[35] 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. At the start of 2014, changes were made to how information is disclosed in the three categories. The LMH and STILL brand segments have operational responsibility for the short-term rental business (rental assets) and use it to generate operating income – in the same way as they would with capital expenditure on property, plant and equipment. That is why the change relating to the rental fleet business (net disbursals) will be reported in cash flow from investing activities in future. The figures for 2013 have been restated to reflect this disclosure change. As a result, cash flow from operating activities in 2013 has improved by €170.3 million, while cash flow from investing activities has decreased by the same amount. In addition, interest received has been reclassified from cash flow from investing activities to cash flow from financing activities because the KION Group’s cash and cash equivalents are also used to repay existing financial debt. Accordingly, both interest payments and interest received will, as a component of financing, be allocated to cash flow from financing activities in future. As a result, cash flow from investing activities in 2013 has decreased by €7.0 million, while cash flow from financing activities has increased by the same amount.

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.

The KION Group’s net cash provided by operating activities totalled €603.8 million, which was significantly higher than the prior-year figure of €506.3 million after restatement to reflect the rental assets. The main reason for this was the €68.8 million decrease in tax payments, which had a positive impact on cash flow. This decrease was due to the fact that there had been one-off tax payments in the previous year in connection with the sale of the hydraulics business. A higher level of working capital at the reporting date had the effect of reducing cash flow.

Net cash used for investing activities amounted to €297.8 million (2013: net cash used of €310.7 million). Capital expenditure on developments (R&D), property, plant and equipment, and the rental fleet business (net) rose by €20.5 million year on year. In the previous year, net cash totalling €25.1 million had been used to acquire Arser and the remaining shares in Willenbrock. The proceeds from the disposal of non-current assets primarily related to disposals of assets no longer required for the Group’s operating activities. Other inflows from investing activities related to the disposal of an equity investment of the Willenbrock Group and dividend payments from equity investments.

Free cash flow – the sum of cash flow from operating activities and investing activities – increased by €110.3 million to €305.9 million in the reporting period (2013: €195.6 million). As in 2013, a large part of it was used for repayments.

At minus €428.1 million, cash flow from financing activities was down significantly on the prior-year figure (2013: minus €531.6 million), which had been particularly affected by the IPO and the restructuring of financial debt. The net repayment of financial debt in the year under review totalled €301.2 million (2013: €1,105.7 million). The financial debt taken up during the year, which came to €1,375.2 million, was more than offset by repayments totalling €1,676.4 million. These repayments included €525.0 million in respect of the early redemption of the bond tranches plus early repayment charges of €14.8 million. Net cash of €82.5 million was also used for regular interest payments (2013: €112.6 million). The distribution of a dividend of €0.35 per share resulted in an outflow of funds of €34.5 million, while the acquisition of 51,000 treasury shares generated an outflow of €1.5 million.

Despite favourable currency effects of €1.8 million (2013: adverse currency effects of €7.0 million), this resulted overall in a sharp contraction in cash and cash equivalents, which fell from €219.3 million as at the end of 2013 to €98.9 million as at 31 December 2014.