Financial position

The principles and objectives applicable to financial management as at September 30, 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 €11,465.7 million as at September 30, 2023, which was €545.0 million higher than the figure as at December 31, 2022 of €10,920.7 million.

Non-current financial liabilities fell to €1,095.5 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 €497.7 million (December 31, 2022: €496.8 million). Maturity-related reclassifications to current financial liabilities meant that non-current liabilities to banks fell to €326.7 million (December 31, 2022: €515.1 million). The decline in the carrying amount of non-current promissory notes to €250.7 million (December 31, 2022: €319.2 million) was also maturity-related.

As at September 30, 2023, current financial liabilities totaled €738.5 million (December 31, 2022: €626.7 million), of which €352.0 million related to issues under the commercial paper program (December 31, 2022: €305.0 million) and €69.5 million represented a tranche of a promissory note now recognized under current liabilities. Current liabilities to banks stood at €303.8 million, which was only just below the figure at the end of 2022 (December 31, 2022: €304.2 million).

Non-current and current financial liabilities fell to a total of €1,834.0 million (December 31, 2022: €1,988.6 million).

Net financial debt (non-current and current financial liabilities less cash and cash equivalents) amounted to €1,535.2 million as at September 30, 2023 (December 31, 2022: €1,670.5 million). This equated to 1.0 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 €2,797.7 million as at September 30, 2023 (December 31, 2022: €2,799.7 million), the liabilities from the short-term rental business of €635.3 million (December 31, 2022: €544.2 million) and the liabilities from procurement leases of €627.2 million (December 31, 2022: €584.9 million) are added to net financial debt.

The ongoing expansion of the lease business led to higher funding needs in the reporting period. Non-current and current liabilities from the lease business rose to €3,521.9 million as at September 30, 2023 (December 31, 2022: €3,214.6 million). Of this total, €3,378.4 million was attributable to the financing of the direct lease business (December 31, 2022: €3,048.4 million) and €143.5 million to the repurchase obligations resulting from the indirect lease business (December 31, 2022: €166.3 million).

Non-current and current other financial liabilities came to €769.1 million as at September 30, 2023 (December 31, 2022: €693.7 million). This item included liabilities from procurement leases amounting to €627.2 million (December 31, 2022: €584.9 million), for which right-of-use assets were recognized.

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 €877.8 million (December 31, 2022: €826.1 million).

The retirement benefit obligation and similar obligations under defined benefit pension plans amounted to €673.0 million as at September 30, 2023 (December 31, 2022: €712.8 million). This decrease was due to higher discount rates compared with the end of 2022.

Consolidated equity stood at €5,846.1 million as at September 30, 2023 (December 31, 2022: €5,607.8 million). The net income of €228.3 million earned during the period under review contributed to the rise in equity, as did the actuarial gains and losses arising from the measurement of pensions, which amounted to a net gain of €33.2 million (after deferred taxes) and were recognized in other comprehensive income. The currency translation gains of €5.7 million, also recognized in other comprehensive income, had a positive impact on equity too. KION GROUP AG’s dividend payout reduced equity by €24.9 million. At 33.8 percent, the equity ratio was on a par with the end of 2022 (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 (excluding right-of-use assets from procurement leases) in the period under review gave rise to cash payments of €281.6 million (Q1–Q3 2022: €252.6 million). The focus in the Industrial Trucks & Services segment was on product development and 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 declined to €298.8 million as at September 30, 2023 (December 31, 2022: €318.1 million).

Taking into account the credit facility of €1,264.1 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 September 30, 2023 amounted to €1,548.5 million (December 31, 2022: €1,577.3 million).

There was a comfortable net cash inflow from operating activities of €599.2 million in the first nine months of 2023 (Q1–Q3 2022: net cash outflow of minus €728.1 million), primarily thanks to the significant improvement in operating profit. Cash flow from operating activities in the prior-year period had been adversely affected by the considerable growth of net working capital as a result of the supply chain disruptions.

Net cash used for investing activities amounted to minus €269.8 million in the first three quarters of 2023, which was more than in the equivalent period of the previous year (Q1–Q3 2022: minus €243.7 million). This included cash payments of minus €281.6 million made in respect of capital expenditure (Q1–Q3 2022: minus €252.6 million), of which minus €82.4 million was attributable to capitalized development costs (Q1–Q3 2022: minus €82.2 million).

As a result, free cash flow – the sum of cash flow from operating activities and investing activities – improved significantly to €329.3 million in the reporting period (Q1–Q3 2022: minus €971.9 million).

Net cash used for financing activities amounted to minus €349.8 million in the first nine months of 2023 (Q1–Q3 2022: net cash provided of €831.3 million). Additions to and repayments of financial debt mainly related to current drawdowns under the commercial paper program and the syndicated revolving credit facility (RCF) as well as the repayment of bank loans. Payments made for interest portions and principal portions under procurement leases totaled minus €117.3 million (Q1–Q3 2022: minus €111.1 million). Due to higher market interest rates and the additional bank loans taken out in the second half of 2022, current interest payments went up substantially to minus €50.7 million (Q1–Q3 2022: minus €24.9 million). The distribution of a dividend to the shareholders of KION GROUP AG resulted in an outflow of funds of minus €24.9 million (Q1–Q3 2022: minus €196.7 million).