Financial position

The principles and objectives applicable to financial management as at March 31, 2024 were the same as those described in the 2023 combined management report.

Analysis of capital structure

Non-current and current liabilities amounted to €11,776.9 million as at March 31, 2024 (December 31, 2023: €11,615.7 million).

Totaling €1,286.1 million as at March 31, 2024, non-current financial liabilities were almost unchanged compared with the end of 2023 (December 31, 2023: €1,285.6 million). The carrying amount of the corporate bond issued, which is included in this line item, amounted to €498.3 million (December 31, 2023: €498.0 million). The non-current promissory notes had a carrying amount of €626.8 million (December 31, 2023: €626.5 million). Non-current liabilities to banks came to €143.2 million (December 31, 2023: €143.2 million).

Current financial liabilities decreased to a total of €192.6 million as at March 31, 2024 (December 31, 2023: €236.8 million). The issuances under the commercial paper program, which totaled €20.0 million at the end of 2023, were repaid in full in the first quarter of 2024. Liabilities to banks fell to €104.4 million (December 31, 2023: €129.2 million). Current financial liabilities included a tranche of the promissory note amounting to €69.5 million that matures in May 2024.

Net financial debt (non-current and current financial liabilities less cash and cash equivalents) amounted to €1,227.3 million as at March 31, 2024 (December 31, 2023: €1,210.6 million). This equated to 0.7 times adjusted EBITDA on an annualized basis (December 31, 2023: 0.7 times). To reconcile the net financial debt with the industrial net operating debt (INOD) of €2,617.9 million as at March 31, 2024 (December 31, 2023: €2,566.2 million), the liabilities from the short-term rental business of €720.0 million (December 31, 2023: €716.6 million) and the liabilities from procurement leases of €670.6 million (December 31, 2023: €639.0 million) were added to net financial debt.

Non-current and current liabilities from the lease business came to €3,887.2 million as at March 31, 2024 (December 31, 2023: €3,756.2 million). Of this total, €3,758.3 million was attributable to the financing of the direct lease business (December 31, 2023: €3,620.5 million) and €129.0 million to the repurchase obligations resulting from the indirect lease business (December 31, 2023: €135.7 million).

Non-current and current other financial liabilities came to €889.7 million as at March 31, 2024 (December 31, 2023: €884.5 million). This item included liabilities from procurement leases amounting to €670.6 million (December 31, 2023: €639.0 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, amounted to €741.7 million as at March 31, 2024 (December 31, 2023: €773.3 million).

As at March 31, 2024, provisions for the retirement benefit obligation and similar obligations under defined benefit pension plans came to €761.5 million, which was only marginally lower than at the end of 2023 with a moderate rise in discount rates (December 31, 2023: €775.7 million).

Consolidated equity increased to €5,945.7 million as at March 31, 2024 (December 31, 2023: €5,772.7 million). The net income of €111.0 million earned during the reporting quarter 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 €13.1 million (after deferred taxes) and were recognized in other comprehensive income. The currency translation gains of €48.1 million, also recognized in other comprehensive income, had a positive impact on equity too. The equity ratio increased slightly to reach 33.5 percent (December 31, 2023: 33.2 percent).

Analysis of capital expenditure

The KION Group’s capital expenditure on property, plant, and equipment and on intangible assets in the reporting quarter (excluding right-of-use assets from procurement leases) gave rise to cash payments of minus €87.7 million (Q1 2023: minus €75.4 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.

Analysis of liquidity

Cash and cash equivalents declined to €251.4 million as at March 31, 2024 (December 31, 2023: €311.8 million).

Taking into account the credit facility of €1,385.7 million (December 31, 2023: €1,364.7 million) that was still freely available and, as at the reporting date, had not been drawn down, the unrestricted cash and cash equivalents available to the KION Group as at March 31, 2024 amounted to €1,635.4 million (December 31, 2023: €1,674.4 million).

Cash flow from operating activities came to €138.8 million in the first quarter of 2024 (Q1 2023: €172.9 million). This figure was boosted by the significantly improved operating profit, whereas the variable remuneration paid in the first quarter of 2024 was much higher than in the prior-year period because of the successful financial year in 2023. In addition, thanks to further rigorous management of working capital, the net working capital was maintained at more or less the same level as at the end of 2023.

Net cash used for investing activities amounted to minus €73.1 million in the first three months of 2024, which was roughly the same level as in the equivalent period of the prior year (Q1 2023: minus €68.0 million). Within this total, cash payments in respect of capital expenditure increased to minus €87.7 million (Q1 2023: minus €75.4 million), of which minus €28.9 million was attributable to capitalized development costs (Q1 2023: minus €25.2 million). In addition, payments totaling €10.5 million were received in the reporting period that resulted from the disposal of assets belonging to a Finnish sales outlet in the Industrial Trucks & Services segment.

Free cash flow – the sum of cash flow from operating activities and investing activities – amounted to €65.7 million in the reporting period (Q1 2023: €104.9 million).

Net cash used for financing activities amounted to minus €125.8 million in the first quarter of 2024 (Q1 2023: minus €71.2 million). In particular, current financial debt was reduced through repayment of commercial paper and the syndicated revolving credit facility (RCF). Payments made for interest portions and principal portions under procurement leases totaled minus €40.7 million (Q1 2023: minus €41.9 million). Current interest payments on financial debt fell to minus €5.2 million (Q1 2023: minus €8.0 million). There were also payments totaling minus €36.1 million (Q1 2023: €0.0 million) as a result of other financing activities.