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 (IFRS). Differences between the accounting policies in accordance with HGB and those in accordance with IFRS 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 2022
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 in the Group’ 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 €100.1 million reported for 2022 (2021: €73.7 million) largely arose from the performance of services for affiliated companies.
Other operating income rose by €57.4 million to €85.2 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 €52.5 million, a year-on-year reduction of €23.6 million. This decline was primarily attributable to a decrease in variable, performance-related salary components, such as short-term incentives and share-based remuneration.
Other operating expenses rose by €120.8 million to €236.9 million. This increase was primarily attributable to exchange rate losses resulting from the measurement of bank accounts and cash pools in foreign currencies amounting to €111.5 million (2021: €19.1 million). In addition, KION GROUP AG saw its expenses for consultancy and other third-party services go up by €27.8 million to €98.7 million in 2022.
The rise in depreciation expense by €12.3 million to €12.8 million is attributable to the current crisis in eastern Europe and the associated inability to collect financial receivables from Russian subsidiaries.
Net financial income fell by €14.7 million to €337.5 million in 2022 (2021: €352.2 million). This was the net result of the following factors in particular:
- The total income from profit-transfer agreements mainly related to Linde Material Handling GmbH in an amount of €172.6 million (2021: €179.7 million) and Dematic Holdings GmbH in an amount of €138.2 million (2021: €150.0 million).
- Interest expense and similar charges, which totaled €52.5 million (2021: €34.0 million), included an amount of €18.3 million resulting from interest charged on intercompany liabilities (2021: €3.0 million) and an amount of €27.5 million arising from external financing (2021: €25.4 million). On a smaller scale, they included expenses of €6.7 million from the unwinding of the discount on pension provisions (2021: €5.7 million).
- Other interest and similar income amounting to €84.1 million (2021: €56.3 million) for the most part consisted of interest income on intercompany receivables.
KION GROUP AG recorded tax income of €0.2 million as a result of its role as the parent company of the tax group for nearly all domestic subsidiaries in 2022 (2021: tax expenses of €50.6 million). This change was due to the much poorer earnings situation of the tax group last year and to the effects of a reassessment of tax circumstances from previous years.
Total net income of €220.6 million was generated in the year under review (2021: €210.1 million). The distributable profit of KION GROUP AG for the 2022 financial year came to €111.0 million (2021: €197.1 million).
in € million |
2022 |
2021 |
Change |
|---|---|---|---|
Revenue |
100.1 |
73.7 |
35.9% |
Other operating income |
85.2 |
27.8 |
> 100% |
Material expenses |
–0.2 |
–0.2 |
0.0% |
Personnel expenses |
–52.5 |
–76.1 |
31.0% |
Other operating expenses |
–236.9 |
–116.1 |
< −100% |
Depreciation, amortization & impairment expense |
–12.8 |
–0.5 |
< −100% |
Operating loss |
–117.1 |
–91.5 |
–28.0% |
Net financial income |
337.5 |
352.2 |
–4.2% |
Income taxes |
0.2 |
–50.6 |
> 100% |
Net income |
220.6 |
210.1 |
5.0% |
Net assets
The total assets of KION GROUP AG increased by approximately 3.6 percent to €8,165.3 million as at December 31, 2022.
At €4,238.2 million, financial assets were unchanged and 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).
Cash and cash equivalents fell by €151.9 million to €48.1 million as at the reporting date.
Receivables and other assets amounted to €3,873.9 million (December 31, 2021: €3,438.8 million). The bulk of this total, €3,797.7 million, consisted of loans and cash pool receivables due from other Group companies (December 31, 2021: €3,372.4 million). The total also included the Company’s entitlement to the transfer of profits from Linde Material Handling GmbH in an amount of €172.6 million (December 31, 2021: €179.7 million) and to the transfer of profits from Dematic Holdings GmbH in an amount of €138.2 million (December 31, 2021: €150.0 million). There were long-term loans to Group companies of €433.8 million (December 31, 2021: €427.9 million).
in € million |
Dec. 31, 2022 |
Dec. 31, 2021 |
Change |
|---|---|---|---|
Assets |
|
|
|
Property, plant and equipment |
1.5 |
1.9 |
–20.0% |
Financial assets |
4,238.2 |
4,238.2 |
0.0% |
Receivables and other assets |
3,873.9 |
3,438.8 |
12.7% |
Cash and cash equivalents |
48.1 |
200.0 |
–75.9% |
Deferred income |
3.5 |
4.1 |
–14.6% |
Total assets |
8,165.3 |
7,883.0 |
3.6% |
|
|
|
|
Equity and liabilities |
|
|
|
Equity |
4,813.1 |
4,788.8 |
0.5% |
Retirement benefit obligation |
73.0 |
63.6 |
14.7% |
Tax provisions |
0.3 |
0.3 |
– |
Other provisions |
25.7 |
65.7 |
–60.9% |
Liabilities |
3,253.2 |
2,964.6 |
9.7% |
Total equity and liabilities |
8,165.3 |
7,883.0 |
3.6% |
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.
Equity increased by €24.3 million in the reporting year. After taking into account the dividend payment of €196.7 million, the net income for the year of €220.6 million, and the profit carried forward of €0.4 million, equity rose to €4,813.1 million (December 31, 2021: €4,788.8 million). The equity ratio was 58.9 percent as at the reporting date (December 31, 2021: 60.7 percent).
Provisions went down by €30.6 million to €99.0 million, mainly because personnel provisions decreased by €37.9 million to €20.9 million. This decrease was primarily due to the reduction in the provision for short-term incentives and share-based remuneration. The Company added €9.4 million to pension provisions, however, taking them to a total of €73.0 million.
Liabilities amounted to €3,253.2 million (December 31, 2021: €2,964.6 million) and predominantly consisted of loan liabilities and cash pool liabilities to other Group companies amounting to €1,411.6 million (December 31, 2021: €2,035.1 million), liabilities to banks of €1,024.9 million (December 31, 2021: €421.8 million), and the corporate bond of €500.0 million (December 31, 2021: €500.0 million). After deduction of cash and cash equivalents, the resulting net debt amounted to €1,476.8 million as at the reporting date (December 31, 2021: €721.8 million).
In 2020, KION GROUP AG launched a corporate bond program (EMTN program) with a total volume of €3 billion. The first bond was placed on the capital markets under this program in 2020 and had a nominal amount of €500.0 million, a maturity date in 2025, and a coupon of 1.625 percent. The bond is not collateralized.
Given the persistent uncertainties in the capital markets and the still elevated level of capital tied up, due mainly to the rise in net working capital, KION GROUP AG took further steps to secure its funding requirements in the year under review.
The commercial paper program was increased by €250.0 million to €750.0 million in April 2022. Of these funds, €305.0 million had been drawn down as at December 31, 2022. In addition, a total of five bilateral loans, each with a volume of €100.0 million, were taken out with banks in June and July 2022. The loans mature in 2023, 2024, and 2026. In October 2022, an additional longer-dated loan of €100.0 million with a two-year term was agreed. This borrowing was offset by the scheduled repayment of the short-term promissory note of €92.5 million in May 2022 and the early partial repayment of a long-term loan of €25.0 million.
Then in September 2022, the term of the variable-rate revolving credit facility (RCF) with a total volume of €1,000.0 million was extended by one year until October 2027. In December 2022, its volume was extended by €385.7 million to €1,385.7 million. The facility has a variable interest rate; the contractually agreed interest terms are linked to KION GROUP AG’s credit rating and to compliance with the Group’s sustainability KPIs.
The liabilities to banks and the promissory notes are not collateralized.
Employees
The average number of employees at KION GROUP AG in 2022 was 286 (2021: 276). KION GROUP AG employed 289 people as at December 31, 2022 (December 31, 2021: 279).