Financial position

The principles and objectives applicable to financial management as at March 31, 2023 were largely the same as those described in the 2022 combined management report.

Analysis of capital structure

Non-current and current liabilities amounted to €11,251.6 million as at March 31, 2023, which was €330.9 million higher than the figure as at December 31, 2022 of €10,920.7 million. 

Non-current and current financial liabilities fell slightly to €1,966.4 million (December 31, 2022: €1,988.6 million). Non-current financial liabilities stood at €1,162.8 million (December 31, 2022: €1,361.8 million). The carrying amount of the corporate bond issued, which is included in this line item, amounted to €497.1 million (December 31, 2022: €496.8 million). In addition to the non-current promissory notes, which had a carrying amount of €319.6 million (December 31, 2022: €319.2 million), non-current financial liabilities mainly comprised liabilities to banks, which fell to €325.4 million for maturity-related reasons (December 31, 2022: €515.1 million).

Current financial liabilities totaled €803.7 million as at March 31, 2023 (December 31, 2022: €626.7 million), of which €338.5 million represented issuances under the commercial paper program (December 31, 2022: €305.0 million). Current liabilities to banks rose to €448.6 million for maturity-related reasons (December 31, 2022: €304.2 million).

Net financial debt (non-current and current financial liabilities less cash and cash equivalents) amounted to €1,613.7 million as at the reporting date (December 31, 2022: €1,670.5 million). This equated to 1.3 times adjusted EBITDA on an annualized basis (December 31, 2022: 1.4 times). To reconcile the net financial debt with the industrial net operating debt of €2,758.3 million as at March 31, 2023 (December 31, 2022: €2,799.7 million), the liabilities from the short-term rental business of €553.8 million (December 31, 2022: €544.2 million) and the liabilities from procurement leases of €590.8 million (December 31, 2022: €584.9 million) are added to net financial debt.

Non-current and current liabilities from the lease business came to €3,288.6 million as at March 31, 2023 (December 31, 2022: €3,214.6 million). Of this total, €3,132.1 million was attributable to financing of the direct lease business (December 31, 2022: €3,048.4 million) and €156.5 million to the repurchase obligations resulting from the indirect lease business (December 31, 2022: €166.3 million).

Non-current and current liabilities from the short-term rental business totaled €553.8 million (December 31, 2022: €544.2 million).

Non-current and current other financial liabilities stood at €710.1 million as at March 31, 2023 (December 31, 2022: €693.7 million). This item included liabilities from procurement leases amounting to €590.8 million (December 31, 2022: €584.9 million), for which right-of-use assets were recorded.

Contract liabilities, which mainly relate to prepayments received from customers in connection with the long-term project business in the Supply Chain Solutions segment, increased to €875.0 million (December 31, 2022: €826.1 million).

There was a moderate rise in the retirement benefit obligation and similar obligations under defined benefit pension plans to €731.2 million as at March 31, 2023 (December 31, 2022: €712.8 million). This was due to slightly lower discount rates compared with the end of 2022.

Consolidated equity went up by €44.5 million to €5,652.3 million as at March 31, 2023 (December 31, 2022: €5,607.8 million). The net income of €73.5 million earned during the first quarter of 2023 had a positive impact on equity, whereas there was a negative impact on equity from actuarial gains and losses arising from the measurement of pensions, amounting to a net loss of €5.0 million (after deferred taxes), and from the currency translation losses of €27.9 million, both of which were recognized in other comprehensive income. The equity ratio fell slightly to 33.4 percent (December 31, 2022: 33.9 percent).

Analysis of capital expenditure

The KION Group’s capital expenditure on property, plant, and equipment and on intangible assets in the quarter under review (excluding right-of-use assets from procurement leases) gave rise to cash payments of €75.4 million (Q1 2022: €81.4 million). The focus in the Industrial Trucks & Services segment was on the expansion and modernization of production and technology facilities. Capital expenditure in the Supply Chain Solutions segment predominantly related to development costs and the construction of a new plant for supply chain solutions in the Chinese city of Jinan, Shandong province.

Analysis of liquidity

Cash and cash equivalents increased to €352.7 million as at March 31, 2023 (December 31, 2022: €318.1 million).

Taking into account the credit facility of €1,376.7 million that was still freely available (December 31, 2022: €1,271.1 million), the unrestricted cash and cash equivalents available to the KION Group as at March 31, 2023 amounted to €1,717.1 million (December 31, 2022: €1,577.3 million).

Net cash provided by operating activities amounted to €172.9 million in the first quarter of 2023, a significant improvement on the net cash outflow of minus €354.9 million in the prior-year period. This was due not only to the improvement in EBIT but also, in particular, to the much less pronounced rise in net working capital compared with the first quarter of 2022 – supported by an increasing easing of the supply chain situation.

Net cash used for investing activities amounted to minus €68.0 million in the first quarter of 2023, which was a lower amount than in the equivalent period of the prior year (Q1 2022: minus €77.8 million). Within this total, cash payments for capital expenditure on production facilities, product development, and purchased property, plant, and equipment came to minus €75.4 million (Q1 2022: minus €81.4 million).

Free cash flow – the sum of cash flow from operating activities and investing activities – improved significantly to €104.9 million as a result (Q1 2022: minus €432.6 million).

Net cash used for financing activities amounted to minus €71.2 million in the quarter under review (Q1 2022: net cash provided of €326.9 million). Additions to and repayments of financial debt mainly related to current payments under the commercial paper program and repayment of amounts under the syndicated revolving credit facility (RCF). Payments made for interest portions and principal portions under procurement leases totaled minus €41.9 million (Q1 2022: minus €37.7 million). Current interest payments amounted to minus €8.0 million (Q1 2022: minus €4.3 million).