[30] Financial liabilities

Non-current and current financial liabilities related to the Company’s general funding and essentially comprised promissory notes, the corporate bond, and liabilities to banks as at December 31, 2023. Financial liabilities as at the reporting date break down as follows:

Promissory notes

As at December 31, 2023, the total nominal amount of the issued promissory notes was €699.5  million (December 31, 2022: €324.5 million). The increase was due to the issue of multiple tranches of promissory notes with a total nominal amount of €375.0 million in October 2023. Nearly all of the new tranches have a variable interest rate (Euribor + margin) and mature between now and 2030.

The following table shows the nominal amounts and interest-rate types of the promissory notes issued by KION GROUP AG. The fixed-rate promissory notes have fixed coupons of between 1.5 percent and 5.1 percent.

KION GROUP AG has entered into an interest-rate swap in order to hedge the fair value risk resulting from a fixed-rate tranche. The interest-rate swap is recognized as a fair value hedge in accordance with IFRS 9 (see note [42]).

The promissory notes are not collateralized.

Corporate bond

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.

Liabilities to banks

As at December 31, 2023, liabilities to banks related to drawdowns of credit lines and to loans from banks at central and local level.

KION GROUP AG has a syndicated revolving credit facility (RCF) with a total volume of €1,385.7 million. In September 2023, the term of the RCF was extended by one year until October 2028. 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 sustainability KPIs.

The amount drawn down from the revolving credit facility was €21.0 million as at December 31, 2023 (December 31, 2022: €114.6 million). The unused portion of the RCF therefore stood at €1,364.7 million (December 31, 2022: €1,271.1 million).

As at December 31, 2023, there was only one remaining bilateral bank loan that had been taken out centrally by KION GROUP AG. It has a total volume of €100.0 million (December 31, 2022: €575.0 million). The bilateral bank loan has a variable rate and matures in 2026. Five bilateral bank loans with a total volume of €475.0 million were repaid in 2023, in some cases ahead of schedule. In addition, Group companies had drawn down bank loans of €151.4 million (December 31, 2022: €129.7 million). KION GROUP AG generally issues guarantees to the banks for Group companies’ existing payment obligations. The liabilities to banks are not collateralized.

Other financial liabilities

KION GROUP AG launched a commercial paper program in November 2019 that currently has a maximum program volume of €750.0 million. The commercial paper is issued with a discount but without a coupon and has a term of up to one year. As at December 31, 2023, €20.0 million of commercial paper had been issued (December 31, 2022: €305.0 million).

Covenants

The revolving credit facility and a number of promissory notes taken out by KION GROUP AG stipulate adherence to covenants. The agreed financial covenant involves ongoing testing of adherence to a maximum level of leverage (defined as the ratio of industrial net operating debt (INOD) to adjusted EBITDA). As at December 31, 2023, the actual level of leverage was well below the limit of the financial covenant. As contractually agreed, this calculation is suspended in respect of the revolving credit facility because KION GROUP AG has two investment-grade credit ratings.

Exceeding the agreed maximum level of leverage as at a particular reference date gives lenders a right of termination.