[28] Equity

Subscribed capital and capital reserves

As at December 31, 2020, the Company’s share capital amounted to €131.2 million (December 31, 2019: €118.1 million) and was fully paid up. It was divided into 131,198,647 no-par-value shares (December 31, 2019: 118,090,000 no-par-value shares).

The Annual General Meeting on May 11, 2017 voted to create authorized capital that will enable the KION Group to meet its funding needs quickly and flexibly. Subject to the consent of the Supervisory Board, the Executive Board is authorized until May 10, 2022 to increase the Company’s share capital by up to €10.879 million by way of an issue of up to 10,879,000 new no-par-value bearer shares (2017 Authorized Capital). Most of the 2017 Authorized Capital was utilized in 2017.

On the basis of a resolution of the Annual General Meeting on May 11, 2017, the Executive Board is also authorized in the period up to and including May 10, 2022 to issue warrant-linked bonds, convertible bonds, or profit-sharing rights with a total par value of up to €1,000.0 million. To this end, a conditional increase was decided upon in order to increase the Company’s share capital by up to €10.879 million by way of an issue of up to 10,879,000 new no-par-value bearer shares (2020 Conditional Capital). The 2017 Conditional Capital was reduced by, among other things, the portion of the share capital attributable to the 9.3 million new shares that were issued as part of the capital increase in May 2017 on the basis of the 2017 Authorized Capital.

On July 16, 2020, the Annual General Meeting approved the creation of new authorized capital in order to secure the Company’s financing options. Subject to the consent of the Supervisory Board, the Executive Board is authorized until July 15, 2025 to increase the Company’s share capital by up to €11.809 million by way of an issue of up to 11,809,000 new no-par-value bearer shares (2020 Authorized Capital).

The Executive Board is also authorized until July 15, 2025 to issue warrant-linked bonds, convertible bonds, or profit-sharing rights with a total par value of up to €1,000.0 million that contain pre-emption rights/obligations for up to 11,809,000 no-par-value shares. To this end, a conditional increase was decided upon in order to increase the Company’s share capital by up to €11.809 million by way of an issue of up to 11,809,000 new no-par-value bearer shares (2020 Conditional Capital).

With the consent of the Supervisory Board, the Executive Board of KION GROUP AG decided on November 18, 2020 to utilize the remaining authorized capital created by the 2017 Annual General Meeting and most of the authorized capital created by the 2020 Annual General Meeting. The share capital was increased against cash contributions by issuing 13,108,647 new no-par-value bearer shares. The gross proceeds from the capital increase came to €813.3 million. An amount of €800.2 million was paid into the capital reserves. The capital increase was entered in the commercial register on December 7, 2020.

The transaction costs of €10.2 million (after tax) that were directly attributable to the capital increase were recognized under capital reserves.

The total number of shares outstanding as at December 31, 2020 was 131,086,470 no-par-value shares (December 31, 2019: 117,959,356 no-par-value shares). In February 2020, 7,338 no-par-value shares (February 2019: 13,674 no-par-value shares) were issued in order to provide the shares for employees’ own investments under KEEP 2019 (2019: KEEP 2018). Due to the issue of 11,129 bonus shares under KEEP 2017 (KEEP 2016: 14,136 bonus shares), KION GROUP AG held 112,177 treasury shares at the reporting date (December 31, 2019: 130,644). These treasury shares are not dividend-bearing and do not confer any voting rights. In September 2019, a further 60,000 treasury shares were repurchased via the stock exchange at an average price of €48.80 in order to provide the shares for employees’ own investments and the free shares under the KEEP 2019 Employee Equity Program. The total cost was €2.9 million. In 2019, an additional 67,104 no-par-value shares were issued under the KEEP 2019 Employee Equity Program. Further details on the KEEP Employee Equity Program can be found in note [46].

Retained earnings

The changes in retained earnings are shown in the > table ‘Consolidated statement of changes in equity’. The retained earnings comprise the net income (loss) for the financial year and past contributions to earnings by the consolidated entities, provided they have not been distributed.

The distribution of a dividend of €0.04 per share (2019: €1.20 per share) to the shareholders of KION GROUP AG resulted in an outflow of funds of €4.7 million in July 2020 (2019: €141.5 million).

Appropriation of profit

KION GROUP AG made a net loss of €6.5 million in 2020. A sum of €72.2 million was taken from other revenue reserves. The Executive Board and the Supervisory Board will propose to the Annual General Meeting to be held on May 11, 2021 that, of the distributable profit of KION GROUP AG for the 2020 financial year amounting to €65.7 million, a dividend totaling €53.7 million be distributed. This equates to €0.41 per dividend-bearing share, representing a dividend payout rate of around 25 percent of net income. It is also proposed that €12.0 million be carried forward to the next accounting period.

Accumulated other comprehensive income (loss) and non-controlling interests

The overall composition of, and changes in, equity are shown in the > table ‘Consolidated statement of changes in equity’.

The currency translation adjustment contains the exchange differences arising from the financial statements prepared in a foreign currency of foreign subsidiaries, associates, and joint ventures.

The gains/losses on the defined benefit obligation are the result of remeasuring defined benefit pension obligations (see also note [29]).

The gains/losses on hedge reserves are the effective portion of the changes in the fair value of hedging instruments in formally documented hedges. The gains/losses on financial investments relate to the remeasurement of the equity investments Shanghai Quicktron Intelligent Technology Co., Ltd, Zhejiang EP Equipment Co., Ltd., and Balyo SA at fair value (FVOCI category under IFRS 9).

The gains/losses from equity-accounted investments contain the share of other comprehensive income (loss) from associates and joint ventures accounted for under the equity method.