €14.4 million resulting from the termination of interest-rate hedging instruments in connection with the previous acquisition finance arrangements. The net cash outflow from financing activities in 2012 (€330.1 million) was also largely attributable to the repayment of loans.

The inflows from the IPO and the capital increases as well as the existing cash from 2012 were predominantly used for the repayments. Overall, this resulted in a sharp contraction in cash and cash equivalents, which fell from €562.4 million as at the end of 2012 to €219.3 million as at 31 December 2013. There was also a decrease in cash and cash equivalents of €7.0 million owing to currency effects (2012: increase of €1.0 million).