Financial position of the Group

The principles and objectives applicable to financial management as at June 30, 2026 were the same as those described in the combined management report in the 2025 annual report.

Analysis of capital structure

Non-current and current liabilities increased to €12,604.9 million as at June 30, 2026 (December 31, 2025: €12,171.9 million).

Non-current and current financial liabilities, the breakdown of which is shown in the table ‘Industrial net debt’, rose to a total of €1,635.1 million as at June 30, 2026 (December 31, 2025: €1,058.9 million).

The increase can be explained by the corporate bond issued in March 2026 with a nominal amount of €500 million under KION GROUP AG’s EMTN program. The entire inflow of funds from issuing the bond was then used to repay existing liabilities from the lease business. This was the main reason for the increase in net financial debt (non-current and current financial liabilities less cash and cash equivalents) to €1,244.1 million as at June 30, 2026 (December 31, 2025: €584.0 million). This equates to 0.6 times adjusted EBITDA on an annualized basis (December 31, 2025: 0.3 times).

With effect from 2026, KION has changed the definition of its alternative performance measure ‘industrial net operating debt’ (INOD). Previously, INOD was defined as the total of net financial debt, liabilities from the short-term rental business, and liabilities from procurement leases. Starting in 2026, funds are deducted from this total that, although they are used solely to finance the lease business and short-term rental business, are recognized within financial liabilities in the statement of financial position because they are part of the Company’s general funding. Changing the definition was necessary because funds from a corporate bond without a specified purpose were used for the first time in 2026 to finance the lease business. Whereas the lease business was previously financed using specifically designated and directly assignable financial instruments, the funds obtained from the corporate bond are recognized within financial liabilities in the statement of financial position. If the definition were not changed, these funds, which should be assigned to the lease business from an economic perspective, would be fully included in industrial net operating debt even though the underlying lease business is not assigned to the industrial business. The changed definition therefore helps to present the financing in accordance with its economic categorization and thus to ensure that this key figure remains meaningful and provides comparability over time.

To reconcile the net financial debt with the industrial net operating debt (INOD) of €2,299.1 million as at June 30, 2026 (December 31, 2025: €2,158.3 million), the liabilities from the short-term rental business of €774.7 million (December 31, 2025: €810.2 million) and the liabilities from procurement leases of €775.1 million (December 31, 2025: €764.1 million) are firstly added to net financial debt. Secondly (in accordance with the changed definition), the funds of €494.7 million obtained from the corporate bond (less the issue discount and transaction costs) to finance the lease business are now deducted in order to calculate the industrial debt. It was not necessary to restate the comparative figures for prior-year periods because the lease business was previously financed solely from financial instruments that could be directly assigned to the lease business, which meant there was no discrepancy between the presentation in the statement of financial position and the assignment from an economic perspective. Leverage on industrial net operating debt (INOD) stood at 1.2 times adjusted EBITDA as at June 30, 2026 (December 31, 2025: 1.2 times) on an annualized basis.

Non-current and current liabilities from the lease business declined to €4,540.1 million as at June 30, 2026 (December 31, 2025: €4,828.6 million). The net decrease was largely due to the use of funds from the bond to repay these liabilities. This was countered to an extent by an increase in the financing volume resulting from the growth of the lease business. In total, €4,428.1 million was attributable to the financing of the direct lease business (December 31, 2025: €4,714.6 million) and €112.0 million to the repurchase obligations resulting from the indirect lease business (December 31, 2025: €114.0 million).

Non-current and current liabilities from the short-term rental business came to €774.7 million (December 31, 2025: €810.2 million).

Contract liabilities, which mainly relate to prepayments received from customers in connection with the long-term project business in the Intelligent Automation Solutions segment, rose to €799.5 million as at June 30, 2026 (December 31, 2025: €655.3 million).

The retirement benefit obligation and similar obligations under defined benefit pension plans fell to €562.1 million as at June 30, 2026 (December 31, 2025: €604.3 million). This decrease was largely due to special funding of €16.8 million provided in order to increase the funding ratio of the pension plans in Germany, but was also attributable to slightly higher discount rates.

Consolidated equity rose to €6,378.5 million as at June 30, 2026 (December 31, 2025: €6,123.0 million). This gave an equity ratio of 33.6 percent (December 31, 2025: 33.5 percent). The main factors in the rise in equity were the net income for the reporting period of €207.6 million and amounts recognized in other comprehensive income comprising currency translation gains of €104.1 million and actuarial gains and losses arising from the measurement of pensions, which amounted to a net gain of €21.5 million (after deferred taxes). These factors were partly offset by the dividend of €81.3 million distributed by KION GROUP AG in the second quarter.

Analysis of capital expenditure

KION’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 minus €153.5 million (H1 2025: minus €173.2 million). The focus in the Industrial Trucks & Services segment was on product development and the modernization of production and technology facilities. Capital expenditure in the Intelligent Automation Solutions segment predominantly related to development costs.

Analysis of liquidity

In the period under review, cash flow from operating activities amounted to a net cash outflow of minus €285.2 million (H1 2025: net cash inflow of €343.3 million) and was weighed down significantly by the repayment of liabilities from the lease business using funds from the corporate bond. Taking into account the funds obtained from the bond issue (less the issue discount and transaction costs), cash flow from operating activities amounted to a net cash inflow of €209.5 million on a correspondingly adjusted basis. Furthermore, the cash payments in connection with implementation of the efficiency program had a negative impact of minus €63.6 million; the bulk of these payments are not being made until the current financial year.

Net cash used for investing activities amounted to minus €187.3 million in the first half of 2026, which was just below the level of the prior-year period (H1 2025: minus €181.4 million). Within this total, cash payments for capital expenditure on property, plant and equipment and on intangible assets declined from the elevated level seen in prior years to minus €153.5 million (H1 2025: minus €173.2 million). Of this figure, minus €53.7 million was attributable to capitalized development costs (H1 2025: minus €66.2 million) and minus €99.7 million to other non-current assets (H1 2025: minus €106.9 million). In the reporting period, there were also cash payments totaling minus €35.6 million (H1 2025: minus €11.1 million) for M&A activities.

The Group’s free cash flow, the definition of which was changed at the start of 2026, came to €22.2 million in the first half of this year (H1 2025: €161.9 million) table ‘Free cash flow’.

Free cash flow was previously defined as cash flow from operating activities plus cash flow from investing activities. Starting in 2026, it also takes into account cash flow from additions to, and repayments of, financial instruments (including related interest payments and borrowing costs) that are used solely to finance the lease business and short-term rental business. The changed definition was necessary because, for the first time, funds from the Company’s general funding are being used to finance the lease business and short-term rental business. If this change were not made, cash flows that, from an economic perspective, should be assigned to the lease business and short-term rental business would not be recognized within free cash flow because of their inclusion in cash flow from financing activities. Changing the definition ensures that these cash flows are assigned correctly from an economic perspective and maintains this key figure’s comparability over time. The changed definition increased free cash flow for the reporting period by €494.7 million as a result of including the funds obtained from the corporate bond (less the issue discount and transaction costs) to finance the lease business.

Net cash provided by financing activities amounted to €382.0 million in the reporting period (H1 2025: net cash used of minus €318.1 million) and was largely attributable to the corporate bond issued in March 2026. The main outgoings were the dividend of minus €81.3 million distributed to KION GROUP AG’s shareholders (H1 2025: minus €107.5 million) and payments made for interest portions and principal portions under procurement leases, which totaled minus €102.3 million (H1 2025: minus €113.2 million).

Cash and cash equivalents fell to €391.0 million as at June 30, 2026 (December 31, 2025: €474.9 million).

Taking into account the credit facility of €1,385.7 million that was freely available and, as at the reporting date, entirely unutilized (December 31, 2025: €1,385.7 million), the unrestricted cash and cash equivalents available to the Group as at June 30, 2026 amounted to €1,776.1 million (December 31, 2025: €1,859.9 million).