Business performance

In 2017, the main focus was on integrating the Dematic subsidiaries acquired and on utilising shared potential for increasing revenue and efficiency. The SCS segment optimised its organisational structure by merging Egemin Automation into Dematic. This will predominantly result in cost benefits for administration and customer management going forward. Retrotech Inc. was also integrated into Dematic North America’s customer service organisation, thereby expanding the aftersales business. An action plan to pool procurement activities was also initiated, and this should have an impact on costs in 2018. Originating from the period before the acquisition, the inefficiencies at the plant in Monterrey, Mexico, were completely eliminated in 2017. Work has been taking place since March of last year to extend the Stříbro site to include a factory for automated conveyor systems. The new factory is due to start manufacturing modules for Dematic’s automated storage and retrieval systems for the European market in 2018.

The bridge loan (acquisition facilities agreement, AFA) agreed between the KION Group and its core group of banks for the acquisition of Dematic originally had a volume of €3,000.0 million and was drawn down in an amount of €2,543.2 million. In the first quarter of 2017, it was then partly refinanced by successfully placing a promissory note with a total volume of €1,010.0 million. This note, which has a significantly extended maturity profile, is divided into several tranches that have maturity periods of five, seven and ten years and have fixed or floating-rate coupons. The capital increase in the second quarter of 2017 was another important refinancing measure. This involved KION GROUP AG issuing a total of 9,300,000 new shares at a placement price of €64.83 per share on 22 May 2017. All of the new shares were placed with institutional investors against cash contributions in an accelerated bookbuilding process; shareholders’ pre-emption rights were disapplied. KION GROUP AG’s share capital rose by 8.55 per cent in total. The gross proceeds from the capital increase came to €602.9 million. The Company’s new no-par-value bearer shares are dividend-bearing from the 2017 financial year.

By the end of 2017, tranche A2 (€343.2 million) and tranche B (€1,200.0 million) of the bridge loan and the fixed-term tranche (€350.0 million) of the senior facilities agreement (SFA) had been repaid in full. The long-term tranche (€1,000.0 million) of the bridge loan is still outstanding and is due to mature in October 2021.

At the end of 2017, the lowering of the corporate income tax rate that was approved in the United States led to the non-cash remeasurement of the KION Group’s deferred tax assets and liabilities. As a result, the KION Group’s income tax position and thus its net income unexpectedly improved by a total of €92.2 million.