Business activities

KION GROUP AG is the strategic management holding company in the KION Group. KION GROUP AG holds all the shares in Dematic Holdings GmbH, Frankfurt am Main (formerly DH Services Luxembourg Holding S.à r.l., Luxembourg) and thus all the shares in the subsidiaries in the Supply Chain Solutions segment. Furthermore, KION GROUP AG is the sole shareholder of Linde Material Handling GmbH, Aschaffenburg, which holds almost all the shares of the companies in the Industrial Trucks & Services segment.

The annual financial statements of KION GROUP AG have been prepared in accordance with the provisions in the German Commercial Code (HGB) and the German Stock Corporation Act (AktG). The management report has been combined with the group management report. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and the additional provisions in section 315e (1) HGB. Differences between the accounting policies in accordance with HGB and those in accordance with IFRSs arise primarily in connection with the accounting treatment of financial instruments, provisions and deferred taxes.

Management system, future development and risk position

As a holding company without any operating activities of its own, KION GROUP AG is indirectly dependent on the earnings and economic performance of its subsidiaries. The management system, expected development and the opportunities and risks of the KION Group are described in detail in the ‘Management system’ and ‘Outlook, risk report and opportunity report’ sections of this combined management report.

Business performance in 2018

The business performance and position of KION GROUP AG are largely determined by the business performance and success of the Group. Detailed reports in this regard are set out in the ‘Business performance’ and ‘Financial position and financial performance of the KION Group’ sections.

Financial performance

KION GROUP AG does not have any operating activities itself. The reported revenue of €30.5 million (2017: €24.3 million) largely arose from the performance of services for affiliated companies.

Other operating income went up by €11.1 million to €33.5 million and includes, in particular, gains on the measurement of bank accounts and cash pools in foreign currencies.

The cost of materials is related to the revenue from the provision of services and mostly consists of expenses for consultancy services.

Personnel expenses fell by €4.9 million to €37.5 million. This year-on-year decrease was due to the smaller addition to provisions for share-based remuneration. There was a countervailing effect on personnel expenses from the increase in the number of employees and from annual salary rises.

Other operating expenses rose by €11.9 million to €80.2 million owing to losses on the measurement of bank accounts and cash pools in foreign currencies. Costs for external services and consultancy are another substantial component of other operating expenses.

The main changes in net financial income/expenses were as follows:

  • Of the total income from profit-transfer agreements, €343.4 million related to Linde Material Handling GmbH (2017: €500.6 million).
  • Interest expense and similar charges, which amounted to €54.9 million (2017: €48.8 million), arose mainly from the external financing of the KION Group via the promissory notes and loan agreements as well as, to a smaller extent, from interest charged on intercompany liabilities and the unwinding of the discount on pension provisions.
  • Other interest and similar income in the amount of €61.6 million (2017: €28.6 million) for the most part consisted of interest income on intercompany receivables. This rise is attributable to KION GROUP AG having taken over the management of the cash pool in 2017, resulting in a gradual increase in intercompany receivables.

KION GROUP AG incurred tax expenses of €55.5 million as a result of its role as the parent company of the tax group in 2018 (2017: €79.4 million). This included a positive tax effect stemming largely from the offsetting of losses of corporations in an amount of €29.4 million in connection with an amendment to tax law (section 8c of the German Corporation Tax Act (KStG)).

A total net profit of €236.3 million was generated in the year under review (2017: €335.5 million). > TABLE 022

Financial performance




in € million








Other operating income




Material expenses




Personnel expenses




Other operating expenses




Depreciation expense




Operating loss




Net financial income




Income taxes




Net income




Net assets

At the end of 2018, the total assets of KION GROUP AG had reduced, albeit insignificantly, by approximately 0.9 per cent year on year to €7,574.5 million.

The financial assets largely comprise the carrying amounts of the equity investments in Dematic Holdings GmbH (formerly DH Services Luxembourg Holding S.à r.l.) (€2,862.2 million) and Linde Material Handling GmbH (€1,368.4 million).

The receivables mainly consist of loans and cash pool receivables due from other Group companies and the Company’s entitlement to the transfer of profits from Linde Material Handling GmbH of €343.4 million (2017: €500.6 million). There are long-term loans to Group companies of €216.0 million.

After taking into account the dividend payment of €116.8 million and the €0.9 million increase in the volume of treasury shares, the net profit of €236.3 million meant that equity rose to €3,811.6 million (31 December 2017: €3,692.9 million). Further disclosures on treasury shares can be found in the notes to the financial statements of KION GROUP AG. The equity ratio was 50.3 per cent as at the reporting date (31 December 2017: 48.3 per cent).

Provisions contracted by €10.0 million to €85.4 million; this was mainly attributable to the reversal of the provisions for share-based remuneration and to the recognition of tax assets following the retrospective abolition of German tax rules on the lapse of some losses following a harmful share acquisition. There was a countervailing effect from the increase in pension provisions. Pension provisions include provisions of €5.5 million (31 December 2017: €3.9 million) for former members of the Executive Board. KION GROUP AG recognised tax provisions of €22.0 million (31 December 2017: €27.6 million) including those in connection with its role as the parent company of the tax group.

Liabilities mainly consist of liabilities to banks of €1,978.7 million (31 December 2017: €2,214.8 million) as well as loan liabilities and cash pool liabilities to other Group companies. The liabilities to banks comprise the financing via the promissory notes, the bridge loan (AFA) and the syndicated loan agreement (SFA). > TABLE 023

Net assets




in € million








Property, plant and equipment




Financial assets



Receivables and other assets




Cash and cash equivalents




Total assets








Equity and liabilities








Retirement benefit obligation




Tax provisions




Other provisions








Total equity and liabilities




Financial position

By pursuing an appropriate financial management strategy, the KION Group – through KION GROUP AG – makes sufficient cash and cash equivalents available at all times to meet the Group companies’ operational and strategic funding requirements. KION GROUP AG is a publicly listed company and therefore ensures that its financial management takes into account the interests of shareholders and banks. For the sake of these stakeholders, KION GROUP AG makes sure that it maintains an appropriate ratio of internal funding to borrowing.

KION GROUP AG signed a syndicated loan agreement (SFA), originally for €1.5 billion, with a syndicate of international banks on 28 October 2015. As at 31 December 2018, the SFA consisted solely of a revolving credit facility of €1.2 billion. This has a variable interest rate and, following the agreement in 2018 of an extension to its term, it can be drawn down until February 2023. As at 31 December 2018, the amount drawn down was €101.8 million (31 December 2017: €184.7 million). The drawdowns under the revolving credit facility are classified as short term.

On 4 July 2016, KION GROUP AG reached agreement on a bridge loan to finance the acquisition of Dematic, originally in an amount of €3.0 billion. As at 31 December 2018, it consisted solely of a floating-rate loan in a nominal amount of €600.0 million that is due to mature in October 2021. At the end of 2017, this loan had a nominal amount of €1,000.0 million. It was partly repaid in 2018 using the funds from the issuance of a further promissory note and using cash received from operating activities.

In 2018, a promissory note was issued in a nominal amount of €200.0 million. It will mature in June 2025 and has both floating-rate and fixed coupons. The resulting funds were used to repay part of the floating-rate loan under the AFA. KION GROUP AG has entered into an interest-rate derivative to hedge the risk of a change in the fair value of the tranche with a fixed coupon.

The promissory note issued in 2017 in a nominal amount totalling €1,010.0 million is divided into several tranches that mature between 2022 and 2027 and have floating-rate or fixed coupons. KION GROUP AG has entered into a number of interest-rate derivatives in order to hedge the interest-rate risk resulting from the floating-rate tranches.

The SFA, AFA and promissory notes are not collateralised. KION GROUP AG has issued guarantees to the banks for all of the payment obligations under the SFA and AFA and it is the borrower in respect of all the payment obligations resulting from the promissory notes.

As at 31 December 2018, liabilities to banks amounted to €1,978.7 million (31 December 2017: €2,214.8 million). After deduction of cash and cash equivalents, net debt amounted to €1,960.4 million (31 December 2017: €2,194.3 million).


The average number of employees at KION GROUP AG was 217 in 2018 (2017: 190). KION GROUP AG employed 230 people as at 31 December 2018 (31 December 2017: 195).