KION GROUP AG
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, 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. KION GROUP AG collects liquidity surpluses of the Group companies in a cash pool and, where possible, covers subsidiaries’ funding requirements with intercompany loans. As a rule, the external financing of the Group’s activities is handled by KION GROUP AG. Managerial holding company functions and the performance, in return for a consideration, of other services are also part of KION GROUP AG’s remit.
The annual financial statements of KION GROUP AG are prepared in accordance with the provisions in the German Commercial Code (HGB) and the German Stock Corporation Act (AktG). The management report is combined with the group management report. Pursuant to section 315e (1) HGB, the consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRSs). 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, deferred taxes, and procurement leases.
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 2020
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 revenue of €70.5 million reported for 2020 (2019: €47.2 million) largely arose from the performance of services for affiliated companies.
Other operating income rose by €17.5 million to €45.9 million and included, in particular, gains on the measurement of bank accounts and cash pools in foreign currencies.
The cost of materials related to the revenue from the provision of services and mostly consisted of expenses for consultancy services.
Personnel expenses amounted to €49.2 million, a year-on-year reduction of €4.7 million. As a result of the decrease in short-term bonus commitments, the addition to provisions for share-based remuneration and short-term incentives fell by approximately €6.4 million. There was a countervailing effect from the increase in the number of employees.
Other operating expenses rose by €29.2 million to €137.0 million, mainly because of higher costs for external services and consultancy. This increase was primarily attributable to expenses resulting from implementation of the capital increase in the reporting year (€14.7 million). Other operating expenses also included foreign currency exchange rate losses resulting from the measurement of bank accounts and cash pools in foreign currencies amounting to €44.1 million (2019: €33.7 million).
The changes in net financial income/expenses were primarily attributable to the following factors:
- Of the total income from profit-transfer agreements, €105.7 million related to Dematic Holdings GmbH (2019: €0.0 million), while an expense of €23.5 million was recorded for the transfer of losses from Linde Material Handling GmbH (2019: income from the transfer of profits of €332.1 million).
- Interest expense and similar charges, which totaled €54.5 million (2019: €52.9 million), included an amount of €41.7 million arising from external financing (2019: €35.7 million). On a smaller scale, they included expenses of €7.6 million from interest charged on intercompany liabilities (2019: €11.8 million) and expenses of €5.1 million from the unwinding of the discount on pension provisions (2019: €5.4 million).
- Other interest and similar income amounting to €55.3 million (2019: €62.4 million) for the most part consisted of interest income on intercompany receivables.
KION GROUP AG incurred tax expenses of €19.4 million as a result of its role as the parent company of the tax group in 2020 (2019: €94.6 million). The decrease was due to the poorer earnings situation of the tax group in 2020.
A total net loss of €6.5 million was incurred in the year under review (2019: net income of €156.9 million).
in € million |
2020 |
2019 |
Change |
|---|---|---|---|
Revenue |
70.5 |
47.2 |
49.3% |
Other operating income |
45.9 |
28.4 |
61.6% |
Material expenses |
–0.3 |
–0.6 |
48.0% |
Personnel expenses |
–49.2 |
–53.9 |
8.8% |
Other operating expenses |
–137.0 |
–107.8 |
–27.1% |
Depreciation expense |
–0.5 |
–0.5 |
–4.2% |
Operating loss |
–70.6 |
–87.2 |
19.0% |
Net financial income |
83.5 |
338.7 |
–75.3% |
Income taxes |
–19.4 |
–94.6 |
79.5% |
Net (loss) income |
–6.5 |
156.9 |
< −100% |
Net assets
As at December 31, 2020, the total assets of KION GROUP AG had increased by approximately 1.7 percent year on year to €7,812.3 million.
The financial assets largely comprised the carrying amounts of the equity investments in Dematic Holdings GmbH (€2,862.2 million) and Linde Material Handling GmbH (€1,368.4 million).
The receivables mainly consisted of loans and cash pool receivables due from other Group companies and the Company’s entitlement to the transfer of profits from Dematic Holdings GmbH of €105.7 million (2019: €0.0 million). There were long-term loans to Group companies of €571.3 million.
Equity increased in the reporting year, primarily due to the capital increase of €813.3 million carried out in December. After taking into account the dividend payment of €4.7 million and the net loss for the year of €6.5 million, equity rose to €4,631.9 million (December 31, 2019: €3,828.6 million).
Further disclosures on treasury shares can be found in the notes to the financial statements of KION GROUP AG. The equity ratio was 59.3 percent as at the reporting date (December 31, 2019: 49.8 percent).
The fall in provisions by €36.9 million to €88.2 million was mainly the result of utilization of the tax provision recognized in the previous year. There was a countervailing effect from the €6.9 million addition to the retirement benefit obligation, which increased to €54.3 million.
Liabilities mainly consisted of loan liabilities and cash pool liabilities to other Group companies amounting to €1,973.4 million (December 31, 2019: €1,981.0 million) and liabilities to banks of €612.7 million (December 31, 2019: €1,739.5 million).
in € million |
Dec. 31, 2020 |
Dec. 31, 2019 |
Change |
|---|---|---|---|
Assets |
|
|
|
Property, plant and equipment |
2.4 |
2.8 |
–16.1% |
Financial assets |
4,235.7 |
4,231.2 |
0.1% |
Receivables and other assets |
3,468.2 |
3,405.7 |
1.8% |
Cash and cash equivalents |
103.2 |
40.7 |
> 100% |
Deferred income |
2.8 |
0.0 |
> 100% |
Total assets |
7,812.3 |
7,680.5 |
1.7% |
|
|
|
|
Equity and liabilities |
|
|
|
Equity |
4,631.9 |
3,828.6 |
21.0% |
Retirement benefit obligation |
54.3 |
47.4 |
14.6% |
Tax provisions |
0.0 |
44.3 |
–99.9% |
Other provisions |
33.8 |
33.4 |
1.2% |
Liabilities |
3,092.2 |
3,726.8 |
–17.0% |
Total equity and liabilities |
7,812.3 |
7,680.5 |
1.7% |
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 financing partners. For the sake of these stakeholders, KION GROUP AG strives for an appropriate ratio of internal funding to borrowing.
On September 24, 2020, KION GROUP AG placed a corporate bond on the Luxembourg Stock Exchange with a total volume of €500.0 million, a coupon of 1.625 percent, and a term ending in September 2025. The unsecured corporate bond was issued at a price of 99.407 percent. The difference between the issue amount and the settlement amount (discount) will be amortized over the term of the bond.
In May 2020, the KION Group reached agreement with its core group of banks on the provision of a syndicated liquidity line, with Kreditanstalt für Wiederaufbau (KfW, Germany’s state-owned development bank) taking a leading role. The liquidity line had a volume of €1.0 billion and a term of twelve months but was not utilized and was terminated ahead of schedule in the fourth quarter.
KION GROUP AG has a multi-currency revolving credit facility of €1,150.0 million. It has a variable interest rate and can be drawn down until February 2023. No amount was drawn down as at December 31, 2020, as had also been the case a year earlier.
As at December 31, 2019, there had been loan liabilities to banks in the amount of €400.0 million. These included the liabilities under the AFA of €200.0 million and a fixed-rate loan with a nominal amount of €200.0 million that, in 2020, were repaid early.
Furthermore, the variable-rate tranches of the promissory note of €653.5 million that was due to mature in 2022 were repaid ahead of schedule in October 2020. The variable-rate tranche of the promissory note of €72.5 million that was due to mature in 2026 was also repaid ahead of schedule in December 2020.
The liabilities to banks and the promissory notes are not collateralized. KION GROUP AG has issued guarantees to the banks for all of the payment obligations under its liabilities to them and it is the borrower in respect of all the payment obligations resulting from the promissory notes.
As at December 31, 2020, there were liabilities to banks amounting to €612.7 million (December 31, 2019: €1,739.5 million) and liabilities arising from the corporate bond of €500.0 million (December 31, 2019: €0.0 million). After deduction of cash and cash equivalents, the resulting net debt amounted to €1,009.5 million (December 31, 2019: €1,698.8 million).
Employees
The average number of employees at KION GROUP AG was 271 in 2020 (2019: 249). KION GROUP AG employed 276 people as at December 31, 2020 (December 31, 2019: 262).