Financial position

The KION Group’s financial position changed only marginally in comparison with the half-year report for 2017. The bridge loan taken out to fund the acquisition of Dematic (acquisition facilities agreement, AFA), which was greatly reduced in the first half of the year, still had a residual amount of €1,000.0 million (31 December 2016: €2,543.2 million). A further financing component is the promissory note issued in the first quarter of 2017 with a nominal value of €1,010.0 million. The fixed-term tranche drawn down under the senior facilities agreement (SFA), which was reduced by €80.0 million in the first half of the year, was unchanged at €270.0 million.

KION GROUP AG has issued guarantees to the banks for all of the payment obligations under the bridge loan and senior facilities agreement; it is the borrower in respect of all the payment obligations resulting from the promissory note. All covenants were again complied with as at 30 September 2017.

Analysis of capital structure

Current and non-current liabilities had fallen to €8,188.1 million as at 30 September 2017 (31 December 2016: €8,801.3 million).

The financial liabilities recognised under liabilities declined to €2,512.3 million as a result of the capital increase carried out in May 2017 (31 December 2016: €3,183.0 million). After deduction of cash and cash equivalents, net financial debt amounted to €2,324.4 million (31 December 2016: €2,903.4 million). This equated to 2.0 times the adjusted EBITDA on an annualised basis.

Non-current financial liabilities net of borrowing costs were virtually unchanged on the position as at 30 June 2017 at €2,271.1 million. The unused, unrestricted SFA loan facility stood at €965.0 million as at 30 September 2017. > TABLE 11

Net financial debt			11
in € million	30/09/2017	31/12/2016	Change
Liabilities to banks (gross)	1,505.1	3,188.6	–52.8%
Promissory note – gross	1,010.0	–	–
Other financial liabilities to non-banks	7.2	7.2	–0.9%
./. Capitalised borrowing costs	–9.9	–12.9	22.7%
Financial liabilities	2,512.3	3,183.0	–21.1%
./. Cash and cash equivalents	–187.9	–279.6	32.8%
Net financial debt	2,324.4	2,903.4	–19.9%

Due to the slightly higher discount rate, the retirement benefit obligation under defined benefit pension plans fell to €959.7 million (31 December 2016: €991.0 million).

Lease liabilities arising from sale and leaseback transactions to fund the long-term leasing business with end customers increased to €1,060.0 million (31 December 2016: €1,007.2 million). Of this amount, €742.9 million related to non-current and €317.2 million to current lease liabilities.

The liabilities from the short-term rental fleet and from procurement leases are reported under other financial liabilities. As at 30 September 2017, other financial liabilities included liabilities of €451.9 million (31 December 2016: €440.0 million) arising from sale-and-leaseback transactions used to finance the short-term rental fleet. The other financial liabilities also included liabilities from residual value guarantees amounting to €17.4 million (31 December 2016: €16.7 million).

Consolidated equity stood at €3,019.4 million as at 30 September 2017 (31 December 2016: €2,495.7 million). The capital increase in the second quarter resulted in a rise of €599.9 million, whereas currency translation effects (minus €271.9 million) had an adverse impact on equity during the period under review. The equity ratio increased from 22.1 per cent at the end of 2016 to 26.9 per cent as at 30 September 2017. > TABLE 10

(Condensed) statement of financial position

in € million

30/09/2017

in %

31/12/2016

in %

Change

1	Last year figures were adjusted due to retrospective changes of the purchase price allocation (PPA) for Dematic

Non-current assets¹

8,632.4

77.0%

8,942.4

79.2%

–3.5%

Current assets

2,575.1

23.0%

2,354.6

20.8%

9.4%

Total assets¹

11,207.5

–

11,297.0

–

–0.8%

Equity¹

3,019.4

26.9%

2,495.7

22.1%

21.0%

Non-current liabilities¹

5,457.7

48.7%

6,128.9

54.3%

–11.0%

Current liabilities

2,730.4

24.4%

2,672.5

23.7%

2.2%

Total equity and liabilities¹

11,207.5

–

11,297.0

–

–0.8%

Analysis of capital expenditure

Analysis of liquidity

Cash and cash equivalents decreased from €279.6 million as at 31 December 2016 to €187.9 million as at 30 September 2017. Taking into account the credit facility that was still freely available, the unrestricted cash and cash equivalents available to the KION Group at the end of the third quarter amounted to €1,150.4 million (31 December 2016: €1,200.8 million).

The KION Group’s net cash provided by operating activities totalled €271.4 million, which exceeded the prior-year figure of €184.2 million due to a further rise in earnings and margins. While the growth in earnings made a positive contribution, there was a negative impact from the significant increase in net working capital.

The net cash used for investing activities amounted to €151.5 million in the first nine months of 2017 (Q1 – Q3 2016: €119.0 million). Cash payments for capital expenditure on development (R&D) and for property, plant and equipment amounted to €144.0 million (Q1 – Q3 2016: €100.9 million) and during the reporting period also included capital expenditure by Dematic. In the prior-year period, the €27.4 million in cash used for acquisitions was mainly attributable to Retrotech.

Free cash flow – the sum of cash flow from operating activities and investing activities – amounted to €119.9 million (Q1 – Q3 2016: €65.2 million).

The net cash used for financing activities amounted to €200.1 million (Q1 – Q3 2016: net cash provided by financing activities of €63.9 million). In addition to the dividend payment of €86.9 million, gross financial debt of €2,734.4 million was repaid. This gross repayment amount included the repayment of the bridge loan as well as the refinancing measures that were carried out. Of the gross additional financial debt of €2,058.2 million, €1,010.0 million was attributable to the issuance in the first quarter of 2017 of the promissory note. The capital increase in May generated a further net inflow of €598.6 million.

Thanks to the optimised financing structure and the aforementioned corporate actions, regular interest payments rose only moderately – despite the overall increase in net debt in comparison with 30 September 2016 – to €39.1 million (Q1 – Q3 2016: €29.6 million excluding the early redemption charge paid of €15.2 million). > TABLE 12

(Condensed) statement of cash flows						12
in € million	Q3 2017	Q3 2016	Change	Q1 – Q3 2017	Q1 – Q3 2016	Change
EBIT	135.3	112.4	20.4%	395.6	318.2	24.3%
Cash flow from operating activities	70.7	107.6	–34.3%	271.4	184.2	47.4%
Cash flow from investing activities	–51.4	–31.9	–60.9%	–151.5	–119.0	–27.4%
Free cash flow	19.3	75.7	–74.5%	119.9	65.2	83.8%
Cash flow from financing activities	15.8	71.0	–77.7%	–200.1	63.9	<–100%
Effect of foreign exchange rate changes on cash	–4.2	–0.8	<–100%	–11.5	–2.0	<–100%
Change in cash and cash equivalents	30.9	145.9	–78.8%	–91.7	127.1	<–100%

You are here:

Financial position

Analysis of capital structure

Analysis of capital expenditure

Analysis of liquidity