Selected notes to the consolidated statement of financial position

Goodwill and other intangible assets

The change in goodwill in the first nine months of 2015 resulted from the acquisition of the logistics automation division of automation specialist Agidens International NV (formerly the Egemin Group), from which goodwill of €50.9 million arose, and from currency effects.

The total carrying amount for technology and development assets as at 30 September 2015 was €199.6 million (31 December 2014: €210.0 million). Development costs of €9.1 million were capitalised in the third quarter of 2015 (Q3 2014: €9.9 million); the corresponding figure for the first three quarters of 2015 was €28.7 million (Q1 – Q3 2014: €31.5 million). Total research and development costs of €35.4 million were expensed in the third quarter of 2015 (Q3 2014: €29.7 million), while €106.1 million was expensed in the first nine months of 2015 (Q1 – Q3 2014: €87.8 million). Of these respective amounts, €13.6 million related to amortisation in the third quarter of 2015 (Q3 2014: €10.8 million) and €39.7 million to amortisation in the first nine months of 2015 (Q1 – Q3 2014: €31.3 million).

Inventories

The rise in inventories compared with 31 December 2014 was largely attributable to the increase in work in progress (up by 20.5 per cent) and finished goods (up by 28.1 per cent). Impairment losses of €2.8 million were recognised on inventories in the third quarter of 2015 (Q3 2014: €2.0 million) and of €6.8 million in the first nine months of 2015 (Q1 – Q3 2014: €8.0 million). Reversals of impairment losses had to be recognised in the amount of €0.9 million in the third quarter of 2015 (Q3 2014: €0.6 million) and in the amount of €2.7 million in the first nine months of 2015 (Q1 – Q3 2014: €2.2 million) because the reasons for impairment no longer existed.

Trade receivables

The rise in trade receivables compared with 31 December 2014 was predominantly due to the increase of €70.8 million in receivables due from third parties and the increase of €4.9 million in receivables due from unconsolidated subsidiaries, equity-accounted investments and other equity investments. Valuation allowances of €41.9 million (31 December 2014: €40.2 million) were recognised for trade receivables.

Assets held for sale

The KION Group holds 30.0 per cent of the shares in Linde Hydraulics GmbH & Co. KG, Aschaffenburg (referred to below as Linde Hydraulics) through Linde Material Handling GmbH, Aschaffenburg. On 20 July 2015, the KION Group exercised the put option vis-à-vis Weichai Power Co., Ltd., Weifang, China (referred to below as Weichai Power) that it held via Linde Material Handling GmbH, Aschaffenburg, on 20.0 per cent of the shares in Linde Hydraulics.

The 20.0 per cent of the shares in Linde Hydraulics, amounting to €41.0 million, have been classified as held for sale since the end of June 2015. Before being reclassified as held for sale, the shares in Linde Hydraulics were accounted for under the equity method. Since their reclassification, they have been required to be recognised at the lower of their carrying amount and fair value less costs to sell. The remaining 10.0 per cent of the shares in Linde Hydraulics continue to be accounted for under the equity method.

In addition, the KION Group has a financial receivable totalling €15.0 million from Linde Hydraulics, which it holds via Linde Material Handling GmbH, Aschaffenburg. The financial receivable is likely to be partly transferred to Weichai Power. As this is expected to take place at the same time as the transfer of the 20.0 per cent of the shares in Linde Hydraulics, a pro-rata amount of €10.0 million of the financial receivable was classified as held for sale at the end of September 2015. The financial receivable is accounted for at amortised cost using the effective interest method.

The shares in Linde Hydraulics are allocated to the LMH segment. The financial receivable is recognised in the Other segment.

Equity

As at 30 September 2015, the Company’s share capital amounted to €98.9 million, which was unchanged on 31 December 2014, and was fully paid up. It was divided into 98.9 million no-par-value shares.

The total number of shares outstanding as at 30 September 2015 was 98,666,438 no-par-value shares (31 December 2014: 98,736,438 no-par-value shares). Between 10 September 2015 and 30 September 2015, a further 70,000 treasury shares were repurchased via the stock exchange at an average price of €38.74 in order to provide the shares for employees’ own investments and the free shares under a planned share-based remuneration programme. The total cost was €2.7 million. At the reporting date, KION GROUP AG held 233,562 treasury shares (31 December 2014: 163,562 treasury shares).

The distribution of a dividend of €0.55 per share to the shareholders of KION GROUP AG resulted in an outflow of funds of €54.3 million.

The accumulated other comprehensive income (loss) included expenses of €2.6 million attributable to assets classified as held for sale.

Retirement benefit obligation

For the purposes of the interim report, a qualified estimate of the defined benefit obligation was made based on the change in actuarial parameters in the period under review.

The retirement benefit obligation was lower than it had been at the end of 2014 owing, above all, to actuarial gains resulting from higher discount rates. The estimated present value of the defined benefit obligation was calculated on the basis of the discount rates shown in > TABLE 25.

The change in estimates in relation to defined benefit pension entitlements resulted in an increase of €13.9 million in equity as at 30 September 2015 (after deferred taxes). The net obligation after offsetting the retirement benefit obligation against the pension plan assets recognised under ‘Other non-current financial assets’ therefore increased to €762.0 million (31 December 2014: €765.8 million).