Financial position

Principles and objectives of financial management

The KION Group pursues a sound financial policy of maintaining a strong credit profile with reliable access to capital markets. By pursuing an appropriate financial management strategy, the KION Group makes sufficient cash and cash equivalents available at all times to meet the Group companies’ operational and strategic funding requirements. As part of its financial management activities, the KION Group aims to optimize the funding structure and conditions. In addition, the KION Group manages its financial relationships with customers and suppliers and mitigates the financial risk to its enterprise value and profitability, notably currency risk, interest-rate risk, price risk, counterparty risk, and country risk. In this way, the KION Group creates a stable funding position for profitable growth.

Within the Group, KION GROUP AG manages intercompany cash pooling centrally. KION GROUP AG pools the liquidity of the Group companies and covers their funding requirements. The vast majority of the Group companies participate in KION GROUP AG’s groupwide cash pool. This funding enables the KION Group to present a united front in the capital markets and strengthens its hand in negotiations with banks and other market participants. The Group occasionally arranges additional local credit lines for some Group companies with banks or leasing companies in order to comply with legal, tax, and other regulations.

The KION Group is a publicly listed corporate group and therefore ensures that its financial management takes into account the interests of shareholders, the banks providing its funding, and other lenders. For the sake of all stakeholders, the KION Group makes sure that it maintains an appropriate ratio of internal funding to borrowing. The KION Group’s borrowing currently has a maturity structure extending until 2030.

Depending on requirements and the market situation, the KION Group also avails itself of the funding facilities offered by the capital markets. The KION Group therefore seeks to implement proactive risk management by rigorously pursuing its corporate strategy and to maintain an investment-grade credit rating in the capital and funding markets by ensuring a solid funding structure.

With regard to the KION Group’s credit ratings, Fitch Ratings confirmed the long-term issuer default rating of BBB with a stable outlook and a short-term issuer default rating of F2. Standard & Poor’s lowered its rating by one notch to BB+ with a stable outlook in June 2025.

KION GROUP AG generally issues guarantees to the banks for Group companies’ existing payment obligations.

The KION Group maintains a liquidity reserve in the form of cash and a revolving credit facility in order to ensure long-term financial flexibility and solvency.

In addition, the KION Group uses derivatives to hedge currency risk. Interest-rate swaps are entered into in order to hedge interest-rate risk.

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’ to adjusted EBITDA). As at December 31, 2025, the actual level of leverage was well below the limit of the financial covenant.

Exceeding the agreed maximum level of leverage gives lenders a right of termination.

The contractually agreed interest terms for the revolving credit facility are linked not only to KION GROUP AG’s credit rating but also to compliance with the Group’s sustainability KPIs. The interest terms for a promissory note issued in October 2023 are also linked to the achievement of ESG targets.

Main corporate actions in the reporting period

In September 2025, KION GROUP AG repaid a corporate bond of €500.0 million – the first that it had issued under the EMTN program – upon maturity.

Analysis of capital structure

The equity and liabilities recognized in the condensed consolidated statement of financial position, broken down into equity, non-current liabilities, and current liabilities, were as follows as at December 31, 2025:

Non-current and current liabilities fell to €12,171.9 million as at the end of 2025 (December 31, 2024: €12,598.3 million). This change was mainly due to the repayment of financial liabilities. Non-current liabilities included deferred tax liabilities of €388.0 million (December 31, 2024: €446.7 million).

Financial debt

Non-current and current financial liabilities declined to a total of €1,058.9 million as at December 31, 2025 (December 31, 2024: €1,700.3 million). The decrease in non-current financial liabilities to €903.8 million (December 31, 2024: €1,002.0 million) predominantly resulted from liabilities being reclassified as current in view of their maturity dates; this primarily affected two tranches of promissory notes. The carrying amount of the non-current promissory notes stood at €376.9 million at the end of 2025 (December 31, 2024: €449.1 million). Non-current financial liabilities also included the second corporate bond under the EMTN program, which was issued in November 2024 and had a carrying amount of €496.8 million as at the reporting date (December 31, 2024: €496.0 million), and liabilities to banks of €29.3 million (December 31, 2024: €56.7 million).

Current financial liabilities decreased to €155.1 million as at December 31, 2025 (December 31, 2024: €698.3 million), mainly due to the repayment of the corporate bond of €500.0 million that matured in September 2025. Also during the reporting year, promissory notes in a total amount of €127.5 million were repaid, in some cases ahead of the maturity date; the carrying amount of the current promissory notes was €25.0 million as at the reporting date (December 31, 2024: €79.5 million). Current liabilities to banks amounted to €88.7 million, which was virtually unchanged year on year (December 31, 2024: €90.2 million). The syndicated revolving credit facility (RCF) was undrawn as at the reporting date, as had also been the case a year earlier.

Net financial debt (non-current and current financial liabilities less cash and cash equivalents) had been reduced to €584.0 million by the end of 2025 (December 31, 2024: €913.2 million). This equated to 0.3 times adjusted EBITDA on an annualized basis (December 31, 2024: 0.5 times). To reconcile the net financial debt with the industrial net operating debt (INOD) of €2,158.3 million as at December 31, 2025 (December 31, 2024: €2,497.5 million), the liabilities from the short-term rental business of €810.2 million (December 31, 2024: €814.1 million) and the liabilities from procurement leases of €764.1 million (December 31, 2024: €770.1 million) are added to net financial debt. Leverage on industrial net operating debt (INOD) stood at 1.2 times adjusted EBITDA on an annualized basis (December 31, 2024: 1.3 times).

Retirement benefit obligation and similar obligations

The KION Group maintains pension plans in many countries. These plans comply with legal requirements applicable to standard local practice and thus the situation in the country in question. The plans comprise defined benefit pension plans, defined contribution pension plans, and plans covering multiple Group companies. The retirement benefit obligation and similar obligations under defined benefit pension plans fell to a total of €604.3 million as at December 31, 2025 (December 31, 2024: €747.5 million), largely due to the overall increase in discount rates. The net obligation under defined benefit pension plans, defined as the present value of the associated obligations after deduction of plan assets, came to €527.5 million (December 31, 2024: €666.9 million). Changes in estimates relating to defined benefit pension entitlements resulted in an increase in equity of €71.2 million (after deferred taxes).

Contributions to pension plans that are entirely or partly funded via funds are paid in as necessary to ensure sufficient assets are available and to be able to make future pension payments to pension plan participants. These contributions are determined by factors such as the funded status, legal and tax considerations, and local practice. Payments totaling €87.6 million (2024: €84.5 million) were made in 2025 for the main pension entitlements in the KION Group. They mostly comprised pension benefits of €29.8 million (2024: €27.0 million) granted directly by the Company and employer contributions to plan assets amounting to €57.7 million (2024: €57.5 million). In 2024 and 2025, the employer contributions included special funding of €50.0 million in order to increase the funding ratio of the pension plans in Germany.

Liabilities from lease and short-term rental business

Non-current and current liabilities from the lease business increased to €4,828.6 million as at December 31, 2025 (December 31, 2024: €4,407.5 million). Of this total, €4,714.6 million was attributable to financing of the direct lease business (December 31, 2024: €4,280.5 million) and €114.0 million to the repurchase obligations resulting from the indirect lease business (December 31, 2024: €127.0 million).

Non-current and current liabilities from the short-term rental business totaled €810.2 million (December 31, 2024: €814.1 million).

Other provisions

Non-current and current other provisions rose to €610.5 million as at December 31, 2025 (December 31, 2024: €482.6 million). This rise was predominantly attributable to provisions for personnel of €282.3 million, which rose significantly year on year as a result of the measurement of share-based remuneration and the measures under the efficiency program (December 31, 2024: €152.1 million). Other provisions also included provisions for product warranties of €158.9 million (December 31, 2024: €169.9 million), for onerous contracts – particularly in connection with the project business in the Supply Chain Solutions segment – of €60.3 million (December 31, 2024: €68.3 million), and for other obligations of €109.1 million (December 31, 2024: €92.3 million).

Other financial liabilities

Non-current and current other financial liabilities came to €907.0 million as at December 31, 2025 (December 31, 2024: €977.0 million). This item predominantly included liabilities from procurement leases amounting to €764.1 million (December 31, 2024: €770.1 million), for which right-of-use assets were recognized.

Contract liabilities

Contract liabilities, which mainly relate to prepayments received from customers in connection with the long-term project business in the Supply Chain Solutions segment, declined to €655.3 million as at December 31, 2025 (December 31, 2024: €778.6 million).

Equity

Consolidated equity went down by €84.1 million to €6,123.0 million as at December 31, 2025 (December 31, 2024: €6,207.1 million). The net income for the reporting year of €240.5 million and the actuarial gains and losses arising from the measurement of pensions, which amounted to a net gain of €71.2 million (after deferred taxes), had a positive impact on equity. However, there was a negative impact from currency translation losses of €306.2 million, which were recognized in other comprehensive income. Moreover, the dividend paid by KION GROUP AG in June 2025 reduced equity by €107.5 million. The equity ratio of 33.5 percent was above the level as at the end of 2024 of 33.0 percent owing to the decrease in total assets.

Analysis of capital expenditure

The KION Group’s capital expenditure on property, plant and equipment and on intangible assets in the reporting year (excluding right-of-use assets from procurement leases) gave rise to cash payments of €395.7 million (2024: €462.9 million). The year-on-year decrease was due to the incremental completion of strategic investment projects, such as the KION Regional Distribution Center Europe in Kahl am Main, which went into operation in mid-2025. This highly automated spare parts distribution center is designed to facilitate the even faster and more reliable supply of spare parts to customers of both operating segments in central Europe. Capital expenditure in the Industrial Trucks & Services segment also focused on product development and the expansion and modernization of production and technology facilities. In the Supply Chain Solutions segment, capital expenditure predominantly related to the development of automation solutions.

Purchase commitments for capital expenditure on non-current assets amounted to €41.8 million as at the reporting date (December 31, 2024: €36.6 million).

Analysis of liquidity

Liquidity management is an important aspect of central financial management in the KION Group. The sources of liquidity are cash and cash equivalents, net cash provided by operating activities, and amounts available under credit facilities. Centralized cash pooling enables liquidity to be managed in such a way that sufficient cash and cash equivalents are always available to the Group companies.

Holdings of cash and cash equivalents decreased to €474.9 million as at December 31, 2025 (December 31, 2024: €787.0 million), of which €474.2 million was available without restriction (December 31, 2024: €786.5 million).

Taking into account the credit facility of €1,385.7 million that was still freely available and was undrawn as at the reporting date (December 31, 2024: €1,385.7 million), the unrestricted cash and cash equivalents available to the KION Group as at the end of 2025 amounted to €1,859.9 million (December 31, 2024: €2,172.2 million).

In 2025, the KION Group’s cash flow from operating activities amounted to a net cash inflow of €1,131.8 million (2024: €1,170.6 million). This improvement was thanks to the operating profit achieved and, in particular, the substantial reduction of net working capital. It was partly offset by various factors, such as lower payments for income taxes compared with 2024 and the payments in respect of defined benefit obligations, which – as had been the case a year earlier – included special funding. However, a material proportion of the expenses recognized in the reporting period for implementation of the efficiency program did not yet have an impact on cash flow.

There was a decrease in net cash used for investing activities to minus €422.3 million in 2025 (2024: minus €468.6 million). Within this total, cash payments in respect of capital expenditure on property, plant and equipment and on intangible assets (excluding right-of-use assets from procurement leases) came to minus €395.7 million (2024: minus €462.9 million), of which €123.5 million was attributable to capitalized development costs (2024: €133.2 million) and €272.2 million to other non-current assets (2024: €329.7 million). The cash paid for acquisitions in the reporting year, which totaled minus €34.6 million (2024: minus €36.7 million), mainly related to the expansion of the international sales network in the Industrial Trucks & Services segment as well as to subsequent purchase price payments for prior-year acquisitions.

The Group’s free cash flow – the sum of cash flows from operating activities and investing activities – was once again at a high level in 2025 and increased slightly year on year to €709.5 million (2024: €702.0 million).

Net cash used for financing activities rose to minus €1,011.8 million in 2025 (2024: minus €224.7 million). This was because the good level of liquidity over the course of the year was used to reduce net financial debt. This item also notably included larger payments made for interest portions and principal portions under procurement leases, which totaled minus €217.6 million (2024: minus €175.0 million), and slightly lower interest payments of minus €63.5 million (2024: minus €69.1 million). The distribution of a dividend to the shareholders of KION GROUP AG resulted in an outflow of funds of minus €107.5 million (2024: minus €91.8 million).