We
keep
the
world
moving.
annual report
2013
KION Group
Segments
LINde MaterIaL HaNdLING
StILL
The Linde Material Handling (LMH) seg-
ment encompasses the Linde, Fenwick
and Baoli brands.
The STILL and OM STILL brands are
grouped in the STILL segment.
€2,881.1 million
REVENUE
€309.1 million
ADJUSTED EBIT
13,776
EMPLOYEES
FINaN cIaL ServIceS (FS)
€1,717.5 million
REVENUE
€123.9 million
ADJUSTED EBIT
7,704
EMPLOYEES
The purpose of the Financial Services (FS) segment
is to act as an internal funding partner for LMH and
STILL, providing finance solutions that promote
sales. FS activities include the internal financing of
the short-term rental fleet, the funding of long-term
leasing business for the KION Group's external cus-
tomers, and the risk management associated with
these operations. In the major sales markets with a
high volume of financing and leasing, this business is
handled by legally independent FS companies.
€539.4 million
REVENUE
€0.7 million
ADJUSTED EBIT
118
EMPLOYEES
BreaKdOWN OF tOtaL reveNue IN 2013
BreaKdOWN OF adju Sted eBIt IN 2013
58.5 %
LINDE MATERIAL
HANDLING
33.4 %
STILL
7.0 %
FINANCIAL SERVICES
1.1 %
OTHER
74.2 %
29.7 %
90 %
80 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0 %
– 10 %
0.2 %
– 4.1 %
LINDE
MATERIAL
HANDLING
STILL
FINANCIAL
SERVICES
OTHER
¹ including effects of consolidation/reconciliation
KION Group
Company profile
Linde is a global premium brand and
a technology leader that has many
years' experience of hydrostatic drive
technology. It has also been develop-
ing and manufacturing electric drive
systems for decades and makes the
resulting expertise available to exter-
nal customers for use in a variety of
applications.
STILL is predominantly a global pre-
mium provider of trucks with electric
and diesel-electric drives. It mainly
focuses on the European and Latin
American markets. Its portfolio
consists of forklift trucks and ware-
house trucks plus associated
services. STILL has also positioned
itself as a leading provider of intelli-
gent intralogistics solutions.
The Baoli brand covers the value and
economy segments in China and
other emerging markets in Asia, east-
ern Europe, the Middle East, Africa,
and Central and South America.
In France, Linde products are sold
under the Fenwick brand. Fenwick is
the biggest material-handling provider
in France. The product portfolio
ranges from warehouse trucks to
heavy trucks and caters to all of the
major application areas. Fenwick and
Linde meet customers' most sophisti-
cated requirements in terms of tech-
nology, efficiency, functionality and
design.
PrOductS aNd ServIceS
Diesel and LP gas
forklift trucks
Electric forklift trucks
Warehouse handling
equipment
Platform trucks
and tractors
In Italy, STILL products are sold under
the OM STILL brand. OM STILL is a
market leader in Italy and offers both
trucks and fully integrated warehouse
systems, including automation and
fleet management solutions.
Voltas is a leading provider of industrial
trucks in India. It manufactures diesel
trucks, electric forklift trucks and ware-
house trucks for the Indian market and
can draw on a network of more than
50 dealers providing sales and service.
Stock management
systems
Transport and truck
control systems
Automation
Fleet management
Purchase
Leasing
Racking systems
Hire purchase
Repair
Maintenance
Full service
Used trucks
Driver training
RFID systems
Hire
PrOductS
ServIce
SYSteMS
FINaNcING
KION Group
Key figures for 2013
KION Group overview
in € million
order intake
revenue
order book 1
Results of operation
eBItDa
adjusted eBItDa 2
adjusted eBItDa margin 2
eBIt
adjusted eBIt 2
adjusted eBIt margin 2
2013
4,489.1
4,494.6
693.3
708.8
721.5
16.1 %
374.2
416.5
9.3 %
2012 *
4,590.3
4,559.8
807.8
914.4
700.5
15.4 %
549.1
408.3
9.0 %
2012
4,700.1
4,726.7
807.8
915.4
747.3
15.8 %
550.1
438.2
9.3 %
2011
4,681.9
4,368.4
953.0
569.2
665.3
15.2 %
213.2
364.6
8.3 %
Change
2013/2012
– 2.2 %
– 1.4 %
– 14.2 %
– 22.5 %
3.0 %
–
– 31.9 %
2.0 %
–
net income (loss) 3
138.4
161.4
161.1
– 92.9
– 14.2 %
Financial position 1
total assets
equity
net financial debt
Cash flow
Free cash flow 4
Capital expenditure 5
6,026.4
1,610.0
979.3
202.6
125.8
6,213.2
660.7
1,790.1
518.1
155.1
6,213.2
660.3
1,790.1
518.1
155.1
6,066.3
– 487.6
2,631.3
– 3.0 %
> 100,0 %
– 45.3 %
234.2
133.0
– 60.9 %
– 18.9 %
Employees 6
22,273
21,215
21,215
21,862
5.0 %
* Key figures for 2012 were adjusted due to the retrospective application of IaS 19r (2011);
order intake, revenue, adjusted eBIt and adjusted eBItDa were aligned due to the sale of the Hydraulics Business
1 Values as at balance sheet date 31/12/
2 adjusted for KIon acquisition items and one-off items
3 net income 2012 included a net gain from the Weichai transaction in the amount of €154.8 million
4 Free cash flow is defined as Cash flow from operating activities plus Cash flow used in investing activities
5 Capital expenditure including capitalised r&D costs, excluding leased and rental assets
6 number of employees in full-time equivalents as at balance sheet date 31/12/
all amounts in this annual report are disclosed in millions of euros (€ million) unless stated otherwise. the addition of the totals pre-
sented may result in rounding differences of +/– €0.1 million. the percentages shown are calculated on the basis of the respective
amounts, rounded to the nearest thousand euros.
ANNUAL REPORT
2013
We
keep
the
world
moving.
The KION Group has a global presence with
products, services and solutions provided
by its six brand companies. The KION Group
is the European market leader and the world's
second largest manufacturer of forklift trucks
and warehouse technology, and it is one of
the leading international suppliers in the sector
in China.
Linde and STILL serve the premium segment
worldwide, while Baoli focuses on the value and
economy segments. Fenwick is the material-
handling market leader in France, OM STILL is
a market leader in Italy and Voltas is one of the
two market leaders in India.
But these strong foundations were not the
only thing that enabled the KION Group to
generate revenue of around €4.5 billion in
2013. The key factor was our workforce of
more than 22,000 people, who go the extra
mile for our customers every day.
ONlINE vERsION
reports.kiongroup.com
REGIstER FOR OuR NEwslEttER
kiongroup.com/newsletter
INvEstOR RElatIONs
kiongroup.com/ir
KION GROup wEbsItE
kiongroup.com
2
What drives us every
day – worldwide
Anyone who keeps the world moving – as we
do in the KION Group – comes into contact
with the lives of millions of people each and every
day. Whether it's filling the shelves in super
markets, sending a parcel from an online retailer
on its way, or getting a part to the assembly
line 'justintime': forklift trucks and warehouse
technology set the pace of the global economy.
Behind all of these activities are the employees
of the KION Group, who work each day on the
products and services that play such a decisive
role in ensuring the efficient flow of goods and
trade around the world. Highly motivated, highly
qualified and always focused on the needs of
the customer.
Jan Koepp
Post Merger Integration
opportunities.
WIEsbadE n, GERMANY
P. 18
VinCent Halma
Marketing
team spirit.
suMMERVIllE , USA
0 4
P .
Cristine sauter
Human Resources
Perspectives.
IndaIatuba /sÃo P aulo, BR A zIl
HE AD OFFICE
SITES
We keep the world moving.KION GROUP AG | Annual Report 2013 0
1
.
P
P. 1
6
andreas Kistner
Innovation Management
Innovation.
asCHaFFEnbuRG, GERMANY
3
6
P . 0
luKáš bartí K
Assembly
Quality.
ČEský kR uMlo V, CzECH REPUBlIC
P. 14
biKe güVen
Material Planning and Marketing
Inspiration.
Istanbul , TURKE Y
P
.
1
2
CHen da
Sales
Passion.
FuZHou, CHINA
P. 0
8
anup r amaCHandra Kurup
Product Development
Potential.
Pun E , INDIA
We keep the world moving.KION GROUP AG | Annual Report 2013
Perspectives.
CrIStIne SAuter
Human Resources
A rapidly growing market. Increasingly complex logistics demands.
In emerging markets, forklift trucks and warehouse technology are
replacing muscle power and hand trucks to an ever greater degree.
And no one knows this better than Cristine Sauter.
IndAIAtubA/SÃo pAulo
Brazil
5
Attractive market
with growth profile
above GDP.
The KION Group operates in an attractive
market that is growing faster than global
economic output.
The worldwide market for industrial trucks
grew at roughly 1.4 times the rate of the global
economy between 1980 and 2013. Industry
experts reckon that this pace is set to accelerate
slightly over the period up to 2017.
this scenario is being driven by three
global mega-trends:
– the industrialisation of the emerging markets,
– the advancing globalisation of world trade
and, as a consequence, the increasing
transportation of goods around the world,
– the growing fragmentation of supply chains
and value chains: just-in-time logistics
and purchases from online retailers create
demand for the KION Group’s products and
services.
Global unit sales of new trucks and
global economic output ¹
8.3
4.1
4.2
3.3
2.8
3.0
2.6
2.7
5.6
3.5
9 %
8 %
7 %
6 %
5 %
4 %
3 %
2 %
1 %
0 %
1980
–
1990
1990
–
2000
2000
–
2010
2010
–
2013
2014
–
2017
Global orders of new trucks
Global economic output
(world GDP)
1 Average annual growth rates for new truck sales and GDP between
1980 and 2013;
Source: WITS/FEM (new trucks 1980 – 2013); McKinsey market survey
(forecast for new trucks 2014E – 2017E); IMF 2013 (global GDP)
CrIStIne SAuter
Human Resources
01
Whether bananas or concrete slabs – virtually
all goods are transported by forklift trucks at
some point
02
KION’s plant in Indaiatuba, where Linde and
STILL trucks are produced
03
Good atmosphere: always ready to listen to
KION staff
02
Recently, demand for high-quality Linde and STILL
products has risen sharply, with the KION Group’s unit
sales in Brazil reaching a record high in 2013. It was
only a question of time before the plant in Rio de
Janeiro reached full capacity. Cristine Sauter belonged
to a small group of KION staff members who organised
the relocation and fresh start at a brand-new factory
near São Paulo.
he mountains of exotic fruit and vegetables
She had the expertise required, because Cristine is a
are stunning; the displays extend as far as the
real Paulista – born and bred in the city. Her grand-
01
T
eye can see in the gigantic market halls in the heart of
parents migrated there from Hamburg years ago, but
the booming Brazilian city of São Paulo. Workers still
the 37-year old speaks perfect German, as well as
load heavy crates of pineapples, melons and bananas
Portuguese, English and Spanish. She could navigate
onto traditional carrinhos – slender, makeshift wooden
the chaotic traffic on the congested multi-lane streets
barrows – and manoeuvre them manually through the
of São Paulo in her sleep.
narrow aisles between market traders and piles of
boxes. Cristine Sauter watches the hustle and bustle
looking for staff by loudspeaker
with great interest. “We could sell loads of forklift trucks
The plant is in Indaiatuba, an hour’s drive from the city.
here,” says the 37-year-old HR manager of KION South
“When we started in 2012, it was a greenfield site.
America. “The potential for us here is enormous.”
There were five of us, including the CEO Frank Bender,
Everywhere is booming in this city of over eleven million
says. With a recently opened freight terminal, Indaia-
inhabitants. Newly renovated buildings peek out between
tuba offered better infrastructure and greater security
and our office started out in a former farmhouse,” she
the high-rises, some extremely run-down, while resi-
than Rio.
dential and office complexes tower into the sky. Despite
the heat, suits are the order of the day in broad Avenida
Paulista, the Wall Street of São Paulo.
03
juggling it with her private life, which involves four small
children, a Labrador puppy and a new house-build. In
her spare time, she is also studying for an MBA.
For Cristine Sauter, it had to be Brazil. As a young
woman she lived in Saarbrücken for a few years where
she studied business administration, but afterwards
she wanted to go back home. “At that time, things were
too slow for me in Germany.” And why did she join the
KION Group? “Here I’m free to organise things myself,
which is unusual in Brazilian companies. And setting up
a new plant was amazing, it was like a start-up.”
She cannot get away from her German roots, nor does
» The KION Group has a clearly defined
growth strategy, and we all work as a team to
implement it – that’s what motivates me!«
Cristine Sauter
Human Resources
When the plant was up and the machinery installed,
she want to. Her grandfather taught her the importance
Cristina had to recruit a qualified workforce of 120
of a good education. “He always said that nobody can
within three months. The question was how to do this
take that away from you,” she recalls. Cristina passes
in a booming region where the unemployment rate is
this philosophy on to her staff as well as her children.
strikingly low, at around one per cent. “One thing we
She works closely with the IFPA German technical
did was to send cars with loudspeakers out into the
college in São Paulo where young employees study for
streets to spread the message that we were offering
qualifications in areas such as freight forwarding and
attractive jobs,” reports Cristina. This actually helped,
industrial management under the dual vocational train-
as German employers are popular in Brazil, not least
ing system. They get their practical experience at the
because they pay wages on time. The HR manager
plant in Indaiatuba. This is a new concept for Brazil –
selected all the new employees personally. “In Brazil,
and it gives the KION Group a distinct competitive edge.
direct contact is very important.”
It just had to be brazil
The new plant, which produces counterbalance trucks
and warehouse technology, was officially opened in
March 2013. The workforce rose to 200 within a few
months – creating plenty of work for Cristine Sauter.
She uses two mobile phones to manage her job,
Quality.
LuKáš BArtíK
Assembly
Being globally focused yet firmly established in its home market
is part of the DNA of the KION Group. Lukáš Bartík and others
like him have all the qualities you’d expect of a good mechanic: an
eye for precision and a passion for technology and commercially
outstanding products. We are the market leaders in Europe thanks
to employees such as Lukáš.
ČEsKý KrumLOv
Czech Republic
7
A global leader –
strong home base …
Measured in terms of new trucks sold, the
KION Group is currently number one in the
European market and number two in the
market worldwide. And with a presence in
more than 100 countries, the company is the
world’s biggest specialist provider of materials
handling trucks and associated services.
Our strong position in western Europe, where
we have a market share of 35 per cent (2013),
is the basis for the global expansion of the
KION Group. The foundation of our business is
stable in this region because of replacement
purchases and a strong service business.
After plunging into a deep crisis, Europe’s mar-
ket for industrial trucks is now recovering. Since
2010 the KION Group has benefited from this
trend with a double-digit percentage increase in
revenue in Germany and the rest of Europe.
Strong in key markets –
The KION Group’s market shares and
market positions in 2013
# 1
35 %
WESTERN
EUROPE
# 1
22 %
E ASTERN
EUROPE
26 %
BR A zIL
¹
# 1
²
# 1
7 %
CHINA
1 Electric forklift trucks and warehouse technology systems (in terms
of unit sales), market share incl. IC trucks.
2 No. 1 among international providers in China and no. 3 measured
by the overall market position in China (in terms of unit sales)
01
01
Quality control: an eye for detail is everything
02
Lukáš Bartík with head of production,
Karl Fritsch
03
Axles from the Lipo plant: the heart of
Linde and STILL trucks
03
02
» There’s a great deal of satisfaction to be had
in sorting out a problem.«
Lukáš Bartík
Assembly
T
here are certain headaches that no factory
castle where they can watch the brown bears that live
is immune to: a problem with a machine is
in the moat. Český Krumlov, known as the pearl of the
holding up the production process. Something isn’t
Bohemian forest, became a UNESCO World Heritage
right with an axle that’s already been made. An employee
site in 1992. Every year its 14,000 residents are joined
calls in sick at short notice. So you can consider your-
by over a million tourists.
self fortunate if you’ve got someone like Lukáš Bartík
in your ranks. The tall 31-year-old is the man for all
Efficiency and precision
occasions in the assembly of electric drive axles at
But there’s more to Český Krumlov than history and
Linde Pohony (Lipo) in Český Krumlov, in the far south
tourism. It’s not even ten minutes’ drive from the bus-
of the Czech Republic.
tling old town, up the hill, past the hypermarkets and
into Tovární – the factory road. On behalf of the KION
In a 2,000 square metre space in hall M1A around three
Group, Lipo has been making electric drive axles here
dozen men assemble electric drive axles for the KION
since 1998 and hydrostatic drive axles since 2010. Vis-
Group’s forklift trucks. Almost 28,000 electric drive
iting Bartík at work after strolling through Krumlov’s
axles and 18,000 hydrostatic drive axles are delivered
centre offers quite a contrast. In this functional building,
annually to truck plants of the KION brand companies
in which everything is focused on efficiency and preci-
Linde and STILL in Germany, China and the USA.
sion, the cosiness of the old town seems a world away.
Electromobility, the technology of the future, has long
been part of everyday life here. Hydrostatic and electric
The first plant on the current Lipo site was built before
drive axles are at the heart of the Linde and STILL
the fall of the Iron Curtain. In the mid-1980s, Jihostroj
trucks – ensuring their exceptional precision. They pro-
made turned parts here for the Czech arms industry.
vide the basis for the strong position of the KION Group
After the break-up of the Soviet Union, the site pro-
in its home market of Europe and increasingly in the
duced chassis components for Porsche, before Linde
growth markets too.
Pohony was founded in April 1997. The company cur-
rently has 273 employees.
“Quickly solving problems”
Bartík has worked on all three production lines at Lipo –
Fascinated by technology even as a boy
the assembly fitter has been there since 2007 – and
This is Bartík’s world – the abundance of highly technical
so can be used flexibly wherever his capabilities are
devices and machinery, the geometrically arranged work-
needed. “If there’s a problem, I try to solve it as quickly
stations, the fitters bustling around and the hum of the
as possible or I find someone who can help,” he says.
forklift trucks. Bartík has been fascinated by machinery
“I try to make sure that people are able to do their work
and technology since he was a little boy. His father
and don’t have to worry about anything else.” The engi-
František, a car mechanic by trade, got his two sons
neering enthusiast isn’t daunted by difficulties, quite the
interested in engineering at an early age. One now
opposite in fact: “There’s a great deal of satisfaction to
builds motorbikes, the other electric drive axles.
be had in sorting out a problem.”
Bartík, who lives just a few miles from the factory with
People don’t tend to associate Český Krumlov with
his wife and his husky dog, even found his way to Lipo
cutting-edge industry. In its historical town centre, the
through his father: “My father was still working here
narrow lanes and beautiful market square teem with
when I started,” he says, smiling. “Ever since I was little
tourists. They take photos of the pretty little baroque
we’ve always tinkered around together. So the fact that
and Renaissance houses along the meandering Vltava
we were then able to work together was something
river, gather in the traditional pubs and visit the medieval
really special for me.”
Potential.
ANuP RAmAChANdRA KuRuP
Product Development
Around 530 forklift trucks were sold 2013 per million people in
western Europe. In India it was just a handful – but that’s about to
change. Through the Voltas brand company, the KION Group has
made early inroads on the subcontinent, just as it did in China.
India is ready and so is Anup Ramachandra Kurup.
PuNE
India
9
… and well positioned in
growth markets.
The KION Group’s leading position in emerging
markets such as India, China, South America
and eastern Europe means that it is excellently
placed to fully exploit the growth opportunities
available there. In 2013 the KION Group’s brand
companies sold 35 per cent of their new trucks
in emerging markets – and this proportion is set
to rise sharply.
A case in point is China, which is the world’s
largest individual market for the KION Group’s
products. The Company has been firmly
established here with its offering of develop-
ment, production and services for more than
two decades and is the leading non-domestic
supplier. The KION Group is the third-largest
player in this market, where it employs some
3,200 people. China is now the Company’s
second-biggest market in terms of unit sales
(behind only Germany).
Growing proportion of new trucks ordered
from the KION Group in emerging markets
(thousand units)
+ 8.7%
average annual
growth rate
28 %
34.2
23 %
33.6
35 %
49.9
32 %
45.6
50
40
20 %
30
27.8
20
10
0
2006
2008
2010
2012
2013
China
Central and South America
Eastern Europe
Rest of Asia
Other
Emerging markets’ share
of the KION Group’s total
order intake
01
02
A
nup’s masterpiece weighs a good four
tonnes. It’s painted yellow and grey, has a
muscular appearance and is as good as impossible to
knock over. The EVX 30 Max is the new forklift truck
from Voltas Material Handling (VMH), the KION Group’s
Indian brand company. “We took just four months to
» Our aim is to develop and manufacture
world-class trucks here in India.«
Anup Ramachandra Kurup
Product Development
develop it,” says Anup Ramachandra Kurup, a senior
Anup and his colleagues work tirelessly to achieve this,
engineer at VMH at the age of just thirty-two.
often working above and beyond the call of duty. “Just
before a product launch, it’s not unknown for us to pull
Anyone who visits Anup will quickly realise that big
an all-nighter,” says Anup. “But I don’t mind, because
changes are under way here in the Indian city of Pune.
since we’ve really been working flat out, everything has
The engineer and his colleagues are operating from a
been much more fun.”
bare-looking office on the second floor, right above the
production hall. Some 200 people here make around
“delighted that the KION Group is on board”
2,000 forklift trucks a year. The factory is bursting at
Anup is well placed to compare the old times with the
the seams. “We have big plans for VMH,” says Sunil K
new. The man from the southern state of Kerala has
Gupta, head of what is still only the second biggest
been at VMH since 2008. At that time VMH was still
manufacturer of forklift trucks in India. “Our goal is clear:
based in the economic hub of Mumbai and was part of
we want to be number one in this growth market.”
the vast Tata Group. No one in India’s biggest industrial
conglomerate was paying proper attention to the rela-
tively small forklift truck business, however. “When it
was sold to the KION Group in 2011, we were over the
moon. We’re now proud to be part of a globally operat-
ing group that is focused entirely on forklift trucks.”
03
01
Highly committed: Anup was named “employee
of the year” for his development of a truck
02
Riding high in Pune: “Since we’ve really been work-
ing flat out, everything has been much more fun.”
03
Precision work: fine-tuning successful technology
Things moved very quickly: in summer 2012 VMH
moved to the industrial city of Pune, where, as a stop-
gap solution, it is leasing production halls. But Indians
are well versed in improvisation and he and his col-
leagues are comfortable dealing with their temporary
surroundings. His colleagues have even built them-
To drive forward development, Anup constantly flits
selves a small test track in the yard, complete with weights
between his office with its large computer and the
for the trucks to lift and inclines.
‘proto shop’. Down here the prototypes designed by
the engineers are constructed and put through their
Synergies help to save huge amounts of time
paces. There’s a strong smell of oil, spanners clang
The rate at which products are developed in Pune
against metal and only the humming of the trucks’
shows how dramatic the changes have been: “Previously
engines drowns out the thud of hammers – a paradise
we needed one year to design a new truck. We’ve
for the engineer. At the edge of this workshop for new
since got it down to under four months.” It helps enor-
developments, which is out of bounds to visitors,
mously that the developers are now able to draw on a
stands the DVX 30 KAT. Another of Anup’s favourites:
whole raft of modules thanks to the takeover by the
“It took half a year for our team to develop that truck,”
KION Group: “For the EVX 30 Max we used transmis-
he says. “Before starting, even we didn’t believe we
sions and axles from our sister brand Baoli in China.
could get a machine like that up and running in such a
That saved a huge amount of time.”
short space of time. But we managed it.” With the
newly developed EVX 20 Max and EVX 30 Max, he and
his team was even faster. What our young engineer
doesn’t say: that he was named ‘employee of the year’
for this achievement.
Innovation.
AndreAs KIsTner
Innovation Management
Andreas Kistner doesn’t do well-trodden paths. In search
of the next brilliant idea, he and his team love nothing
more than going off the beaten track. Their goal: ensuring
tomorrow is as successful as today.
AschAffenburg
Germany
11
Technology leadership
drives premium
positioning …
The KION Group is right in the vanguard when it
comes to technology and innovation. By spending
in excess of €114 million on research and develop
ment in 2013, the Company is a leader in its sector.
Over 900 people work at ten research centres in
Europe, Asia and the Americas to devise forward
looking solutions; more than a quarter of them
are based in China so that they are close to their
market. This continuous R&D investment means
that clients in all markets and segments can expect
to have a fully customised range of trucks and
services to choose from.
In 2013 the KION Group launched more than a
dozen new trucks and truck families in the market,
thereby providing added impetus for 2014, and a
number of new products and services are set to be
introduced this year as well.
The KION Group’s staff working in
research and development ¹
914
847 ²
944
820
1000
900
800
700
600
500
400
300
200
100
0
2010
2011
2012
2013
1 Fulltime employees working in research and development
2 Excluding staff working in the Hydraulics Business that was
sold in 2012
AndreAs KIsTner
Innovation Management
01
» Our intention in creating a culture
of systematic experimentation is to
break away from familiar territory
and open up new business oppor-
tunities.«
Andreas Kistner
Innovation Management
01
Never alone while out running or when
working as an innovation manager
02
Keeping an eye on several things at
once: in production, such as here at
the Linde plant in Aschaffenburg …
03
… and in services
02
03
Mr Kistner, as a runner you usually know the
In terms of efficiency, Linde trucks are already
route to the finishing line before you set off –
the best – where do you plan to go next?
which must be quite different from your job as
Resting on our laurels would not be good enough for
head of Innovation Management?
us, and it’s also risky. Our ambition is to steadily pro
At the end of the working day, I actually look forward
duce innovations that result in progress for Linde
to well maintained, well lit running tracks. At work
Material Handling and our customers. The fundamen
things are different: I look for new ways of doing things
tals for this are structured procedures and the use of
and I like challenges. Even as a child I enjoyed trying
appropriate methods. Most innovations then arise from
things out when playing with Lego, and this passion has
experimentation, intensive teamwork and numerous
never left me. I basically grew up in the garage where
iterations. Our intention in creating a culture of system
I tinkered about with motorbikes. I got on a motorbike
atic experimentation is to get off the beaten track and
for the first time when I was eight, and I entered my
open up new business opportunities.
first competition a year later. Now, I’m still involved in
international motocross competitions as a scrutineer
how does that work in practice?
who carries out technical inspections of the motor
Today, we don’t know where we will be in 15 or 20 years’
cycles in use.
time, or – in other words – what the world and our cus
tomers will be like then. Obviously, many factors will
When you’re running you’re on your own. Are you
change and the speed of these changes will become
also alone in your role as innovation manager?
ever greater as the world becomes even more complex.
Not at all. We work in crossfunctional teams. Our
How will logistics systems and the flow of goods change?
areas of expertise are wide ranging and include sales,
Will our customers still buy equipment in 15 year’s time,
service, marketing, research & development and pro
or will there be completely different payment models?
duction. That’s extremely important, because we need
It is important to analyse all these factors on an ongoing
to keep our eye on many areas, such as megatrends,
basis and to evaluate current and potential business
new technologies, different customer groups and
opportunities with the upside and downside in mind –
potential new customers, markets, competitors, our
and then to take action at the right time.
company, resources and, consequently, the environ
ment. We give our employees the scope to think about
the future, which is where our company’s success will
lie. It is particularly important for our staff to be crea
tive, passionate and daring, for them to work hard on
their innovations, to think like business people and to
be prepared to break completely new ground.
What makes changes into innovations?
Innovations are products, processes and business
models that inspire customers, who are only prepared
to spend money on genuine added value, which ulti
mately is what makes innovation – financially – suc
cessful. As well as improvements to products, which
are often minor, it can also include new products,
service optimisations, profitable payment models or
new logistics management processes.
AndreAs KIsTner
– 44 years old
– head of Innovation Management
– Linde Material handling
– Aschaffenburg
– Joined the group 18 years ago
Andreas Kistner is a qualified car mechanic. He
joined Linde Material Handling as an engineer in
1995 and later gained an MBA by combining
work with study. His master’s thesis was on the
strategic development of counterbalanced
trucks using systematic innovation strategies.
After working for the KION Group as a module
manager in Hamburg, he returned to Aschaffen
burg to become Head of Innovation Manage
ment at Linde.
Passion.
CheN DA
Sales
A willingness to listen to what the customer wants, coupled
with a sure sense for the optimum solution – a hallmark of
the KION Group, whether in Chemnitz or China. To achieve
this, Chen Da is always prepared to go the extra mile.
fuzhOu
China
13
… and
customer value.
Customers of the KION Group particularly bene-
fit from the industrial trucks’ good handling
capacity and very low running costs throughout
their lifecycle.
The cost benefits for customers mean that
the KION Group can set prices at a level that
enables it to achieve higher margins than its
competitors. After all, personnel expenses and
the cost of operating a truck over its lifecycle
constitute a significant portion of the purchase
price, especially in highly developed markets.
The proximity of the KION Group’s brand
companies to their customers also ensures a
high level of availability for the trucks. Around
the world, around 12,900 inhouse and external
service engineers work for the KION Group.
This business offers considerable potential also
outside of Europe: in China, revenue from
services has risen substantially in recent years.
The KION Group’s service business in China ¹
(€ million)
+ 15.7%
average annual
growth rate
78.4
70.5
103.9
91
50.1
50.8
110
100
90
80
70
60
50
40
30
20
10
0
2008
2009
2010
2011
2012
2013
1 The service business consists of aftersales, rentals, used trucks
and other trucks.
01
01
Close to the business: visiting a customer’s
refrigerated warehouse in sub-zero temperatures
02
Technical expertise adds value
03 Sustenance: a freshly grilled snack after a
long day spent in meetings with customers
02
“As well as talking to the managers, it is essential to
speak to the drivers and the maintenance team
because they are the only ones who know the trucks,”
says Chen. The 32-year-old wants to identify potential
cy cold emerges from behind the raised shutter.
problems before they turn into actual faults; that is
An electric forklift truck whirs in and sets down a
what spurs him on every day. “I even like it when cus-
I
pallet of cardboard boxes full of eels. Large fish, loose
tomers call me about minor things,” he says and grins.
or in boxes and deep frozen at minus 28 degrees, are
“No wonder my phone is always ringing.”
piled up to the ceiling. The truck rolls back outside into
the winter air of the port city of Fuzhou in southern
A skilled sales pitch combined with technical
China, where the temperature is a mild eleven degrees
knowledge
above zero. At Mingcheng, a firm that specialises in the
This close contact with every customer is a hallmark of
cold storage of seafood, more than 100 Linde brand
the KION Group’s brand companies. Around the world,
electric forklift trucks undergo this temperature change
12,900 in-house and external service staff are in direct
several times a day, which puts a severe strain on their
contact with product users. Chen Da is also able to
motors and batteries. As a result, good maintenance is
answer technical questions on the spot, because he
vital for durability, says Chen Da, a salesman for Linde
was a field service engineer for ten years before work-
in Fuzhou, the capital of Fujian Province on the south-
ing in sales. He can also drive large trucks himself, so
east coast of China. Chen travels to Mingcheng at least
his skilled sales pitch is combined with a tremendous
once a week to check the condition of the trucks.
wealth of technical knowledge.
03
» Understanding precisely what our customers require,
presenting them with a professional and tailor-made
solution and, in return, earning the respect and trust of
our customers – this gives me self-confidence and
the feeling that I have achieved something.«
Chen Da
Sales
Every month, Chen Da travels 3,000 to 4,000 kilo-
metres by car – on congested urban ring roads, new
flyovers and motorways, passing suburbs where it looks
The most important visit: delivery
as if everything has just been turned inside out. Old
If a customer is building a new warehouse, Chen visits
residential districts and mills give way to 30-floor apart-
at the planning stage and takes a close look at the
ment blocks and state-of-the-art factories – Fuzhou
specifications to enable him to suggest suitable trucks.
is also part of the Chinese boom. Directly behind the
“The first thing to do is to listen closely to what the cus-
densely populated coastal strip loom steep hills covered
tomer needs.” The height of the doorways is crucial. If
in lush vegetation. Barges and freighters chug along
required, Linde can also help to design the warehouse.
the Min river along which, like Mingcheng, many cus-
The most important visit, particularly for new custom-
tomers have their warehouses. The long hours on the
ers, is when the first trucks are delivered. Chen Da is
road do not bother Chen, far from it: “I enjoy talking to
always on site to check the trucks or to train the drivers
customers and getting to know what they want. And
himself. He stresses that this visit is when the founda-
supporting customers by phone alone does not work
tions are laid for future relationships with new custom-
in China. You have to sit down together, have a cup of
ers, because “the first 30 to 100 hours that the trucks
tea and create a pleasant atmosphere.”
are in operation are crucial”.
There are tea sets on large wooden trays in every
Chen considers that one of his greatest successes
office in Fujian Province. Tea is a fixed ritual at every
was winning back a customer who had left and was
meeting. The first brew is poured out of the teapot
regarded as difficult. The customer works with metal
over the tiny drinking bowls to clean them and it drips
that is bent at a high temperature – which puts a great
through holes in the tray into a basin beneath. Then
strain on trucks. He had tried out several brands until
the host infuses the fragrant leaves up to seven times
Chen, together with members of the company’s work-
and pours the tea. Whilst this is happening, Chen Da
force, developed a strategy to ensure that the trucks
recommends a new forklift truck model, details prices
run reliably despite the harsh conditions. Ever since,
or solves problems. Chen laughs a lot and skilfully
Chen reports proudly, the customer has only bought
combines everyday subjects with business.
Linde trucks.
Inspiration.
BIke Güven
Material Planning and Marketing
A truck that doesn’t work is no good to anyone. Wherever
in the world you might be. And in growth markets in particular,
the service business is becoming increasingly important.
In Turkey, an important trading hub, Bike Güven makes sure
everything runs smoothly for her customers.
IsTAnBul
Turkey
15
Robust integrated
business model with
high contribution
from services.
This provides the basis for the KION Group’s
lasting business success. Customer services,
truck rentals, used trucks and spare parts
together contribute more than 40 per cent of
revenue. This business is very resilient to
fluctuations in the economic cycle. Moreover,
it generates particularly good margins for the
KION Group.
There are around 1.2 million KION trucks in
use around the globe, forming a broad basis for
a strong and integrated service business.
A comprehensive network of more than 1,200
sales and/or service outlets worldwide ensures
that the KION Group is never far from its cus-
tomers. This creates strong customer loyalty,
which in turn offers more potential for growth
and provides a lasting competitive advantage.
The KION Group’s strong global network with more
than 1,200 sales and/or service outlets
177
NORTH
AMERICA
579
EuROPE
316
ASIA
101
CENTRAL AN d
SOu TH AMERICA
59
REST OF WORL d
01
A
day when the phone doesn’t ring once is a
perfect day for Bike Güven because it means
02
that everything is going well. The brand new STILL
reach truck from Hamburg has got through Turkish
customs, and in Kocaeli Province the engineer has fin-
ished the overnight repairs to the defective order picker
at the local Ford works in time for the morning shift.
“My job is a bit like conducting an orchestra – making
sure that everyone comes in at the right moment,” says
Her favourite colleague of all is virtual
the 30-year old Head of Material Planning and Market-
When it comes to service, Bike Güven is in her element;
ing at STILL ARSER in Istanbul. Sometimes there’s
she has perfected the system at STILL ARSER. A quali-
even time for a cup of strong Turkish coffee, although
fied interpreter from Ankara with a blonde ponytail, she
Bike Güven always has her eyes glued to her smart-
was quick to learn how to meet urgent requests. Since
phone.
she joined Arser eight years ago, she has worked in
new truck sales planning and marketing. From the out-
Impeccable customer service is the top priority. Service
set, the phone scarcely stopped ringing. “The salesmen
business now accounts for more than 40 per cent of
and dealers used to ring us continuously, asking ques-
KION Group’s revenue, and it ranges from after sales,
tions such as how quickly can we deliver a two-tonne
truck rental and used trucks to fleet management
truck with a four-meter mast or how long will it be until
systems. Services are also becoming increasingly
a new battery arrives.”
important in the emerging markets. Last year, STILL
acquired a majority stake in its former exclusive dealer
Much has improved, with new technology now making
Arser İş Makineleri Servis ve Ticaret A.Ş. – a key strate-
things much easier for Bike Güven and her customers.
gic step for the KION Group. The sign on the office
Her favourite colleague is virtual and goes by the name
building in the Ümraniye district of Istanbul now shows
of e-care. This is the software program that Bike Güven
the name of STILL ARSER.
played a huge role in developing and it provides dealers
and customers in Turkey with real-time online updates.
If a telescopic forklift has jammed, the customer sends
a help request to e-care and the system notifies all the
01
Expertise: responding rapidly to
customer requirements is crucial
02
Perfection: Bike Güven has optimised
order processing at STILL ARSER
03 Always on the ball: “My job is a
bit like being a conductor”
03
» I think it’s great getting up every morning and not
knowing what challenges my customers will throw
at me. I then have to find a tailor-made solution for
each one of them …«
Bike Güven
Material Planning and Marketing
relevant contact people – including Bike Güven. Even at
The importance of personal contact
three in the morning, an engineer is sent out to deal
But an exclusive focus on customer needs and all the
with the repairs and the spare parts. If necessary, the
most sophisticated organisation are still not enough in
department head has to arrange an urgent delivery of a
the fast-growing Turkish market, which is also a major
suitable replacement truck. “What I like best about my
hub for trade with the Middle East. Little gets done
job is getting up in the morning and not knowing what
without personal contacts. Recently, a customer in the
will happen that day,” she says.
east of the country complained that his allocated dealer
never called in just for a cup of tea and a chat, he always
Just living in Istanbul requires a great deal of organisa-
wanted to talk about business. Bike Güven immediately
tional skill. On the European side, the slim minarets of
took note and passed the message to the dealer. After
the Blue Mosque point towards the sky and tourists
all, she has to live up to her name; in Turkish Güven
push past the carpets, gold jewellery and leather goods
means ‘trust’. “If customers have any doubts, trust is
in the Grand Bazaar. Bike Güven lives on the Asian
our crucial advantage over the competition,” she says
side, just 20 minute’s drive from the office, but the route
emphatically.
to work itself requires careful planning – because there
is gridlock on the bridges over the Bosphorus at rush
hour in this city of millions.
Opportunities.
JAN KOePP
Post Merger Integration
The KION Group is more than the sum of its parts. Pooling the
strengths of its brand companies has unleashed huge potential.
For customers and investors. Around the world. Jan Koepp
creates synergies that add value.
WIesbA deN
Germany
17
Strong profitability –
well prepared for future
value creation.
Constantly improving efficiency and profitability
is a clear objective for the KION Group. Size
and synergies – a combination that makes the
KION Group stand head and shoulders above
other truck manufacturers.
This involves collaborating on research and
development, improving plant structures and
fully exploiting the economies of scale created
by a worldwide production network. Other
areas of focus are the optimal use of shared,
cross-brand modules and platforms and the
ongoing expansion of the service business.
The KION Group’s earnings before interest and tax
(EBIT / margin)
500
450
400
350
300
250
200
150
100
50
0
3.9
139
9.0
8.3
408
417
363
10 %
9.3
9 %
8 %
7 %
6 %
5 %
4 %
3 %
2 %
1 %
0 %
2010
2011
2012
2013
EBIT (€ million)
Margin (%)
EBIT adjusted for KION acquisition items and non-recurring
items; key figures for 2012 have also been adjusted to reflect
the sale of the hydraulics business
JAN KOePP
Post Merger Integration
01
» Travelling to other continents gives me new ideas, sparks
my creativity and recharges my mental batteries …«
Jan Koepp
Post Merger Integration
01
Global: close to the markets and brands
02
Focus on China: knowledge of other cultures
creates an advantage
03
Teamwork: “We combine skills
with experience”
02
03
Mr Koepp, the brand companies with the short-
How do you ensure that the Group’s new brand
est histories in the KION Group are baoli and
companies are able to meet these requirements?
Voltas – both of which are in Asia. You manage
It cannot be done by simply transferring funds for capi-
their integration into the Group. do you know
tal expenditure. Our job only starts in earnest when the
how many hours you have spent on planes?
agreements have been signed. We assess our part-
At a rough estimate, I have flown round the world
ners’ internal processes, strategy implementation and
about five times, that’s about 200,000 kilometres,
conduct. We establish which aspects we want to work
and most of the trips were to China. The remarkable
on so that we can meet all of our targets and we supply
insights that I gain are always worth the long flights.
the necessary technologies and methods. The KION
This gives me new ideas, sparks my creativity and
Group has a duty to provide each new brand company
recharges my mental batteries. When I land on another
with what it needs.
continent, I often don’t arrange to be picked up from
the airport, I take public transport. I also like to be
The KION Group already had two global brands,
adventurous with food, which is probably due to the
Linde and sTILL, baoli is the third. What role
fact that I have lived abroad for 17 of the past 20 years,
does KION’s Chinese brand company play?
most of that time in Brazil.
Baoli covers the value and economy market range and
it has a special role in the multi-brand strategy. The
The multi-brand strategy is a key element of the
Chinese brand company provides the technical founda-
KION Group’s growth policy. What makes it so
tion for products for the Indian and South American
effective?
markets. Baoli receives marketing support from the
We want the right product range that covers all market
regional KION companies such as KION South America
segments. For this reason, we draw on local experts in
and KION South Asia. Our Indian brand company
every market segment and focus on the requirements
Voltas in turn benefits from Baoli technology.
of each market – in terms of meeting all needs, ‘one
size fits all’ just doesn’t work. We share our knowledge
of technology and products and we establish tried-and-
tested, standard processes, which makes the brand
companies more competitive. The idea is to merge
downstream business units and processes and then to
make them available to the brand companies. Together,
these steps all create value and help to ensure that the
KION Group continues to grow profitably and is not just
a loose affiliation of brands.
JAN KOePP
– 45 years old
How do you tackle the integration of a new brand
– Head of Post Merger Integration
company?
You have to understand what is needed locally. First,
we summarise the expectations brought by the new
company and the KION Group. Companies that have
– KION Group
– Wiesbaden
– Joined the Group twelve years ago
Jan Koepp worked for the Group back in the
times of Linde AG. He started in 2002 at Linde
recently joined the Group want to grow faster than
Material Handling in Brazil, and initially
before. The KION Group would like to occupy a
stronger position in a new company’s market. And
KION customers have specific expectations in terms
of products, their reliability and the service we offer.
We then merge the KION Group’s strengths and expe-
rience with those of our colleagues in the new brand
company. We can only become more successful in
the market by working together.
developed the brand company’s finance activi-
ties. He then managed the merger of Linde and
STILL in Brazil (now KION South America) and
the construction of the new plant in Indaiatuba,
São Paulo. The new plant produces warehouse
technology and IC trucks for Linde and STILL.
As Head of Post Merger Integration, Jan Koepp
now ensures that newly acquired brand compa-
nies such as Voltas and Baoli, are well integrated
into the KION Group.
Team spirit.
VINceNT HALmA
Marketing
The KION Group has its eye firmly on the USA as a high-opportunity
market. To make even greater inroads there, we need to do what the
Americans do best: show determination and team spirit. Vincent Halma
can count on the right products with Linde and STILL – and he can
count on the right team as well.
SUmmerVILLe
USA
19
Highly motivated and
qualified employees with
proven track record.
International, highly qualified and highly moti-
vated: the KION Group’s more than 22,000
employees, who demonstrate dedication and
creativity day in, day out, are both the heart
and the backbone of the company.
Their hard work underpins the operational
success of the company and ensures a strong
financial performance. This was one of the
key elements in the successful stock market
flotation of the KION Group in June 2013.
The company’s growth strategy is reflected in
the structure of the workforce. In 2013, the
Group recruited extra staff for its service and
sales operations and notably invested in new
employees in the emerging markets and growth
regions. The KION Group is increasingly hiring
local management in all its markets in order to
utilise their strong market knowledge and
expertise.
KION Group employees by country
(Full-time equivalents as at 31 Dec 2013)
5,930
OTHER
1,823
UNITED
KINGDOM
8,050
GERMANy
22,273
WORLDWIDE
3,178
FR ANCE
3,292
CHINA
VINceNT HALmA
Marketing
01
W
hen Vincent Halma talks about his new job
location, you can’t help but notice his
02
sense of enthusiasm. “We have tremendous opportuni-
ties that haven’t been taken advantage of,” says the
Vice President Marketing of KION North America. “We
have so much collective knowledge within the KION
Group that can make us successful. The point now is to
use it.” Halma is backed by the capable team of the
global KION network.
01
KION plant in Summerville: capacity for
20,000 trucks
02 “ Plenty of knowledge there to be successful”
03
A strong team: achieving the objectives of
the KION Group by pulling together as a team
The goals are clear: the market share in North America,
The key markets include the old “Rust Belt,” the
the second largest individual market in the world for
industrial belt stretching across the Midwest and as far
KION Group products, will grow substantially in the
south as Texas. What is needed are new products. “In
coming years. Every morning, when Halma gets out of
Europe, for instance, lorrys (tractor trailers) are loaded
his car in front of the KION plant in Summerville, South
from the side, while in the USA forklifts enter the trailer
Carolina, he is reminded of the fact that North America
from the back. The US market requires different equip-
is more than the USA alone. When he looks up, he sees
ment,” explains Vincent Halma. “In addition, the USA
the Canadian and Mexican flags fluttering alongside the
has totally different philosophies when it comes to
Stars and Stripes.
US economy is bouncing back
warehouse optimization which requires a completely
different product design and approach to the market.”
After the heavy years of the crisis, the US economy
The vehicles tailored for the US market under the Linde
has gained traction again and is overtaking Europe in
and STILL brands are backed by KION technology from
terms of growth. Plus, after the service sector has been
Europe and Asia. In terms of production capacity, on
on the rise for years, the largest national economy in
the other hand, Summerville is in the lead, with the abi-
the world wants to regain a prominent position in the
lity to produce as many as 20,000 units a year. A cent-
manufacturing sector. The buzzword is reindustralizia-
ral element of the strategy is to provide a comprehen-
tion. “Made in USA” is poised to become a globally
sive range of products and to leverage the dense retail
recognized standard for quality again. Volkswagen
network that the KION Group has access to in the USA.
and BMW are establishing US production facilities and
Apple is starting to produce products in its home
country once more. Motorola is looking to attract new
customers for its high-end cell phone with the slogan
“Made in USA.” And all of them need forklifts. Approxi-
mately 185.000 industrial trucks were sold in the US
in 2013, an increase of 12 per cent compared to the
previous year.
03
Vincent Halma
Marketing
returning to an old passion
Vincent Halma is looking forward to the tasks ahead:
helping to market newly developed products for the
American market, expanding sales structures, and cre-
ating service offerings. The 43-year-old father of two
The US South: a popular location for businesses
sons has the right skills for the job. For nine years he
And it’s easy to feel at home in the town where Halma
was Managing Director of the STILL brand in the
lives, 20 minutes from Summerville. Charleston’s histo-
Netherlands and was later responsible for Western
ric buildings and cobblestone streets from the period
Europe.
before the Civil War give the town a historic flair. The
streets are lined with palm trees, a promenade on the
For the native Dutchman, the move to South Carolina
Atlantic invites for a stroll, and the spicy Southern food
meant returning to an old passion: the USA. After stu-
with its oysters and seafood is famous around the
dying business management in Leeuwarden, Holland,
world.
Halma wanted to get international experience with an
internship and went to Columbus, Ohio, to do his MBA.
What’s more, Charleston’s harbor offers a perfect logi-
He stayed for seven years gaining experience in pro-
stics infrastructure. Others have discovered the area’s
duct development and sales. “The very first job I had in
advantages as well. Charleston has attracted compa-
my life was in the United States,” he says with pride. So
nies like Boeing and Bosch. “KION’s North American
he didn’t have to think twice when he got the offer to
project is its most ambitious to date,” says Halma.
return to his favorite country in 2014.
“I’m very proud to be able to contribute.”
to our SharehoLderS
Contents
21
To our shareholders
Letter to SharehoLderS
executive Board
report of the SuperviSory Board
KioN ShareS
ServiceS for SharehoLderS
22
24
26
36
41
KION GROUP AG | Annual Report 2013
We keep the world moving.
» 2013 was a
financially solid
year. 9.3 per
cent EBIT mar-
gin represents
a new record.«
Gordon riske
ChIEf ExECuTIvE OffICEr
to our SharehoLderS
Letter to shareholders
thu, 20 Mar 2014 8:08am
From:
To:
CC:
subject: Annual report 2013
Gordon riske
KION Group Shareholders
Thomas Toepfer, Theodor Maurer, Bert-Jan Knoef, CP Quek, Supervisory Board, Customers, Employees, Business Partners
dear shareholders,
dear customers, partners and friends of the kion Group,
On 28 June 2013 we were able to celebrate the fact that the shares of KION GrOuP AG had been
successfully listed on the frankfurt Stock Exchange. Both for our staff and for me personally this
day was one of the most moving professional events of the past financial year. We are especially
proud that this initial public offering (IPO) was so successful because it took place in such challeng-
ing market conditions. The foundations for this high-profile launch in the capital market were laid by
our customers, shareholders and partners and, in particular, by the commitment and dedication of
our employees around the world. On behalf of the KION Group Executive Board I would like to take
this opportunity to thank our highly motivated and expert workforce for this achievement.
Today we are publishing our first annual report as a publicly traded company. We are reporting on a
year whose financial results were able to build impressively on the previous years. At the same time
we have taken the key operational and financial measures needed to ensure that we can continue
on our global growth trajectory over the coming years while further enhancing our profitability on a
sustainable basis.
Funding strengthened by the iPo
As far as the implementation of its growth strategy is concerned, the KION Group is now in an even
stronger financial position than it was a year ago. The proceeds received from the capital increases
carried out as part of the IPO have provided us with a very sound and extensive capital base.
Our equity ratio at the end of 2013 came to 26.7 per cent. Our net debt at the reporting date was
only around 1.4 times adjusted EBITDA for the previous twelve months. We therefore have a very
solid and secure long-term funding base.
The prospects for our business and, consequently, for our shareholders and employees are excel-
lent, with independent research predicting that the worldwide market for industrial trucks is once
again set to grow at roughly 1.5 times the rate of the global economy over the next decade. We
intend to benefit disproportionately from this growth.
Business stabilised at a high level
Global demand for industrial trucks continued to grow in 2013. The total number of units sold in the
material handling market exceeded 1 million for the first time, which represented year-on-year
growth of 7 per cent. In addition to the united States there was also strong growth in the emerging
markets of China, eastern Europe and Brazil, which are particularly important to the KION Group.
Inbox 02Sent ItemsAll folders » 35 per cent
of our new
trucks go to
customers
in emerging
markets.«
FOTO to our SharehoLderS
Letter to shareholders
In this market environment we continued to develop our business at the high level of the outstanding
previous year. Despite being impaired by the adverse market conditions in western Europe – which
remains the KION Group’s core market – sales of new KION trucks amounted to 142,800 units, in
line with the impressive figure achieved in 2012 (141,700 units). The total value of the KION Group’s
order intake came to a substantial €4.489 billion. We generated revenue of €4.495 billion – which
was in line with the excellent prior-year figure – despite adverse exchange-rate effects. We further
increased our adjusted earnings before interest and tax (EBIT) to €416.5 million. Our EBIT margin
reached 9.3 per cent, which was a new record for the KION Group.
We are deliberately exploiting the economies of scale that we possess compared with our competi-
tors. At the same time we are constantly improving the efficiency of our European production net-
work. In October, for example, we closed our heavy truck plant in Merthyr Tydfil and transferred the
bulk of this production to a contract manufacturing facility.
Presence in emerging markets expanded
The continuing success of our strategy of expanding our presence in the world’s emerging markets
has strengthened our resolve to redouble our efforts in this direction. 35 per cent of the orders that
we received for new trucks came from emerging markets, which was more than ever before. And in
December our Linde brand company celebrated its 20th anniversary in China when it handed over
the 100,000th Linde truck manufactured in China.
The material handling market in China presents excellent prospects. Whereas 530 new trucks were
sold in western Europe for every 1 million inhabitants in 2013, only 180 were sold in China, which is
now the KION Group’s second-largest market in terms of unit sales (behind only Germany). And
truck sales in China continue to grow apace. The sales and service organisation that we have estab-
lished throughout this country enables us to fully exploit this enormous potential, and we have there-
fore been able to successfully introduce our business model – which includes a high proportion of
service business – in China as well.
The strategic partnership with Weichai Power will provide the KION Group with additional stimulus
for its operations in China and the rest of Asia. This unique alliance offers both parties the opportu-
nity to enter new business lines together and to reap synergies for their mutual benefit. It also takes
us to the next stage in the long-term expansion of our business in Asia.
But this was not the only place where we made considerable headway last year. We expanded pro-
duction at our Indian brand company voltas, whose plant commenced operations in 2012. We offi-
cially opened a completely new KION plant at Indaiatuba, São Paulo, in Brazil last year. In addition to
warehouse trucks, KION South America has also been manufacturing IC trucks at this site since
then under the Linde and STILL brands for the South American market.
Inbox 02Sent ItemsAll folders » One in four
of our develop-
ers works in
China on new
products and
platforms.«
to our SharehoLderS
Letter to shareholders
Product portfolios intelligently combined
In 2013 we also constantly broadened the product ranges offered by our brand companies, intro-
ducing more than a dozen new trucks and truck families. Our multi-brand strategy and global reach
provide us with a key competitive edge in this respect. We modify successful products in line with
specific requirements in other regions where fresh demand for similar trucks arises. In these emerg-
ing markets our brand companies Baoli and voltas are the main providers that localise the manufac-
ture of established trucks, modify them for specific brands and then launch them in the market. Our
development centre in China plays an important role in this aspect of our business. roughly a quar-
ter of our total global development staff work there on new products and platforms designed to
meet the requirements of the emerging markets in particular.
In 2013 we spent more than €114 million, or 2.5 per cent of our revenue, in research and develop-
ment, which makes us an industry leader in this respect. The outstanding competitive position occu-
pied by our Linde and STILL brands in our European home market is largely based on our technol-
ogy leadership.
Last year, Linde Material handling presented the BMW factory in Leipzig with a fleet of industrial
trucks fitted with fuel-cell hybrid drives for production of the BMW i. having been extensively refined,
new engines make Linde’s EvO models the lowest-emission series-production diesel trucks in the
market. The pollutants that they produce are on average 69 per cent below the maximum permitted
statutory limits, which means that these trucks can even be used inside buildings.
The STILL rx 70 hybrid was named International forklift Truck of the Year in 2013 after having
already won the federal Ecodesign Award in the previous year. The first-ever hybrid truck manufac-
tured in series production, which is equipped with a diesel-electric drive, obtains the energy for its
drive system from both the diesel tank and from electric energy storage units known as ‘ultracaps’.
STILL extended its rx 70 family range in 2013 by introducing new IC trucks with load capacities of
between four and eight tonnes. Their optimum handling capacity is based on a unique combination
of power, precision, ergonomics, compactness and safety.
new products planned for the Us market
however, we are not only focusing on our home market and on emerging markets. We are also con-
centrating on other markets where we do not yet have a sufficiently large presence. A case in point
is the united States, where we see considerable growth potential for the KION Group’s brands. After
all, this is the world’s second-biggest single market after China. In the uS we have a factory with
substantial unused capacity as well as an extensive nationwide dealer network. We can build on
these over the long term by launching new uS-specific products that are currently being developed.
Inbox 02Sent ItemsAll folders » The high-
margin service
business
accounts for
more than 40
per cent of the
KION Group’s
revenue.«
FOTO to our SharehoLderS
Letter to shareholders
sales and service expanded by the addition of new sites
We are constantly expanding the sales and service network used by KION Group’s brand compa-
nies in order to strengthen our brands in the various regions around the world. In mid-2013 our
brand company STILL acquired a majority stake in Turkish dealer Arser in order to increase its foot-
print in this important country. Linde opened new branches in Thailand and Malaysia to enable it to
serve these markets even more effectively. As the size of its fleets in markets outside western
Europe grows, the proportion of revenue accounted for by the service business increases accord-
ingly. Stable and profitable, the service business contributes more than 40 per cent of the KION
Group’s revenue. The services provided for our installed fleet of some 1.2 million trucks worldwide
substantially reduce our reliance on short-term economic cycles and, at the same time, offer attrac-
tive margins.
experienced workforce is the key driver of our success
Our investment in 2013 went beyond sales and service structures and new products. Our workforce
grew as well, as more than 1,000 highly qualified people joined our organisation worldwide. At the
same time we continued to invest in the best-possible training and development opportunities for
these employees. We want to remain a reliable partner for our customers and work with them to put
new ideas into practice. By offering highly efficient and economical trucks, we help to ensure that
our customers are successful.
Some of our 22,000 employees who work each and every day for our customers are featured in the
front part of this annual report. You may even meet one of them in person at some point. This is
quite possible if you consider that our products and staff travel around the world in the service of
our customers: We keep the world moving. I therefore hope that you have an interesting journey of
discovery through the world of the KION Group.
With best wishes,
Gordon riske
vorsitzender des vorstands | Chief Executive Officer
KION GrOuP AG
Abraham-Lincoln-Strasse 21 | 65189 Wiesbaden (Germany)
Sitz der Gesellschaft | registered Office: Wiesbaden (Germany)
registergericht | Court of registration: Wiesbaden (Germany), hrB 27060
vorsitzender des Aufsichtsrats | Chairman of the Supervisory Board: Dr. John feldmann
vorstand | Executive Board: Gordon riske (vorsitzender/CEO), Bert-Jan Knoef, Theodor Maurer,
Ching Pong Quek, Dr. Thomas Toepfer
Inbox 02Sent ItemsAll folders 24
Executive Board
01
02
Theodor MaUrer
dr ThoMas ToePFer
Member of the Executive Board
of KION GrOuP AG
CEO of Linde Material handling
Chief financial Officer (CfO) and Labour
relations Director of KION GrOuP AG
born in 1959 in Konstanz
born in 1972 in hamburg
We keep the world moving.
KION GROUP AG | Annual Report 2013
to our SharehoLderS
Executive Board
25
03
Gordon riske
04
05
ChinG PonG QUek
BerT-Jan knoeF
Chief Executive Officer (CEO)
of KION GrOuP AG
Member of the Executive Board
of KION GrOuP AG
Chief Asia Pacific Officer
Member of the Executive Board
of KION GrOuP AG
CEO of STILL
born in 1957 in Detroit (uSA)
born in 1967 in Batu Pahat/Johor
(Malaysia)
born in 1960 in hengelo
(Netherlands)
KION GROUP AG | Annual Report 2013
We keep the world moving.
26
Report of the Supervisory Board of
KION GROUP AG
Dear shareholders,
The main event of 2013 for KION GROUP AG was its successful initial public offering (IPO)
on 28 June 2013. The business built strongly on the excellent results achieved last year and
continued to perform at the same high level.
The tasks and responsibilities imposed on the Supervisory Board by the law, the Company’s
articles of incorporation and the German Corporate Governance Code were fulfilled with
dedication and great diligence. Because of KION GROUP AG’s IPO last year, there were
many important decisions, transactions requiring approval and other matters to be discussed
and resolved upon.
Dr John FElDMann
Chairman
Any references to KION GROUP AG and its Executive Board in the following section also
apply to KION Holding 1 GmbH and its Executive Board, which were in existence prior to
the change in legal form to a German public limited company (Aktiengesellschaft).
Monitoring and advisory role in dialogue with the Executive Board
The Supervisory Board advised the Executive Board on all significant matters relating to
managing the Company and monitored the Executive Board’s running of the Company. The
Supervisory Board was fully involved in all major decisions affecting the Company from an
early stage. There were particularly intensive discussions with the Executive Board on the
subjects of funding, the IPO and corporate strategy. The Supervisory Board satisfied itself
at all times that the Company was being managed lawfully and diligently.
At meetings of the full Supervisory Board, the performance of the business and decisions
and transactions that were important for the Company were deliberated on and discussed
extensively on the basis of the information provided to the Supervisory Board by the
Executive Board. The Executive Board always notified the Supervisory Board of every sig-
nificant aspect of these transactions promptly and in detail, providing both written and oral
reports. As expected, the main issues covered in 2013 included the issues surrounding the
Company’s planned IPO, as well as the Company’s ongoing business performance and
financial position, planning of capital expenditure, the employment situation, risk manage-
ment and the compliance programme. Other fundamental matters were corporate strategy
and corporate planning, in particular in view of the new opportunities presented by the
arrival of a new major shareholder, Weichai Power Co. Ltd.
We keep the world moving.KION GROUP AG | Annual Report 2013 27
The Executive Board gave the Supervisory Board sufficient notice of transactions that,
according to the law, the Company’s articles of incorporation or the rules of procedure for
the Executive Board of KION GROUP AG, require the Supervisory Board’s consent and
presented them in good time for resolutions to be adopted. The Supervisory Board exam-
ined closely the resolutions proposed by the Executive Board and deliberated on them
before adopting them. In urgent cases, written resolutions were also adopted.
The Executive Board informed the Supervisory Board about key financial data at regular
intervals. Where there was a discrepancy between the actual figures and the business plan-
ning, the Executive Board always provided the Supervisory Board with a detailed oral and
written explanation of what it considered the main reasons for the discrepancy. This
enabled the Executive Board and Supervisory Board to discuss the reasons in detail and,
if necessary, to take effective countermeasures.
In the periods between meetings of the Supervisory Board and between those of its com-
mittees, the chairman of the Supervisory Board, who is also chairman of the Executive
Committee created following the change of legal form, remained in close contact at all
times with the Chief Executive Officer. This ensured that the Supervisory Board was always
kept up to date on the Company’s performance and any significant transactions.
Main focus areas discussed by the Supervisory Board
In the first half of the year under review, the work of the Supervisory Board focused on the
wide-ranging preparations for the Company’s IPO. Its deliberations concentrated on general
business conditions, economic conditions and financial parameters as well as corporate
governance matters and, in particular, the areas of responsibility assigned to the Supervi-
sory Board – such as Executive Board remuneration.
In 2013, the Supervisory Board and its committees dealt with these issues and made the
necessary decisions at a total of 18 meetings (eight full Supervisory Board meetings and ten
committee meetings). Some of the meetings were held in the form of conference calls.
There were also several informal conference calls for the purpose of providing the members
of the Supervisory Board or the relevant committees with advance information.
To our shareholdersReport of the Supervisory BoardWe keep the world moving.KION GROUP AG | Annual Report 2013 28
KIon 2020 strategy
The Executive Board’s plans for the further development of the Company’s strategy, which
are aggregated in the KION 2020 strategy, were a key area covered by the Supervisory
Board’s deliberations in 2013. The Executive Board provided the Supervisory Board and its
Executive Committee with an initial introduction to the strategy on 26 September 2013.
A workshop with the Executive Committee devoted exclusively to this subject was then held
on 14 October 2013, followed by an extraordinary meeting of the Supervisory Board on
17 October 2013 and a status report for the Supervisory Board and Executive Committee
on 19 December 2013. The Supervisory Board provided constructive support on corporate
governance considerations relating to the 2020 strategy and followed them with great inter-
est. Irrespective of the Supervisory Board’s fundamental approval of the 2020 strategy,
specific measures for implementing it still require the separate consent of the Supervisory
Board as specified by the rules of procedure for the Executive Board.
Corporate governance and comply-or-explain statement
The regular reports by the Executive Board and some of the Company’s managers on
corporate governance matters were a further important subject area discussed by the
Supervisory Board and its committees. As part of its monitoring duties in this area required
by stock company law, the Supervisory Board itself ensured that it was informed about
corporate governance matters by means of appropriate reports covering the internal control
system, risk management, internal auditing and compliance within the Group, in addition to
its Audit Committee dealing with these matters on a regular basis. The focus was on the
processes in place as well as on the content of the individual reports. As a result of these
reviews, the Supervisory Board was able to gain an impression of the processes in place
and to examine and comment on the proposed developments in these areas.
As part of the further development of its procedures, the Supervisory Board and Audit
Committee have decided to hold an extra Audit Committee meeting in the first quarter of
every year in addition to its regular meetings. The meeting will address the following
matters: the internal control system, risk management, internal audit and compliance within
the Group. A further meeting of the full Supervisory Board is to take place in the fourth
quarter of every year covering corporate strategy and its further development. The size of
the committees and their effectiveness are also to be reviewed in the course of 2014. The
Supervisory Board will decide during the year whether a formal efficiency review should
take place at the end of 2014.
In accordance with section 3.10 of the German Corporate Governance Code, the Executive
Board and the Supervisory Board provide a detailed report on corporate governance in the
We keep the world moving.KION GROUP AG | Annual Report 2013 29
KION Group in the corporate governance report. This is combined with the declaration on
corporate governance pursuant to section 289a of the German Commercial Code (HGB)
and can be found on pages 44 to 52 of the annual report. The report is also available on
the KION GROUP AG website at kiongroup.com/GovernanceReport. For details of the
remuneration paid to the Executive Board and the Supervisory Board for 2013, please refer
to the remuneration report which can be found on pages 57 to 65 of the annual report.
At its meeting on 19 December 2013, the Supervisory Board thoroughly discussed the
KION Group’s compliance with the recommendations of the current version of the German
Corporate Governance Code. The Supervisory Board keeps a close eye on changes to
the Code and to governance standards at international level. The Executive Board and
Supervisory Board submitted a comply-or-explain statement pursuant to section 161 of the
German Stock Corporation Act (AktG) on 19 December 2013. It has been made perma-
nently available to the public on the KION GROUP AG website. KION GROUP AG complied
with all but one of the recommendations in the German Corporate Governance Code
(version dated 13 May 2013) and intends to continue to do so in future. The only recommen-
dation of the Code with which KION GROUP AG does not comply is the recommendation in
section 3.8 (3) of the Code for an excess in the D&O insurance policies for members of the
Supervisory Board. KION GROUP AG’s articles of incorporation do not provide for this type
of excess. The Company believes that such an excess is not typical at international level
and would therefore make it considerably more difficult to find independent candidates, in
particular candidates from outside Germany.
Matters relating to the Executive Board
The Supervisory Board appointed Hostettler, Kramarsch & Partner (hkp), a leading consul-
tancy firm specialising in executive remuneration, to devise the remuneration system. The
chairman of the Supervisory Board was provided with technical and administrative assis-
tance in this matter, mainly by the Company’s head of human resources and the head of the
corporate office. The Executive Board exempted them from their obligation to report to the
members of the Executive Board in order to perform this task. External, professional legal
advisors were also consulted. Following the transformation of KION Hold ing 1 GmbH into a
public limited company with an Executive Committee, a number of meetings were held
between the chairman of the Supervisory Board and the members of the Human Resources
Committee. During these meetings, the structure of the remuneration system, the individual
components of the remuneration package, the vertical and horizontal appropriateness and
content of the pension scheme for Executive Board members, including the provisions in
the Executive Board service contracts, were discussed in detail and prepared for resolution.
At the Supervisory Board meeting on 25 April 2013, the relevant decisions were made and
the chairman of the Supervisory Board was authorised to conduct negotiations with the
To our shareholdersReport of the Supervisory BoardWe keep the world moving.KION GROUP AG | Annual Report 2013 30
Executive Board members. The members of the Human Resources/Executive Committee
and the full Supervisory Board were constantly updated on the progress of the negotiations
and the agreement reached with the Executive Board members.At the end of the negotia-
tions, when the Supervisory Board had acknowledged the outcome, the chairman of the
Supervisory Board signed the Executive Board service contracts on behalf of the Company.
Work of the committees
During the period prior to the change of the Company’s legal form to a public limited com-
pany, KION Holding 1 GmbH had an audit committee, a human resources committee and a
mediation committee pursuant to section 27 (3) of the German Codetermination Act (MitbestG).
On 29 May 2013, during the transformation of the Company into a public limited company,
the Supervisory Board decided to maintain or create four committees at the future public
limited company, the members of which were elected at a subsequent meeting of the
Supervisory Board on 27 June 2013. The four committees were the Mediation Committee
pursuant to section 27 (3) MitbestG, the Executive Committee, the Audit Committee and the
Nomination Committee. These committees, but primarily the Executive Committee, prepare
the matters to be discussed at the meetings of the full Supervisory Board. In individual cases,
the Supervisory Board’s decision-making powers were delegated to committees within the
scope permitted by law. The chairman of the Supervisory Board is also chairman of all
committees except the Audit Committee. At the meetings of the full Supervisory Board, the
committee chairmen report in detail on the discussions of the committees to ensure that
the Supervisory Board as a whole is always fully informed.
The Executive Committee consists of four shareholder representatives and four employee
representatives. It prepares the meetings of the Supervisory Board and is responsible for
ongoing matters between Supervisory Board meetings. The Executive Committee prepares
the Supervisory Board’s decisions relating to corporate governance, particularly amendments
to the comply-or-explain statement pursuant to section 161 AktG reflecting changed circum-
stances and the checking of adherence to the comply-or-explain statement. It also prepares
documents for the Supervisory Board when Executive Board members are to be appointed or
removed and, if applicable, when a new Chief Executive Officer is to be appointed. Documents
relating to any matters in connection with Executive Board remuneration are also compiled by
the Executive Committee. The Executive Committee is also responsible for resolutions concern-
ing the conclusion, amendment and termination of Executive Board employment contracts
and agreements with Executive Board members governing pensions, severance packages,
consultancy and other matters and for resolutions about any matters arising as a result of such
contracts and agreements, unless they relate to remuneration. The responsibilities of the
Executive Committee also include resolutions about the extension of loans to Executive Board
We keep the world moving.KION GROUP AG | Annual Report 2013 31
members and parties related to them and to Supervisory Board members and parties related
to them as well as resolutions to approve contracts with Supervisory Board members
outside their Supervisory Board remit. The Executive Committee should – in consultation
with the Executive Board – regularly deliberate on long-term succession planning for the
Executive Board.
In 2013, the Executive Committee consisted of Dr John Feldmann (chairman), Dr Alexander
Dibelius, Mr Joachim Hartig, Mr Denis Heljic, Mr Johannes P. Huth, Mr Thilo Kämmerer,
Mr Jiang Kui and Mr Kay Pietsch. The Executive Committee met four times in 2013, includ-
ing one conference call with the Audit Committee concerning the budget. The main topics
discussed by the Executive Committee in 2013 were those concerning the Company’s IPO
and the KION 2020 strategy.
The Mediation Committee comprises the chairman of the Supervisory Board, his deputy, an
employee representative and a shareholder representative. If the majority required by
section 27 (3) and section 31 (3) MitbestG is not reached in a vote by the Supervisory Board
on the appointment of an Executive Board member, the Mediation Committee must pro-
pose candidates for the post to the Supervisory Board within a month. The chairman of the
Supervisory Board does not have a second vote on the candidates proposed.
In 2013, the Mediation Committee consisted of Dr John Feldmann (chairman), Mr Joachim
Hartig, Dr Alexander Dibelius (until 27 June 2013) Mr Johannes P. Huth (from 27 June 2013)
and Mr Kay Pietsch. The Mediation Committee did not need to be convened in 2013.
The Audit Committee comprises four members. Its purpose is to assist the Supervisory
Board in performing its task of monitoring accounting processes, compliance matters and
reporting. These responsibilities encompass monitoring the quality and integrity of the
consolidated and separate financial statements (as well as related disclosures), the internal
control mechanisms, risk management and the internal audit system. The Audit Committee
also reviews the other work carried out by the independent auditor in connection with the
audit and checks that the independent auditor is qualified and independent. It is also
responsible for engaging the independent auditor, determining the focus of the audit and
agreeing the fee. In addition, the Audit Committee exercises the rights in investee companies
set forth in section 32 (1) MitbestG.
In 2013, the Audit Committee consisted of Mr Hans-Peter Ring (chairman, from 27 June 2013),
Dr Martin Hintze (chairman, until 27 June 2013), Dr John Feldmann (from 27 June 2013),
Dr Roland Köstler (until 30 September 2013), Mr Kay Pietsch, Ms Alexandra Schädler
(from 2 October 2013) and Ms Silke Scheiber (until 27 June 2013). Mr Hans-Peter Ring is
an independent financial expert within the meaning of sections 100 (5) and 107 (4) AktG.
To our shareholdersReport of the Supervisory BoardWe keep the world moving.KION GROUP AG | Annual Report 2013 32
The Audit Committee met seven times in 2013, including one conference call concerning
the status of the annual financial statements and one conference call with the Executive
Committee concerning the budget. The main topics discussed by the Audit Committee in
2013 were the 2013 annual financial statements, the budget and the regular subject of the
key elements of corporate governance within the Company.
The Nomination Committee comprises four members, all of whom are shareholder repre-
sentatives. The Nomination Committee’s only task is to propose candidates for the Super-
visory Board to the Supervisory Board for proposal to the Company’s Annual General
Meeting when Supervisory Board elections are due.
In 2013, the Nomination Committee consisted of Dr John Feldmann (chairman),
Dr Martin Hintze, Mr Jiang Kui and Ms Silke Scheiber. The Nomination Committee
did not meet in 2013.
In 2013, the Human Resources Committee, whose tasks were taken over by the Executive
Committee following the change of legal form, consisted of Mr Johannes Huth (chairman),
Mr Joachim Hartig, Dr Alexander Dibelius and Mr Thilo Kämmerer. The Human Resources
Committee only met twice before it was replaced by the Executive Committee. At these
meetings the Human Resources Committee discussed the future Executive Board service
contracts and the remuneration of the members of the Executive Board of the future
KION GROUP AG.
All members of the Supervisory Board attended the Supervisory Board meetings in 2013
apart from the following exceptions: at one meeting, three members sent their apologies,
at four meetings, two members sent their apologies and at two meetings, one member
sent apologies. With the exception of three committee meetings at each of which one
member sent apologies, all the members of the committees attended all the meetings of
each committee.
audit of the separate and consolidated financial statements
The Company’s independent auditor, Deloitte & Touche GmbH Wirtschaftsprüfungsgesell-
schaft, Frankfurt am Main, audited the Company’s separate financial statements and
management report and the consolidated financial statements and group management
report for the year ended 31 December 2013. Various meetings were held between the
chairman of the Audit Committee and the auditors in preparation for the appointment of the
auditors. They concerned the suitability and independence of the auditors, the regular
rotation of the auditing staff responsible, which was already apparent at the time, and the
question of fees. The forthcoming engagement of an auditing firm was discussed at the
We keep the world moving.KION GROUP AG | Annual Report 2013 33
Audit Committee meeting on 13 March 2013 and there was an opportunity to speak to the
auditors in person. The key audit issues were discussed and set out accordingly at the
Audit Committee’s meetings on 13 March 2013 and 7 August 2013. The auditors were
appointed by the chairman of the Supervisory Board on 11 December 2013.
The auditor issued an unqualified opinion for the separate financial statements, including
the management report, for the year ended 31 December 2013 and the consolidated
financial statements, including the group management report, for the year ended
31 December 2013.
In order to inform the Supervisory Board and its Audit Committee as soon as possible about
the progress of the audit and the individual audit findings that were emerging, the members
of both committees were offered two telephone briefings in which the Executive Board and
the auditor took part. The auditor submitted his report and the documents relating to the
financial statements to the members of the Audit Committee on 3 March 2014 and to the
members of the Supervisory Board on 13 March 2014. The report was discussed in depth at
the Audit Committee meeting on 10 March 2014 and at the full Supervisory Board meeting
on 20 March 2014, both of which were attended by the auditor. At both of those meetings,
the auditor reported in detail on the main findings of the audit and provided comprehensive
answers to all questions asked by members of the Audit Committee and Supervisory Board.
Having itself scrutinised the Company’s separate financial statements, consolidated finan-
cial statements, management report and group management report for the year ended
31 December 2013, the Audit Committee then made one recommendation to the full
Supervisory Board, which the chairman of the Audit Committee explained in more detail in
his report to the meeting of the full Supervisory Board. On this basis, following further
discussion of its own, the Supervisory Board approved the results of the independent audit
at its meeting on 20 March 2014. Based on the final outcome of the Supervisory Board’s
own review, no objections were raised. The Supervisory Board approved the Company’s
separate financial statements and consolidated financial statements for the year ended
31 December 2013 prepared by the Executive Board. The annual financial statements were
therefore adopted.
At its meeting on 20 March 2014, the Supervisory Board also discussed and approved the
proposal made by the Executive Board that the distributable profit of KION GROUP AG be
appropriated for the payment of a dividend of €0.35 per no-par-value share. In doing so, the
Supervisory Board took account of the Company’s financial situation and performance, its
medium-term financial and capital-expenditure planning and the interests of the share holders.
The Supervisory Board believes the proposed dividend is appropriate.
To our shareholdersReport of the Supervisory BoardWe keep the world moving.KION GROUP AG | Annual Report 2013 34
review of the dependency report
The Supervisory Board also considered the report compiled by the Executive Board of
KION GROUP AG concerning the Company’s relationships with affiliated entities (depend-
ency report). The Company’s auditors, Deloitte & Touche GmbH Wirtschaftsprüfungs-
gesellschaft, Frankfurt am Main, reviewed the dependency report, compiled an auditors’
report on it and issued the following unqualified opinion based on their completed audit:
auditor’s opinion
Based on our audit and evaluation conducted in accordance with our professional duties,
we hereby confirm that
1. the factual information presented in the report is accurate,
2. the consideration paid by the company in the legal transactions listed in the report was
not inappropriately high,
3. in respect of the transactions listed in the report, there are no circumstances that would
support an assessment materially different from the assessment made by the Executive
Board.
The dependency report and the auditors’ report about it were submitted to all the members
of the Supervisory Board in good time and were discussed in detail in the presence of the
auditor at the Supervisory Board meeting on 20 March 2014. The auditor reported on the
main findings of his audit. The Supervisory Board agreed with the findings of the audit. Based
on the final outcome of its own review, the Supervisory Board did not raise any objections
to the Executive Board’s declaration at the end of the report concerning relationships with
affiliated entities.
Personnel changes
There were a number of changes to the membership of the KION GROUP AG and KION
Holding I GmbH Executive Boards during 2013. Mr Klaus Hofer stepped down from the
Executive Board of KION Holding 1 GmbH with effect from 10 January 2013. Mr Bert-Jan
Knoef, Chief Executive Officer of STILL GmbH, Mr Theodor Maurer, Chief Executive Officer
of Linde Material Handling GmbH, and Mr Ching Pong Quek, Chief Asia Pacific Officer
joined the Executive Board of KION Holding 1 GmbH with effect from 11 January 2013.
There were also several changes on the Supervisory Board. Following the change of legal
form, the size of the Supervisory Board was increased from twelve members to 16. At the
Annual General Meeting on 5 June 2013, Mr Hans Peter Ring and Mr Tan Xuguang were
also appointed as further shareholder representatives with effect from 9 June 2013.
We keep the world moving.KION GROUP AG | Annual Report 2013 35
Mr Denis Heljic and Mr Özcan Pancarci were appointed as employee representatives by the
courts, with effect from 12 June 2013. Ms Alexandra Schädler was appointed by the courts
as an employee representative to replace Dr Roland Köstler on the Supervisory Board, with
effect from 2 October 2013.
The details of this report were discussed thoroughly at the Supervisory Board meeting on
20 March 2014 when it was adopted.
My colleagues on the Supervisory Board and I would like to thank the members of the
Executive Board, the employees of KION GROUP AG and the Group companies in
Germany and abroad for their commitment and outstanding achievements in 2013.
Dr John Feldmann
Chairman
To our shareholdersReport of the Supervisory BoardWe keep the world moving.KION GROUP AG | Annual Report 2013
36
KION shares
Strong growth for the equity markets in 2013
Basic information on KION shares
>> Table 001
International securities markets exhibited a strong upward trend
in 2013. The Euro Stoxx 50 increased from 2,636 points to 3,109
points, a gain of 18.0 per cent. The DAX was even more buoyant, ris-
ing by 25.5 per cent to 9,552 points. And the Dow Jones Industrial
Index climbed by a substantial 26.5 per cent to 16,577 points.
However, there was volatility over the course of the year, primar-
ily due to discussions and market expectations about the imminent
scaling back by the Federal Reserve of its bond-buying programme,
which is aimed at stimulating the economy. The Fed’s announce-
ments that it would possibly reduce its bond buying in the short term
led to turbulence in international equity markets in late June. How-
ISIN
WKN
Bloomberg
Reuters
DE000KGX8881
KGX888
KGX.GR
KGX.DE
Share type
No-par-value shares
Indices
SDAX, MSCI Small Cap Germany
ever, this step was postponed and low interest rates and indications
A total of 19.8 million shares with an issue volume of €475.4 million
of an economic turnaround then boosted share prices in the second
were placed with new investors. During the stabilisation period in the
half of the year.
30 days after the IPO, 2.6 million of these shares were available for
placement again as an over-allotment option. At the end of the stabi-
lisation phase, the over-allotment option was exercised for 0.3 million
Strong performance of KION shares after the IPO
shares, which meant that a total of 17.5 million shares remained in
free float.
Although the marketing period was characterised by the difficult sit-
In the course of KION GROUP AG’s flotation, there were also
uation in capital markets caused by uncertainty surrounding the
two accompanying capital increases with a total volume of
Fed’s bond buying, the KION Group successfully made its initial
€446.4 million: €328.4 million to raise the shareholding of Weichai
public offering (IPO) on 26 June 2013. Its shares have been listed in
Power (Luxembourg) Holding S.à r.l. (Weichai Power) to 30.0 per
the Prime Standard segment of the Frankfurt Stock Exchange since
cent and €118.1 million through conversion into equity of a
28 June 2013. >> Table 001
shareholder loan of Superlift Holding S.à r.l., whose shares are held
in investment funds that are advised by Kohlberg Kravis Roberts &
Co. L.P. (KKR) and The Goldman Sachs Group, Inc. (Goldman
Sachs). As a result of the three capital increases in connection with
the IPO, the KION Group’s equity was increased by a total of
€859.9 million before deduction of the directly attributable transac-
tion costs.
On the first day of trading on 28 June 2013, the shares
began trading at €24.19 and closed at €23.70. Investors’ growing
con fidence in the business model of the KION Group and the
general uptrend on international stock markets had a strong pos-
itive impact on the share price over the subsequent months.
We keep the world moving.KION GROUP AG | Annual Report 2013 37
By the end of the year, KION shares were trading at €30.73, an
when the KION Group was sold in 2006, are now free to sell
increase of 29.6 per cent on the closing price on 28 June, easily out-
the shares held on
their behalf by KION Management
performing the wider market over this period. Between 28 June and
Beteiligungs GmbH & Co. KG (MPP KG) or to transfer them into
the end of the year, the DAX and SDAX recorded gains of 20.0 per
their private investment accounts. As a result, these shares are
cent and 17.1 per cent respectively. KION shares were able to carry
deemed to be part of the free float. Shares held by members of the
over this strong performance into the next year, closing on 7 March
KION Executive Board and members of the Management Boards of
2014 at €35.67. >> Diagram 001
Linde Material Handling GmbH and STILL GmbH remain subject to
Free float has increased to 31.1 per cent since
the IPO
a lock-up period of one year following the IPO and are therefore
reported as shares held by the KION Group’s management that are
still held by MPP KG. Further details about the shareholdings of
members of the Executive Board of KION GROUP AG can be found
in the Corporate Governance Report on page 52.
At the end of the stabilisation phase on 27 July 2013, 17.7 per cent of
Until 28 December 2013, Weichai Power had an option to
KION shares were in free float. Weichai Power held 30.0 per cent of
acquire shares from the stake held by KKR and Goldman Sachs and
the shares, while KKR, Goldman Sachs and the KION Group’s man-
thereby increase its stake from 30.0 per cent to 33.3 per cent.
agement held the other 52.3 per cent.
Weichai Power exercised this option on 18 December 2013. The
The KION Group purchased a total of 200,000 treasury shares
shares were transferred on 15 January 2014. Since completion of
on the stock exchange between 28 August and 26 September 2013
this transaction there has been a mutual right of first offer between
in preparation for an employee share programme, which will be
Weichai Power, on the one hand, and KKR and Goldman Sachs on
implemented during 2014. This equated to 0.2 per cent of the total
the other with respect to their respective shareholdings. Weichai
number of shares.
Power has also undertaken not to acquire more than 49.9 per cent
Furthermore, many of the participants in the KION management
of KION shares between now and 28 June 2018 (as part of a stand-
partnership plan (MPP), which was launched for selected managers
still agreement).
Share price performance from 28 June 2013 to 7 March 2014
>> Diagram 001
€38
€35
€32
€29
€26
€23
KION GROUP + 50.5 %
+ 24.0 %
+ 17.5 %
XETRA DAX
SDAX
€23.70 *
€35.67 *
* Closing price
JUNE
2013
JULY
2013
AUGUST
2013
SEPTEMBER
2013
OCTOBER
2013
NOVEMBER
2013
DECEMBER
2013
JANUARY
2014
FEBRUARY
2014
MARCH
2014
To our shareholdersKION shares We keep the world moving.KION GROUP AG | Annual Report 2013 38
Between the IPO and 28 December 2013, KKR and Goldman
SDAX inclusion
Sachs were prohibited from selling their shares. After that date, they
were free to offer their shares for sale. On 7 January 2014, KKR and
On 23 September 2013, following a periodic review of market indi-
Goldman Sachs placed 10.7 million shares – 10.8 per cent of KION
ces, KION shares were included in the SDAX, the Deutsche Börse
shares – on the stock exchange at a price of €29.50 per share. The
index of the 50 small public limited companies that follow those listed
placement closed within a few hours and was significantly oversub-
in the MDAX in terms of free-float market capitalisation and trading
scribed. KKR and Goldman Sachs are now prohibited again from
volume. This made KION shares attractive to a broader range of
selling their shares until 7 April 2014.
investors, because many institutional investors are predominantly
Whereas 20.3 per cent of shares were in free float as at 31
interested in companies listed on an index. KION GROUP AG’s
December 2013, following the exercise of the option by Weichai
free-float market capitalisation amounted to €617.8 million as at
Power and the share placement by KKR and Goldman Sachs, this
31 December 2013 (€1,098.3 million as at 7 March 2014). The aver-
figure has now risen to 31.1 per cent. KKR and Goldman Sachs
age daily trading volume for KION shares in 2013 was 104.4 thou-
remain KION GROUP AG’s largest shareholders. >> Diagram 002
sand shares.
Shareholder structure as at 7 March 2014
>> Diagram 002
Attractive dividend of €0.35 per share planned
0.2 %
KION GROUP AG
34.5 %
KKR A ND GOLDMAN SACHS ¹
0.9 %
KION MANAGEMENT ²
The Executive Board and Supervisory Board of KION GROUP AG
will propose a dividend of €0.35 per share to the Annual General
Meeting. This equates to a dividend payout rate of 25 per cent of net
income. Pro-forma earnings per share for 2013 was €1.40.
>> Table 002
31.1 %
FREE F LOAT ³
33.3 %
WEICHAI POWER
1 Held via Superlift Holding S.à r.l.
2 Held via KION Management Beteiligungs GmbH & Co. KG for participants in the management partnership
plan whose shares are subject to a lock-up period.
3 Includes shares that are still held by KION Management Beteiligungs GmbH & Co. KG for participants in the
management partnership plan but are no longer subject to a lock-up period and can therefore be sold or
transferred to participants’ private investment accounts.
We keep the world moving.KION GROUP AG | Annual Report 2013 39
Share data
>> Table 002
Opening price as at 28/06/2013
All-time high 2013
All-time low 2013
Closing price as at 31/12/2013
Market capitalisation as at 31/12/2013
Performance 2013
Average daily volume 2013 in shares
Average daily volume 2013 in €
Share capital
Shares outstanding as at 31/12/2013
Pro forma earnings per share 2013
Dividend per share 2013*
Pay-out ratio*
Total dividend payment*
Equity ratio as at 31/12/2013
* Proposed dividend for the fiscal year 2013
€24.19
€31.70
€23.50
€30.73
€3,038.7 million
29.6 %
104.4 thousand
€2.7 million
€98,900,000
98,900,000
€1.40
€0.35
25 %
€34.5 million
26.7 %
To our shareholdersKION shares We keep the world moving.KION GROUP AG | Annual Report 2013
40
Majority of financial analysts recommend
KION shares
As a result of the improved credit profile, the KION Group’s
credit rating went up in July 2013. Moody’s upgraded the Corporate
Family Rating by three notches, from B3 / positive to Ba3 / stable,
Ten brokerage houses published regular studies about KION shares.
while Standard & Poor’s also significantly improved its credit rating
Six of the analysts recommended KION shares as a buy; four rated
for the KION Group, from B / stable to BB– / positive.
them as neutral. The median target price specified for the shares
was €37.50 as at 7 March 2014.
Greatly improved capital structure
Many voting right notifications since the IPO
Between the IPO and 7 March 2014 KION GROUP AG released
48 publications of voting rights announcements. KKR, Goldman
Not only did the IPO significantly strengthen the Company’s equity
Sachs and Weichai Power have entered into a shareholder agree-
base, it also greatly improved the debt structure and maturity profile.
ment regarding the exercise of their voting rights; details of the
Among other things, the loans taken up in connection with the
agreement can be found in the IPO prospectus. Under this agree-
acquisition of the KION Group in 2006 were fully repaid in July 2013
ment, the voting rights of the three shareholders must be added
using the proceeds from the IPO. Of the existing bonds due to
together by law. This means that any securities transaction involving
mature in 2018, the floating-rate tranche of €175 million has also
KION shares that Goldman Sachs carries out, in particular as lead
been repaid in full.
manager or in the course of its normal banking activities, will exceed
In February 2013, KION Finance S.A. issued a new bond that will
the threshold above which a voting right notification is legally
mature in 2020. Of the total volume of €650 million placed, €450 mil-
required. A voting right notification is required for such transactions
lion is repayable at a fixed nominal interest rate of 6.75 per cent, while
and it must relate to all of the voting rights held by KKR, Goldman
€200 million carries a floating interest rate based on three-month
Sachs and Weichai Power. In addition to the numerous notifications
Euribor plus 450 basis points.
of voting rights in conjunction with the IPO and the sale of shares in
The KION Group’s funding structure consists of the new bond
January 2014, there were consequently also a number of further vot-
with a volume of €650 million maturing in 2020, the fixed-rate tranche
ing right notifications. All notifications of voting rights received and
with a volume of €325 million maturing in 2018, which has an interest
published by KION GROUP AG can be found on the Company web-
rate of 7.875 per cent, and a revolving credit facility (RCF) maturing in
site at kiongroup.com/ir/voting_rights_announcements.
2018. The RCF was restructured after the IPO, and up to €1,045 mil-
lion can be drawn down as required.
We keep the world moving.KION GROUP AG | Annual Report 2013 TO Our ShArEhOLdErS
Services for shareholders
41
Services for shareholders
Investor relations activities
A wealth of information is available on the KION website under Inves-
tor Relations.
Even before its IPO, the KION Group attached great importance to
providing a service for syndicate banks and capital market partici-
pants, particularly the bond investors. During the IPO process, the
Executive Board and KION’s investor relations (IR) team held in-depth
discussions with investors and analysts, particularly in Europe and
the United States, in order to explain the details of the business
model to potential investors and encourage them to invest in KION
KION grOup INVESTOr rELATIONS
shares. We will maintain and steadily increase this dialogue in future.
kiongroup.com/ir
After the IPO, we participated in numerous conferences, organised
several roadshows unrelated to any specific transaction and held
many one-to-one meetings with investors. Overall, the Executive
Here you can access data about KION shares and bonds, press
Board and IR team talked to investors at conferences and road-
releases, presentations and IR events as well as information about
shows on 16 days in the second half of the year and also met with a
the Annual General Meeting and corporate governance within the
number of other investors in individual meetings at KION’s head-
Group. You can register for the IR newsletter under IR Services,
quarters in Wiesbaden. Besides the details of the business model,
which will enable you to receive our press releases and more. The
the focus was primarily on the KION Group’s plans to increase its
contact details of the IR team and the financial calendar can also be
margins and on market performance in our various core regions.
found here. The KION Group’s financial reports are available both as
In November, we invited investors and analysts to a factory day
PDF files and as interactive online versions. The latter also contain a
at Linde Material Handling’s site in Aschaffenburg, where they were
download section where, for example, you can download all of the
able to see Linde forklift trucks and warehouse trucks for themselves
tables as an Excel file.
and gain an insight into how they are built.
Conference calls and online information
First Annual General Meeting on 19 May 2014
KION GROUP AG will hold its first Annual General Meeting as a listed
Ever since we issued our first bond in 2011, we have held a confer-
public limited company at the Rhein-Main-Hallen, Rheinstrasse 20,
ence call for investors on the day on which financial reports are pub-
Wiesbaden on 19 May 2014. All of the necessary information
lished. It is a chance for members of the Executive Board to explain
about the event, including the announcement and agenda, will
the results and answer questions.
be published at the appropriate time on the Company website at
kiongroup.com/agm.
We keep the world moving.KION GROUP AG | Annual Report 2013 Corporate GovernanCe
Contents
43
Corporate Governance
Corporate GovernanCe report
Declaration pursuant
Executive board and supervisory board
shareholdings and directors’ dealings
DisClosures relevant to aCquisitions
remuneration report
Executive Board remuneration
Supervisory Board remuneration
44
44
52
53
57
57
64
KION GROUP AG | Annual Report 2013
We keep the world moving.
44
Corporate governance report
Corporate governance covers the whole system of managing and
monitoring an enterprise, the principles and guidelines that shape its
1. Comply-or-explain statement
pursuant to section 161 (1) AktG
business policy and the system of internal and external control and
monitoring mechanisms. The Executive Board and Supervisory
Section 161 (1) of the German Stock Corporation Act (AktG) requires
Board of KION GROUP AG believe that an uncompromising
the management board and supervisory board of a publicly listed
commitment to the highest standards of corporate governance is
company to issue an annual declaration stating that the company
essential to the Company’s long-term success. Compliance with
has complied with, or intends to comply with, the recommendations
these principles also promotes the trust that our investors,
of the Code and also stating which recommendations it has not
employees, business partners and the public have in the manage-
applied or does not intend to apply, and the reasons why. Detailed
ment and monitoring of the Company.
reasons must be given for any departure from the recommendations
There is a close correlation between the corporate governance
of the Code. The comply-or-explain statement must be made
report required by section 3.10 of the German Corporate Governance
permanently available to the public on the company’s website.
Code as amended on 13 May 2013 (the Code) and the content of the
KION GROUP AG has been a listed company on the regulated
corporate governance declaration required by section 289a German
market of the Frankfurt Stock Exchange since 28 June 2013. It has
Commercial Code (HGB). For this reason, the Executive Board and
not previously issued a comply-or-explain statement pursuant to
the Supervisory Board of KION GROUP AG have combined the two
section 161 (1) AktG. However, the Company has already stated in its
statements.
IPO prospectus that with one exception, it complies, and will comply
DEClARAtION PURSUANt tO
SECtION 289a Of thE GERmAN
COmmERCIAl CODE (hGB)
in future, with the recommendations in the Code.
The Executive Board and Supervisory Board have considered
the recommendations of the Code in detail and on 19 December
2013 they issued the first comply-or-explain statement of KION
GROUP AG as required by section 161 (1) AktG as follows:
1. KION GROUP AG complies, and will continue to comply in future,
with all but one of the recommendations of the German Corporate
The corporate governance declaration required by section 289a
Governance Code government commission (dated 13 May 2013)
HGB includes the comply-or-explain statement in accordance with
published by the Federal Ministry of Justice in the official part of
section 161 AktG (see 1. below), relevant disclosures on corporate
the electronic Federal Gazette.
management practices extending beyond statutory requirements
In departure from section 3.8 (3) of the German Corporate
(see 2. below), a description of the working methods of the
Governance Code (the Code), the articles of incorporation of KION
Executive Board and the Supervisory Board, and a description of
GROUP AG do not provide for an excess in the D&O insurance
the working methods and composition of the Supervisory Board
policies for members of the Supervisory Board. The Company
committees
(see 3. below). The declaration on corporate
believes that such an excess is not typical at international level and
governance pursuant to section 289a HGB is part of the manage-
would therefore make it considerably more difficult to find
ment report. According to section 317 (2) sentence 3 HGB, the
independent candidates, in particular candidates from outside
information provided in accordance with section 289a HGB does
Germany.
not have to be included in the audit of financial statements.
2. KION GROUP AG has been a listed company since 28 June 2013
and has not previously issued a comply-or-explain statement
pursuant to section 161 AktG. Since its initial public offering (IPO),
KION GROUP AG has issued guidelines on diversity in the Company
We keep the world moving.KION GROUP AG | Annual Report 2013
45
in order to document its compliance with the recommendations in
In 2013 the Executive Board and the Supervisory Board (or its
sections 4.1.5, 5.1.2 (1) and 5.4.1 (2) of the Code. Since the IPO, KION
committees) regularly discussed corporate governance issues in
GROUP AG has complied with all of the recommendations of the
accordance with a rolling schedule of topics. This ensured that the
government commission (dated 13 May 2013) except for the
key elements of corporate governance within the KION Group were
recommendation in section 3.8 (3) of the Code, as described above.
always on the agenda at meetings of the Company’s main
With respect to section 5.4.2 of the Code, the Supervisory
decision-making bodies. The Supervisory Board in particular
Board believes that, taking account of the employee representatives
complied with the supervisory duties incumbent upon it under the
on the Supervisory Board, it is appropriate to have two independent
German Stock Corporation Act. For example, the Supervisory
members of the Supervisory Board, who are elected by the share-
Board’s Audit Committee, which was set up partly for this purpose,
holders.
received regular reports on the accounting processes and the
effectiveness of the internal monitoring and risk management
Wiesbaden, 19 December 2013
systems and of the audit of financial statements, and then reported
For the Executive Board:
Gordon Riske
Dr Thomas Toepfer
For the Supervisory Board:
Dr John Feldmann
back to the full Supervisory Board on these matters.
2.1 internal control system
KION GROUP AG has an internal control system designed to meet
the specific needs of the Company. Its processes are intended to
ensure the correctness of the internal and external accounting
processes, the efficiency of the Company’s business operations and
compliance with key legal provisions and internal policies. These
control processes also include the Company’s strategic planning,
where the underlying assumptions and plans are reviewed on an
The comply-or-explain statement is available on the website of
ongoing basis and revised as necessary.
KION GROUP AG kiongroup.com/comply_statement.
The Supervisory Board and in particular the Supervisory Board’s
Audit Committee regularly obtain information on the processes put in
place as part of the internal control system and are satisfied as to
2. Relevant disclosures on corporate
their efficiency.
governance
2.2 accounting-related internal control system
The corporate governance of KION GROUP AG is essentially, but not
exclusively, determined by the provisions of the German Stock
For its accounting process, the KION Group has defined suitable
Corporation Act and those of the Codetermination Act and also
structures and processes as part of its internal control and risk
follows the recommendations of the German Corporate Governance
management system and implemented them throughout the Group.
Code. KION GROUP AG complies with all the Code’s recommenda-
Besides defined control mechanisms, it includes, for example,
tions, with one exception. These fundamental principles are
system-based and manual reconciliation processes, clear separation
combined with a commitment to sustainable business, taking
of functions, strict compliance with the double-checking principle
account of society’s expectations in the markets in which the
and written policies and procedures. The overarching aim is for the
Company operates.
separate financial statements, consolidated financial statements,
management report and group management report to be fully com-
Corporate GovernanCeCorporate governance report We keep the world moving.KION GROUP AG | Annual Report 2013
46
pliant with the relevant statutory and regulatory requirements and, in
KION GROUP’s compliance organisation is made up of the
particular, the applicable financial reporting standards. Changes to
following committees, functions and duties:
these requirements and standards are analysed on an ongoing basis
The Executive Board of KION GROUP AG bears collective
and taken into account as appropriate. Details can be found in the
responsibility for the functioning of compliance management within
risk report, which is part of the group management report.
the Group; the compliance department reports to the Chief Executive
2.3 risk management system
Officer of KION Group AG. Responsibility for implementing compli-
ance management has been delegated to the Chief Compliance
Officer, the CEOs of the STILL and LMH segments, and the heads of
As part of professional and responsible corporate management, the
the KION regions. Responsibility for monitoring of course remains
Executive Board is required to regularly obtain information from the
with the CEO of the Group. The KION compliance department, the
Company’s risk management function about existing risks and
KION compliance team and the KION compliance committee provide
changes to them and then to report on this to the Supervisory Board.
operational support to the aforementioned functions. The KION
The KION Group’s risk management system is defined in groupwide
compliance department focuses mainly on preventing compliance
risk guidelines, which contain a standardised catalogue of risks.
violations by providing guidance, information, advice and training. It
Specific individual risks are then reported by the individual Group
manages the KION compliance team, in which local and regional
entities using an online reporting tool. Reporting on cross-segment
compliance officers of the Group are represented.
risks and groupwide risks is carried out by the Accounting & Finance
The members of the compliance team at KION GROUP AG are
function and the relevant departments.
available to advise all Group employees and answer their questions
2.4 Compliance management system
compliance programme, particularly for providing advice, information
at any time. They are also responsible for the implementation of the
and training.
The Executive Board and Supervisory Board of KION GROUP AG
Actual or suspected incidents of non-compliance can be
consider
that adhering uncompromisingly
to broad-ranging
reported by post, email or fax. All employees can also report any
compliance standards is essential to sustained financial success.
cases of non-compliance via a compliance hotline and can choose
That is why a comprehensive compliance programme, centring
to remain anonymous.
around the KION Group Code of Compliance, has been set up for
As part of its work, the compliance department at KION GROUP
KION GROUP AG and its Group companies worldwide.
AG cooperates closely with the legal and internal audit departments.
The KION Group Code of Compliance, which is available in all of
The KION compliance committee is staffed by the heads of these
the main languages relevant to the Group companies of KION
departments and the head of human resources, operating as a
GROUP AG, provides every employee with clear guidance on how to
cross-functional committee that primarily advises on, examines and,
conduct their business in accordance with sound values and ethics
if relevant, punishes incidents of non-compliance that are reported.
and in compliance with the law. The aim is that all employees should
While the KION compliance department is responsible for preventing
receive regular training on the most important compliance subjects
compliance violations, the internal audit unit is tasked with checking
(e.g. competition law, data protection, communication and anti-
the facts of reported non-compliance cases. On behalf of the
corruption). Desk-based employees can use e-learning tools to
Executive Board, the internal auditors also monitor subsidiaries for
complete the mandatory training.
compliance with regulations. If their audits confirm cases of
Compliance activities focus on anti-corruption, foreign trade /
non-compliance, it is the task of HR or Legal to remedy the violations
export controls, liability of senior management, directors’ and
and sanction those responsible, if appropriate.
officers’ liability, capital markets compliance, IT security and data
The Management Boards of the KION brand parent companies
protection.
and their subsidiaries are responsible for ensuring compliance. The
We keep the world moving.KION GROUP AG | Annual Report 2013 47
Local Compliance Representatives advise and support the directors
The Company’s Chief Executive Officer, Mr Gordon Riske, was
and senior managers in ensuring compliance throughout the Group.
appointed a non-executive director of Weichai Power with effect
2.5 audit-relevant processes
from 24 June 2013. The Supervisory Board had previously given its
consent. Appropriate precautions have been taken to ensure that
this role at a major shareholder of the Company does not create a
The KION Group’s separate financial statements and management
conflict of interest relating personally to Mr Riske. Formal processes
report, and the consolidated financial statements and group
have been put in place to ensure that Mr Riske, in his role as a
management report, which are prepared by the Executive Board of
non-executive director of Weichai Power, will not be involved in
KION GROUP AG, are audited by an independent auditor, discussed
transactions that could give rise to a conflict with the interests of the
by the Audit Committee and approved by the Supervisory Board.
KION Group. Nor will Mr Riske will be involved in transactions relating
The independent auditor reviews the condensed consolidated
to the exercise of voting rights by Weichai Power or its subsidiaries at
interim financial statements and the condensed interim group
the Annual General Meeting of KION GROUP AG. It has been
management report for the first half of the year. The Executive Board
ensured that Mr Riske maintains a strict separation between his
discusses all interim reports with the Audit Committee before they
duties as a non-executive director of Weichai Power and his duties
are published.
2.6 avoiding conflicts of interest
as Chief Executive Officer of KION GROUP AG and that he fulfils all
of his legal obligations in the interests of the Company.
Executive Board member Ching Pong Quek received an
incentive bonus of RMB 486,659.00 in the year under review from
Conflicts of interest between the governing bodies and other
Siming District, Xiamen, China. Based on the average exchange rate
decision-makers in the Company or significant shareholders go
in 2013, this is equivalent to €59,596.20. This payment was not
against the principles of good corporate governance and are harmful
related to Mr Quek’s work on the Executive Board; it was paid
to the Company. KION GROUP AG and its governing bodies there-
exclusively in connection with his role as a member of the Manage-
fore adhere strictly to the recommendations in the Code. The
ment Team (Chief Executive Officer) of Linde (China) Forklift Trucks
employees of KION GROUP AG and its investees are made aware of
Corp., Ltd., Xiamen, China. Similar incentives in varying amounts
the problem of conflicts of interest as part of compliance training and
were also paid to 23 other members of the management team of
are bound by rules on how to behave in the event of actual or
Linde (China) Forklift Trucks Corp., Ltd., Xiamen, China. The bonuses
potential conflicts of interest.
are awarded each year by the administrative district of Siming to
The Company attaches high priority to preventing possible
management teams of local companies who have made a particular
conflicts of interest from occurring in the first place and to dispelling
contribution to the regional economy over the past twelve months.
any impression that they might exist. This is especially important in
Such payments are also common in other districts in China and
view of the long-standing involvement of major shareholders
serve to make these regions more attractive to talented managers
Goldman Sachs and KKR, which exerted considerable influence
and, in particular, employees from foreign companies who are
over the Company’s Executive Board in the years before KION
seconded to China. The payment was disclosed to the Chief
GROUP AG’s conversion to a public limited company and its IPO,
Executive Officer and the Supervisory Board.
Weichai Power’s significant investment in KION GROUP AG, and the
representation of these shareholders on the Supervisory Board of
KION GROUP AG. The Company achieves these aims by avoiding
business scenarios or personnel scenarios that could give the
impression of a conflict of interest and by taking transparent steps
that effectively avoid concerns about conflicts of interest.
Corporate GovernanCeCorporate governance report We keep the world moving.KION GROUP AG | Annual Report 2013 48
3. Working methods of the Executive Board and
Supervisory Board and composition of the
committees of the Supervisory Board
responsibilities within the executive Board
>> TabLe 003
executive Board
responsibilities
The Executive Board and Supervisory Board of KION GROUP AG
Gordon Riske
have a close and trusting working relationship that focuses on
ensuring the sustained success of the Company. The members of
the Executive Board regularly attend Supervisory Board meetings,
unless the Supervisory Board decides to meet without the Executive
Board.
The Board of Management promptly, comprehensively and
regularly reports to the Supervisory Board on the performance of the
KION Group. Besides the reporting obligations defined by law, the
Dr Thomas Toepfer
rules of procedure for the Executive Board of KION GROUP AG set
out further reporting requirements and reservations of approval in
favour of the Supervisory Board.
3.1 Working methods of the executive Board
The Executive Board of KION GROUP AG comprises five members.
It is responsible for managing the Company in the Company’s
Bert-Jan Knoef
interest, i.e. taking account of shareholders, customers, employees
and other stakeholders with the aim of creating sustainable added
value. The Executive Board develops the Company’s strategy,
discusses it with the Supervisory Board and ensures that it is
implemented. Every Executive Board member is responsible for his
or her own area of responsibility, and keeps his or her fellow board
Theodor Maurer
members informed of developments on an ongoing basis.
Ching Pong Quek
>> TabLe 003
Ceo Kion Group aG
Strategy / Business Development
Corporate Communications
Corporate Office
Internal Audit
Compliance
KION Warehouse Systems
KION Synergies / Platforms
North America Region
South America Region
CFo Kion Group aG
Accounting, Tax & Financial Services
Corporate Finance / Investor Relations / M&A
Controlling
HR / Labour Relations Director
Legal
IT
Purchasing
Data Protection
executive Board member Kion Group aG
CEO STILL GmbH
Logistics / Urban
executive Board member Kion Group aG
CEO Linde Material Handling GmbH
Quality
Facility Management / Health Safety
Environment
executive Board member Kion Group aG /
Chief asia pacific officer
Asia Pacific Region
We keep the world moving.KION GROUP AG | Annual Report 2013 49
Every Executive Board member must disclose potential conflicts of
its work. The Supervisory Board is fully involved from an early stage
interest to the Supervisory Board immediately and must also inform
in all decisions that are fundamental to KION GROUP AG.
the other Executive Board members. All transactions between KION
The Supervisory Board of KION GROUP AG consists of 16 mem-
GROUP AG and Executive Board members or parties or companies
bers, eight of whom are employee representatives and eight are
closely associated with them must be concluded on an arm’s-length
shareholder representatives. The shareholder representatives are
basis.
elected by the Annual General Meeting by simple majority.
Rules of procedure laid down by the Supervisory Board define
The Supervisory Board has drawn up rules of procedure for its
the areas of responsibility of the Executive Board members and the
work. These apply in addition to the requirements of the articles of
way in which they work together. The full Executive Board normally
incorporation and also define the Supervisory Board committees.
meets every 14 days and is chaired by the CEO. Individual Executive
According to these rules, the chairman of the Supervisory Board
Board members sometimes take part via video conference. At the
coordinates its work and the cooperation with the Executive Board,
meetings, the board members discuss measures and business that,
chairs its meetings and represents it externally. The Supervisory
under the Executive Board’s rules of procedure, require the approval
Board meets in person at least twice in each half of a calendar year,
of the full Executive Board. Resolutions of the Full Executive Board
and adopts its resolutions at these meetings. Between these
are passed by simple majority unless a greater majority is required by
meetings, resolutions may also be adopted in writing, by telephone
law. The chairman has a casting vote in the event of a tied vote.
or by other similar forms of voting, provided that the chairman of the
Resolutions of the Executive Board may also be adopted between
Supervisory Board or, in his absence, his deputy, decides on this
meetings. Taking account of the requirements of section 90 AktG,
procedure for the individual case concerned. The Supervisory Board
the Executive Board provides the Supervisory Board with regular,
adopts resolutions by a simple majority of the votes cast unless a
timely and comprehensive information on all matters of relevance to
different procedure is prescribed by law. If a vote is tied, the matter
the business as a whole relating to operating policy, strategic
will only be renegotiated if the majority of the Supervisory Board vote
planning, business performance,
financial position,
financial
in favour of this option. Otherwise the Board must vote again without
performance and business risks. The Chief Executive Officer meets
delay. If this new vote on the same matter also results in an equal
regularly with the chairman of the Supervisory Board to discuss
number of votes for and against, the chairman of the Supervisory
these matters too.
Board has a casting vote.
The working methods of the Executive Board are described in
more detail in the rules of procedure laid down by the Supervisory
3.3 objectives for the composition of the
Board for the Executive Board, which also set out the business
supervisory Board
allocation plan and the matters reserved to the full Executive Board.
The Executive Board’s rules of procedure reserve certain important
The Supervisory Board strives to ensure that its composition is
transactions for the approval of the Supervisory Board. The budget
appropriate to its responsibilities and obligations. In particular, this
planning requires the approval of the Supervisory Board, for example,
means considering members’ individual qualities and skills as well as
as do major acquisitions or investments.
the specific requirements resulting from the global business activities
The Company is represented by two members of the Executive
of KION GROUP AG and its Group companies. The Supervisory
Board, by one member of the Executive Board acting conjointly with
Board is therefore of the opinion that the priority in aiming for a
a Prokurist (person with full commercial power of representation), or
composition based on diversity must be the expertise of the
by two Prokurists.
individual members and a balanced mix of personal qualities,
experience, skills, qualifications and knowledge of all members in
3.2 Working methods of the supervisory Board
line with the requirements of the business, and has agreed upon
guidelines for the selection of Supervisory Board members in the
The Supervisory Board of KION GROUP AG advises and monitors
form of a diversity statement. This also means that the Supervisory
the Executive Board in its management of the Company and reviews
Board’s aim is to have an appropriate number of women on the
Corporate GovernanCeCorporate governance report We keep the world moving.KION GROUP AG | Annual Report 2013 50
Supervisory Board. Given that at present – as in the past – there are
appointed. Other documents prepared by the Executive Committee
already two female members on the KION GROUP AG Supervisory
relate to any matter in connection with Executive Board remunera-
Board, it believes that an appropriate proportion has already been
tion. The Executive Committee is also responsible for resolutions
achieved which takes account of the specifics of the enterprise and
concerning the conclusion, amendment and termination of Executive
it will make efforts to retain this proportion of women. The Supervisory
Board employment contracts and agreements with Executive Board
Board would also support the inclusion of other female Board mem-
members governing pensions, severance packages, consultancy
bers who meet the above criteria, but at present it does not see any
and other matters and for resolutions about any matters arising as a
need for further increasing the proportion of women on the KION
result of such contracts and agreements, unless they relate to
GROUP AG Supervisory Board in the short term, or for introducing a
remuneration. The responsibilities of the Executive Committee also
mandatory quota for female members of the Supervisory Board. At
include resolutions about the extension of loans to Executive Board
the same time, it is following the debate in society and among
members, Supervisory Board members and parties related to them
politicians regarding a statutory minimum quota for women on
within the meaning of sections 89 and 115 AktG, as well as resolutions
supervisory boards and will take any measures that may be required.
to approve contracts with Supervisory Board members outside their
3.4 Working methods and composition of the committees
consultation with the Executive Board – regularly deliberate on long-
of the executive Board and supervisory Board
term succession planning for the Executive Board.
Supervisory Board remit. The Executive Committee should – in
On 29 May 2013, but with effect from the registration of the change
in 2013, the members of the executive Committee were:
of form to KION GROUP AG, the Supervisory Board of KION Holding
1 GmbH (known as KION GROUP AG (under formation) before the
Dr John Feldmann (chairman)
effective date of the change of legal form) resolved to create four
Joachim Hartig (deputy chairman)
committees, whose tasks, responsibilities and work processes
Dr Alexander Dibelius
comply with the provisions of the German Stock Corporation Act
Denis Heljic
(AktG) and the German Corporate Governance Code. The chairman
Johannes P. Huth
of each committee reports regularly to the full Supervisory Board on
Jiang Kui
his committee’s work. The committees have each drawn up rules of
Thilo Kämmerer
procedure that define their tasks and working methods.
Kay Pietsch
executive Committee
mediation Committee
The Executive Committee consists of four shareholder representa-
The Mediation Committee comprises the chairman of the Supervi-
tives and four employee representatives. Its chairman is always the
sory Board, his deputy, an employee representative and a share-
chairman of the Supervisory Board. It prepares the meetings of the
holder representative. If a majority of two thirds of votes as required
Supervisory Board and is responsible for ongoing matters between
by section 27 (3) and section 31 (3) MitbestG is not reached in a vote
Supervisory Board meetings. The Executive Committee also
by the Supervisory Board on the appointment of an Executive Board
prepares the Supervisory Board’s decisions relating to corporate
member, the Mediation Committee must propose candidates for the
governance, particularly amendments to the comply-or-explain
post to the Supervisory Board within one month. The chairman of
statement pursuant to section 161 AktG reflecting changed circum-
the Supervisory Board does not have a second vote on the candi-
stances and the checking of adherence to the comply-or-explain
dates proposed.
statement. It also prepares documents for the Supervisory Board
when Executive Board members are to be appointed or removed
and, if applicable, when a new Chief Executive Officer is to be
We keep the world moving.KION GROUP AG | Annual Report 2013 51
in 2013, the members of the mediation Committee were:
nomination Committee
Dr John Feldmann (chairman)
Joachim Hartig (deputy chairman)
Johannes P. Huth (from 27 June 2013)
Dr Alexander Dibelius (until 27 June 2013)
Kay Pietsch
audit Committee
The Nomination Committee has four members, all of whom are
shareholder representatives and are elected by the shareholder
representatives on
the Supervisory Board. The Nomination
Committee’s only task is to propose new candidates for the Super-
visory Board to the Company’s Annual General Meeting.
members of the nomination Committee:
The Audit Committee has four members, who are elected by the
Dr John Feldmann (chairman)
Supervisory Board. Its purpose is to assist the Supervisory Board in
Dr Martin Hintze (deputy chairman)
performing its task of monitoring accounting processes, compliance
Jiang Kui
matters and reporting. These responsibilities encompass monitoring
Silke Scheiber
the quality and integrity of the consolidated and separate financial
statements (as well as related disclosures), the internal control
Until 27 June 2013, when its tasks were taken over by the Executive
mechanisms, risk management and the internal audit system. The
Committee, the members of the Human Resources Committee
Audit Committee also reviews the work carried out by the
were:
independent auditor and checks that the independent auditor is
qualified and independent. It is also responsible for engaging the
Johannes P. Huth (chairman)
independent auditor, determining the focus of the audit and agreeing
Joachim Hartig (deputy chairman)
the fee. In addition, the Audit Committee exercises the rights in
Dr Alexander Dibelius
investee companies set forth in section 32 (1) MitbestG.
Thilo Kämmerer
in 2013, the members of the audit Committee were:
Hans Peter Ring (chairman, from 27 June 2013)
Dr Martin Hintze (chairman, until 27 June 2013)
Kay Pietsch (deputy chairman)
Dr John Feldmann (from 27 June 2013)
Dr Roland Köstler (until 30 September 2013)
Alexandra Schädler (from 2 October 2013)
Silke Scheiber (until 27 June 2013)
As an independent member of the Audit Committee, the chairman,
Hans Peter Ring, has the required expertise in the areas of account-
ancy and auditing specified in sections 100 (5) and 107 (4) AktG.
Corporate GovernanCeCorporate governance report We keep the world moving.KION GROUP AG | Annual Report 2013 52
EXECUtIVE BOARD AND SUPERVISORY
BOARD ShAREhOlDINGS AND
DIRECtORS’ DEAlINGS
1. Shareholdings
As at 31 December 2013, the shares in KION GROUP AG or related
financial instruments held directly or indirectly by all members of the
Executive Board and Supervisory Board equated to less than
1 per cent of all the shares issued by the Company.
2. Directors’ dealings
Pursuant to section 15a of the German Securities Trading Act
(WpHG), members of the Executive Board and the Supervisory
Board and related parties are obliged to disclose transactions
involving shares in the Company or related financial instruments if
the value of these transactions reaches €5,000 or more within one
calendar year. >> TabLe 004
transactions pursuant to section 15a WpHG in 2013
>> TabLe 004
Buyer / seller
type of transaction
Date of transaction
share price (€) number of shares
total value (€)
Benita Riske
Johannes Huth
Purchase
Purchase
Holger Brandt
Sale
28 June 2013
1 July 2013
22 November 2013/
18 December 2013*
23.81984
23.690525
29.5042
3,000
50,000
7,000
71,459.52
1,184,526.25
206,529.40
* The report dated 18 December 2013 refers to the report dated 22 November 2013, in which it was only possible to state a provisional sale price of €28.945 for the 7,000 shares. The report dated
22 November 2013 also stated that a second report concerning these 7,000 shares would be made once the final sale price had been determined. Mr Brandt has known the final sale price since
13 December 2013. It was determined by adjusting the provisional price of €28.945 per share, which was set on the day the shares were transferred to the broker, when the sale of the shares
was completed in such a way as to avoid disrupting the market (which required an extended selling period). The price was adjusted by the payment of a premium of €0.5592, which was equiva-
lent to the weighted average sale price achieved on each trading day. At the end of the sale period, this produced a final sale price of €29.5042.
We keep the world moving.KION GROUP AG | Annual Report 2013 53
Disclosures relevant to acquisitions,
section 315 (4) HGB
The disclosures relevant to acquisitions pursuant to section 315 (4)
This obligation also includes other securities of the Company, includ-
HGB together with the explanatory report form an integral part of the
ing securities that can be converted into shares in the Company or
group management report.
1. Composition of subscribed capital
options that can be exercised or exchanged to obtain shares in the
Company. Under this agreement, KMB is not permitted to offer,
pledge, allocate, sell or undertake to sell the shares concerned, sell
call options or call contracts, buy put options, or grant call options,
purchasing rights or subscription rights.
The subscribed capital (share capital) of KION GROUP AG amounted
The Executive Board understands that KION GROUP AG’s two
to €98,900,000 as at 31 December 2013. It is divided into 98,900,000
major shareholders, Superlift Holding S.à r.l. (‘Superlift’) and Weichai
no-par-value bearer shares. The share capital is fully paid-up. All of
Power (Luxembourg) Holding S.à r.l. (‘Weichai Power’) have entered
the shares in the Company give rise to the same rights and
into a shareholder agreement in which they have both undertaken to
obligations. Each share confers one vote and entitlement to an equal
coordinate their voting at the Annual General Meeting of the Company
share of the profits. The rights and obligations arising out of the
in respect of certain resolutions. Furthermore, the Executive Board
shares are defined by legal provisions. As at 31 December 2013, the
understands that Superlift and Weichai Power have come to an
Company held 200,000 shares in treasury. The primary intention is
arrangement in the shareholder agreement to grant each other a
to offer these treasury shares to staff as part of an employee share
mutual right of first offer in respect of the shares held by the other
programme, the details of which are currently being prepared.
shareholder.
2. Restrictions on voting rights or the transfer of
shares
There are generally no restrictions with respect to voting rights or the
transfer of shares in the Company. In accordance with the legal
provisions applicable to bearer shares, all of the shares in the
KION GROUP AG has no rights arising from the treasury shares
that it holds (section 71b AktG).
3. Direct or indirect shareholdings in the Com-
pany that represent more than 10 per cent of
the voting rights
Company can be traded freely.
As far as the Company is aware, the following companies directly or
As at 31 December 2013, KION Management Beteiligungs
indirectly held more than 10 per cent of the voting rights in KION
GmbH & Co. KG (KMB) held shares in the Company on behalf of
GROUP AG as at 31 December 2013:
managers in the Company and its subsidiaries. KMB has made an
undertaking to the syndicate banks underwriting the IPO regarding
– Superlift with a direct shareholding equivalent to 48.6 per cent of
the shares held by KMB for members of the Executive Board of the
the voting rights
Company, the Executive Board of KION Material Handling GmbH
and the Management Boards of Linde Material Handling GmbH and
Pursuant to the German Securities Trading Act (WpHG), the
STILL GmbH at the time the underwriting agreement was signed as
shareholding held by Superlift is deemed to belong to the
part of the IPO. It has undertaken not to dispose of these shares
following other companies:
within a period of twelve months from the day after the Company’s
>> TabLe 005
first day of trading on the stock exchange, i.e. until 29 June 2014.
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeDisclosures relevant to acquisitions
54
Companies to which superlift is deemed to belong >> TabLe 005
– Weichai Power with a direct shareholding equivalent to 30.0 per
cent of the voting rights
Company
KKR & Co. L.P.
registered office
Wilmington, USA
Pursuant to WpHG, the shareholding held by Weichai Power is
deemed to belong to the following other companies:
KKR 1996 Overseas, Limited
George Town, Cayman Islands
>> TabLe 006
KKR 2006 Fund (Overseas),
Limited Partnership
George Town, Cayman Islands
KKR 2006 Limited
George Town, Cayman Islands
KKR Associates 2006 (Overseas),
Limited Partnership
KKR Associates Europe II,
Limited Partnership
George Town, Cayman Islands
Companies to which Weichai power is deemed
to belong
>> TabLe 006
Calgary, Canada
Company
registered office
KKR Europe II Limited
George Town, Cayman Islands
KKR European Fund II,
Limited Partnership
Calgary, Canada
KKR Fund Holdings GP Limited
George Town, Cayman Islands
KKR Fund Holdings L.P.
George Town, Cayman Islands
KKR Group Holdings L.P.
George Town, Cayman Islands
KKR Group Limited
George Town, Cayman Islands
KKR Management LLC
KKR Partners (International),
Limited Partnership
Wilmington, USA
Calgary, Canada
KKR PEI Associates, L.P.
St. Peter Port, Guernsey
KKR PEI GP LIMITED
St. Peter Port, Guernsey
KKR PEI International Holdings GP Ltd. George Town, Cayman Islands
KKR PEI International Holdings L.P.
George Town, Cayman Islands
KKR PEI Investments, L.P.
St. Peter Port, Guernsey
GS Capital Partners V Employee
Fund, L.P.
GS Capital Partners V Employee
Funds GP, L.L.C.
Wilmington, USA
Wilmington, USA
GS Capital Partners V Offshore, L.P.
George Town, Cayman Islands
GS Capital Partners V
GmbH & Co. KG
GS Advisors V, L.L.C.
Frankfurt am Main,
Germany
Wilmington, USA
GSCP V AIV, L.P.
George Town, Cayman Islands
GS Capital Partners V Institutional, L.P. Wilmington, USA
GS Advisors V AIV, Ltd.
George Town, Cayman Islands
Goldman, Sachs & Co.
New York, USA
The Goldman Sachs Group, Inc.
Wilmington, USA
Shandong Heavy Industry
Group Co., Ltd.
Weichai Group Holdings Limited
Weichai Power Co., Ltd.
Jinan, People’s Republic
of China
Weifang, People’s Republic
of China
Weifang, People’s Republic
of China
Weichai Power Hong Kong International
Development Co., Ltd.
Hong Kong,
People’s Republic of China
other
People’s Republic of China
registered office
Beijing, People’s Republic
of China
On 18 December 2013, Weichai Power exercised one of the call
options granted to it by Superlift, acquiring with the completion of the
purchase after the reporting date a further 3.3 per cent of the shares
in KION GROUP AG from Superlift. Weichai Power therefore now
holds 33.3 per cent of the shares in the Company. In addition,
Superlift sold 10.7 million shares in KION GROUP AG to institutional
investors in January 2014 as part of an accelerated bookbuilding
process. Since then, it has held approximately 34.5 per cent of the
shares. Since the reporting date, there may have been further
changes to the aforementioned shareholdings of which the
Company is unaware. As the shares in the Company are bearer
shares, the Company only learns about changes to the size of
shareholdings if they are notifiable pursuant to the WpHG or other
regulations.
We keep the world moving.KION GROUP AG | Annual Report 2013
55
4. Shares with special rights that confer
and section 31 MitbestG. Pursuant to article 6 (1) of the articles of
authority to exert control over the Company
incorporation of the Company, the Executive Board must have a min-
imum of two members. The Supervisory Board determines the num-
There are no shares with special rights that confer the authority to
ber of Executive Board members. Pursuant to section 84 AktG and
exert control over the Company.
section 6 (3) of the Company’s articles of incorporation, the Supervi-
5. type of voting right controls in cases where
employees hold some of the Company’s
capital and do not exercise their control
rights directly
sory Board may appoint a Chief Executive Officer and a deputy.
Section 179 (1) sentence 1 AktG requires that amendments to
the articles of incorporation be passed by resolution of the Annual
General Meeting. In accordance with article 23 of the articles of
incorporation in conjunction with section 179 (2) sentence 2 AktG,
resolutions at the Annual General Meeting on amendments to the
articles of incorporation are passed by simple majority of the votes
In connection with the acquisition of the business of the current
cast and by simple majority of the share capital represented in the
KION GROUP AG from Linde AG in 2006, a relatively large group of
voting unless a greater majority is specified as a mandatory
managers and executives in the KION Group were given the
requirement under statutory provisions. The option to stipulate a
opportunity to indirectly acquire shares in KION GROUP AG’s legal
larger majority than a simple majority in any other cases has not
predecessor, the former KION Holding 1 GmbH, through a
been exercised in the articles of incorporation.
limited partnership in KMB (see under 2 above). When KION
The Supervisory Board is authorised in article 10 (3) of the
Holding 1 GmbH was transformed into KION GROUP AG, these
articles of incorporation to amend the articles of incorporation
holdings were exchanged for shares in the new Company. The
provided that such amendments relate solely to the wording.
participants (limited partners) in KMB are free to instruct the
programme to sell their shares or to transfer them into their private
investment accounts unless lock-up provisions apply because the
7. Authority of the Executive Board to issue or
executives concerned are members of the Executive Board of KION
buy back shares
GROUP AG or members of the management board of a consoli-
dated German subsidiary (see under 2 above).
The Extraordinary General Meeting on 13 June 2013 authorised the
At the Annual General Meetings of KION GROUP AG, KMB is
Company, in the period up to 12 June 2016, to acquire for treasury
represented either by its general partner, KION Management
up to 10 per cent of all the shares in issue at the time of the resolution
Beteiligungs GmbH, or by its managing limited partners. Before
or in issue on the date the authorisation is exercised, whichever is the
important resolutions of the Annual General Meeting, these partners
lower. Together with other treasury shares in possession of the
must convene a partners’ meeting of KMB and obtain the approval
Company or deemed to be in its possession pursuant to section 71a
of the limited partners with regard to how to vote. The limited partners
et seq. AktG, the treasury shares bought as a result of this
pass resolutions by simple majority when taking a decision on how
authorisation must not exceed 10 per cent of the Company’s share
they should vote at the Annual General Meeting of KION GROUP AG.
capital at any time. The Company may sell the purchased treasury
6. Appointment and removal of members of the
Executive Board; amendments to the articles
of incorporation
shares through a stock exchange or by means of an offer to all
shareholders. It may also sell the shares in return for a non-cash
consideration, in particular in connection with the acquisition of a
business, parts of a business or equity investments. In addition, the
treasury shares may be offered to employees of the Company or of
an affiliated company as part of an employee share ownership
Members of the Company’s Executive Board are appointed and re -
programme. The treasury shares can also be retired. Share buyback
moved in accordance with the provisions of sections 84 and 85 AktG
for trading purposes is prohibited.
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeDisclosures relevant to acquisitions 56
The authorisation may be exercised on one or more occasions,
In the event that a third party (with the exception of KKR and Goldman
for the entire amount or for partial amounts, in pursuit of one or more
Sachs, companies affiliated with them or funds or limited partner-
aims, by the Company, by a subsidiary or by third parties for the
ships / partnerships owned by them or that are advised or managed
account of the Company or the account of a subsidiary. At the choice
by them) acquires beneficial ownership of more than 50 per cent of
of the Executive Board, the shares may be purchased through the
all shares in KION GROUP AG, KION GROUP AG will be obliged to
stock exchange, by way of a public purchase offer made to all share-
submit an offer to acquire the aforementioned debt instruments at a
holders or by way of a public invitation to shareholders to tender their
price of 101 per cent of their nominal value. This offer must remain
shares.
valid for a minimum of 30 days from the date of the change of control
So far, the Company has only exercised this right when it
acquired 200,000 shares between 28 August and 26 September
2013. The intention is to offer these shares to staff at the Company
– Senior facility agreement dated 23 December 2006 (and
amended on several occasions thereafter), concluded between
and certain Group companies in 2014 as part of an employee share
KION Group GmbH (now KION Material Handling GmbH) and,
programme.
among others, the London branch of UniCredit Bank AG
The Company did not have any conditional or authorised capital
in 2013.
8. material agreements that the company has
signed and that are conditional upon a
change of control resulting from a takeover
bid, and the consequent effects
In the event that a third party (with the exception of KKR and Goldman
Sachs, companies affiliated with them or funds or limited partner-
ships / partnerships owned by them or that are advised or managed
by them) acquires beneficial ownership of more than 50 per cent of
all shares in KION GROUP AG, any loan facilities drawn down would
be immediately repayable and any that had not been drawn down
would be automatically cancelled.
In the event of a change of control resulting from a takeover bid,
certain consequences are set out in the following contracts
– KION Material Handling GmbH has entered into an agreement
with Volkswagen AG for the supply of internal combustion
concluded between Group companies of KION GROUP AG and
engines. This agreement includes a provision under which either
third parties:
– Covenant agreement dated 15 April 2011 in connection with
the €325,000,000 7.875 per cent senior secured notes
maturing in 2018, concluded between Deutsche Trustee
party may terminate the agreement without notice if there is a
change in ownership involving more than 50 per cent of the
shares in either case.
Company as trustee, KION Finance S.A. and KION Group
9. Compensation agreements that the
GmbH (now KION Material Handling GmbH).
– Covenant agreement dated 14 April 2013 in connection with
the €450,000,000 6.75 per cent senior secured notes maturing
in 2020 and the €200,000,000 senior secured floating rate
Company has signed with the Executive
Board members or employees and that will
be triggered in the event of a takeover bid
notes maturing in 2020 of KION Finance S.A., concluded
No such agreements have been concluded between the Company
between Deutsche Trustee Company Limited as trustee, KION
and its current Executive Board members or employees.
Finance S.A. and KION Group GmbH (now KION Material
Handling GmbH).
We keep the world moving.KION GROUP AG | Annual Report 2013
57
Remuneration report
This remuneration report forms an integral part of the group man-
mer KION Holding 1 GmbH and arising from their respective service
agement report for KION GROUP AG. In accordance with statutory
contracts with the various subsidiaries. The following information
requirements and the recommendations of the German Corporate
therefore provides a brief description of the Executive Board remu-
Governance Code as amended 13 May 2013 (DCGK), it explains the
neration arrangements initially in force in the period from 4 June to 28
main features of the remuneration system used for the Executive
June 2013 and then gives a detailed description of the Executive
Board and the Supervisory Board of the Company and also dis-
Board remuneration system applicable since 29 June 2013.
closes the remuneration paid to the individual members of the Exec-
utive Board and the Supervisory Board in return for the work that
essential features of the executive Board remuneration
they carried out on behalf of the Company and its subsidiaries in
system in the period 4 June 2013 to 28 June 2013
2013. Remuneration disclosures also include remuneration received
by members of the Company’s Executive Board and Supervisory
In the period between the effective date of the change in the legal
Board and third parties when they were members of the Executive
form of the Company to a public limited company and the first day of
Board or Supervisory Board of the former KION Holding 1 GmbH
trading in the Company’s shares on the Frankfurt Stock Exchange on
before new Executive Board service contracts were signed with
28 June 2013, the arrangements applied for the remuneration of the
KION GROUP AG for the performance of their duties at the Com-
members of the Executive Board remained the same as the arrange-
pany and its subsidiaries in 2013.
ments that had applied prior to 4 June 2013 under the service con-
EXECUtIVE BOARD REmUNERA tION
Remuneration system
tracts with the various subsidiaries relevant to the persons con-
cerned. The total remuneration paid to the members of the Executive
Board in this period comprised a non-performance-related salary
and non-performance-related non-cash benefits, performance-
related (variable) remuneration and pension entitlements.
Non-performance-related remuneration consisted of a fixed
annual salary (basic remuneration) and additional benefits. The fixed
annual salary was paid at the end of each month in twelve equal
At its meeting held on 25 April 2013, the Supervisory Board of the
instalments, the last payment being made for the full month in which
former KION Holding 1 GmbH adopted a resolution as part of the
the Executive Board service contract ended. The additional benefits
conversion of the Company into a public limited company to approve
essentially included use of a company car and the payment of premi-
the remuneration system for the future Executive Board of KION
ums for accident insurance with benefits at a typical market level.
GROUP AG and fix the remuneration to be paid to the individual
The performance-related remuneration was a variable remuner-
members of the Executive Board. This resolution was in line with the
ation component based on performance measured over one year. It
Human Resources Committee’s recommendation. The Supervisory
was structured differently for each individual Executive Board mem-
Board took care not only to ensure compliance with the require-
ber. In the case of Mr Riske and Dr Toepfer, who were employed by
ments of the German Stock Corporation Act (AktG) and the DCGK,
KION GROUP GmbH (now KION Material Handling GmbH) prior to
but also to ensure that the remuneration to be paid to the individual
the change in legal form of KION Holding 1 GmbH, there was a com-
members of the Executive Board was harmonised. Although the
bined performance and target-based bonus system based on two
Executive Board service contracts were to come into force on the
performance targets: adjusted earnings before interest, taxes and
effective date of the change in legal form, i.e. on 4 June 2013, the
amortisation (EBITA) and unlevered free cash flow (UFCF). For Mr
new remuneration system was conditional upon KION GROUP AG’s
Knoef, Mr Maurer and Mr Quek, the relevant bonus system was that
successful IPO and therefore only came into force on the day after
used by the Group companies in which they were a member of the
the first day of trading on the Frankfurt Stock Exchange on 28 June
management board up to their appointment to the Executive Board
2013. Up to that point, KION GROUP AG continued to use the remu-
of the Company and that was based on annual financial perfor-
neration arrangements applicable to the board members of the for-
mance targets of a varying nature weighted according to brand and
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeRemuneration report 58
Group criteria. Achievement of the targets for EBIT (40 per cent
of the KION Group, its business and financial situation, its perfor-
weighting), UFCF (also 40 per cent weighting) and revenue (20
mance and future prospects, the normal amount and structure of
per cent weighting) was measured in 2013.
executive board remuneration in comparable companies and the
In all bonus systems, the possible range for target achievement
internal salary structure. The Supervisory Board also took into
was 0 per cent to 200 per cent. If the targets derived from the annual
account the relationship between the Executive Board remuneration
budget were achieved in full, target achievement was 100 per cent.
and the remuneration paid to senior managers and the workforce of
The target achievement levels for each weighted Company target
the Company as a whole, including increases over the course of
were added together to give the total target achievement.
time. Other criteria used to determine remuneration included the
The pension entitlements consisted of contributions for retire-
remit and work to be carried out by the individual members of the
ment, invalidity and surviving dependants’ benefits. Specifically:
Executive Board. The remuneration system was converted with sup-
Mr Riske and Mr Knoef participated in a defined benefit scheme
port from external consultants working independently of the Execu-
funded entirely by the Company. This scheme was a final salary
tive Board and the Company.
scheme guaranteeing Mr Riske a retirement pension of up to
The total remuneration now paid to the Executive Board also
50 per cent of his final basic salary and Mr Knoef a retirement pen-
comprises a non-performance-related salary and non-perfor-
sion of up to 60 per cent of his final basic salary. Dr Toepfer and Mr
mance-related non-cash benefits, performance-related (variable)
Maurer also belonged to defined benefit schemes comprising two
remuneration and pension entitlements. When the variable remuner-
components fully funded by KION: a fixed basic pension to a maxi-
ation structure was defined, the emphasis was on creating a meas-
mum amount of €36,000 p.a. for Dr Toepfer and to a maximum
urement basis covering a number of years, thus providing the mem-
amount of €30,000 p.a. for Mr Maurer (the final amount in each case
bers of the Executive Board with an incentive to contribute to the
being dependent on the duration of the service contract) and a vari-
sustained and long-term growth of the Company. The structure also
able top-up pension based on 12 per cent of basic salary for Dr
takes into account both positive and negative performance.
Toepfer and 9 per cent of basic salary for Mr Maurer, from which a
In addition, the remuneration for all members of the Executive
fixed pension component could be calculated by multiplying the
Board is subject to upper limits on the amounts payable, both overall
amounts concerned by an age-related annuitisation factor each year.
and also in terms of the variable components.
Subject to participation in the deferred compensation model offered
The pension entitlements consist of entitlements in respect of
by the KION Group (KION pension plan), both Dr Toepfer and Mr
retirement, invalidity and surviving dependants’ benefits. The Super-
Maurer also receive a third component (referred to as the matching
visory Board regularly reviews the structure and appropriateness of
employer contribution): they were granted an additional Company
Executive Board remuneration.
contribution to be invested in the KION pension plan (up to a maxi-
mum of 6 per cent of basic salary for Dr Toepfer and up to a maxi-
non-performance-related remuneration
mum of 5 per cent of basic salary for Mr Maurer, depending on the
amount of deferred compensation); the amount concerned was con-
The Executive Board members of KION GROUP AG receive non-per-
verted into guaranteed pension capital by multiplying it by an age-de-
formance-related remuneration in the form of a fixed annual salary
pendent annuitisation factor each year. Mr Quek was not entitled to
(basic remuneration) and additional benefits. The fixed annual salary
a company pension.
is paid at the end of each month in twelve equal instalments, the last
payment being made for the full month in which the Executive Board
essential features of the executive Board remuneration
service contract ends. The additional benefits essentially comprised
system since 29 June 2013
use of a company car and the payment of premiums for accident
insurance with benefits at a typical market level.
Since the IPO, the remuneration of the Executive Board of KION
Additional special benefits have been agreed for Mr Quek
GROUP AG has been determined in accordance with the require-
because he has been sent from Singapore to China on foreign
ments of the AktG and the DCGK. It reflects the size and complexity
assignment.
We keep the world moving.KION GROUP AG | Annual Report 2013 59
Mr Quek’s remuneration is therefore structured as if he were lia-
The individual performance of the Executive Board members is
ble for taxes and social security contributions in Singapore. KION
rated using a discretionary performance multiple with a factor of
GROUP AG pays the additional taxes and social security contribu-
between 0.8 and 1.2. The factor is determined by the Supervisory
tions that Mr Quek incurs in China and Germany. In 2013, this amount
Board with reference to attainment of the individual targets defined
was €227,077. The additional benefits agreed with Mr Quek include
by the Supervisory Board in a target agreement form at the start of
the cost of trips home to Singapore for Mr Quek and his family, a
the year. The factor is applied to total target achievement for the
company car, rental payments in Xiamen and private health insur-
budget targets and results in payment of the individual target bonus
ance. In 2013, the special additional benefits for Mr Quek amounted
if the overall target attainment is 100 per cent. The amount paid as
to a total of €117,161. These special benefits will be granted for as
one-year variable remuneration is capped at 200 per cent of the tar-
long as Mr Quek’s designated place of work is Xiamen or until his
get bonus.
service contract with KION GROUP AG ends.
In the event that an Executive Board member is not entitled to
remuneration for the entire year on which the calculation is based,
performance-related remuneration
the remuneration is reduced pro rata temporis.
The performance-related remuneration components consist of a
multiple-year variable remuneration
variable remuneration component measued over one year and a var-
iable remuneration component measured over several years in the
The multiple-year variable remuneration component is structured in
form of a rolling performance share plan with a three-year term.
the form of a performance share plan. At the start of the three-year
performance period, a conditional entitlement to a certain target
one-year variable remuneration
number of performance shares is granted. This number is calculated
by dividing the allocation value (in euros) for the particular Executive
The one-year variable remuneration is a remuneration component
Board member by the fair value of one performance share at the time
linked to the business profitability and productivity of the KION
of grant. The number of preliminary performance shares defined in
Group in the relevant financial year. Its amount is determined by the
this way is adjusted depending on achievement of the two target val-
attainment of targets based on the following KPIs: earnings before
ues – total shareholder return (TSR) for KION shares compared with
interest, taxes and amortisation (EBITA), return on capital employed
the STOXX® Europe Total Market Index (TMI) Industrial Engineering
(ROCE), revenue and net debt. They are weighted as follows:
index and return on capital employed (ROCE) – over the perfor-
30 per cent for EBITA, 30 per cent for ROCE, 20 per cent for revenue
mance period. Each target has a 50 per cent weighting.
and 20 per cent for net debt. The target values for the financial com-
The possible range for target achievement for both elements is
ponents are derived from the annual budget and specified by the
0 per cent to 150 per cent. If KION shares outperform the STOXX®
Supervisory Board.
Europe TMI Industrial Engineering index by 10 per cent and the
The possible range for target achievement is 0 per cent to
ROCE targets defined each year on the basis of the budget are
200 per cent. If the targets derived from the annual budget are
achieved, total target achievement will be 100 per cent.
achieved in full, target achievement is 100 per cent. The target
achievement levels for the weighted Company targets (EBITA, ROCE,
revenue and net debt) are added together to give the total target
achievement.
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeRemuneration report 60
The amount paid for each tranche is determined by the final
The plan is a cash-settled long-term incentive plan that does not
number of performance shares multiplied by the price of the
include the right to receive any actual shares. The first payment
Company’s shares (average price over the preceding 60 trading
under the plan will be made in 2016.
days) at the end of the performance period. Depending on achieve-
Under the requirements of German accounting standard (GAS)
ment of the individual targets defined by the Supervisory Board at
17 and IFRS 2, the total expense arising from share-based payments
the start of the performance period (three-year target agreement
and the fair value of the performance share plan on the date of grant-
form), the Supervisory Board can use a discretionary factor to make
ing must be disclosed. As the conditional entitlements under the per-
a final adjustment to the calculation of the amount to be paid out at
formance share plan were only granted for the first time in 2013,
the end of the performance period by plus or minus 20 per cent,
there are no comparative prior-year figures to disclose >> TabLe 007
although the maximum payment may not exceed 200 per cent of the
allocation value.
performance share plan
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
total
Fair value of the
performance share plan
on the date of grant
number of performance
shares granted 1
Fair value per
performance share
on date of grant
€1,500,000
€1,000,000
€1,000,000
€830,000
€1,000,000
€5,330,000
73,710
49,140
49,140
40,786
49,140
261,916
€20.35
€20.35
€20.35
€20.35
€20.35
>> TabLe 007
total expense for
share-based
remuneration
in 2013
€349,975
€233,317
€233,317
€193,652
€233,317
€1,243,578
1 The target number of performance shares (PS) is calculated by dividing the allocation value by the fair value of one performance share. In this calculation, the number of performance shares is
rounded to the nearest whole number where necessary.
We keep the world moving.KION GROUP AG | Annual Report 2013 61
Prior to the planned IPO, Executive Board member Dr Thomas Toep-
For each of the ordinary members of the Executive Board, a fixed
fer was granted a special bonus (to be payable in two tranches)
annual contribution of €150,000 (€124,500 for Mr Quek) will be paid
dependent on a successful IPO and subject to the condition that Dr
into their pension accounts for the duration of the member’s period of
Toepfer remained employed by KION GROUP AG after the IPO for a
service on the Executive Board. Interest is paid on the pension
period of twelve months (for tranche 1) and 18 months (for tranche 2).
account at the prevailing statutory guaranteed return rate for the life
The amount of the bonus depends on the weighted average price of
insurance industry (applicable maximum interest rate for the calcula-
KION shares in the four weeks immediately preceding the payment
tion of the actuarial reserves of life insurers pursuant to section 2 (1)
of each tranche. On the basis of the share price of €30.73 as at
German Regulation on the Principles Underlying the Calculation of
31 December 2013, the fair value of the bonus as at the reporting
the Premium Reserve (DeckRV)) until an insured event occurs. If
date was approximately €1.5 million. The pro-rata expense for 2013
higher interest is generated by investing the pension account, it will be
ist €0.6 million. If, prior to the due dates for the payment of tranche 1
credited to the pension account when an insured event occurs (sur-
or tranche 2, Dr Toepfer dies, suffers permanent incapacity or is
plus). The standard retirement age for the statutory pension applies.
forced to leave the Company without good cause of his own making,
Once Executive Board members have reached their 62nd birthday,
he will remain entitled to payment of this bonus.In connection with
they are entitled to early payment of the pension. In the event of inva-
the provision of this special bonus entitlement, Dr Toepfer paid a
lidity or death, the contributions that would have been made until the
one-off capital contribution of €200,000 into the Company, which
age of 60 are added to the pension account, although only a maxi-
the Company has deducted from the net amount of a bonus for 2012
mum of ten contributions will be added. When an insured event
due to be paid to Dr Toepfer in 2013.
occurs, the pension is paid as a lump sum or, following a written
pension entitlements
request, in ten annual instalments.
termination benefits
KION GROUP AG grants its Executive Board members direct enti-
tlement to a company pension plan consisting of retirement, inva-
In line with the DCGK, all Executive Board service contracts provide
lidity and surviving dependants’ benefits. The defined benefit
for a severance payment equivalent to no more than two years’
entitlement for Gordon Riske, the Company’s Chief Executive
annual remuneration payable in the event of the contract being ter-
Officer, which had been granted in his original service contract,
minated prematurely without good cause. The amount of annual
was transferred to his Executive Board service contract. The ben-
remuneration is defined as fixed salary plus the variable remunera-
efit amounted to a maximum of 50 per cent of the most recent
tion elements, assuming 100 per cent target achievement and
fixed annual salary after the end of the tenth year of service based
excluding non-cash benefits and other additional benefits, for the
on his original service contract. For the other members of the
last full financial year before the end of the Executive Board service
Executive Board, the present value of the previous defined benefit
contract. If the Executive Board service contract was due to end
plan was transferred as a starting contribution for new pension
within two years, the severance payment is calculated pro rata tem-
arrangements in the form of a defined contribution plan. The new
poris. If a service contract is terminated for good cause for which the
defined contribution plan is structured as a cash balance plan.
Executive Board member concerned is responsible, no payments
are made to the Executive Board member in question. The Company
does not have any commitments for the payment of benefits in the
event of a premature termination of Executive Board contracts fol-
lowing a change of control.
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeRemuneration report 62
Executive Board members are subject to a post-contractual
non-compete agreement, pension benefits that Mr Riske receives
non-compete agreement of one year. In return, the Company pays
due to his previous work for other employers and income from other
the Executive Board member compensation for the duration of the
use of his working capacity (with the exception of remuneration for
non-compete agreement amounting to 100 per cent of his final fixed
work as a member of a supervisory or advisory board or a board of
salary. Other income of the Executive Board member is offset against
directors) will be offset against these transitional benefits.
the compensation.
If an Executive Board member suffers temporary incapacity, he
In the event that Mr Riske’s appointment is not extended for rea-
will receive for a period of six months a full fixed salary plus the one-
sons for which he is not responsible and he has not reached the
year variable remuneration. In the event of temporary incapacity for a
standard retirement age for the statutory pension or in the event that
further six months, the Executive Board member will receive 80 per
Mr Riske resigns for good cause before the end of his appointment
cent of his fixed salary, but only up to a point at which the service
or suffers permanent incapacity after his period of service as a result
contract is terminated.
of sickness, he will receive transitional benefits of €252,000 per
If an Executive Board member ceases to be employed by the
annum on the basis of previous contracts. During his current term of
Company as a result of death, he or his family members will be enti-
office, the amount of the transitional benefits will rise by €12,000
tled to the fixed monthly remuneration for the month in which the
each year up to a maximum amount of €300,000 per annum. Sever-
service contract ends and for the three subsequent months, but only
ance payments in the event of early termination of his appointment
up to the point at which the service contract would otherwise have
without good cause, compensation
for
the post-contractual
come to an end.
remuneration of executive Board members
Basic, non-performance-
related pay
other, non-performance-
related benefits 2
one-year performance-related
variable remuneration
multiple-year, performance-related, share-based remuneration
(long-term incentive) 3
total
Gordon Riske 1,4
Bert-Jan Knoef 1
Theodor Maurer 1
Ching Pong Quek 1
Dr Thomas Toepfer 1,4
Former Executive
Board members,
2012/2013 4,5
2013
€700,000
€440,761
€440,761
€480,566
€462,520
2012
€600,000
€0
€0
€0
€141,680
2013
€25,606
€21,310
€23,495
€123,502
€26,605
2012
€28,257
€0
€0
€0
€11,724
2013
€724,226
€283,483
€319,880
€350,520
€472,131
2012
€1,219,194
€0
€0
€0
€290,718
€10,145
€1,075,000
€1,226
€74,464
€7,023
€2,109,515
total for 2013
€2,534,753
€1,816,680
€221,744
€114,445
€2,157,263
€3,619,427
€5,330,000
€870,713
1 Mr Gordon Riske had been a member of the Executive Board of KION GROUP GmbH since 1 October 2007 and switched to the Executive Board of KION GROUP AG with effect from 4 June 2013.
Dr Thomas Toepfer had been a member of the Executive Board of KION GROUP GmbH since 1 September 2012 and switched to the Executive Board of KION GROUP AG with effect from 4 June 2013.
Mr Bert-Jan Knoef, Mr Theodor Maurer and Mr Ching Pong Quek had been members of the Executive Board of KION GROUP GmbH since 11 January 2013 and switched to the Executive Board
of KION GROUP AG with effect from 4 June 2013.
2 Other, non-performance-related benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
3 Fair value on the date of grant.
4 The value for one-year variable remuneration for 2013 also includes the difference between the 2012 bonus reserve and the actual bonus paid for 2012.
5 Former members of the Executive Board of KION Holding 1 GmbH.
performance
share plan
ipo bonus
ipo bonus
performance
share plan
2013
2012
2012
2013
€1,500,000
€1,000,000
€1,000,000
€830,000
€1,000,000
€0
€0
€0
€0
€0
€0
€870,713
€0
€0
€0
€0
€0
€0
€0
>> TabLe 008
2012
€1,847,451
€0
€0
€0
€444,122
2013
€2,949,832
€1,745,554
€1,784,136
€1,784,588
€2,831,969
€0
€0
€0
€0
€0
€0
€0
€18,394
€11,114,473
€3,258,979
€5,550,552
We keep the world moving.KION GROUP AG | Annual Report 2013
63
Remuneration paid to members of the Executive
Board in 2013
may vary by + / – 20 per cent of the variable remuneration. For
multiple-year variable remuneration, the fair value at the date of grant
is shown as a preliminary notional variable. The first payment will be
The total remuneration granted to Executive Board members for
made in 2016, provided the Company’s long-term targets are
2013, including the remuneration paid for the period when they were
achieved.
members of the Executive Board of KION Holding 1 GmbH was
Excluding the period in which they were members of the Execu-
€11,114,473. Of this amount, €2,534,753 was attributable to fixed
tive Board of KION Holding 1 GmbH, i.e. for the period since the IPO
non-performance-related remuneration components, €8,357,976 to
on 28 June 2013 only, the total remuneration granted to Executive
variable one-year and multiple-year performance-related remunera-
Board members for 2013 was €8,671,538. Of this amount, €1,412,752
tion components and €221,744 to other non-performance-related
was attributable to fixed non-performance-related remuneration
benefits. The figure shown for one-year variable remuneration is
components, €7,143,197 to variable one-year and multiple-year per-
based on a preliminary total target achievement rate calculated using
formance-related remuneration components and €115,589 to other
preliminary earnings figures at the beginning of 2014. This prelimi-
non-performance-related benefits.
nary variable remuneration for each Executive Board member is also
The additional benefits were measured at the value calculated
subject to adjustment by the Supervisory Board in line with the indi-
for tax purposes. >> TabLe 008
vidual performance of the Executive Board member. This adjustment
>> TabLe 008
2012
€1,847,451
€0
€0
€0
€444,122
2013
2012
2012
2013
€2,949,832
€1,745,554
€1,784,136
€1,784,588
€2,831,969
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€18,394
€11,114,473
€3,258,979
€5,550,552
remuneration of executive Board members
Basic, non-performance-
other, non-performance-
one-year performance-related
related pay
related benefits 2
variable remuneration
multiple-year, performance-related, share-based remuneration
(long-term incentive) 3
total
performance
share plan
ipo bonus
performance
share plan
ipo bonus
Gordon Riske 1,4
Bert-Jan Knoef 1
Theodor Maurer 1
Ching Pong Quek 1
Dr Thomas Toepfer 1,4
Former Executive
Board members,
2012/2013 4,5
2013
€700,000
€440,761
€440,761
€480,566
€462,520
2012
€600,000
€0
€0
€0
2013
€25,606
€21,310
€23,495
€123,502
€26,605
2012
€28,257
€0
€0
€0
2013
€724,226
€283,483
€319,880
€350,520
€472,131
2012
€1,219,194
€0
€0
€0
€141,680
€11,724
€290,718
2013
€1,500,000
€1,000,000
€1,000,000
€830,000
€1,000,000
€0
€0
€0
€0
€870,713
€10,145
€1,075,000
€1,226
€74,464
€7,023
€2,109,515
total for 2013
€2,534,753
€1,816,680
€221,744
€114,445
€2,157,263
€3,619,427
€0
€0
€5,330,000
€870,713
1 Mr Gordon Riske had been a member of the Executive Board of KION GROUP GmbH since 1 October 2007 and switched to the Executive Board of KION GROUP AG with effect from 4 June 2013.
Dr Thomas Toepfer had been a member of the Executive Board of KION GROUP GmbH since 1 September 2012 and switched to the Executive Board of KION GROUP AG with effect from 4 June 2013.
Mr Bert-Jan Knoef, Mr Theodor Maurer and Mr Ching Pong Quek had been members of the Executive Board of KION GROUP GmbH since 11 January 2013 and switched to the Executive Board
of KION GROUP AG with effect from 4 June 2013.
3 Fair value on the date of grant.
2 Other, non-performance-related benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
4 The value for one-year variable remuneration for 2013 also includes the difference between the 2012 bonus reserve and the actual bonus paid for 2012.
5 Former members of the Executive Board of KION Holding 1 GmbH.
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeRemuneration report
64
There were also termination benefits of €6,001,370 and share-based
The total remuneration paid to former members of the Executive
remuneration of €39,050 for members of the Executive Board in
Board in 2013 amounted to €207,561 (2012: €165,396). Provisions
2012, which were not included in the table above.
for defined benefit obligations to former members of the Executive
The table below shows the contributions (additions to the plan)
Board or their surviving dependants amounting to €5,171,114 (2012:
attributable to each individual Executive Board member and the cor-
€3,635,970) were recognised in accordance with IAS 19.
responding present values. >> TabLe 009
In the year under review, no advances were made to members
of the Executive Board, and no loans were granted.
pensions
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
>> TabLe 009
2013 service cost
2012 service cost
present value (DBo)
31 Dec 2013
present value (DBo)
31 Dec 2012
€422,727
€89,965
€56,967
€0
€58,758
€299,605
€0
€0
€0
€5,714
€3,180,565
€1,642,647
€492,380
€265,443
€341,416
€2,225,444
€0
€0
€0
€89,670
SUPERVISORY BOARD REmUNERA tION
Remuneration system
Additional remuneration is paid for being a member or chairman
of a committee, although this does not apply in the case of the Nom-
ination Committee or the Mediation Committee pursuant to section
27 (3) German Codetermination Act (MitbestG). The annual remuner-
ation for members of a committee is €8,000, while the chairman of a
committee receives double this amount.
The Supervisory Board’s remuneration is defined in article 18 of
If a member of the Supervisory Board or one of its committees
KION GROUP AG’s articles of incorporation. Members of the Super-
does not hold the position for a full financial year, remuneration is
visory Board receive fixed remuneration plus reimbursement of out-
reduced pro rata temporis.
of-pocket expenses. The annual remuneration amounts to €45,000
The members of the Supervisory Board receive an attendance
for ordinary members of the Supervisory Board, €75,000 for the
fee of €1,250 per day for meetings of the Supervisory Board and its
deputy chairman of the Supervisory Board and €105,000 for the
committees, although they only receive this amount once if they
chairman of the Supervisory Board.
attend more than one meeting on the same day.
We keep the world moving.KION GROUP AG | Annual Report 2013 65
The Company reimburses each member for any VAT incurred in
on 4 June 2013 only, the total remuneration paid to the Supervisory
connection with his remuneration.
Board members for 2013 was €745,826. Of this amount, €649,703
A D&O insurance policy without an excess has been taken out
was attributable to remuneration for activities carried out by the
for the members of the Supervisory Board.
Supervisory Board. The remuneration paid for committee work
Remuneration paid to members of the Super-
visory Board in 2013
totalled €96,123. The table below shows the remuneration paid to
each Supervisory Board member for 2013, including the remunera-
tion paid for the period when they were members of the Supervisory
Board of KION Holding 1 GmbH. >> TabLe 010
The total remuneration paid to Supervisory Board members for
In 2013, no company in the KION Group paid or granted any remu-
2013, including the remuneration paid for the period when they were
neration or other benefits to members of the Supervisory Board for
members of the Supervisory Board of KION Holding 1 GmbH, was
services provided as individuals, such as consulting or brokerage
€1,207,018. Excluding the remuneration for the period in which they
activities. No advances or loans were granted to members of the
were members of the Supervisory Board of KION Holding 1 GmbH,
Supervisory Board either.
i.e. for the period since the effective date of the change of legal form
supervisory Board remuneration
>> TabLe 010
Dr John Feldmann (Chairman)
Joachim Hartig (Deputy Chairman)
Holger Brandt
Dr Alexander Dibelius
Denis Heljic
Dr Martin Hintze
Johannes P. Huth
Thilo Kämmerer
Dr Roland Köstler
Jiang Kui
Özcan Pancarci
Kay Pietsch
Hans Peter Ring
Alexandra Schädler
Silke Scheiber
Tan Xuguang
Hans-Peter Weiß
total
Fixed remuneration
€102,356
€74,188
€38,671
€46,019
€29,783
–
€56,578
€46,019
€32,522
€56,578
€29,783
€46,019
€30,810
€13,351
€56,578
€37.879
€46,019
Committee
remuneration
€14,710
€5,503
€5,503
€4,903
–
€1,539
€5,503
€3,104
€6,029
–
€10,407
€9,807
€2,373
€770
–
–
attendance fees
total remuneration
€48,493
€46,117
€23,500
€31,240
€10,413
–
€21,220
€34,215
€31,240
€26,701
€8,925
€41,060
€8,925
€2,975
€28.898
€1.829
€27,965
€165,559
€125,808
€62,171
€82,762
€45,099
–
€79,338
€85,737
€66,865
€89,308
€38,708
€97,485
€49,542
€18,699
€86.246
€39.708
€73,984
€743,151
€70,152
€393,715
€1,207,018
We keep the world moving.KION GROUP AG | Annual Report 2013Corporate GovernanCeRemuneration report Group manaGement report
Contents
67
Group management report
Fundamentals oF the KIon Group
Profile of the KION Group
Strategy of the KION Group
Management system
FInancIal report
Macroeconomic and sector-specific conditions
Business performance
Financial position and financial performance
Non-financial performance indicators
events aFter the reportInG date
outlooK, opportunIty and rIsK report
Outlook
Risk report
Opportunity report
68
68
75
77
79
79
82
83
102
110
111
111
112
120
KION GROUP AG | Annual Report 2013
We keep the world moving.
68
Fundamentals of the KION Group
PROFIle OF the
KION GROUP
Organisational structure
As far as the Company is aware, Weichai Power indirectly held a
stake of 30.0 per cent, while Superlift Holding held 48.6 per cent as
at 31 December 2013. Transactions after the 2013 reporting date
caused Superlift Holding’s stake to fall to 34.5 per cent and, as far as
the Company is aware, Weichai Power’s indirect stake to rise to
33.3 per cent (see ‘Events after the reporting date’ on page 110).
The KION Group’s segment structure did not change in the
The KION Group began a new chapter in its history when its parent
reporting year (see page 73).
company, KION GROUP AG, was successfully floated on the stock
market on 28 June 2013. The IPO and a number of accompanying
measures have resulted in substantial changes to the Group’s
Management and control
organisational structure and shareholder structure.
KION Group Holding 1 GmbH, the strategic management
corporate governance
holding company of the KION Group, was converted into KION
GROUP AG before the IPO. Since then, it has indirectly held all
The KION Group follows generally accepted standards of sound,
shares in KION Material Handling GmbH (formerly KION GROUP
responsible corporate governance. The German Corporate Govern-
GmbH), the operational parent company of the KION Group.
ance Code (DCGK) provides the framework for management and
A total of 17.5 million shares – equating to 17.7 per cent of the
control. As required by section 289a of the German Commercial
share capital – were placed with new investors. Of this number,
Code (HGB), the corporate governance standards that the Group
17.2 million new shares originated from a capital increase in June
applies are set out in the declaration on corporate governance. This
2013, while 0.3 million shares came from the stake held by existing
declaration also contains the comply-or-explain statement pursuant
shareholder Superlift Holding S.à r.l., Luxembourg, as an over-
to section 161 German Stock Corporation Act (AktG), which was
allotment option.
issued by the Executive Board and Supervisory Board of KION
KION GROUP AG’s IPO was accompanied by two capital
GROUP AG on 19 December 2013, and the corporate governance
increases:
– Weichai Power (Luxembourg) Holding S.à r.l., Luxembourg,
report pursuant to section 3.10 of the German Corporate Govern-
ance Code, which also provides information about the compliance
standards in the Group. The declaration on corporate governance
acquired 13.7 million new shares immediately before completion
can be viewed and downloaded on the Company’s website
of the IPO. This company is a subsidiary of Weichai Power Co.
(kiongroup.com/comply_statement). It also forms part of this annual
Ltd. (referred to below as Weichai Power), which is a strategic
report.
anchor shareholder of KION GROUP AG.
– Also before completion of the IPO, Superlift Holding S.à r.l.,
The essential features of the remuneration system are described
in the remuneration report, which is part of the 2013 group manage-
Luxembourg, (referred to below as Superlift Holding) acquired
ment report and can be found on pages 57 to 65 of the annual
4.0 million shares by way of converting an existing loan into
report. The total amounts for Executive Board remuneration and
equity and transferring the shares in Superlift Funding. The
Supervisory Board remuneration are reported in the notes to the
shareholders of Superlift Holding are investment funds that are
consolidated financial statements (note [43]).
advised by group companies of The Goldman Sachs Group, Inc.
(Goldman Sachs) and companies that are advised by or affiliated
disclosures relevant to acquisitions
with Kohlberg Kravis Roberts & Co. L.P. (KKR).
The disclosures relevant to acquisitions (pursuant to section 315 (4)
HGB) together with the explanatory report form an integral part of the
We keep the world moving.KION GROUP AG | Annual Report 2013 69
group management report and can be found on pages 53 to 56 of
members to 16 members when the legal form of the Company was
the annual report.
executive Board
changed in advance of the IPO. On 5 June 2013, Hans Peter Ring
and Tan Xuguang were elected as shareholder representatives.
Hans Peter Ring qualifies as both an independent member within the
meaning of clause 5.4.2 of the German Corporate Governance Code
Since 4 June 2013, the Executive Board of KION GROUP AG has
and as an independent member with expertise in the fields of
been responsible for the operational management of the KION
accounting and auditing as required by section 100 (5) AktG. Denis
Group and is the successor to the Executive Board of the former
Heljic and Özcan Pancarci were appointed as additional members
KION GROUP GmbH. As at 31 December 2013, the responsibilities
representing the Company’s employees. Alexandra Schädler has
of the Executive Board members were allocated as follows:
been an employee representative since 2 October 2013. She
Gordon Riske, Chief Executive Officer (CEO), is responsible,
replaced Dr Roland Köstler, who stepped down from the Super-
among other things, for the strategic management of the Group,
visory Board on 1 October 2013. The composition of the Supervisory
communications, governance and compliance, internal audit, KION
Board is presented in note [44] in the notes to the consolidated
Warehouse Systems and the North and South America regions.
financial statements.
Dr Thomas Toepfer, Chief Financial Officer (CFO), is in charge of
The Supervisory Board advises the Executive Board in its
finance, the Financial Services (FS) segment, IT activities, mergers &
handling of significant matters and business transactions. In order to
acquisitions, investor relations, purchasing, human resources, legal
increase efficiency and meet the standards required for a publicly
affairs and data protection. He is also the Company’s Labour
listed company, the Supervisory Board reformulated its committees
Relations Director.
at the end of May 2013. Consequently, the Mediation Committee
Bert-Jan Knoef is CEO and Labour Relations Director of
pursuant to section 27 (3) MitbestG and the Audit Committee, which
the brand company STILL GmbH. He oversees all cross-brand
were already in existence, have been supplemented by the
logistics activities and manages the intra-group logistics service
Nomination Committee and the Executive Committee. When the
provider, Urban.
new members were appointed to the committees on 27 June 2013,
Theodor Maurer is CEO and Labour Relations Director of the
Hans Peter Ring took over as chairman of the Audit Committee.
brand company Linde Material Handling GmbH and holds cross-
Before the IPO, the Supervisory Board signed new contracts of
brand responsibility for quality, facility management, health, safety
employment with all Executive Board members. At the same time, the
and the environment.
term of CEO Gordon Riske’s new contract was extended until 2017.
Ching Pong Quek is Chief Asia Pacific Officer and heads up the
KION Group’s entire Asia business.
Until his departure on 11 January 2013, Klaus Hofer was
Business model
responsible for human resources, legal affairs, health & safety and
internal audit. He was also the KION Group’s Labour Relations
The KION Group has an integrated business model that incorporates
Director. His responsibilities were transferred to Gordon Riske,
products and services and covers every step of the value chain so
Dr Thomas Toepfer and Theodor Maurer.
that it can offer comprehensive support to customers worldwide:
The Executive Board maintains a relationship of trust with, and is
product development, manufacturing, sales and logistics, spare
monitored by, the Company’s Supervisory Board.
parts business, truck rental and used trucks, financial services and
supervisory Board
system and software solutions.
The KION Group earns most of its consolidated revenue from
the sale of industrial trucks. In the reporting year, new products
The Supervisory Board, which was formed in accordance with the
accounted for 56.1 per cent of the Group’s revenue, while the stable
German Codetermination Act (MitbestG), was increased from twelve
and profitable service business generated 43.9 per cent.
Group manaGement reportFundamentals of the KION GroupWe keep the world moving.KION GROUP AG | Annual Report 2013 70
The KION Group operates a multi-brand strategy involving the
business strengthens customer relationships and therefore con-
three global brands Linde, STILL and Baoli plus the three regional
tributes to new truck sales.
brands Fenwick, OM STILL and Voltas MH.
This requires an extensive global sales and service network. The
Worldwide research and development activities (R&D) enable
KION brand companies have more than 1,200 outlets staffed by
the KION Group to consolidate and extend its technology leadership.
almost 13,000 service employees in over 100 countries worldwide.
The Company plays a pioneering role in hydrostatic and diesel-
Approximately half of them are employed by the KION Group. In
electric drive systems and in innovative energy-efficient and
other cases, the Company relies on external dealers.
low-emission drive technologies (electric drives, hybrid drives, fuel
In established markets, services are often provided in the con-
cells). As at the end of 2013, the KION Group employed a total of
text of leasing arrangements and are agreed over the entire term of
944 developers, of whom 232 worked in Asia. Development costs
the lease. There are also individual orders for repairs and mainte-
corresponded to 2.5 per cent of consolidated revenue in the year
nance work as well as for spare parts.
under review, putting the KION Group above the industry average.
In addition, the KION Group looks after entire customer fleets,
The focus of the Group’s R&D activities is described on page 105.
using special fleet management software to monitor the trucks in the
The KION Group offers customers tailor-made solutions and
fleets.
only makes trucks specifically to order. A large proportion of new
In the year under review, 26.1 per cent of consolidated revenue
trucks are fitted with technical components developed especially for
was attributable to services in connection with maintenance, repairs,
a particular order. The Linde and STILL brands’ premium positioning
fleet management and spare parts.
is underpinned by advantages for customers in terms of total cost of
The service business is complemented by rental truck and used
ownership (TCO). The trucks’ hallmarks are cost-efficiency, high pro-
truck business, allowing peaks in capacity requirements to be met
ductivity, comparatively low maintenance and high residual values.
and customers to be supported after their leases have expired.
New truck sales increase the installed base in the market, pro-
Trucks can be rented on a flexible, short-term basis, for example.
viding a basis for service business (spare parts, maintenance and
This business is integrated into the LMH and STILL segments in
repairs) within the KION Group’s integrated business model. The
terms of its operations and is financed internally by Financial
brand companies also have extensive used truck and rental truck
Services.
businesses.
Once a lease has expired, the truck is serviced at a recondition-
New truck business is supported by financial services in many
ing centre before being sold as a used truck.
markets. The KION Group has therefore integrated its financial
services offering into the truck sales process. In the main sales
markets with a high volume of financing and leasing, financial
Market and influencing factors
services are handled by legally independent financial services
companies. Their activities include the internal financing of the brand
Industrial trucks are deployed for a wide variety of applications.
companies’ short-term rental fleets and long-term leasing to
Material handling products are used for tasks such as loading and
customers.
unloading, linking production steps and moving pallets in logistics
Many financing agreements are linked to service contracts.
centres or in retail / wholesale operations. They therefore form part of
Financial services are therefore a further cornerstone of the service
the production processes and supply chains of many different
business within the integrated business model.
industries around the world.
In the reporting year, approximately 50 per cent of revenue from
Measured in terms of unit sales of new trucks, the growth of the
new trucks involved some form of financing via KION companies,
market for industrial trucks has exceeded global economic growth
external banks or dealers.
over the past ten years (2003-2013), rising at an average of around
An installed base of some 1.2 million trucks worldwide enables
5.0 per cent per year. In the KION Group’s view, the significant
the KION Group to run a high-margin service business. The service
influencing factors for this market growth are as follows:
We keep the world moving.KION GROUP AG | Annual Report 2013 71
– Industrialisation in China and other emerging markets is fuelling
capital expenditure. The need for new infrastructure supports
Market position
economic growth and is creating disproportionately strong
The KION Group is one of the world’s leading manufacturers of
demand for inexpensive industrial trucks.
– As globalisation gathers pace, the value chain is becoming
industrial trucks. Measured in terms of units sold, it consolidated its
position as the number one in Europe and the number two world-
increasingly segmented and additional transport services are
wide in the year under review. Based on the sales figures for 2013,
required between the individual steps of the value chain.
– Companies are becoming more specialised and focusing on their
the KION Group’s market share was 14.1 per cent worldwide and
35.3 per cent in western Europe. The KION Group is ranked third in
core competences, leading to the fragmentation of supply chains.
China behind two domestic manufacturers, making it the largest
The growth of internet-based commerce is making the logistics
foreign producer. It is one of the leading manufacturers in Brazil – the
processes for consumer products more segmented and more
largest individual market in South America – and is the market leader
complex. Both of these factors push up demand for transport
for electric forklift trucks and warehouse trucks. The Company is
services.
– The large number of trucks in use in mature markets provides a
also among the leading providers in eastern Europe and India.
The product portfolio includes counterbalance trucks powered
strong base for replacement business. The KION Group esti-
by an internal combustion engine or electric drive, warehouse tech-
mates that around 90.0 per cent of sales in western Europe are
nology (ride-on and hand-operated industrial trucks) and towing
currently accounted for by replacement investments.
– Measured in terms of units ordered, around 46.0 per cent of the
global market was attributable to counterbalance trucks with an
vehicles for industrial applications. It covers all load capacities, from
1 tonne to 18.0 tonnes.
Revenue from the high-margin service business stabilises con-
internal combustion engine in 2013. Counterbalance trucks with
solidated revenue and reduces dependency on market cycles. The
an electric drive accounted for around 16.0 per cent and ware-
KION Group makes use of its own sales and service network and, in
house technology for 38.0 per cent. In western Europe and other
some countries, draws on the services of external dealers.
highly developed economies, counterbalance trucks with an
The industrial trucks are manufactured in strategically favourable
electric motor and warehouse technology make up the bulk of the
locations within the global network. Owing to the particular require-
market volume, whereas the focus in China and other emerging
ments of its business, the KION Group manufactures major compo-
markets is frequently on simple counterbalance trucks with an
nents itself – notably lift masts, axles, counterweights and safety
internal combustion engine.
equipment – in order to ensure security of supply and the availability
The products in the premium price segment, which is the KION
of spare parts for critical components. Other components – such as
Group’s main area of activity, are characterised by an above-aver-
electronic components, rechargeable batteries, engine components
age useful life, high productivity, comfort and high performance,
and industrial tyres – are purchased through the KION Group’s
combined with lower running and energy costs. According to the
global procurement organisation. Long-term supply agreements for
KION Group’s estimates, this segment accounts for roughly one
hydraulic components have also been signed with Weichai Power
in four new trucks, with a higher proportion in developed markets.
and its controlling interest Linde Hydraulics GmbH & Co. KG (referred
Measured in terms of the number of units ordered, the middle
to below as Linde Hydraulics), in which the KION Group holds a
price segment (value) is almost twice as big. The economy price
30.0 per cent stake as a strategic investment. The KION Group oper-
segment, which is particularly important in emerging markets,
ates a total of 14 production facilities in eight countries. >> Table 011
accounts for around a quarter of the global market.
As a result of the KION Group’s global presence and integrated
business model, its financial situation is influenced not only by
economic conditions but also by exchange rates and changes in
commodity prices.
Group manaGement reportFundamentals of the KION GroupWe keep the world moving.KION GROUP AG | Annual Report 2013
72
production sites of the KIon Group
>> Table 011
location
products / use
linde material handling
Germany
Aschaffenburg
Weilbach
Kahl
France
Châtellerault
czech republic
Český Krumlov
united states
Summerville
china
Xiamen
Jingjiang
stIll
Germany
Hamburg
Reutlingen
Geisa
Italy
Luzzara
Brazil
Counterbalance trucks with IC engine or electric drive, warehouse technology
Component production
Spare parts warehouse, component production
Warehouse technology
Component production
Counterbalance trucks with IC engine or electric drive, warehouse technology
Counterbalance trucks with IC engine or electric drive, container handlers and extra heavy-duty
trucks, warehouse technology
Counterbalance trucks with IC engine or electric drive, warehouse technology
Counterbalance trucks with IC engine or electric drive, warehouse technology, components
Very narrow aisle trucks
Component production
Warehouse technology
Indaiatuba / São Paulo
Counterbalance trucks with IC engine, warehouse technology
other (voltas mh)
India
Pune
Counterbalance trucks with IC engine or electric drive, warehouse technology
We keep the world moving.KION GROUP AG | Annual Report 2013 73
the segments and their products and services
For internal management purposes, the KION Group has divided its
business into operating segments that correspond to the reportable
The KION Group is represented in the market by three global brands –
segments, as required by international financial reporting standards
Linde, STILL and Baoli – and three regional brands: Fenwick (France),
(IFRS 8).
OM STILL (Italy) and Voltas MH (India). While the brand companies
have full operational and commercial responsibility within their mar-
kets, KION GROUP AG is the strategic management holding com-
pany and is responsible for the groupwide strategy and groupwide
business standards. >> Table 012
segments 2013*
in € million
LMH
STILL
Financial Services
Other
Consolidation / reconciliation
total
>> Table 012
revenue
adjusted eBIt 1
employees 2
2013
2,881.1
1,717.5
539.4
235.1
– 878.5
4,494.6
2012
2,965.4
1,676.6
509.3
250.9
– 842.4
4,559.8
2013
309.1
123.9
0.7
73.5
– 90.6
416.5
2012
301.0
122.2
1.4
44.4
– 60.6
408.3
2013
13,776
7,704
118
675
–
2012
13,148
7,253
112
702
–
22,273
21,215
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011); Revenue and Adjusted EBIT were aligned due to the sale of the Hydraulics Business
1 Adjusted for KION acquisition items and one-off items
2 Number of employees in full-time equivalents as at 31 December
Group manaGement reportFundamentals of the KION GroupWe keep the world moving.KION GROUP AG | Annual Report 2013 74
linde material handling (lmh) segment
Financial services (Fs) segment
The Linde Material Handling (LMH) segment encompasses the
The purpose of the Financial Services (FS) segment is to act as an
Linde, Fenwick and Baoli brands.
internal funding partner for LMH and STILL, providing finance solu-
Linde is a global premium brand and a technology leader.
tions that promote sales. FS activities include the internal financing of
Among its other selling points, it has decades of experience with
the short-term rental business of the LMH and STILL operating seg-
hydrostatic drive technology and meets customers’ highest require-
ments, the financing of long-term leasing business for external cus-
ments regarding technology, efficiency, functionality and design. The
tomers of the KION Group and the related risk management. In the
product portfolio ranges from warehouse trucks to extra heavy-duty
large sales markets with a high volume of financing and leasing, this
trucks and caters to all of the major application areas. Linde has
business is handled by legally independent FS companies.
been developing and manufacturing electric drive systems for
When long-term leasing business is being conducted, FS itself
decades and makes the resulting expertise available to external
acts as the contractual partner to external customers and offers
customers for use in a variety of applications.
various financing models.
In France, Linde products are sold under the Fenwick brand.
Operational responsibility for the short-term rental business
The Baoli brand covers the value and economy segments in
(short-term fleet) lies with the LMH and STILL brand segments. FS
China and other growth markets in Asia, eastern Europe, the Middle
acts as the contractual partner to the brand segments, providing
East, Africa and Central and South America.
the financing for this short-term fleet. FS refinances both long-term
leasing with end customers and the short-term fleet mostly on the
stIll segment
basis of sale and leaseback agreements.
In addition, the bulk of sales financing for external customers is
The STILL and OM STILL brands are grouped in the STILL segment.
offered indirectly, with an external leasing company to which the
STILL is predominantly a global premium provider of trucks with
business is referred by the KION Group acting as lessor rather than
electric and diesel-electric drives. It mainly focuses on the European
the KION Group. The financial services provider purchases the truck
and Latin American markets.
from the KION Group and provides the finance to the end customer.
The segment’s portfolio consists of forklift trucks and ware-
The KION Group carries out the majority of the servicing for the truck
house trucks plus associated services. STILL has also positioned
and, once the financing has expired, assists with its reconditioning
itself as a leading provider of intelligent intralogistics solutions, offer-
and remarketing.
ing trucks and fully integrated warehouse systems, including auto-
mation and fleet management solutions.
other segment
The Other segment mainly comprises holding companies and ser-
vice companies, the latter providing cross-segment services such as
IT and logistics. The Indian subsidiary Voltas Material Handling Pvt.
Ltd. (referred to below as Voltas MH) also belongs to this segment.
Voltas MH manufactures diesel trucks and electric forklift trucks as
well as warehouse trucks for the Indian market. It has a network of
more than 50 dealers providing sales and service.
We keep the world moving.KION GROUP AG | Annual Report 2013 75
StRAteGy OF the KION GROUP
2. Expand the range of services in European markets and in growth
regions
The KION Group’s strategy is centred on international growth and
The KION Group is continually extending its portfolio of services and
strong profitability. The aim is to seize the opportunities presented by
improving their quality at every stage of the product lifecycle. This
the attractive conditions in the global material handling market and to
includes servicing, maintenance and spare parts as well as fleet
comprehensively and sustainably harness them for the benefit of
management solutions, intralogistics processes, efficient supply
shareholders while managing risk at all times. Building on their lead-
chains and IT systems. Financial services are also a key component
ing position in western Europe and in the premium price segment,
of the service portfolio. The KION Group has an installed base of
the companies of the KION Group want to increase their market
around 1.2 million trucks from which to expand its service business.
share in the core markets and in fast-growing markets outside western
The Company also intends to increase its market share by, for exam-
Europe in future. This is accompanied by a greater presence in the
ple, opening additional service outlets in attractive growth markets
value and economy price segments. The crucial requirement is that
and stepping up the short-term rental business. It is expanding its
they offer superior customer benefits in all regions and price seg-
service business in the major sales region of China, where service
ments. That is why the KION Group is securing its position as a lead-
revenue has more than doubled since 2008 and now accounts for
ing technology provider by investing heavily in research and develop-
about a quarter of total revenue in China. The target is for service
ment. It operates cost-efficiently throughout the value chain and
business to continue to contribute approximately 40.0 per cent of
applies its solid service model as a global benchmark.
revenue over the next few years. This will stabilise business perfor-
mance, reduce susceptibility to economic downturns and boost
profitability.
Growth-oriented strategy
1. Continue to strengthen the KION Group’s leading position in west-
ern European core markets by investing in research and develop-
The KION Group wants to take full advantage of buoyant demand in
3. Harness the full market potential of growth regions
ment
the BRIC countries (Brazil, Russia, India, China) and other emerging
markets. Another focus is the North American market, which offers
The KION Group is consolidating its position as the number one in
comparatively high growth potential. That is why the Company is
Europe’s industrial truck market with customer-focused technologi-
launching region-specific products in the value and economy
cal innovations and a high proportion of trucks with customer-
segments and strengthening its local production and sales network.
specific equipment. In recent years, the proportion of revenue spent
To achieve its strategic objectives, the KION Group is making
on research and development has been above the industry average
targeted investments in production capacity, product development
and stood at 2.5 per cent in the year under review. The KION Group
and the sales and service network. It also continually analyses the
aims to increase customer benefits in all price segments by introduc-
market and, if necessary, weighs up whether to acquire other
ing innovative drive systems, advanced ergonomics, intelligent
companies. The strategic partnership entered into with Weichai
intralogistics solutions and more.
Power has already begun to strengthen the KION Group’s position in
China and is expected to help in harnessing the potential of other
Asian markets, while Voltas MH is opening up access to the Indian
volume market.
The range of products and services is tailored to region-specific
requirements. To this end, the KION Group operates a multi-brand
strategy in the different regions. Region-specific products based on
low-cost product platforms are the preferred option in the emerging
Group manaGement reportFundamentals of the KION GroupWe keep the world moving.KION GROUP AG | Annual Report 2013 76
markets of Asia, Central America and South America, where the
6. Continually improve operational performance and robustness
Baoli and Voltas MH brand companies play a key role. Other external
opportunities for growth are examined on an ongoing basis, includ-
There are also a number of research and development initiatives
ing in relation to the sales and service network.
aimed at cutting costs, improving quality and speeding up the
efficiency-oriented strategy
development process. The KION Group also adapts products to
country-specific requirements so that they can be launched
successfully in those countries. Over the next few years, it plans to
increase its purchasing volume from emerging markets from 26.9 per
4. Optimise production and thereby reduce costs
cent in 2013 to as much as 40.0 per cent. The strategic partnership
with Weichai Power will contribute to this significantly.
Over the past few years, the KION Group has streamlined its produc-
Processes in all functions are also constantly analysed to identify
tion capacity in developed markets, bringing about improvements to
potential for improvement. STILL, for example, restructured the back
capacity utilisation and cost efficiency. At the same time it has
office of its regional branches in Scandinavia after conducting such
created new capacity in Brazil, India and China. The aim is to
an analysis.
continue to monitor the degree of inhouse production as well as to
increasingly manufacture trucks locally to serve the emerging
markets. The same is happening with product development, particu-
larly for the value and economy price segments. The development
site in China, which was expanded again in 2013, is playing a key role
here.
5. Leverage groupwide synergies
Although the brand companies in the KION Group are largely respon-
sible for their own market activities, the KION Group harnesses
groupwide synergies and uses resources efficiently by centralising
certain
functions. Central departments are
responsible
for
purchasing, quality and production control, logistics, financial
services and IT. This makes it possible to establish best practice
across the Group. In product development, a cross-brand, cross-
regional modular and platform strategy enables a greater number of
common parts, bringing advantages in terms of product costs and
development costs yet retaining distinct identities for each brand.
We keep the world moving.KION GROUP AG | Annual Report 2013
77
MANAGeMeNt SySteM
Key performance indicators (KPIs)
The KION Group’s strategy, which centres on value and growth, is
reflected in how the Company is managed. It uses four main key per-
formance indicators (KPIs) to continuously monitor market success,
profitability, financial strength and liquidity. The performance targets
of the Group and the segments are based on selected financial KPIs,
as is the performance-related remuneration paid to managers. Each
month, the KPIs are measured and made available to the Executive
Board in a comprehensive report. This enables the management
team to take prompt corrective action in the event of discrepancies.
>> Table 013
Key performance indicators
>> Table 013
in € million
2013
2012 *
2012
2011
order intake
revenue
adjusted eBIt ¹
Free cashflow
4,489.1
4,590.3
4,700.1
4,681.9
4,494.6
4,559.8
4,726.7
4,368.4
416.5
408.3
438.2
364.6
202.6
518.1
518.1
234.2
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011); Order intake, Revenue and Adjusted EBIT were aligned due to the sale of the Hydraulics Business
1 Adjusted for KION acquisition items and one-off items
Group manaGement reportFundamentals of the KION GroupWe keep the world moving.KION GROUP AG | Annual Report 2013 78
KpIs related to business volume
Besides the aforementioned core KPIs, the KION Group uses
additional financial and non-financial KPIs. Net debt is now becom-
order intake and revenue are broken down by region, segment and
ing less important than the other financial KPIs because the Group’s
product category in the KION Group’s management reporting so
financial position improved substantially in the year under review.
that growth drivers and pertinent trends can be identified and ana-
The non-financial KPIs essentially relate to customers, employees,
lysed at an early stage. Order intake is a leading indicator for reve-
sustainability and technology. Some of them are used operationally
nue. The length of time between receipt and invoicing of an order
as leading indicators for the financial KPIs.
varies between business units and product groups.
The KPIs used to manage the brand segments are order intake,
revenue and adjusted EBIT. Earnings before tax (EBT) and return on
equity (ROE) are the KPIs used to manage the Financial Services
segment.
earnings-related KpI
adjusted eBIt: The key figure used for the operational management
and analysis of financial performance is adjusted earnings before
interest and tax (EBIT). It is calculated in the same way as EBIT,
except that it does not take account of the KION Group purchase
price allocation or any non-recurring items.
liquidity-related KpI
Free cash flow: Free cash flow is the main KPI for managing lever-
age and liquidity. It is determined by the KION Group’s operating
activities and investing activities. Free cash flow does not include
interest arising from financing activities. The performance measure-
ment of free cash flow is supported by the carefully targeted man-
agement of working capital and by detailed planning of capital
expenditure.
We keep the world moving.KION GROUP AG | Annual Report 2013 Group manaGement report
Financial report
7979
Financial report
MACROeCONOMIC ANd
SeCtOR-SPeCIFIC CONdItIONS
Macroeconomic conditions
emerged from the crisis. This also held back growth in neighbouring
countries. Many eastern European countries, including Russia,
achieved lower rates of growth than in 2012.
Among the Asian emerging markets, China registered growth at
almost the same level as in the previous year and quickly overcame
a short-lived period of economic weakness. Other Asian countries,
including Indonesia and Thailand, generated weaker growth than in
The global economy grew by 2.2 per cent in 2013. This was slightly
2012. Brazil continued along its upward trajectory, although the pace
less than in the previous year, which was due, above all, to a slower
of growth was slower. Despite muted growth, emerging markets
rate of growth in many emerging markets. Although the mood in
remained the economic powerhouses of the global economy with
Europe and the United States brightened considerably in the second
gains of 4.5 per cent. >> Diagram 003
half of the year, global economic growth was sluggish.
Economic performance in the European Union stabilised over
Demand for industrial trucks is largely driven by investment confi-
the course of 2013. Despite contracting significantly in the first quar-
dence and world trade volumes as well as GDP growth. Like GDP,
ter, gross domestic product (GDP) over the year as a whole reached
worldwide spending on capital equipment increased only cautiously
the same level as in 2012. Germany and the United Kingdom were
as ongoing uncertainty about growth prospects have continued to
the main drivers of the recovery in western Europe during the year.
dampen companies’ willingness to invest, particularly in the euro-
However, negative growth rates in Italy and Spain and increasing
zone. Global trade in 2013 was once again well behind the medium-
problems in France demonstrate that the eurozone has not yet
term trend.
>> Diagram 003
7.6 %
4.7 %
Gross domestic product in 2013 – real year-on-year change
CHINA
INDIA
WORLD
BRAzIL
UNITED STATES
JAPAN
RUSSIA
GERMANy
0.5 %
EU
0.0 %
2.2 %
2.2 %
1.9 %
1.7 %
1.2 %
Source: Oxford Economics (as at 17 January 2014)
1.0 %
2.0 %
3.0 %
4.0 %
5.0 %
6.0 %
7.0 %
8.0 %
We keep the world moving.KION GROUP AG | Annual Report 2013 8080
Sectoral conditions
sales markets
Growth rates in the KION Group’s main sales markets varied in
2013. Western Europe, which had seen a decline of 7.1 per cent in
2012, remained flat in 2013 with growth of just 0.3 per cent – despite
stabilisation and a slight recovery towards the end of the year. The
Measured in terms of the number of new trucks ordered, the global
main reason for this was the marked weakness of the market in Ger-
market for industrial trucks expanded by 6.9 per cent in 2013,
many, which experienced a 4.3 per cent decline in the number of
exceeding the threshold of one million trucks for the first time. The
trucks ordered, above all due to declining demand in the first half of
market therefore more than made up for the decline of 3.1 per cent
the year. However, the markets in France, Italy and the United King-
in the previous year, despite subdued macroeconomic conditions.
dom were largely stable. Eastern Europe grew by a substantial
Diesel trucks (up by 8.0 per cent) and warehouse technology prod-
7.8 per cent, although the biggest individual market, Russia, was
ucts (up by 7.1 per cent) grew at a similarly high rate, whereas growth
unable to maintain its pace from the previous year and recorded
in electric forklift trucks (up by 3.6 per cent) was more muted.
growth of just 0.7 per cent. China generated double-digit growth,
The bulk of the unit increase (47.6 per cent) was accounted for
picking up pace as the year progressed, while the other Asian
by the Chinese market, which generated growth of 14.4 per cent.
emerging markets grew at comparatively moderate rates. By con-
The KION Group estimates that the main beneficiaries of this growth
trast, the material handling market in Brazil – the largest individual
were the value and economy price segments, predominantly diesel
market in South America – enjoyed a boom although it partly
trucks. North America also made a substantial contribution to the
stemmed from special government programmes designed to boost
global market’s recovery, registering growth of 10.9 per cent.
investment. Measured in terms of the number of trucks, order intake
grew by about a third in Brazil. >> Table 014
Global industrial truck market (order intake)
>> Table 014
in thousand units
Western Europe
Eastern Europe
North America
Central & South America
Asia (excl. Japan)
Rest of world
World
Source: WITS / FEM
2013
259.4
58.0
201.0
52.3
327.0
114.5
1,012.2
2012
258.7
53.8
181.2
48.6
292.2
112.2
946.7
change
0.3 %
7.8 %
10.9 %
7.5 %
11.9 %
2.0 %
6.9 %
We keep the world moving.KION GROUP AG | Annual Report 2013 8181
procurement markets
Financial markets
Commodity prices continue to have a direct impact on around a
The KION Group bills the bulk of its revenue in euros; the proportion
quarter of the cost of the materials needed to manufacture an indus-
was 62.8 per cent in 2013 (2012: 65.5 per cent). The remainder is
trial truck in the KION Group.
billed in foreign currencies, notably the Chinese renminbi, pound
The average price over the year for steel, the most important
sterling and the Brazilian real. China’s renminbi proved comparatively
commodity, fell significantly compared with 2012 owing to weaker
stable over the year. Pound sterling depreciated against the euro,
economic conditions. Prices for lead-acid batteries, which make up
with the average price for the year down by 4.7 per cent compared
a significant proportion of the total price of electric trucks, are par-
with 2012. Despite various market interventions by the Brazilian cen-
ticularly dependent on lead prices on the metal exchanges. How-
tral bank, the value of the real fell by a considerable 14.3 per cent.
ever, these price fluctuations are borne by customers owing to the
Overall, currency effects had a negative impact on the KION Group’s
way in which contracts are formulated. Manufacturing costs are also
order intake and revenue. Excluding currency effects, consolidated
influenced to a slight extent by the prices for copper and rubber,
revenue would have been €74.8 million or 1.7 per cent higher and
which were also down year on year.
order intake would have been €73.8 million or 1.6 per cent higher.
Energy prices were slightly lower in 2013 than they had been in
>> Table 015
the previous year. The price of Brent crude oil, which is quoted in US
dollars and affects the price of other fuels and plastic, went up con-
siderably during 2013 owing to the crisis in Syria, although the aver-
age price over the year was 5.8 per cent below the price for the pre-
vious year.
currencies
Average rate per Euro
Australia (AUD)
Brazil (BRL)
Switzerland (CHF)
China (CNy)
United Kingdom (GBP)
Russia (RUB)
U.S.A. (USD)
Source: Reuters
>> Table 015
2012
1.24
2.51
1.21
8.11
0.81
39.92
1.29
2013
1.38
2.87
1.23
8.17
0.85
42.33
1.33
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 8282
Regulatory situation
In Germany, Linde Material Handling increased its stake in Wil-
lenbrock Fördertechnik Holding GmbH – an exclusive dealer focus-
The products and services of companies in the KION Group have to
ing on the Bremen and Hannover sales regions – from 23.0 per cent
comply with specific legal requirements in their respective markets.
to 74.0 per cent at the end of 2013. This transaction was part of the
Compliance with the different requirements has to be verified or cer-
succession planning for a founding shareholder who was leaving
tified. Many of the legal requirements are enshrined in product-spe-
Willenbrock. As yet unaudited figures show that the company
cific and other standards (e.g. EN, ISO and DIN).
employed more than 500 people and generated revenue of around
The tightening of emissions standards is not only taking place in
€165.0 million in 2013.
developed markets, it is also increasingly observable in emerging
In Turkey, STILL acquired 51.0 per cent of the shares in Arser İş
markets such as China. This trend benefits the KION Group with its
Makineleri Servis ve Ticaret A.Ş. (referred to below as Arser) in
high-tech products.
August. The company was already the exclusive dealer for the sub-
Legal requirements also apply to the construction and operation
stantial Turkish market – a major hub for European trade with the
of production facilities, including in relation to air pollution avoidance,
Middle East – and will enable the KION Group to step up its busi-
noise reduction, waste production & disposal and health & safety.
ness here.
Furthermore, the KION Group fulfils all of the legal requirements per-
The KION Group has also strengthened its presence in France
taining to exports and financing business.
by purchasing the remaining shares in two dealers. The outstanding
BUSINeSS PeRFORMANCe
Ipo
45.7 per cent stake in Bretagne Manutention S.A. (Pacé), a dealer for
LMH, was acquired on 23 July 2013, followed on 11 September 2013
by the outstanding stake of 49.9 per cent in Manusom SAS (Rivery),
which sells STILL products.
Within the production organisation, LMH’s container handler
and heavy truck business was restructured. Product rights and other
assets from the container handler division were sold to Konecranes,
KION GROUP AG’s IPO and the accompanying capital increases
a global market leader in the lifting business. Since then, Konecranes
have greatly improved the KION Group’s financial situation and
has been a long-term supplier of container handlers for Linde Mate-
increased its financial flexibility. The Group used the proceeds to sig-
rial Handling’s global distribution network. The alliance is improving
nificantly reduce its net financial debt and create a basis from which
efficiency in research and development and will enable LMH to con-
to drive forward its successful policy of global expansion. Details can
tinue to offer a broad range of reach stackers and container han-
be found in the ‘Financial position’ section (see page 94).
dlers. LMH’s extra heavy-duty truck plant in Merthyr Tydfil (Wales,
As a result of the IPO and the subsequent reduction in financial
UK) was closed in October 2013, with the bulk of production initially
debt, there was a significant improvement in the KION Group’s credit
transferring to a contract plant in the Czech Republic. The Czech
profile, and consequently in its credit rating. Rating agency Moody’s
plant reached full production volume, with the customary high level
upgraded its corporate family rating by three notches, from B3 / posi-
of quality and security of supply, in the fourth quarter. The restructur-
tive to Ba3 / stable, while Standard & Poor’s improved its rating for the
ing is enabling the KION Group to make further efficiency gains in the
KION Group from B / stable to BB- / positive. As a result, the KION
European production network. In the medium term, extra heavy-duty
Group will be able to obtain funding on the bond market on better
truck production is to transfer to China.
terms in future.
Key strategic measures in 2013
In Brazil, KION South America officially opened its new plant in
Indaiatuba (São Paulo) in March 2013. This has doubled production
capacity in Brazil, the largest individual market in South America;
capacity utilisation was good. By pooling production in São Paulo
The KION Group boosted its sales organisation in the European mar-
and stepping up cross-brand cooperation, the KION Group can lev-
ket in the year under review by acquiring four companies.
erage synergies and respond faster to customer requirements. At
We keep the world moving.KION GROUP AG | Annual Report 2013 8383
the same time, KION South America works closely with the Chinese
reduce debt, which had been initiated in late 2012, and the full repay-
KION brand Baoli (Jiangsu) Forklift Co., Ltd., whose truck platform is
ment of the acquisition finance after the IPO, combined with cheaper
used to meet South American demand and is fitted with local com-
funding under the new credit facility, quickly resulted in a marked
ponents. The increase in production capacity was accompanied by
reduction in interest cost in 2013. A vastly improved funding struc-
expansion of the sales organisation.
ture provides greater flexibility for generating profitable growth in the
The joint venture JULI Motorenwerk s.r.o., in which LMH and
future.
STILL together hold 50.0 per cent of shares, has established a pro-
duction facility for electric motors in China in order to achieve faster
penetration of the Chinese market, particularly in the value and econ-
omy segments. The start-up phase was a success. This will make it
possible to fit locally built motors into electric forklift trucks and ware-
Business situation and financial performance
of the KION Group
house trucks from 2014.
Key influencing factors
FINANCIAl POSItION ANd
FINANCIAl PeRFORMANCe
The sale of Linde Material Handling’s hydraulics business in Decem-
ber 2012 means that the key figures for the LMH segment and for the
KION Group are not fully comparable with the key figures from the
previous year. For this reason, the revenue, order intake and the
profit contributions of the hydraulics business have been excluded
from adjusted EBIT and adjusted EBITDA. The adjustments were
Overall assessment of the economic situation
made on the basis of the financial results for the hydraulics business
that were reported as part of the LMH segment in 2012.
The KION Group can look back on a very solid 2013. Despite chal-
The first-time adoption of new financial reporting standards (see
lenging economic conditions, particularly in western Europe, and
the notes to the consolidated financial statements) did not have a
customers’ marked reluctance to invest during the first nine months
major impact on the financial performance or financial position of the
of the year, the Group maintained its strong market position over the
KION Group. Because the rules governing transition to the new IAS
year as a whole. Global market share amounted to 14.1 per cent,
19R ‘Employee Benefits’ require it to be adopted retrospectively, the
with a slight increase for the service business. The KION Group
prior-year figures have been restated. The profit-and-loss transfer
therefore again proved that its business model is robust, even in a
agreement concluded between KION Material Handling GmbH and
challenging economic climate. Owing to currency effects, revenue
Linde Material Handling GmbH in April 2013 led to a sharp increase in
was slightly lower than in 2012 (excluding the hydraulics business).
deferred tax assets in the reporting year.
The target of a year-on-year increase for the adjusted EBIT margin
was achieved, despite the difficult market conditions. The margin’s
rise from 9.0 per cent in 2012 (excluding the hydraulics business) to
9.3 per cent in 2013 can be attributed, above all, to an optimised
cost structure and the ability to command higher prices. The more
flexible cost structure achieved to date gives the KION Group a sig-
nificant competitive edge. Nonetheless, the Group invested in its
future growth in the reporting year. Spending on research and devel-
opment equated to 2.5 per cent of revenue, which was once again
higher than the industry average.
The net income generated of €138.4 million was very encourag-
ing. Free cash flow stood at €202.6 million. The successful steps to
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 8484
level of orders
effects of €73.8 million were eliminated, the KION Group would have
been at virtually the same high level as 2012.
The number of trucks ordered rose moderately in 2013. However, the
The KION Group’s global market share was around 14.1 per cent
KION Group was unable to keep up with the pace of growth in the
in 2013, 0.9 percentage points less than in 2012. Regional factors
sector globally. The main reason for this was that western European
played a role here, for example the Group does not have a large
markets remain crucial to the Group’s new orders. This meant that
presence in the fast-growing North American market. The decline in
the Group was particularly affected by continued weak demand in
unit sales of counterbalance trucks also had a negative impact.
Germany and western Europe in the first nine months of the year.
Outside western Europe, the number of trucks ordered went up by
revenue
6.9 per cent and the KION Group was therefore roughly at the aver-
age for the global market. It was able to keep pace with the rate of
Revenue totalled €4,494.6 million, down 4.9 per cent year on year
growth in the eastern European market, while in South America it
(2012: €4,726.7 million). Excluding the hydraulics activities, revenue
grew at a far faster rate than the market. Order numbers in China
would have been just 1.4 per cent below the 2012 level. Currency
were also up significantly. However, the market there, which is dom-
effects of €74.8 million had a negative impact, the main contributing
inated by the economy price segment, grew at an even faster rate.
factors being the devaluation of the Brazilian real and pound sterling.
Overall, the emerging markets accounted for 35.0 per cent of new
Adjusted for these effects, revenue grew by 0.2 per cent on a like-for-
orders in 2013 (2012: 32.1 per cent). This was a new record for the
like basis.
KION Group, both in percentage terms and in absolute numbers.
The total value of order intake was €4,489.1 million, just
revenue by product category
2.2 per cent short of its value in the corresponding period of the pre-
vious year (excluding the hydraulics business). There was a decline in
Revenue from new trucks amounted to €2,519.6 million, which was
the volume of orders in the Linde Material Handling segment,
down significantly on the previous year (2012: €2,651.5 million) owing
whereas the STILL segment saw a sharp rise. If exchange rate
to negative currency and structural effects, among other reasons.
revenue by product category
in € million
New business
Hydraulics
Service offering
- After sales
- Rental business
- Used trucks
- Other
total
2013
2,519.6
0.0
1,975.0
1,174.2
443.1
226.4
131.3
2012
2,651.5
167.8
1,907.4
1,149.8
427.6
213.0
117.0
4,494.6
4,726.7
>> Table 016
change
– 5.0 %
– 100.0 %
3.5 %
2.1 %
3.6 %
6.3 %
12.2 %
– 4.9 %
revenue – excluding hydraulics Business
4,494.6
4,559.8
– 1.4 %
We keep the world moving.KION GROUP AG | Annual Report 2013
8585
Rising unit sales of warehouse trucks were unable to fully offset the
German market, which did however stabilise again during the sec-
decline in counterbalance trucks.
ond half of the year. The KION Group registered a small rise in reve-
After a subdued start to the year, revenue generated by the ser-
nue in western Europe outside Germany.
vice business rose substantially in subsequent quarters and climbed
In eastern Europe, the KION Group brand companies slightly
by 3.5 per cent year on year to €1,975.0 million (2012: €1,907.4 mil-
exceeded the strong level of revenue earned in the previous year.
lion). This largely offset the decline in the new truck business, which
Revenue increased particularly significantly in the Russian market,
was mainly caused by currency effects. The proportion of revenue
although the pace of growth tailed off in the second half of the year.
attributable to the service business grew from 41.8 per cent in 2012
There was a year-on-year decline in revenue in Asia: with increasing
(adjusted for the hydraulics business) to 43.9 per cent. All areas of
unit sales in the lower price segment, revenue decreased in the first
the service business saw a year-on-year increase. In rental and leas-
six months and was not fully offset in the third and fourth quarters. A
ing business, the growth was accounted for by long-term business
sharp increase in revenue in Brazil was attributable to the rise in
and fleet management. There was also a rise in demand for after-
demand for the KION brands’ industrial trucks that are tailored spe-
sales services, with orders placed at short notice and spare parts
cifically to the local market. Expansion of capacity at the Indaiatuba
generating particularly strong growth. The increase confirms the
plant to meet the increased demand had a positive impact.
KION Group’s view that the postponement of orders for new trucks
Overall, the proportion of consolidated revenue generated by the
to replace old ones is pushing up demand for services. The volume
KION Group outside Germany climbed from 74.1 per cent in 2012 to
of revenue from the used truck business was also higher than in the
75.2 per cent in 2013. In 2013, 25.3 per cent of consolidated revenue
previous year. >> Table 016
revenue by customer location
was earned in the fast-growing emerging markets, compared with
24.4 per cent in the previous year. The KION Group therefore moder-
ately reduced its dependency on the western European market again
in 2013 thanks to its strategy of growth in the emerging markets.
Revenue broken down by customer location predominantly reflects
>> Table 017
the absence of revenue from hydraulics activities in Germany, west-
ern Europe, Asia and the United States. Moreover, the declining vol-
ume of business in western Europe was primarily attributable to the
revenue by customer location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
total revenue
2013
3,223.9
369.7
279.4
453.5
168.1
2012
3,363.3
362.8
324.2
485.6
190.7
4,494.6
4,726.7
>> Table 017
change
– 4.1 %
1.9 %
– 13.8 %
– 6.6 %
– 11.9 %
– 4.9 %
revenue – excluding hydraulics Business
4,494.6
4,559.8
– 1.4 %
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report
8686
earnings
eBIt and eBItda
Non-recurring items totalled €42.3 million, of which €29.5 mil-
lion was attributable to KION acquisition items. The remaining
amount was accounted for by, among other things, costs for the IPO
and accompanying capital increases, which were taken directly to
Total earnings before interest and tax (EBIT) amounted to €374.2 mil-
income, follow-up costs in connection with the closure of production
lion. As expected, this was substantially below EBIT for the previous
sites and expenses related to restructuring. These were partly offset
year (2012: €549.1 million), which had included a net gain from the
by income of €7.0 million arising from remeasurement of the previous
sale of the hydraulics business of €211.8 million. The 2012 figure had
shares in connection with the acquisition of a further 51.0 per cent of
also included the contribution to operating profit of the hydraulics
the shares in Willenbrock Fördertechnik Holding GmbH. There was
business for the whole year.
further non-recurring income of €8.1 million relating to the hydraulics
A more meaningful comparison is provided by EBIT adjusted
business that was sold in December 2012, but also purchase-
for non-recurring items, which went up by 2.0 per cent to
price-related losses for equity-accounted investments. The net
€416.5 million (2012: €408.3 million excluding the hydraulics busi-
income from non-recurring items and KION acquisition items of
ness). Price increases that the KION Group was able to implement
€112.0 million (or €140.8 million excluding the operating profit of the
thanks to its strong technological and competitive position had a
hydraulics business) in 2012 included the net gain from the sale of
noticeable effect, as did product innovations and a greater pro-
the hydraulics business, the income arising from remeasurement of
portion of higher-margin trucks with customer-specific equip-
shares and, in particular, depreciation, amortisation and impairment
ment. Efficiency increases at production sites and other cost sav-
charges and administrative fees in connection with the purchase
ings also had a beneficial impact. The adjusted EBIT margin
price allocation. In the previous year, the expense arising from the
therefore improved from 9.0 per cent in 2012 to 9.3 per cent.
purchase price allocation had been €41.5 million. >> Table 018
eBIt*
in € million
Net income
Income taxes
Financial result
eBIt
+ Non-recurring items
+ KION acquisition items
adjusted eBIt
>> Table 018
change
– 14.2 %
89.4 %
7.7 %
– 31.9 %
> 100.0 %
– 28.7 %
2.0 %
2012
161.4
– 149.5
– 238.2
549.1
– 182.2
41.5
408.3
2013
138.4
– 15.9
– 219.8
374.2
12.8
29.5
416.5
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011); Adjusted EBIT were aligned due to the sale of the Hydraulics Business
We keep the world moving.KION GROUP AG | Annual Report 2013 8787
EBITDA was down by 22.5 per cent year on year at €708.8 million
(2012: €914.4 million). Adjusted EBITDA amounted to €721.5 million,
which was above the comparable figure for 2012 of €700.5 million
(adjusted for the hydraulics business). The adjusted EBITDA margin
was 16.1 per cent, compared with 15.4 per cent in the previous year.
>> Table 019
eBItda*
in € million
EBIT
Amortisation and depreciation
eBItda
+ Non-recurring items
+ KION acquisition items
adjusted eBItda
>> Table 019
change
– 31.9 %
– 8.4 %
– 22.5 %
> 100.0 %
– 64.5 %
3.0 %
2012
549.1
365.3
914.4
– 215.0
1.2
700.5
2013
374.2
334.6
708.8
12.3
0.4
721.5
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011); Adjusted EBITDA were aligned due to the sale of the Hydraulics Business
Key influencing factors for earnings
hydraulics business, however. Despite more extensive international
business, selling expenses were down by €24.3 million on 2012,
The cost of sales fell by 5.1 per cent to €3,255.2 million (2012:
while administrative expenses fell by €23.2 million year on year. As a
€3,430.8 million). The main reason was the absence of the hydraulics
result, the costs of the IPO, which were recognised as administrative
business. Other factors included the cost benefits derived from the
expenses, were more than offset by various savings.
successful restructuring of the production sites and the resultant
As expected, the ‘other’ item of €76.6 million was lower than the
increase in capacity utilisation as well as favourable price move-
previous year’s figure of €253.4 million. The other expenses and
ments in the commodity markets. Gross profit came to €1,239.4 mil-
other income reported under this item amounted to net income of
lion (2012: €1,295.9 million). Consequently, the KION Group was able
€75.0 million. This was considerably below the €237.5 million
to slightly improve its gross margin to 27.6 per cent (2012:
reported in 2012, which had included non-recurring income from the
27.4 per cent) despite the sale of the high-margin hydraulics business.
sale of the hydraulics business. In the reporting year, this transaction
Cost-cutting measures introduced at the start of the reporting
generated subsequent income of €8.1 million. Other income also
year also had a positive impact on selling and administrative
included earnings from commission collected, which are not
expenses. The comparative prior-year figures had included the
reported under revenue.
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 8888
The income from companies accounted for under the equity
method, which is also reported under ‘other’, declined from €15.9 mil-
lion in 2012 to €1.7 million in 2013. The decisive factor for the fall in
the share of profit of equity-accounted investments was the pro-rata
loss made by Linde Hydraulics of €14.2 million. This loss was partly
offset by the remeasurement of the 23.0 per cent stake in Willen-
brock Fördertechnik Holding GmbH (which had previously been
accounted for under the equity method) when additional shares
were acquired to increase the stake to 74.0 per cent in 2013. This
resulted in income of €7.0 million. >> Table 020
condensed income statement of the KIon Group*
>> Table 020
in € million
Revenue
Cost of sales
Gross profit
Selling expenses
Research and development costs
Administrative expenses
Other
earnings before interest and taxes (eBIt)
Net financial expenses
earnings before taxes
Income taxes
net income
* Condensed income statement for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
2013
4,494.6
2012
4,726.7
– 3,255.2
– 3,430.8
1,239.4
– 538.2
– 113.6
– 290.0
76.6
374.2
– 219.8
154.3
– 15.9
138.4
1,295.9
– 562.5
– 124.5
– 313.2
253.4
549.1
– 238.2
310.9
– 149.5
161.4
change
– 4.9 %
5.1 %
– 4.4 %
4.3 %
8.7 %
7.4 %
– 69.8 %
– 31.9 %
7.7 %
– 50.4 %
89.4 %
– 14.2 %
We keep the world moving.KION GROUP AG | Annual Report 2013 8989
net financial income / expenses
represents diluted and basic earnings per share of €1.69 (2012:
€2.52). Average pro-forma earnings per share in 2013, based on
There was an improvement in the balance of financial income and
98.9 million no-par-value shares, amounted to €1.40.
financial expenses, leading to net financial expenses of €219.8 mil-
lion (2012: €238.2 million). Nevertheless, the decrease did not fully
appropriation of profit
reflect the vastly improved funding structure and funding conditions.
Non-recurring items in connection with the repayment and refinanc-
The Executive Board and Supervisory Board of KION GROUP AG
ing of financial debt had a negative impact on net financial income.
will propose a dividend of €0.35 per share to the Annual General
The repayment of debt as part of the IPO did not lead to an increase
Meeting on 19 May 2014. As there are 98,700,000 dividend-bearing
in net financial income until the middle of the year. Following repay-
shares, this equates to a total dividend payout of €34.5 million. A
ment in full of the acquisition finance and the early repayment of the
total of 25 per cent of the net income accruing to the KION Group
floating-rate portion of the 2011/2018 corporate bond (floating rate
shareholders will therefore be distributed in dividends.
note, €175.0 million), capitalised borrowing costs of €24.5 million
were recognised as an expense. Other finance costs of €18.3 million
were attributable to the ending of interest-rate hedges related to the
acquisition finance, which was repaid after the IPO. The required
Business situation and financial performance
of the segments
remeasurement of the options recognised in connection with the
30.0 per cent equity investment in Linde Hydraulics resulted in addi-
lmh segment
tional financial expenses of €14.7 million in the reporting year.
Adjusted for these three negative one-off items, net financial
Business performance and order intake
expenses amounted to €162.4 million, equating to a significant year-
on-year improvement of €75.8 million.
The Linde Material Handling segment, which comprises the Linde,
Income taxes
Fenwick and Baoli brand companies, generated order intake of
€2,901.8 million in 2013, defending its number-one market position in
Europe and in the Chinese premium segment. However this was
Income taxes of €149.5 million in 2012 contrasted with a far lower tax
4.1 per cent down on the figure achieved last year of €3,026.1 million
burden of €15.9 million in the reporting year. The tax rate was there-
(excluding the hydraulics business) due, above all, to the difficult
fore 10.3 per cent (2012: 48.1 per cent). Current tax expenses fell to
sales situation in Germany and negative currency effects. The
€59.0 million in the reporting year (2012: €122.1 million). The higher
increased volume of orders in eastern Europe and Asia only partly
prior-year figure was mainly due to the effect of taxable profit from
offset the decline in the western European market.
the sale of the hydraulics business. There was also deferred tax
During the reporting year, LMH improved its position throughout
income of €43.1 million, compared with deferred tax expenses of
the value chain by acquiring a majority stake in German dealer Wil-
€27.4 million in 2012. The main reason for this was the profit-and-loss
lenbrock Fördertechnik Holding GmbH (see page 82), expanding
transfer agreement concluded between KION Material Handling
service capacity and the sales network with Weichai Power in China
GmbH and Linde Material Handling GmbH in April 2013. In connec-
and restructuring its container handler and heavy truck business
tion with this agreement, deferred tax assets with deferred tax
(see page 82). The transfer of heavy truck production to a contract
income totalling €41.8 million were recognised on loss carryforwards
plant in the Czech Republic went to plan, and the production site in
that it had previously not been possible to utilise. Measurement of
Wales had largely been shut down by the end of the year. LMH also
the deferred taxes as at the reporting date led to net additional
collaborated successfully with Linde Hydraulics, with which it has a
deferred tax income of €1.3 million as a result of other items. Net
ten-year exclusive supply agreement.
income after taxes came to €138.4 million (2012: €161.4 million). This
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 9090
revenue
earnings
Currency effects and difficult market conditions for new truck busi-
Adjusted EBIT totalled €309.1 million, which was just up on the
ness meant that the segment’s revenue fell by 2.8 per cent to
adjusted prior-year result of €301.0 million (excluding the hydraulics
€2,881.1 million (2012: €2,965.4 million excluding the hydraulics busi-
business). The decline in revenue was offset by the ability to com-
ness). Introduced at the start of 2013, the EVO models – which are
mand higher prices and the increase in productivity, including the
among the lowest-emission counterweight trucks with an internal
reduction in fixed costs. The adjusted EBIT margin therefore
combustion engine – made a positive contribution to revenue. The
improved significantly, from 10.2 per cent in 2012 to 10.7 per cent in
same was true of the new generation of reach trucks, which came on
2013.
the market in March. However, unit sales of diesel-powered trucks
In 2012, EBIT of €522.9 million had included non-recurring gains
and warehouse trucks declined overall, whereas there was a slight
arising in connection with the sale of the majority of the hydraulics
gain for electric forklift trucks in nearly every region. There was also
business (€247.0 million) and remeasurement in connection with the
stronger demand for used trucks than in 2012. Coupled with the fur-
acquisition of the outstanding 51.0 per cent of shares in Linde
ther growth in service and spare-parts business, this offset most of
Creighton (€12.6 million).
the downturn in new truck business and segment revenue was only
Adjusted EBITDA in the LMH segment came to €444.5 million
slightly below the 2012 level.
(2012: €432.2 million), corresponding to an adjusted EBITDA margin
of 15.4 per cent (2012: 14.6 per cent). >> Table 021
Key figures – lmh –
in € million
Order intake 1
Revenue 1
EBITDA
Adjusted EBITDA 1
EBIT
Adjusted EBIT 1
Adjusted EBITDA margin 1
Adjusted EBIT margin 1
1 Key figures for 2012 were adjusted due to the Hydraulics Business
>> Table 021
change
– 4.1 %
– 2.8 %
– 38.6 %
2.8 %
– 46.0 %
2.7 %
–
–
2012
3,026.1
2,965.4
720.4
432.2
522.9
301.0
14.6 %
10.2 %
2013
2,901.8
2,881.1
442.1
444.5
282.4
309.1
15.4 %
10.7 %
We keep the world moving.KION GROUP AG | Annual Report 2013 9191
stIll segment
revenue
Business performance and order intake
Revenue advanced by 2.4 per cent to €1,717.5 million (2012:
€1,676.6 million), with gains for both new truck business and service
The STILL segment, which comprises the STILL and OM STILL
business. The strongest revenue growth was generated in Russia
brand companies, performed encouragingly in 2013, increasing the
and Brazil, although the devaluation of the Brazilian real eroded
total value of its order intake by 2.6 per cent to €1,692.0 million (2012:
some of the gain. Despite the weak market environment, STILL also
€1,648.6 million) despite the negative impact of currency effects. The
boosted its revenue in Germany and the rest of Europe due to both
order volume bucked the trend in the declining German market and
volume and price effects.
remained largely stable, whereas there were decreases in the United
Kingdom and Spain. By contrast, Italy and France experienced a
earnings
strong uptrend. STILL’s orders were up significantly in eastern
Europe – thanks in part to the expansion of sales in Russia and Tur-
Adjusted EBIT came to €123.9 million, which was just up on the pre-
key – and Brazil, and the segment also gained market share in these
vious year (2012: €122.2 million). The adjusted EBIT margin stood at
regions.
7.2 per cent, slightly below the margin of 7.3 per cent in 2012.
Additions to STILL’s product range included a diesel truck in the
Adjusted EBITDA rose to €223.0 million (2012: €217.9 million),
RX 70 series that has a load capacity of four to eight tonnes. A new
while the adjusted EBITDA margin remained unchanged year on year
series of trucks with internal combustion engines was introduced to
at 13.0 per cent. >> Table 022
cater specifically to the needs of customers in the South American
market.
Key figures – stIll –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
>> Table 022
change
2.6 %
2.4 %
7.1 %
2.3 %
12.5 %
1.4 %
–
–
2012
1,648.6
1,676.6
200.2
217.9
97.7
122.2
13.0 %
7.3 %
2013
1,692.0
1,717.5
214.4
223.0
109.9
123.9
13.0 %
7.2 %
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report
9292
Financial services (Fs) segment
Business performance
ments relating to the financing of the short-term rental fleet. Another
€240.7 million was attributable to leased assets under operating
leases relating to external customer contracts. Leasing business,
which generated lease originations of €436.0 million, continued to
As the central funding partner of the LMH and STILL brand segments,
focus on the core European markets of France, Germany, Italy, Spain
the Financial Services (FS) segment benefited from a further increase
and the United Kingdom. The volume of business in eastern Europe,
in demand for lease finance, particularly in Europe outside Germany.
China and Brazil remained at a low level.
Operational responsibility for the short-term rental business (short-
term rental fleet) lies with the LMH and STILL brand segments. FS acts
Financial performance
as the contractual partner to the brand segments, providing the
financing both for long-term leasing and for the short-term rental fleet,
Segment revenue, including internal revenue from the financing of
mostly on the basis of sale and leaseback agreements.
the LMH and STILL segments’ short-term rental fleet, advanced by
In 2013, long-term business with external end customers grew at
5.9 per cent to €539.4 million (2012: €509.3 million). Revenue gener-
a somewhat stronger rate than finance for the LMH and STILL seg-
ated from external customers went up by 6.0 per cent, from
ments’ short-term rental business. The assets of the Financial Ser-
€296.8 million to €314.7 million. The FS segment’s earnings before
vices segment had increased to €1,249.4 million as at 31 December
tax came to €4.7 million, which was just below the figure for 2012 of
2013 (31 December 2012: €1,039.0 million). Of this amount, €458.1 mil-
€4.8 million. As at 31 December 2013, return on equity (ROE)
lion was accounted for by lease receivables from external customers
remained unchanged on the prior year at 13.0 per cent.
and €449.1 million by lease receivables from the LMH and STILL seg-
>> Table 023
Key figures – Financial services –
>> Table 023
in € million
Revenue
Adjusted EBITDA
Adjusted EBIT
EBT
Lease receivables 1
thereof to third parties
Lease liabilities 2
thereof liabilities from funding of the short-term rental business
Net financial debt
Equity 3
Return on equity 3
1 Includes intra-group lease receivables from LMH and STILL segments from funding of the short-term rental business
2 Includes liabilities from financing of the short-term rental fleet reported as other financial liabilities
3 Earnings before taxes / Average equity tied up during the reporting period excluding the net income of the period
2013
539.4
66.2
0.7
4.7
907.2
458.1
935.2
319.7
163.6
41.7
2012
509.3
59.2
1.4
4.8
753.3
379.9
730.3
263.7
174.9
41.7
change
5.9 %
11.8 %
– 52.1 %
– 2.7 %
20.4 %
20.6 %
28.1 %
21.2 %
– 6.4 %
– 0.0 %
13.0 %
13.0 %
–
We keep the world moving.KION GROUP AG | Annual Report 2013 9393
other segment
Business performance
Financial performance
Earnings and revenue in the Other segment also include intra-group
contributions from consolidated subsidiaries that are eliminated at
Group head office functions that do not come under any other seg-
Group level. Revenue decreased from €250.9 million in 2012 to
ment, plus the Voltas brand company, are reported in the Other
€235.1 million. As in the previous year, the main revenue drivers were
segment. Voltas MH, the leading provider in the Indian market, reg-
internal IT and logistics services as well as Voltas MH. The segment’s
istered a rise in order intake for electric forklift trucks and ware-
revenue from external customers rose to €48.2 million (2012:
house trucks, while diesel trucks proved stable. It stepped up its
€42.9 million), predominantly due to contributions from Voltas MH.
collaboration with Baoli on product development and production.
EBIT grew to €71.8 million (2012: minus €12.2 million), while
This enables the KION Group to serve the Indian volume market
adjusted EBIT rose to €73.5 million (2012: €44.4 million). This increase
even more efficiently.
Key figures – other –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
compared with the previous year was largely due to the year-on-year
improvement in subsidiaries’ earnings and the related rise in intra-
group income from investments in the Other segment, which is elimi-
nated at Group level during consolidation. >> Table 024
>> Table 024
change
– 6.3 %
– 6.3 %
> 100.0 %
45.4 %
> 100.0 %
65.7 %
2012
250.9
250.9
5.6
62.2
– 12.2
44.4
2013
235.1
235.1
88.7
90.4
71.8
73.5
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report
9494
Financial position
and restrictions were comfortably complied with in the past financial
year. The ending of the acquisition finance meant that many restric-
principles and objectives of financial management
tions were lifted in the second half of the year, thereby greatly improv-
ing flexibility as far as funding is concerned.
By pursuing an appropriate financial management strategy, the
Depending on requirements and the market situation, the KION
KION Group ensures that sufficient cash and cash equivalents are
Group will also avail itself of the funding facilities offered by the public
available at all times to meet the Group companies’ operational and
capital markets in future. The KION Group therefore seeks to main-
strategic funding requirements. In addition, the KION Group opti-
tain an investment-grade credit rating in the capital and funding mar-
mises its financial relationships with customers and suppliers, man-
kets by rigorously pursuing a value-based strategy, implementing
ages any collateral security offered and mitigates the financial risk to
proactive risk management and ensuring a solid funding structure.
its enterprise value and profitability, notably currency risk, inter-
The KION Group maintains a liquidity reserve in the form of unre-
est-rate risk, price risk, counterparty risk and country risk. In this
stricted, bindingly committed credit lines and cash in order to ensure
way, the KION Group creates a stable funding position from which to
financial flexibility and solvency.
maintain profitable growth.
The KION Group only uses derivatives to hedge underlying
The financial resources within the KION Group are provided
operational transactions; in particular, hedging for currency and
based on an internal funding approach. The KION Group collects
interest-rate risks. Only cash flow hedges were used for this purpose
liquidity surpluses of the Group companies in central or regional
in the reporting year. The interest-rate swaps and currency swaps
cash pools and, where possible, covers subsidiaries’ funding
that had been used in 2012 to hedge interest-rate risk and currency
requirements with intercompany loans. This funding enables the
risk arising out of acquisition finance had been terminated in connec-
KION Group to present a united front in the capital markets and
tion with the repayment of this finance by the middle of 2013.
strengthens its hand in negotiations with banks and other market
participants.
main financing activities in the reporting period
As a listed group of companies that also obtains funding using
corporate bonds and loan facilities, the KION Group considers the
The placement of 17.2 million new shares at €24.00 per share gener-
interests of shareholders, bond holders and banks in its financial
ated €413.4 million for the KION Group (before deduction of bank
management. For the sake of these stakeholders, the KION Group
charges). A further €328.4 million was generated by a capital increase
makes sure that it maintains an appropriate ratio of internal funding
of 13.7 million shares, which were acquired by Weichai Power imme-
to borrowing.
diately before completion of the IPO. In connection with the IPO,
The KION Group’s borrowing is based on a long-term approach.
Superlift Holding acquired 4.0 million shares at a price of €29.21 per
The core elements – a revolving loan facility of €1,045.0 million and
share by way of converting an existing loan and its stake in Superlift
two secured corporate bonds of €325.0 million and €650.0 million
Funding into equity. This boosted equity by a further amount of
respectively – are due to mature between 2018 and 2020. The Group
approximately €118.1 million. Overall, equity rose by €859.9 million as
occasionally arranges additional credit lines for KION Group compa-
a result of the three capital increases. After deduction of transaction
nies with local banks or leasing companies in order to comply with
costs of €13.9 million (adjusted for tax effects) that were recognised
legal, tax and other regulations.
directly in equity, the net increase in the Group’s equity amounted to
Among other things, the loan facility and the contractual condi-
€845.9 million. The portion of the transaction costs for the capital
tions relating to the issuance of the corporate bonds require compli-
increases that exceeded the amounts recognised in equity was
ance with loan conditions (‘covenants’). The loan facility also requires
recognised directly as an expense.
compliance with specific financial covenants during the term of the
agreement. Non-compliance may, for example, give lenders the right
to terminate the loan or permit bondholders to put the corporate
bonds back to the issuer prior to their maturity date. All covenants
We keep the world moving.KION GROUP AG | Annual Report 2013 9595
In connection with the IPO, the KION Group agreed a new
analysis of capital structure
revolving loan facility with a group of banks for €995.0 million with a
term to maturity of five years after the IPO. The loan facility was
Financial debt
increased to €1,045.0 million in December 2013. Combined with the
current lower level of interest rates, this loan facility offers far more
Following its full repayment of the acquisition finance of €1,078.1 mil-
favourable credit terms than the previous funding.
lion and the floating rate note with a volume of €175.0 million, the
The inflows from the IPO, along with part of the new loan facility
KION Group’s long-term borrowing has comprised two secured cor-
and existing cash reserves, was used to repay in full the long-term
porate bonds with a total volume of €975.0 million. The bond issued
bank loans under the acquisition finance arrangements (Senior Facil-
in the reporting year consisted of a fixed-rate tranche with a volume
ities Agreement or SFA). In addition, the floating rate note, which was
of €450.0 million and a floating-rate tranche with a volume of
due to mature in 2018 and amounted to €175.0 million, was repaid
€200.0 million. The fixed-rate tranche of a bond issued in 2011,
early in full.
which has a volume of €325.0 million and a maturity date of 2018,
Back in February 2013, KION Finance S.A. placed a senior
remains unchanged.
secured bond with a total volume of €650.0 million and a maturity
As at the reporting date, €184.4 million had been drawn down
date of 2020. The proceeds, net of the bank commission, were used
under the newly agreed revolving loan facility of €1,045.0 million –
to refinance all loans maturing in 2014 and 2015.
including other loan liabilities of individual Group companies outside
Following completion of the main funding activities, the KION
Germany and contingent liabilities. The KION Group therefore had
Group was able to report a healthy equity ratio of 26.7 per cent as at
unused loan facilities worth €860.6 million that it could draw down at
31 December 2013. As at the reporting date, net debt was roughly
short notice as at 31 December 2013. Gross financial debt totalled
1.4 times adjusted EBITDA for the past twelve months. The remain-
€1,215.3 million on the reporting date; including capitalised borrow-
ing long-term financial debt has a comfortable maturity profile.
ing costs, the financial debt recognised in the statement of financial
Between 28 August and 26 September 2013, KION GROUP AG
position stood at €1,198.6 million. After deduction of cash and cash
used cash and cash equivalents to buy treasury shares for an
equivalents, the remaining net financial debt came to €979.3 million
employee share programme. As at 31 December 2013, 0.2 million
as at 31 December 2013 (31 December 2012: €1,790.1 million).
shares were held in treasury. The volume of funding required was
>> Table 025
€5.6 million.
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 9696
net financial debt
in € million
Corporate bond – fixed rate (2011/2018) – gross
Corporate bond – floating rate (2011/2018) – gross
Corporate bond – fixed rate (2013/2020) – gross
Corporate bond – floating rate (2013/2020) – gross
Liabilities to banks (gross)
Liabilities to non-banks (gross)
./. Capitalised borrowing costs
Financial debt
./. Cash and cash equivalents
net financial debt
>> Table 025
change
0.0 %
– 100.0 %
–
–
– 87.6 %
47.1 %
51.2 %
– 49.0 %
61.0 %
– 45.3 %
2012
325.0
175.0
–
–
1,882.1
4.5
– 34.1
2,352.4
– 562.4
1,790.1
2013
325.0
–
450.0
200.0
233.7
6.6
– 16.7
1,198.6
– 219.3
979.3
retirement benefit obligation
Further details about the retirement benefit obligation are pro-
vided in note [28] in the notes to the consolidated financial state-
The KION Group supports pension plans in many countries. These
ments.
plans comply with legal requirements, local practice and the situa-
tion in the country in question. They are either defined benefit pen-
lease liabilities
sion plans, defined contribution pension plans or multi-employer
benefit plans. As at 31 December 2013, the retirement benefit obli-
Lease liabilities arising from financial services activities totalled
gation under defined benefit pension plans amounted to €560.1 mil-
€617.1 million as at 31 December 2013 (31 December 2012:
lion. The moderate year-on-year rise was largely due to ongoing
€475.0 million). These resulted solely from sale and leaseback trans-
additions to pension provisions. After deduction of pension assets
actions used to finance leases with external customers. Of this total,
amounting to €22.4 million, the net obligation stood at €537.7 million
€403.7 million was accounted for by non-current lease liabilities (31
(31 December 2012: €524.8 million).
December 2012: €329.2 million) and €213.3 million by current lease
Contributions to pension plans that are entirely or partly funded
liabilities (31 December 2012: €145.8 million). The rise in non-current
via funds are paid in as necessary to ensure sufficient assets are
lease liabilities is attributable, above all, to new leases and the first
available and to be able to make future pension payments to pension
consolidation of the dealer Willenbrock.
plan participants. These contributions are determined by various
factors, such as the funded status, legal and tax considerations, and
local practice. The payments made by the KION Group to retired
employees in 2013 totalled €25.1 million, which included €13.1 mil-
lion for direct pension payments and €11.6 million for employer con-
tributions to plan assets. Transfers to external pension funds resulted
in further payments of €0.4 million.
We keep the world moving.KION GROUP AG | Annual Report 2013
9797
Short-term rentals and procurement leases are allocated to the
receivables, future inflows of funds from sub-leases with customers
brand companies. The corresponding liabilities are reported under
and revenue from the sale of used trucks.
other financial liabilities (see note [32] in the notes to the consolidated
financial statements). These include, among other things, liabilities of
equity
€327.5 million from sale and leaseback transactions used to finance
the short-term rental fleet. They also contain liabilities arising from
Equity rose substantially due to the capital increases carried out dur-
residual-value guarantees amounting to €17.3 million. These residu-
ing the reporting year. It stood at €1,610.0 million on 31 December
al-value liabilities relate to residual-value guarantees, provided in
2013, compared with €660.7 million at the end of 2012. There was an
connection with the sale of assets to leasing companies, where the
even greater increase in the equity ratio, which went up from
guaranteed amount is more than 10.0 per cent of the fair value of the
10.6 per cent at the end of 2012 to 26.7 per cent at the end of 2013,
asset in question. The lease liabilities are mostly covered by lease
because of the simultaneous reduction of debt. >> Table 026
condensed balance sheet, equity and liabilities*
>> Table 026
in € million
equity
non-current liabilities
thereof:
Corporate bond
Financial liabilities
Deferred tax liabilities
Lease liabilities
current liabilities
thereof:
Financial liabilities
Trade payables
Lease liabilities
2013
1,610.0
in %
26.7 %
2012
660.7
in %
change
10.6 %
> 100.0 %
2,709.8
45.0 %
3,929.0
63.2 %
– 31.0 %
958.3
12.8
306.2
403.7
15.9 %
0.2 %
5.1 %
6.7 %
489.5
1,811.2
308.8
329.2
7.9 %
29.2 %
5.0 %
5.3 %
95.8 %
– 99.3 %
– 0.8 %
22.6 %
1,706.6
28.3 %
1,623.5
26.1 %
5.1 %
227.5
550.5
213.3
3.8 %
9.1 %
3.5 %
51.8
646.0
145.8
0.8 %
10.4 %
2.3 %
> 100.0 %
– 14.8 %
46.3 %
total equity and liabilities
6,026.4
6,213.2
– 3.0 %
* Condensed balance sheet for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 9898
Funding vehicles not reported on the statement of financial
analysis of liquidity
position
Liquidity management is an important aspect of central financial
The KION Group makes limited use of funding vehicles not reported
management. The sources of liquidity are cash and cash equivalents
on the statement of financial position. As part of its financing activities,
(including pledged cash deposits), cash flow from operating activi-
the KION Group has entered into leases both for its own use and for
ties and amounts available under loan facilities. Cash and cash
transfer to customers. In accordance with the relevant IFRS require-
equivalents totalled €219.3 million as at 31 December 2013. The fig-
ments, such leases are not reported as either an asset or a liability on
ure for the previous year of €562.4 million had been boosted by
the statement of financial position. The nominal amount of the con-
inflows from the transactions with Weichai Power at the end of 2012.
tractual obligations arising from such leases not reported in the state-
Taking into account the loan facility that was still available, the KION
ment of financial position was €206.0 million as at 31 December 2013
Group had access to cash and cash equivalents amounting to
(31 December 2012: €194.2 million; see note [33] in the notes to the
€1,079.6 million as at the reporting date, compared with €930.9 mil-
consolidated financial statements).
lion as at 31 December 2012.
analysis of capital expenditure
Net cash provided by the KION Group’s operating activities
totalled €336.1 million (2012: €414.0 million). The significant decrease
was largely due to one-off tax payments of €57.7 million in connec-
Capital expenditure (excluding leased and rental assets) was again
tion with the sale of the hydraulics business in 2012. EBIT of
funded by cash flow from operating activities and by withdrawals
€549.1 million in 2012 included, among things, income of €211.8 mil-
from the revolving part of the SFA in the reporting year.
lion from the sale of the hydraulics business that did not impact on
Capital expenditure amounted to €125.8 million in 2013, down by
cash flow from operating activities.
18.9 per cent on 2012 (€155.1 million). The decrease was mainly attrib-
Net cash used for investing activities totalled €133.5 million. By
utable to the sale of the hydraulics business at the end of 2012, which
contrast, the net cash provided by investing activities in 2012 came
had high levels of capital expenditure. Another reason for the decrease
to €104.1 million, which included proceeds of €259.7 million from the
was the ending of special projects, which in 2012 were the construc-
sale of the hydraulics business. Cash payments for capital expendi-
tion of a new plant in São Paulo and the relocation of production in
ture on non-current assets and property, plant and equipment,
Europe. By contrast, there were no special projects of comparable
which make up the biggest outflow of funds, fell from €155.1 million
magnitude in the LMH and STILL segments in 2013. Capital expendi-
in 2012 to €125.8 million in 2013. In both the Linde Material Handling
ture on developing products and expanding production sites and on
and STILL operating segments, the volume of capital expenditure
the ongoing modernisation of the IT infrastructure increased slightly
was below that of the comparable prior-year period, which for the
year on year.
LMH segment had still included the hydraulics business and for the
A significant portion of capital expenditure went on the develop-
STILL segment the new plant in Brazil. Major projects related to
ment and refinement of counterbalance trucks, reach trucks and other
improvement of the performance of the global spare parts ware-
warehouse trucks and on innovations such as lithium-ion batteries.
house in Kahl, the expansion of production and development capac-
Operational investments predominantly related to equipment and
ities in China in the LMH segment and various measures to modern-
machinery for the production of new industrial trucks and compo-
ise the German sites in the STILL segment. Capital expenditure
nents. IT investment projects related to areas such as standardisation
(excluding leased and rental assets) was again funded in the report-
of the global sales systems.
ing year.
Net cash used for acquisitions amounted to €25.1 million (after
deduction of the cash received). The acquisitions were the Arser
Group in Turkey (€3.9 million) and 51.0 per cent of the shares in the Ger-
man dealer Willenbrock Fördertechnik (€21.2 million). In the previous
year, €9.7 million of the outflow of funds was attributable to the acqui-
We keep the world moving.KION GROUP AG | Annual Report 2013 9999
sition of a majority stake in Linde Creighton. The main inflows from
than in 2012 and amounted to €119.6 million in the reporting period.
investing activities related to dividend payments from equity invest-
These interest payments included a non-recurring outflow of funds
ments, interest income and net inflows from non-current assets.
of €14.4 million resulting from the termination of interest-rate hedging
Free cash flow – the sum of cash flow from operating activities
instruments in connection with the previous acquisition finance
and investing activities – was €202.6 million in the reporting period.
arrangements. The net cash outflow from financing activities in 2012
This was below the prior-year figure of €518.1 million, which had
(€330.1 million) was also largely attributable to the repayment of
been affected by non-recurring items.
loans. The positive free cash flow and the existing cash from 2012
Cash
flow
from
financing activities amounted
to minus
were predominantly used for the repayments. >> Table 027
€538.6 million. Inflows resulted from the issuance of the corporate
bond in February 2013 (€649.0 million), capital contributions in con-
nection with the IPO (€741.8 million) and a drawdown from the new
Net assets
loan facility (€184.4 million). Gross repayments of all financial liabili-
ties, including the early redemption of the 2011/2018 floating rate
non-current assets
note, amounted to a total outflow over the period as a whole of
€2,201.6 million. This amount was partly offset by taking up financial
Non-current assets grew only slightly year on year, advancing by
debt of €1,095.9 million – including the corporate bond issued in
4.8 per cent to €4,435.8 million (31 December 2012: €4,231.0 million).
2013. Cash and cash equivalents of €5.6 million were used to buy
There was a small rise in intangible assets, which reached
200,000 shares for an employee share programme. The cash pay-
€2,428.7 million. The main reasons were the acquisitions in the
ments for costs incurred in connection with the debt and equity
reporting year, which increased goodwill by €23.1 million. There was
transactions mentioned above amounted to €56.3 million (2012:
further capitalisation of development costs, software and other
€15.6 million). Regular interest payments were €10.1 million lower
intangible assets, while amortisation totalled €73.6 million.
condensed cash flow statement*
in € million
EBIT
Cash flow from operating activities
Cash flow from investing activities
Free cash flow
Cash flow from financing activities
Currency effects on cash
change in cash and cash equivalents
* Condensed cash flow statement for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
>> Table 027
change
– 31.9 %
– 18.8 %
< – 100.0 %
– 60.9 %
– 63.2 %
< – 100.0 %
< – 100.0 %
2012
549.1
414.0
104.1
518.1
– 330.1
1.0
188.9
2013
374.2
336.1
– 133.5
202.6
– 538.6
– 7.0
– 343.0
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report
100100
The change in leased assets reflects the growth in the volume of
new long-term leases signed and consolidation of the leasing busi-
financial services business conducted by the KION Group with
ness of the dealer Willenbrock.
external end customers, which stood at €251.9 million at the end of
Other financial assets changed only insignificantly and stood at
2013 (31 December 2012: €191.3 million). The increase can primarily
€51.7 million (31 December 2012: €50.2 million).
be attributed to the greater volume of industrial truck operating
An explanation of the change in deferred tax assets is provided
leases with external customers and the consolidation of the leasing
in note [14] in the notes to the consolidated financial statements.
business of the dealer Willenbrock. Beneficial ownership remains
with KION as the lessor.
current assets
Rental assets, which mostly consist of the rental fleets of the
LMH and STILL operating segments, had risen to €461.2 million as
Current assets reduced year on year, falling by 19.8 per cent to
at the reporting date (31 December 2012: €395.1 million).
€1,590.7 million (31 December 2012: €1,982.2 million). The main rea-
Other property, plant and equipment had declined slightly year
son for this was the use of cash and cash equivalents to repay debt.
on year, falling to €499.4 million (31 December 2012: €500.3 million).
Overall, there was very little change in other current assets. The
Additions of property, plant and equipment in the reporting period of
decline in inventories to €511.8 million (31 December 2012:
€64.4 million were offset by depreciation of €67.8 million.
€549.9 million) was attributable to improved management of working
Equity-accounted investments declined to €138.6 million
capital. Likewise, trade receivables decreased to €558.7 million (31
(31 December 2012: €154.8 million) largely due to the losses incurred
December 2012: €625.5 million). Lease receivables advanced from
by the 30.0 per cent stake in Linde Hydraulics.
€132.1 million as at 31 December 2012 to €170.8 million on the
Long-term lease receivables arising from finance leases with
reporting date owing to the increase in business volume.
external customers increased by 15.6 per cent to €308.8 million,
>> Table 028
reflecting – as was the case with leased assets – the high number of
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
total inventories
>> Table 028
change
– 9.7 %
– 11.0 %
– 5.1 %
– 6.9 %
– 6.9 %
2012
120.0
75.0
349.0
5.9
549.9
2013
108.3
66.7
331.2
5.5
511.8
We keep the world moving.KION GROUP AG | Annual Report 2013
101101
Working capital (inventories and trade receivables less trade paya-
bles) was €520.0 million as at the reporting date, which was less than
it had been a year earlier (31 December 2012: €529.3 million).
>> Table 029
condensed balance sheet, assets*
>> Table 029
in € million
non-current assets
thereof:
Goodwill
Brand names
Deferred tax assets
Rental assets
Leased assets
Lease receivables
current assets
thereof:
Inventories
Trade receivables
Lease receivables
Other current assets
Cash
2013
4,435.8
in %
73.6 %
2012
4,231.0
in %
68.1 %
change
4.8 %
1,494.7
24.8 %
1,473.2
23.7 %
594.7
295.5
461.2
251.9
308.8
9.9 %
4.9 %
7.7 %
4.2 %
5.1 %
593.9
264.9
395.1
191.3
267.1
9.6 %
4.3 %
6.4 %
3.1 %
4.3 %
1.5 %
0.1 %
11.5 %
16.7 %
31.7 %
15.6 %
1,590.7
26.4 %
1,982.2
31.9 %
– 19.8 %
511.8
558.7
170.8
114.7
219.3
8.5 %
9.3 %
2.8 %
1.9 %
3.6 %
549.9
625.5
132.1
106.8
562.4
8.9 %
10.1 %
2.1 %
1.7 %
9.1 %
– 6.9 %
– 10.7 %
29.2 %
7.4 %
– 61.0 %
– 3.0 %
total assets
6,026.4
6,213.2
* Condensed balance sheet for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 102102
NON-FINANCIAl PeRFORMANCe
INdICAtORS
headcount
The average number of employees (full-time equivalents (FTEs),
including trainees and apprentices) in the KION Group was 21,632 in
The KION Group’s enterprise value is determined not only by finan-
2013 (2012: 22,232 FTEs). As at 31 December 2013, the KION Group
cial KPIs but also to a significant extent by non-financial ones. These
companies employed 22,273 FTEs, 1,058 more than a year earlier.
are based on the Company’s relations with its customers and
Much of this increase was accounted for by the first-time consol-
employees, on its technological position and on environmental con-
idation of the trading and sales companies acquired in the year
siderations. Together, they enable conclusions to be drawn about
under review. The acquisition of Willenbrock Fördertechnik increased
the extent to which the KION Group succeeds in:
headcount by 542 employees, while the acquisition of Arser added a
competent and committed employees;
– being an attractive and responsible employer that can retain
– developing products that meet customers’ needs and environ-
– continually increasing the customer benefits provided by its
– designing production processes in such a way that resources
mental requirements now and in future;
products and services;
further 122. Besides the acquisitions, companies in the KION Group
also continued to strengthen their sales and service functions. The
sharp rise in the number of people employed in these functions more
than offset the slight decline in production employees. Closure of the
Merthyr Tydfil site and the transfer of production to a contract pro-
duction facility contributed to this decline (see page 82). Implement-
ing the job losses with the minimum possible social impact had
utmost priority during the process of closing the site. The number of
are conserved and emissions are avoided as far as possible.
staff in administrative functions rose only moderately due to the
cost-cutting measures initiated.
The KION Group firmly believes that these aspects are crucial to
At regional level, there were only slight changes in headcount
its positioning as a pioneering company in a highly competitive
overall. The number of employees rose in Germany, France and Tur-
environment.
employees
hr strategy
key, primarily due to the acquisition of trading companies. As at 31
December 2013, headcount in China (excluding Hong Kong) had
increased by approximately 5 per cent compared with the end of
2012. The research and development, production and sales func-
tions were all expanded in China. >> Table 030
The KION Group’s success is founded on the capabilities and com-
mitment of its employees. Its human resources (HR) strategy is
geared towards providing the best possible support for strategic
development and international growth. The KION Group aims to
always have a sufficient number of qualified, committed employees
at all levels of its operations and to offer them attractive working con-
ditions and the opportunities afforded by working for an international
group of companies. This strategy also enables the Company to
tackle the challenges of demographic change.
We keep the world moving.KION GROUP AG | Annual Report 2013 103103
employees (full-time equivalents)
>> Table 030
31/12/2013
Western Europe
Eastern Europe
Americas
Asia
Rest of world
total
31/12/2012
Western Europe
Eastern Europe
Americas
Asia
Rest of world
total
lmh
8,689
1,048
122
3,360
557
stIll
6,553
625
526
0
0
13,776
7,704
8,259
1,034
122
3,195
538
6,214
582
457
0
0
13,148
7,253
Fs
80
16
1
10
11
118
71
16
1
13
11
112
other
519
0
0
156
0
675
534
0
0
168
0
702
total
15,841
1,689
649
3,526
568
22,273
15,078
1,632
580
3,376
549
21,215
Personnel expenses amounted to €1,143.8 million – a year-on-year
decrease of 4.9 per cent – owing to the smaller average headcount for
the year, which was primarily attributable to the sale of the hydraulics
business. This easily offset the countervailing effect caused by adjust-
ments to wages and salaries. >> Table 031
personnel expenses
in € million
Wages and salaries
Social security contributions
Post-employment benefit costs and other benefits
total
2013
900.5
203.7
39.5
2012
946.6
222.1
34.0
1,143.8
1,202.7
>> Table 031
change
– 4.9 %
– 8.3 %
16.2 %
– 4.9 %
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report
104104
diversity
tial, high performers and experts in key functions. Organised in
cooperation with the European School of Management and Technol-
The KION Group sees itself as a global manufacturer with strong
ogy (ESMT), KION Campus is an international, cross-brand execu-
intercultural awareness: as at 31 December 2013, people from 66
tive development programme aimed at the Group’s 300 or so top
different countries were employed across the KION Group.
executives. In addition, new managers at STILL receive support
One of the ways in which the Company promotes international
under the First Leading programme during their first few years. Pro-
collaboration between employees is the KION expat programme,
spective managers can enhance their skills through STILL’s young
which gives employees the opportunity to transfer to different coun-
Professional programme, while international staff with high potential
tries where the KION Group is represented.
can participate in the International Junior Circle. The STILL Academy
The KION Group tackles the challenges of demographic change
offers subject-specific and interdisciplinary training courses. Oppor-
by providing working conditions that are suited to employees’
tunities at Linde Material Handling include a virtual assessment cen-
age-related requirements and organising healthy-living programmes
tre for future managers.
so that it can continue to benefit from older employees’ experience.
As at 31 December 2013, 23.5 per cent of employees were over the
training and professional development
age of 50 (31 December 2012: 22.6 per cent). A total of 250 employ-
ees were participating in partial retirement models as at the reporting
The companies in the KION Group currently offer training for 19 pro-
date (31 December 2012: 333).
fessions in Germany. They employed a total of 591 trainees and
Another aspect of diversity is increasing the proportion of female
apprentices as at 31 December 2013 (31 December 2012: 543). This
employees, which rose from 15.9 per cent to 16.1 per cent in 2013.
represents a significant increase in the number of trainees and
Women occupied 8.0 per cent of management positions (2012:
apprentices, which will enable the KION Group to meet its ongoing
8.6 per cent). The Executive Board has resolved to double the pro-
recruitment needs. Work placements for students combining voca-
portion of women in management positions by 2020. Going forward,
tional training with a degree course are also offered in cooperation
the KION Group intends to fill more management positions with
with various universities.
employees from outside Germany in order to better reflect the Com-
The continuing professional development on offer was expanded
pany’s international make-up.
in 2013, for example by using e-learning platforms. This included
The KION Group offers flexible working-time models that pro-
PC-based training on the KION Group’s code of conduct.
mote a good work-life balance. In addition, Linde Material Handling
has implemented a company agreement about ‘teleworking / home
Ideas management
office’, which stipulates the terms on which employees can work at
home on a mutually agreed and voluntary basis.
The companies in the KION Group regularly reward employees for
development of specialist workers and executives
its ideas management scheme over the past two years. New sugges-
their good ideas. STILL, in particular, has placed greater emphasis on
tions are quickly processed using a web tool and then receive recog-
Finding highly qualified people to fill specialist and executive posi-
nition in regular reports on the intranet. In 2013, 724 ideas were sub-
tions is crucial to the KION Group’s success. As a result, one of the
mitted, of which 184 were rewarded and put into practice.
focuses of HR work across the Group was again the recruitment and
development of suitable young talent in 2013.
health and safety in the workplace
The KION Group endeavours to offer its employees interesting
career opportunities and flexible, family-friendly working-time mod-
The steps that the KION companies must take with regard to work-
els. The Group companies also collaborate closely on areas such as
place safety, health and the environment are laid down in a corporate
talent management and training & development programmes. This
policy. According to this document, the KION Group’s obligations
helps to systematically identify and support staff with strong poten-
include taking comprehensive precautions to create a safe working
We keep the world moving.KION GROUP AG | Annual Report 2013 105105
environment and ensuring employees know how to avoid risks and
technology provider. Total R&D spending, including depreciation,
accidents.
amortisation and impairment, as well as capitalisation of develop-
At 97.1 per cent, the health rate remained at the same high level
ment expenses, amounted to €114.2 million in 2013 (2012: €120.2 mil-
as in the previous year. The number of workplace accidents and the
lion). The decline is essentially attributable to the sale of the hydrau-
workdays lost as a result had fallen slightly compared with 2012.
lics business. Research and development (R&D) is therefore geared
Analysis of accidents and detailed action plans help to reduce risks
towards the overarching aim of containing customers’ total cost of
in the workplace.
ownership (TCO) – including purchase price, maintenance and repair
In addition, LMH has launched a programme for changing the
costs and fuel consumption – while complying with environmental
culture of health and safety at four German plants. It developed the
targets and regulatory requirements. Another aim is to integrate the
programme in collaboration with experts at DuPont Sustainable
KION Group’s logistics solutions into customers’ value chains and
Solutions.
harness the potential of new application areas.
The medium-term aim is for all sales outlets to implement an
Brand-specific and cross-brand modular and platform strate-
occupational health and safety management system in accordance
gies are pursued to ensure research and development is as cost-ef-
with OHSAS 18001. To assist with this, a safety expert has been
ficient as possible, the complexity and variety of products is reduced
recruited for the Aschaffenburg site. In 2013, STILL’s occupational
and development times are shortened. The cross-brand R&D plat-
health and safety management system was certified in accordance
form enables research results and technological expertise to be
with OHSAS 18001.
shared, although responsibility for product development lies mainly
Besides conventional measures to ensure workplace safety,
with the individual companies.
increasing attention is being paid to employees’ general health.
Since 2013, Linde Material Handling’s German plants have offered
Key r&d figures
free health checks for all employees. Five key health factors are
checked and discussed during an appointment with a company
The KION Group spent a total of €114.2 million on R&D in 2013, a
doctor.
employee share programme
similar amount to the previous year. As in 2012, this corresponded to
2.5 per cent of revenue, or 4.5 per cent of revenue from new truck
business. Spending on research and development was therefore
higher than the industry average once again in 2013. The total
Having successfully floated on the stock exchange, the KION Group
includes capitalised development costs of €45.7 million (2012:
wants to set up a share programme to enable its employees to share
€51.2 million) as well as depreciation and amortisation in the amount
in the Company’s success. To this end, 200,000 treasury shares
of €45.1 million (2012: €55.5 million) (see note [17] in the notes to the
were repurchased over a four-week period, which represented
consolidated financial statements).
around 0.2 per cent of the Company’s share capital. The intention is
The number of full-time jobs in R&D teams stood at 944 at the
to launch the programme in Germany in 2014 before rolling it out at
end of 2013 (31 December 2012: 847). There was particularly strong
other sites around the world, wherever possible.
growth at the R&D centre in Xiamen (China), which had 232 FTEs at
the end of 2013. This centre carries out cross-brand development
work, focusing mainly on the economy and value price segments in
Research and development
emerging markets.
strategic focus of research and development
In 2013, the KION Group again channelled a considerable proportion
of its product revenue into research and development in order to
enhance its portfolio so that it can secure its position as a leading
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 106106
total r&d spending*
in € million
Research and development costs (P&L)
Amortisation expense
Capitalised development costs
total r&d spending
R&D spending as percentage of revenue
* Total R&D spending for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
>> Table 032
change
– 8.7 %
18.9 %
– 10.9 %
– 5.0 %
–
2012
124.5
– 55.5
51.2
120.2
2.5 %
2013
113.6
– 45.1
45.7
114.2
2.5 %
External costs predominantly related to engineering services,
under review found that the Linde diesel trucks were the cleanest
materials for prototype development and IT. Linde Hydraulics, which
trucks in the highest-volume market segment, i.e. trucks with a load
was spun off in 2012, and Linde Material Handling collaborate closely
capacity of between 2.5 and 3.5 tonnes.
on the development of new hydraulics products. >> Table 032
STILL is expanding its RX 70 range with the RX70-60/80 and
RX70-40/50 models. The focus is on adhering to emissions legisla-
The KION Group takes comprehensive measures to protect the
tion, with diesel particulates being reduced by more
than
products it develops against imitations. In 2013, the KION compa-
92.0 per cent. Technical aspects – handling capacity, driving perfor-
nies were granted a total of 85 patents (2012: 63). As at 31 December
mance and the ergonomics of the driver’s workstation – have also
2013, the companies of the KION Group held a total of 1,596 patent
been improved. Energy consumption by industrial trucks has been
applications and issued patents (31 December 2012: 1,495 patent
reduced substantially yet again thanks to the tried-and-tested hybrid
applications and issued patents).
version and STILL’s Blue-Q energy-efficiency programme.
Focus of r&d in 2013
region-specific and customer-specific design
reduction of emissions and fuel consumption
In 2013, the KION Group’s R&D centre in Xiamen again focused on
developing platform concepts for China and other emerging mar-
Both Linde and STILL launched updated diesel trucks at the start of
kets. The core task was to develop three models with different drive
the year in response to new EU emissions standards (97/68/EC
systems and in different price categories. A basic, low-cost variant
stage IIIB). The pollutants produced by Linde’s H20 to H50 (EVO)
(drive unit with a torque converter) was successfully launched on the
series of IC counterbalance trucks are well below the maximum per-
Chinese market at the start of the year. The model is now being mar-
mitted statutory limits thanks to new, low-emission engines as well
keted in Brazil as well, having been adapted to meet local require-
as a particulate filter fitted as standard. The value for emitted partic-
ments. Two more models in the counterbalance truck series are cur-
ulate matter (PT) is 84.0 per cent below the limit, hydrocarbons (HC)
rently being developed in Xiamen that have more sophisticated drive
and nitrogen oxides (NOx) are 26.1 per cent below the limit and the
systems. The Indian company Voltas MH is also collaborating with
figure for carbon monoxide (CO) is 99.5 per cent below the limit. As
the R&D centre in Xiamen and is using an axle developed there for its
a result, the trucks are even suitable for use in enclosed spaces. The
new electric forklift truck.
new trucks are also more energy-efficient and offer improved driver
Bespoke solutions play an important role, especially in devel-
ergonomics and safety. An analysis of exhaust emissions in the year
oped markets. In the year under review, Linde Material Handling
We keep the world moving.KION GROUP AG | Annual Report 2013
107107
pushed ahead with customising industrial trucks in accordance with
networking
customer requirements in the western European market, resulting in
a new generation of reach trucks, Linde R14 to R20, which have a
The automation and networking of supply chains remains an impor-
load capacity of between 1.4 and 2 tonnes. A far greater number of
tant subject. In 2013, STILL launched the iGoEasy system, which
mast, chassis and battery variants, combined with optional features,
can be installed, operated, and adjusted intuitively using an iPad.
enable customer-specific solutions to be created from series pro-
iGoEasy has been designed for use in plants with low transport vol-
duction trucks. At the same time, the chassis and other modules
umes where, until now, the best option has been to manage the flow
form the basis for other models of the KION Group. This is in line with
of goods with just a manually operated truck. The system enables
the Group’s modular and platform strategy, which involves a higher
simple transport tasks carried out by a single truck to be fully auto-
proportion of common parts.
mated for the first time, without the need for specially trained staff.
drive technology
Workplace safety and ergonomics
As in the previous year, development of new drive technologies cen-
To move heavy loads in explosion protection areas, LMH has
tred on powerful lithium-ion batteries for electric and hybrid trucks.
brought out two new diesel trucks that meet the EC requirements
LMH and STILL launched the first hand pallet trucks and towing
for use in zone-two explosive atmospheres (EN 1755), while the
vehicles fitted with such batteries at the end of 2013. They store con-
Atex version has been type-tested in accordance with 94/9/EC by
siderably more energy and can be charged faster than lead-acid bat-
TÜV Rheinland.
teries. In addition, LMH and STILL are also pushing forward with the
The LMH and STILL optical driving path warning system
development of lithium-ion batteries for counterbalance trucks in
BlueSpot, which warns of approaching trucks in aisles and at blind
higher weight categories. Another project is concerned with devel-
crossings, has also been available with red LEDs at LMH since
oping high-performance booster batteries for hybrid trucks.
November, so that the light that stands out most against the colour
The KION companies are also conducting fundamental research
of the floor can be selected. BlueSpot directional is another new fea-
into alternative drive technologies. In a field trial for the production of
ture: the LED lights project a blue arrow onto the floor to indicate the
the BMW i, the KION Group is currently working with the BMW
direction in which the approaching truck is travelling.
Group and Munich University of Technology to investigate a hydro-
To ascertain how the ergonomics of truck workstations can be
gen drive for industrial trucks. The E-LOG-Biofleet research project,
further improved, the KION Group and students from Munich Univer-
which was launched in 2011 to test the suitability of the fuel-cell
sity of Technology carried out a research project in which they devel-
hybrid drive developed by Linde and Fronius, officially started a year-
oped a working environment based on the principles of universal
long field test at DB Schenker in June. Four STILL trucks fitted
design. However, more research and testing are required before the
with fuel cells built by Danish manufacturer H2-Logic are also being
concept can be applied.
trialled at a Danish DIy chain.
The LMH unit New Business & Products, which is responsible
for marketing existing electric drive concepts, teamed up with
sweeping technology manufacturer Val’Air S.A.S at MobiliTec 2013
to present a compact hybrid sweeping machine for use in city cen-
tres and on industrial sites. LMH won the 2013 Industriepreis in the
power transmission and fluid technology category for its ROTRAC
E2 and E4 road-rail shunting vehicles.
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 108108
Customers
customer satisfaction
Sustainability
The KION Group endeavours to achieve a balance between environ-
mental, economic and social considerations in its business activities.
The KION companies gauge customer satisfaction in feedback
This focus on sustainability is reflected in its eco-friendly and safe
discussions and from the degree of customer loyalty. STILL regularly
products that help customers to conserve energy, reduce emissions
carries out such surveys in service and sales. A CRM project has
and comply with strict workplace safety standards (see ‘Research
also been launched with the aim of finding out more about the
and development’). Furthermore, the KION Group ensures that its
customer structure and customer needs so that resources can be
production processes have as minimal an impact on the environ-
deployed in an even more targeted manner.
ment as possible and that it offers safe and discrimination-free work-
The KION Group’s leading market position is underpinned by the
ing conditions.
accolades that it has earned. In 2013, Linde Material Handling was
The corporate policy on workplace safety, health and the envi-
again voted the best industrial truck brand when it received the
ronment was revised in the year under review. It defines a number of
Image Award from the trade magazine VerkehrsRundschau. As part
requirements for the companies in the KION Group, including:
of a 2013 study to produce an image ranking for the warehousing
and transshipment sector, the magazine had commissioned
TNS Emnid to analyse the reputations and profiles of the biggest
brands in the industrial truck sector.
sales and marketing activities
The number and quality of contacts with customers at trade fairs
enable conclusions to be drawn about existing and new customers’
interest in product innovations.
The KION Group has particularly stepped up its activities in
the Asia-Pacific region. In mid-May, the KION brand companies
Linde, STILL and Baoli jointly presented their product portfolios in
the necessary training;
of conduct and industry standards;
– as a minimum, complying with all relevant national laws, codes
– ensuring safe working conditions and providing employees with
– avoiding the release of pollutants, discharge and emissions into
– reducing the volume of waste by making better use of raw mate-
– using materials, products and processes that comply with best
– using resources, energy and raw materials efficiently.
rials and using recyclable materials;
the environment as far as possible;
environmental practice;
the Indonesian capital, Jakarta. The Indonesia-China Mechanical
Strict rules governing health, safety and the environment (HSE) apply
and Electrical Products Trade Fair is the biggest of its kind in
in all areas of the company. In the reporting year, KION plants around
south-east Asia.
the world were audited in accordance with a groupwide standard
In October, Linde Material Handling presented its Linde H100 to
and HSE data was collected for the fourth time. These activities
H180 IC trucks with hydrostatic drive at a roadshow that visited
increased awareness of workplace safety and environmental protec-
Poland, Slovakia, Hungary, Romania and the Czech Republic. LMH
tion and identified areas that could still be improved. A groupwide
was also represented at last year’s MobiliTec in Hannover, where it
system of KPIs was introduced in 2013 to keep better track of the
showed three innovative electric trucks. And LMH exhibited along-
progress made with HSE matters. The goal is to bring HSE stand-
side partners at LogiMAT 2013. Both LMH and STILL also had
ards into line worldwide and create a shared culture of awareness
stands at CeMAT in Brazil.
regarding the environment and safety.
At the international ‘transport logistic’ fair in Munich, STILL
Safety experts at the KION Group’s various production facilities
showcased its expertise in developing and applying alternative
began to collaborate more closely last year. Besides monthly confer-
drive systems as used in the RX 70 Hybrid, the first series-
ence calls, there was also an international HSE conference, at which
production hybrid forklift truck. STILL also appeared at the India
experts from the individual sites and country organisations presented
warehousing&logistics fair in New Delhi.
their successful workplace safety activities (see the HR report). For the
We keep the world moving.KION GROUP AG | Annual Report 2013 109109
first time, numerous representatives from the sales companies also
Checking compliance with fundamental human rights and mini-
took part.
mum social standards has always had the highest priority in the pur-
All plants capture data about their energy consumption, vol-
chasing function. To satisfy its own requirements and the wish of
umes of waste and recycling, water consumption, CO2 emissions
many big-ticket customers for end-to-end monitoring of the supply
and volatile organic compounds (VOC). This data is included in an
chain, the KION Group has developed a supplier policy that forms
annual internal environmental report. Data for 2013 was not available
the basis for incorporating environmental and ethical stipulations into
at the time this group management report was compiled.
the supplier management process.
According to the 2012 environmental report, energy consump-
Furthermore, all KION Group brands acknowledge their respon-
tion had declined slightly compared with 2011. Just under half
sibilities as corporate citizens. This is demonstrated by the fact that
(46.7 per cent) of the energy consumed was electricity and
both the Executive Board and employees personally support numer-
27.5 per cent was gas. Approximately 92.2 per cent (2011:
ous charities in different countries. Providing support in the event of
92.5 per cent) of waste was recycled. Compared with the previous
disasters is a particular priority. For example, trucks from KION com-
year, water consumption and CO2 emissions fell slightly while VOC
panies were deployed to help build barriers against flooding on the
emissions declined significantly.
Elbe river in 2013.
In addition, Linde Material Handling began to implement a sys-
tem for analysing environmental impact using lifecycle assessments.
The first step involved investigating and comparing the exhaust
emissions of IC trucks in the product portfolio, which revealed that
the new EVO models had particularly good emission levels.
At its core plant in Hamburg, STILL had its occupational health
and safety management system certified in accordance with the
BS.OHSAS 18001 standard and its environmental and energy man-
agement systems certified in accordance with ISO 14001 and ISO
50001 respectively in 2013. STILL intends to reduce its energy con-
sumption considerably over the next few years by using energy effi-
ciently and conserving resources.
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportFinancial report 110110
Events after the reporting date
On 18 December 2013, Weichai Power exercised its option to acquire
a further 3.3 per cent of the shares of KION GROUP AG from the
stake held by KKR and Goldman Sachs, thereby increasing its stake
from 30.0 per cent to 33.3 per cent. The shares were transferred on
15 January 2014. Furthermore, the Executive Board understands
that Superlift and Weichai Power have come to an arrangement in
the shareholder agreement to grant each other a mutual right of first
offer in respect of the shares held by the other shareholder.
On 7 January 2014, KKR and Goldman Sachs sold 10.7 million
shares – 10.8 per cent of their KION stake – on the stock exchange
at a price of €29.50 per share. Following this step, KKR and Gold-
man Sachs are now prohibited from selling shares until 7 April 2014.
As result of Weichai exercising its option and of the placement of
shares, the stake held by KKR and Goldman Sachs has declined
from 48.6 per cent to 34.5 per cent. At the same time, the free float
grew to 31.1 per cent.
We keep the world moving.KION GROUP AG | Annual Report 2013 Group manaGement report
Events after the reporting date
Outlook, opportunity and risk report
111111
Outlook, opportunity and risk report
OUtlOOK
Assumptions
Forward-looking statements
The forecasts in this section are derived from the KION Group’s mul-
tiple-year market, business and financial plan, which is based on
certain assumptions. Market planning takes into account macroeco-
nomic and industry-specific performance, which is described below.
The forward-looking statements and information given below are
Business planning and financial planning are based on expected
based on the Company’s current expectations and assessments.
market performance, but also draw on other assumptions, such as
Consequently, they involve a number of risks and uncertainties.
those relating to changes in the cost of materials, the KION Group’s
Many factors, several of which are beyond the control of the KION
ability to command higher prices from customers and movements in
Group, affect the Group’s business activities and profitability. Any
exchange rates.
unexpected developments in the global economy would result in the
KION Group’s performance and profits differing significantly from
expected macroeconomic conditions
those forecast below. The KION Group does not undertake to update
forward-looking statements to reflect subsequently occurring events
In the opinion of the International Monetary Fund (IMF), the pace of
or circumstances. Furthermore, the KION Group cannot guarantee
global economic growth will pick up slightly in 2014. The global
that future performance and actual profits generated will be consist-
economy is expected to grow at a rate of 3.7 per cent and the euro-
ent with the stated assumptions and estimates and can accept no
zone at 1.0 per cent. The economic situation in emerging markets
liability in this regard.
is stabilising, and moderate growth is anticipated in those coun-
Actual business performance may deviate from our forecasts
tries. The forecast for economic conditions is based on the
due, among other factors, to the opportunities and risks described
assumption that the eurozone will continue to stabilise, monetary
here. Performance particularly depends on macroeconomic and
policy will become increasingly more restrictive and be adjusted to
industry-specific conditions and may be negatively affected by
reflect the faster pace of growth, and fiscal policy will remain cau-
increasing uncertainty or a worsening of the economic and political
tious. The Chinese government is not expected to launch any major
situation.
growth initiatives.
Forecast for 2013
expected sectoral conditions
The overall market for industrial trucks will continue to depend heav-
The KION Group achieved the forecasts that it had made despite
ily on economic conditions in key sales markets, with the level of
challenging conditions in the economy as a whole and in the material
capital investment and the growth in global trade being particularly
handling sector. Order intake and revenue were almost at the same
crucial. In 2013, the global market for industrial trucks expanded by
level as in 2012. Currency effects had a negative impact on these fig-
around 7 per cent, reaching a record level of more than one million
ures, which is why the original forecasts made in the 2012 group
new trucks ordered. This was primarily driven by a recovery of
management report were adjusted slightly downwards in the interim
demand in China and North America. Given the positive economic
financial report for the third quarter of 2013. There was another
prospects and more optimistic investment climate, the KION Group
increase in adjusted EBIT and the EBIT margin, as had been antici-
anticipates a further increase, albeit moderate, in the worldwide mar-
pated. One of the contributing factors here was the further rise in the
ket volume in 2014. The major driving forces are likely to be the fur-
proportion of total revenue generated by the service business, which
ther stabilisation of demand in western Europe, a sustained uptrend
increased to 43.9 per cent – above the target of 40 per cent. The
in North America and growth in fast-growing Asian and eastern
KION Group generated much higher net income of €138.4 million, as
European markets.
had been forecast in the 2012 consolidated financial statements.
We keep the world moving.KION GROUP AG | Annual Report 2013 112112
Market expectations are also positive over the longer-term per-
expected financial position
spective. Based on current macroeconomic forecasts and in view of
the rise in global trade volumes, the KION Group predicts an average
The KION Group improved the maturity profile of its borrowing in
annual growth rate (in units) of about 4 per cent for the global market
February 2013 by issuing a bond and then significantly reduced its
over the next few years and does not expect there to be significant
debt in June when it made its initial public offering. These meas-
changes in the proportion of total revenue generated by each prod-
ures, combined with its good operating performance, meant that
uct segment.
the KION Group had reduced net debt to below €1 billion by the
expected business situation and financial per-
formance
end of 2013.
The Group intends to continue down this path in 2014, using
cash flow from operating activities to further lower net debt and
further optimising its capital structure and funding structure.
The KION Group aims to unlock the full potential of the western Euro-
pean markets and emerging markets in 2014.
Overall statement on expected performance
The KION Group expects a slight increase in both its order intake
and its consolidated revenue compared with 2013. Contributing fac-
The basis for the long-term success of the KION Group is the strong
tors here will be a recovery of the markets in western Europe and
position occupied by its global and regional brands in western
increased market share, above all in fast-growing markets, where the
Europe and the emerging markets. The global brands Linde Material
KION Group also wants to build on its strong position. Service busi-
Handling and STILL, in particular, safeguard their technology leader-
ness in western Europe and the emerging markets will continue to
ship and underline their status as premium brands by maintaining
play a significant role in 2014. From a regional perspective, the KION
high levels of capital expenditure and R&D spending.
Group expects Asia, eastern Europe and the United States to pro-
Overall, the KION Group is forecasting profitable growth for 2014
vide particularly strong impetus, assuming only moderate exchange-
and aims to achieve a sustained improvement in its market positions
rate fluctuations.
worldwide. The successful IPO in 2013 lays the foundations for fur-
Based on market expectations, the Group forecasts a significant
ther optimisation of the Group’s financial position.
year-on-year rise in adjusted EBIT resulting from the anticipated rise
in revenue and further improvements to processes and cost struc-
tures, for example in sales and development.
The margin is also likely to increase compared with 2013 owing
to the Group’s continued ability to command higher prices, a more
favourable cost situation following the closure of the Merthyr Tydfil
RISK RePOR t
plant, implementation of the modular strategy and better production
Risk strategy
capacity utilisation at existing plants. In addition, the forecast is
based on the assumption that the cost of materials will rise only
The business activities of the KION Group necessarily involve risk.
moderately and that there will be negative currency effects.
Dealing responsibly with risk and managing it in a comprehensive
Free cash flow is also expected to be considerably higher in
manner is an important element of corporate management. The
2014 than in the previous year. The main factor will be cash flow from
overarching aim is to fully harness business opportunities while
operating activities, which will be boosted by increased EBIT, among
ensuring that risk always remains under control. Using its groupwide
other things. Taxes that were paid in 2013 in connection with the sale
risk management system, the KION Group contains all identified
of the hydraulics business will not be due in 2014. With regard to
risks by implementing suitable measures and takes appropriate pre-
cash flow from investing activities, the KION Group anticipates higher
cautions. This ensures that the losses expected if these risks arise
capital expenditure than in 2013.
We keep the world moving.KION GROUP AG | Annual Report 2013 113113
will be largely covered and therefore will not jeopardise the Compa-
statements. The risks reported by the individual companies are com-
ny’s continuation as a going concern.
bined to form divisional risk reports as part of a rigorous reporting
At the KION Group, risk management has always been embed-
process. To this end, minuted risk management meetings are held
ded in the Accounting & Finance function and now plays an active
once a quarter. Moreover, material risks are discussed at the quar-
and wide-ranging role due to the strategic focus of Accounting &
terly business review meetings. The divisional risk reports are then
Finance. The operational units’ business models, strategic perspec-
used to compile an overall risk portfolio for the KION Group as a
tives and specific plans of action are examined systematically.
whole. To support this, the relevant departments of the holding com-
Principles of risk management
pany are consulted each quarter in order to identify and assess risk –
particularly Company-wide, cross-brand risk affecting areas such as
treasury, purchasing, tax, human resources and financial services.
The Executive Board of KION GROUP AG and the Supervisory
To ensure that the risk management systems are fully integrated into
Board’s Audit Committee are informed of the Group’s risk position
the KION Group’s overall financial planning and reporting process,
once a quarter. The Internal Audit department audits the risk man-
they are located in the Group Accounting & Finance function.
agement system at regular intervals.
The procedures governing the KION Group’s risk management
activities are laid down in internal risk guidelines. For certain types of
risk, such as financial risk or risks arising from financial services, the
relevant departments also have guidelines that are specifically
geared to these matters and describe how to deal with inherent
risks. Risk management is organised in such a way that it directly
Material features of the internal control and risk
management system pertaining to the (Group)
accounting process
reflects the structure of the Group itself. Consequently, risk officers
principles
supported by risk managers have been appointed for each company
and each division. A central Group risk manager is responsible for
The main objectives of the special accounting-related internal control
the implementation of risk management processes in line with pro-
system are to avoid the risk of material misstatements in financial
cedures throughout the Group. His or her remit includes the defini-
reporting, to identify material mismeasurement and to ensure com-
tion and implementation of standards to ensure that risks are cap-
pliance with the applicable regulations and internal instructions. This
tured and evaluated.
includes verifying that the consolidated financial statements and
The risk management process is organised on a decentralised
group management report comply with the relevant accounting
basis. Firstly, a groupwide risk catalogue is used to capture the risks
standards. There can, however, be no absolute certainty that these
attaching to each company. Each risk must be captured individually.
objectives are achieved in full and at all times.
If the losses caused by a specific risk or the likelihood of this risk
occurring exceed a defined limit, the KION Group’s Executive Board
material processes and controls in the
and its Accounting & Finance function are notified immediately. Each
(Group) accounting process
risk is documented in a specially developed module within the inter-
net-based reporting system that is used for the entire planning and
For its (Group) accounting process, the KION Group has defined
reporting process. Risks affecting more than one Group company,
suitable structures and processes within its internal control and risk
such as market risks, competition risks, financial risks and risks aris-
management system and implemented them in the organisation.
ing from financial services are not recorded individually but are
Changes to the law, accounting standards and other pro-
instead evaluated at Group level. Consequently, such risks are not
nouncements are continually analysed with regard to their relevance
quantified.
and effect on the consolidated financial statements and group man-
The scope of consolidation for risk management purposes is the
agement report; the relevant changes are then incorporated into the
same as the scope of consolidation for the consolidated financial
Group’s internal policies and systems.
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportOutlook, opportunity and risk report 114114
All consolidated entities must follow the KION GROUP IFRS
Internal control mechanisms and ongoing analysis of the regulatory
Accounting Manual when preparing their IFRS reporting packages.
framework enable any risks that might jeopardise compliance of the
This manual contains the recognition, measurement and disclosure
consolidated financial statements and group management report
rules to be applied in the KION Group’s accounting in accordance
with accounting standards to be identified as soon as possible so
with IFRS. The accounting guidelines primarily explain the financial
that appropriate countermeasures can be taken. Such risks form
reporting principles specific to the KION Group’s business. In addi-
part of the KION Group’s overall risk profile and are classified as
tion, all companies must adhere to the schedule defined by head
operational risk.
office for preparing the consolidated financial statements and group
management report.
The accounting-based internal control and risk management
Risks
system encompasses defined control mechanisms, automated and
manual reconciliation processes, separation of functions, the dou-
aggregate risk
ble-checking principle and adherence to policies and instructions.
The employees involved in the Group’s accounting process
In 2013, the KION Group’s overall risk position improved substantially
receive regular training in this field. Throughout the accounting pro-
compared with the previous year due to repayment in full of the
cess, the local companies are supported by central points of con-
acquisition finance. With regard to 2014, the risks in the risk matrix
tact. The consolidated accounts are drawn up centrally using data
below will be continually observed and evaluated. For example, we
from the consolidated subsidiaries. A consolidation department with
consider the probability of market risk materialising as low because
specially trained employees carries out the consolidation activities,
of the fairly positive market expectations. However, the possible
reconciliations and monitoring of the stipulated deadlines and pro-
impact of market risk continues to be rated at a medium risk level
cesses. Monthly checklists have been drawn up for the consolidation
because of the importance of the market for the KION Group’s busi-
process and are worked through in a standardised manner. All post-
ness situation and financial performance. As things stand at present,
ings are managed centrally and documented. This team also moni-
there are no indications of any risks that could jeopardise the Com-
tors the system-based controls and supplements them with manual
pany’s continuation as a going concern. >> Diagram 004
checks. The entire accounting process contains a number of spe-
cific approval stages, for which extensive plausibility checks have
been set up. Employees with the relevant expertise provide support
on specialist questions and complex issues. The central Internal
Audit department also checks, among other things, the reliability of
the accounting work by the subsidiaries in Germany and abroad. It
focuses primarily on the following aspects:
tive Board, other policies and internal instructions;
– compliance with legal requirements, directives from the Execu-
– integrity and effectiveness of the internal control systems for
– correct performance of tasks and compliance with business
– correctness of the accounting (and of the financial reporting that
avoiding financial losses;
principles;
is based on the accounting) in terms of form and substance.
We keep the world moving.KION GROUP AG | Annual Report 2013 115115
risk matrix
>> Diagram 004
L
E
V
E
L
K
S
R
I
H
G
H
I
I
M
U
D
E
M
W
O
L
• Market risk
• Procurement risk
• Production risk
• Sales risk
• Legal risk
• Competition risk
• R&D risk
• IT risk
• Financial risk
• Risk arising from
financial services
• Human resources risk
of new trucks. Although demand for services is less cyclical, it corre-
lates with the degree of utilisation in the truck fleet – which usually
declines during difficult economic periods. As the KION Group can
only adjust its fixed costs to fluctuations in demand to a limited
extent, reductions in revenue impact on earnings.
Despite the KION Group’s strong growth in emerging markets,
the proportion of revenue it earns in the eurozone remains high. As a
result, the market conditions that prevail there impact significantly on
the KION Group’s financial performance. Although economic perfor-
mance has stabilised somewhat, the eurozone remains susceptible
to disruption. Doubts surrounding the stability of the financial system
and the ability of the single currency to survive have not been allayed,
either. Overall, these factors could reduce eurozone customers’ will-
ingness to invest and consequently the demand for the KION Group’s
products.
Slower than forecast macroeconomic growth in emerging mar-
kets could also have a negative impact on global trade volumes and
thus on growth in the material handling market.
LOW
MEDIUM
HIGH
Various measures aimed at making cost structures more flex-
PROBABILITy OF OCCURRENCE
HIGH RISK
MEDIUM RISK
LOW RISK
ible – such as the consolidation of production facilities – help to con-
tain the earnings risk arising from reductions in revenue caused by
economic conditions. Diversification of the customer base in terms
of industry and region as well as expansion of service activities also
play a role in mitigating risk. Moreover, the KION Group closely mon-
The market risks and competition risks described, the risks along the
itors the market and its competitors so that it can identify market
value chain, the human resources risks and the legal risks largely
risks at an early stage and adjust its production capacities in good
relate to the Linde Material Handling and STILL segments. By con-
time. Besides global economic growth, the KION Group also analy-
trast, risks arising from financial services mainly affect the Financial
ses exchange rates, price stability, the consumer and investment cli-
Services segment, while financial risks predominantly impact on the
mate, foreign trade activity and political stability in its key sales mar-
Other segment.
kets. The risk management function continually analyses the possible
impact of the situation in the eurozone on the Group’s financial posi-
market risks and competition risks
tion and financial performance. In addition to ongoing screening and
monitoring, the risk reports regularly include a separate assessment
market risk can arise when the economy as a whole or a particular
of the risks arising from the sovereign debt crisis.
sector does not perform as well as had been anticipated in the out-
competition risk describes the risk that growing competitive
look. Cyclical fluctuations in macroeconomic activity affect the mar-
pressure will prevent the KION Group from achieving its predicted
ket for industrial trucks. Customers’ decisions on whether to invest,
margins and market share. The markets in which the KION Group
particularly in new trucks, depend to a large degree on the macro-
operates are characterised by strong competition, often price-
economic situation and conditions in their particular sector. During
driven. Manufacturers from Asia have cost advantages in production
an economic downturn, customers tend to postpone their purchases
due to the currency situation and also because local labour costs are
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportOutlook, opportunity and risk report
116116
lower. Competition is therefore fierce, particularly in the lower and
risks along the value chain
middle price segments, and the impact is especially strong in emerg-
ing markets. Building on their local competitive advantages, Asian
research and development risks: The KION Group’s market posi-
manufacturers – above all those in China – are also looking for
tion and business performance depend to a large extent on its ability
opportunities to expand. Although the high quality expectations and
to remain a leading provider of technology. This requires the Group
service needs of customers in developed markets present a barrier
to continually develop products that meet customer expectations
to growth for many of these manufacturers, this situation is likely to
and comply with changing regulatory and technological require-
intensify competitive pressures in future.
ments. To this end, the KION Group must anticipate customers’
It is also conceivable that competitors will join forces and their
needs and quickly bring new products to market. If the Company
resulting stronger position will be detrimental to the KION Group’s
does not succeed in doing this, its technological and competitive
sales opportunities. Moreover, predictions of higher volumes and
position could be compromised in the long term.
margins may lead to overcapacity, which would put increased pres-
The innovations developed by the KION Group are comprehen-
sure on prices.
sively protected by intellectual property rights, in particular patents.
Although the KION Group’s strengths have enabled it to charge
Nevertheless, there is always the possibility that products or product
appropriate prices until now, it is taking a variety of steps to contain
components will be imitated. There is also a risk that patent applica-
competition risk. Alliances, partnerships, acquisitions and other
tions will not be successful.
measures are playing an increasing role in improving the KION
The KION Group contains research and development risk by
Group’s competitiveness in terms of resources, market access and
focusing firmly on customer benefit when developing products.
product range. The steps that the KION Group is taking to mitigate
Close collaboration between sales and development units ensures
its competition risk also include making its plants more efficient and
that customer needs are incorporated into the development process
securing low-cost sources of supply.
on an ongoing basis.
The KION Group also continually evaluates its options for
procurement risks: Procurement activities constitute a poten-
strengthening and consolidating its position in emerging markets, in
tial risk for the KION Group in terms of the lack of availability of parts
particular through strategic partnerships, the creation of joint ven-
and components for logistical or quality reasons and the rising cost
tures or acquisition of local manufacturers. One of the risks of such
of raw materials, energy, base products or intermediate products. As
alliances and acquisitions is that the expected benefits will material-
a result, there is always the possibility that the KION Group will face
ise only partly or not at all. For example, the organisational integration
backlogs in the supply of individual raw materials and components.
of new units can harm financial performance for a variety of reasons.
KION obtains some of its key components, such as combustion
It is also possible that a partner will collaborate with competitors if
engines, tyres, high-performance forged and electronic parts, from a
exclusivity agreements are not in place.
limited number of core suppliers.
Other risks arise as a result of constant changes in the Compa-
The risk of supply bottlenecks – for example in the event of a
ny’s political, legal and social environment. Because it operates in
shortage of raw materials or financial difficulties at core suppliers –
countries in which the political or legal situation is uncertain, the
cannot be ruled out in future. The KION Group mitigates this risk
KION Group is exposed to the consequent risk of government reg-
through appropriate diversification of its supplier structure in the
ulation, capital controls and expropriations. The KION Group miti-
context of a global procurement organisation. In addition, the sup-
gates such strategic risks by, for example, carrying out in-depth
plier development department, which focuses on improving suppli-
market research, conducting thorough evaluation procedures to
ers’ production processes, helps suppliers to ensure that their pro-
assess political and economic conditions and drafting contracts
cesses are cost-efficient and offer excellent quality. To build its
appropriately.
industrial trucks, Linde Material Handling requires hydraulic compo-
nents that are manufactured by the affiliated company Linde Hydrau-
We keep the world moving.KION GROUP AG | Annual Report 2013 117117
lics. Because LMH is highly dependent on these components, their
ever. It is also conceivable that customers would face a liquidity
supply is secured by detailed long-term contractual agreements.
shortfall and therefore be unable to fulfil their payment obligations
LMH also has access to patents and other intellectual property rights
immediately or even at all. Currently, there is little dependence on
that are important to its business activities.
individual sectors in the KION Group’s customer portfolio. The KION
Price changes present another procurement-related risk. In
Group’s reliance on individual customers also remains low. Its busi-
2013, around 26.4 per cent of the cost of materials for new trucks
ness is also highly diversified from a regional perspective. In addition,
was directly influenced by changes in commodity prices. Moreover,
the KION Group supplies companies of all sizes. Experience has
conditions on the commodity markets typically affect component
shown that the KION Group’s exposure to the risk of possible pay-
prices after a delay of three to six months. The KION Group endeav-
ment defaults is low, but this risk can be further mitigated by recov-
ours to pass on price increases to customers but cannot always do
ering any collateral.
so entirely due to market pressures.
It risks: A high degree of interconnectedness between sites
production risks are largely caused by quality problems, possi-
and with customers and other companies means that KION also
ble operational disruptions or production downtime at individual
relies on its IT systems working flawlessly. The KION Group under-
sites. In such cases, the KION Group’s closely integrated manufac-
takes ongoing further development of a reliable, extendable and flex-
turing network presents a heightened risk to its ability to deliver
ible IT system environment with the aim of countering any IT-related
goods on time. There is also a risk that structural measures and reor-
risks that may arise from the failure of IT systems and IT infrastruc-
ganisation projects will not be implemented owing to disruption of
ture. Internal IT resources are pooled in KION Information Manage-
production or strikes. Delays in delivery or a rise in the number of
ment Services GmbH, which has well-established processes for
complaints could harm the KION Group’s premium positioning and,
portfolio management and project planning and control. Independ-
as a result, its financial situation.
ent external audits are conducted to provide additional quality assur-
To mitigate these risks, the KION Group carries out preventive
ance. Various technical and organisational measures protect the
maintenance, implements fire protection measures, trains its staff
data of the KION Group and its Group companies against unauthor-
and builds a pool of external suppliers. The Company has taken out
ised access, misuse and loss. These measures include procedures
a commercially appropriate level of insurance cover against loss.
to validate and log access to the Group’s infrastructure.
Quality assurance is a high priority throughout the value chain and
reduces possible quality-related risks arising from the products and
Financial risks
services provided. The KION Group mitigates its quality-related risks
significantly by applying rigorous quality standards to its develop-
Group Treasury is responsible for ensuring that sufficient financial
ment activities, conducting stringent controls throughout the pro-
resources are always available for the KION Group’s international
cess chain and maintaining close contact with customers and sup-
growth. The main types of financial risk managed by Group Treasury,
pliers. To mitigate risks resulting from restructuring measures, the
including risks arising from funding instruments, are liquidity risk,
KION Group undertakes such measures only after a comprehensive
currency risk, interest-rate risk and counterparty risk. Credit risk
planning process and works closely with employee representatives
consists solely of counterparty risks attaching to financial institu-
to ensure HR measures are implemented with the minimum possible
tions. Risk management procedures issued by Group Treasury stip-
social impact.
ulate how to deal with the aforementioned risks.
The main sales risks – besides a drop in revenue caused by
The KION Group reduced its financial risk considerably during
market conditions – result from dependence on individual customers
the year under review by increasing its equity and repaying the
and sectors. For example, it is possible that customers would post-
acquisition finance in full. Long-term borrowing by the KION Group
pone or cancel orders during a period of economic difficulty. There
consists of two secured corporate bonds with a total volume of
have not been any significant cancellations in previous years, how-
€975.0 million, which are due to mature in 2018 and 2020, and a
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportOutlook, opportunity and risk report 118118
revolving loan facility of €1,045.0 million, which will mature in mid-
Pursuant to IFRS, these assets are not amortised and their measure-
2018. Taking into account the other loan obligations of individual for-
ment depends, above all, on future expectations. If these future
eign companies and contingent liabilities, €184.4 million of this
expectations are not fulfilled, there is a risk that impairment losses
amount was being utilised in the form of loans and guarantees as at
will have to be recognised on these assets.
31 December 2013. This meant that undrawn credit lines amounted
The individual Group companies directly manage counterparty
to €860.6 million. Risk arising out of the more favourable lending
risks involving customers. These counterparty risks have not
conditions that have been agreed were not regarded as material as
changed significantly, despite the financial crisis. Each individual
at 31 December 2013. The more favourable conditions, which were
Group company has established a credit management system for
agreed as part of the IPO, particularly relate to the restrictions in
identifying customer-related counterparty risks at an early stage and
respect of complying with financial covenants and upper limits for
initiating the necessary countermeasures. Analysis of the maturity
certain transactions and in respect of the obligation to submit special
structure of receivables is an integral element of monthly reporting.
regular reports. The KION Group complied with all the lending cove-
nants in the reporting year.
risks arising from financial services
The Company generally refers to credit ratings to manage coun-
terparty risk when depositing funds with a financial institution.
The KION Group’s leasing activities mean that it may be exposed to
The KION Group only uses derivatives to hedge underlying
residual value risks from the marketing of trucks that are returned by
operational transactions; they are not used for speculative purposes.
the lessee at the end of a long-term lease and subsequently sold or
It is exposed to currency risk because of the high proportion of its
re-leased. Residual values in the markets for used trucks are there-
business conducted in currencies other than the euro. Normally, at
fore constantly monitored and forecast. The KION Group regularly
least 50.0 per cent of the currency risk related to the planned oper-
assesses its overall risk position arising from financial services.
ating cash flows based on liquidity planning is hedged by currency
The risks identified are immediately taken into account by the
forwards in accordance with the relevant guideline. The interest-rate
Company in the costing of new leases by recognising writedowns or
swaps and currency swaps that had been used in 2012 to hedge
valuation allowances and adjusting the residual values. Risk-mitigat-
interest-rate risk and currency risk arising out of acquisition finance
ing factors include the demand for used trucks, which stabilises the
had been terminated in connection with the repayment of this finance
residual values of the KION Group’s industrial trucks. The majority of
by the middle of 2013.
the residual values have underlying remarketing agreements that
Group Treasury rigorously complies with and monitors the strict
transfer any residual-value risk to the leasing company. This had a
separation of functions between the front, middle and back offices.
positive impact on the financial results in 2013. Groupwide standards
Each Group company’s liquidity planning is broken down by cur-
to ensure that residual values are calculated conservatively, com-
rency and incorporated into the KION Group’s financial planning and
bined with an IT system for residual-value risk management, reduce
reporting process. Group Treasury checks the liquidity planning and
risk and provide the basis on which to create the transparency
uses it to determine the funding requirements of each company.
required.
The funding terms and conditions faced by the lenders them-
The KION Group mitigates its liquidity risk and interest-rate risk
selves (manifested, for example, in the payment of liquidity premiums
by ensuring that most of its transactions and funding loans have
on interbank lending) may result in a future shortage of lines of credit
matching maturities and by constantly updating its liquidity planning.
and / or increased financing costs for companies. However, the
Long-term leases are primarily based on fixed-interest agreements.
Group currently does not expect any further changes in its lines of
The credit facilities provided by various banks and an effective dun-
credit or any excessive increases in margins.
ning process ensure that the Group has sufficient liquidity.
Goodwill and the brands represented 34.7 per cent of total
In order to exclude currency risk, the KION Group generally
assets as at 31 December 2013 (31 December 2012: 33.3 per cent).
funds its leasing business in the local currency used in each market.
We keep the world moving.KION GROUP AG | Annual Report 2013 119119
Because of low default rates, counterparty risk has not been sig-
the existing risk provision in the form of insurance or provisions will
nificant to date in the Group. The KION Group has not identified any
be sufficient in each individual case. However, the KION Group is
material changes between 2012 and 2013. The Group also mitigates
not expecting any of these existing legal proceedings to have a
any losses from defaults by its receipt of the proceeds from the sale
material impact on its financial position or financial performance.
of repossessed trucks. In addition, receivables management has
These lawsuits relate, among other things, to liability risks, espe-
been improved by enhancing the dunning process. The credit port-
cially as a result of legal action brought by third parties because, for
folio management system was updated during 2013. Besides the
example, the Company’s products were allegedly faulty or the
design of the business processes, it also encompassed the risk
Company allegedly failed to comply with contractual obligations.
management and control processes.
Further legal risk may arise as a result of the environmental restora-
Moreover, the KION Group offers the majority of financial ser-
tion of sites that have been shut down in recent years, for example
vices indirectly via selected financing partners that bear the risks of
work required due to contamination. Any damage to the environ-
the finance transaction. As far as these financial services are con-
ment may lead to legal disputes and give rise to reputational risk.
cerned, the KION Group bears the counterparty risk in under
The KION Group has taken measures to prevent it from incur-
3 per cent of cases.
ring financial losses as a result of these risks. Although legal dis-
putes with third parties have been insignificant both currently and
human resources risks and legal risks
in the past, the Company has a centralised reporting system to
record and assist pending lawsuits. In addition to the high quality
The KION Group relies on having highly qualified managers and
and safety standards applicable to all users of the Company’s
experts in key roles. If they left, it could have a long-term adverse
products, with which it complies when it develops and manufac-
impact on the Group’s prospects.
tures the products, it has also taken out the usual types of insur-
That is why the KION Group actively engages in HR work
ance to cover any third-party claims. These issues are also tackled
aimed at identifying and developing young professionals with high
by teams whose members come from a variety of functions. The
potential who already work for the Company and retaining them
aim of the teams is to identify and avoid risks, for example the risks
over the long term, thereby enabling succession planning for key
arising from inadequate contractual arrangements. A further objec-
roles across the Group. The KION Group also positions itself in the
tive of this cooperation across functions is to ensure compliance
external market as an employer of choice. This will enable it to
with mandatory laws, regulations and contractual arrangements at
make strategic additions to its portfolio of existing staff and, in this
all times.
way, avert the risk of possibly losing expertise and thereby becom-
Owing to the KION Group’s export focus, legal risk and reputa-
ing less competitive.
tional risk arise due to the numerous international and local export
Restructuring measures may result in a risk of strikes and reac-
controls that apply. The Company mitigates these risks with a variety
tions of other kinds by the workforce. As demonstrated several
of measures. Consequently, export controls are an important part of
times in the past, this risk is contained by collaborating closely with
the compliance activities carried out by the Group companies.
employee representatives and, if job losses are necessary, taking
comprehensive steps to ensure they are achieved with the mini-
mum possible social impact.
The legal risks arising from the KION Group’s business are typ-
ical of those faced by any company operating in this sector. The
Group companies are a party in a number of pending lawsuits in
various countries. The individual companies cannot assume with
any degree of certainty that they will win any of the lawsuits or that
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportOutlook, opportunity and risk report 120120
OPPORtUNIty RePOR t
Management of opportunities
Opportunity situation
market opportunities
The economy as a whole may perform better than expected in 2014.
For example, the eurozone might stabilise at a faster rate than pre-
Opportunity management, like risk management, forms a central
dicted by economic research institutes. This could also have a posi-
part of the Company’s day-to-day management. Individual areas of
tive impact on growth rates in eastern Europe and other emerging
opportunity are identified within the framework of the strategy pro-
markets. Moreover, circumstances may occur in the wider market at
cess. Opportunities are determined and managed on a decentral-
any time – such as quality problems at competitors or the effects of
ised basis in line with the Group strategy.
consolidation – that boost demand for products from the KION
There are monthly reports on the opportunity situation as part of
Group brands. New, unforeseen regulatory initiatives could be
the regular Group reporting process. As a result, the KION Group is
launched, for example the tightening of health and safety regulations
in a position to ascertain at an early stage whether market trends,
or emissions standards, that would push up demand for the pre-
competitive trends, or events within the Group require individual
mium products offered by the KION Group brands. Average prices
areas of opportunity to be re-evaluated. This may lead to reallocation
for procuring commodities over the year may be cheaper than antic-
of the budgets earmarked for the realisation of opportunities. Such
ipated.
decisions are made on the basis of the potential of the opportunity,
Medium- to long-term market opportunities are presented, in
drawing on empirical values. There is no management system for the
particular, by:
evaluation of opportunities comparable to the system for risk man-
agement.
– growing demand for intralogistics products and services as a
consequence of globalisation, industrialisation and fragmenta-
Categorisation of opportunities
By ‘opportunities’, we mean positive deviations from the expecta-
tions set out in the outlook relating to the economic situation and the
KION Group’s position. Opportunities are divided into three catego-
tion of supply chains;
oped markets;
– high demand for replacement investments, especially in devel-
– the trend towards outsourcing service functions to industrial
– the trend towards trucks powered by electric motors – one of the
truck manufacturers;
ries:
KION Group’s particular strengths.
Market opportunities describe the potential resulting from trends
in the market and competitive environment and from the regulatory
strategic opportunities
situation.
Strategic opportunities are based on implementation of the
The realisation of strategic opportunities is already largely reflected in
Group’s strategy. They may lead to positive effects that exceed plan-
the expectations regarding the KION Group’s financial performance
ning assumptions.
in 2014. Nonetheless, its actual performance may be even more pos-
Business-performance opportunities arise in connection with
itive if the effects of individual measures exceed expectations. New
operational activities along the value chain, such as restructuring or
strategic opportunities that were not part of the planning may arise
cost-cutting measures.
over the course of the year, for example acquisitions and strategic
partnerships.
We keep the world moving.KION GROUP AG | Annual Report 2013 121121
The KION Group’s medium- to long-term strategic opportunities
arise, in particular, from:
– strengthening of its market-leading position in core western
European markets, especially in view of its leading technology
and high proportion of customer-specific fittings;
lifecycle, taking advantage of the high number of trucks in use;
– expansion of the service portfolio at every stage of the product
– harnessing of market potential in fast-growing regions;
– expansion of business in North America.
Business-performance opportunities
The expected consequences of the planned measures for increasing
efficiency and restructuring – such as the closure of the plant in Mer-
thyr Tydfil, which was the final phase in the restructuring of the Euro-
pean production sites – and the harnessing of intra-group synergies
have also been incorporated into the 2014 forecast. Nevertheless,
effects might occur that are better than had been expected.
The following occurrences may lead to profitability increases in
the medium term:
– ongoing efficiency increases at production sites;
– use of global development capacities and product ranges;
– modular and platform strategy for products across the Group.
We keep the world moving.KION GROUP AG | Annual Report 2013Group manaGement reportOutlook, opportunity and risk report Consolidated finanCial statements
Contents
123
Consolidated Financial
Statements
Consolidated inCome statement
Consolidated statement of
Comprehensive inCome
Consolidated statement of finanCial position
Consolidated statement of Cash flows
Consolidated statement of Changes in equity
notes to the Consolidated
finanCial statements
Basis of presentation
Notes to the consolidated income statement
Notes to the consolidated statement of financial position
Other disclosures
auditors’ opinion
responsibility statement
124
125
126
128
130
132
132
152
162
197
238
239
KION GROUP AG | Annual Report 2013
We keep the world moving.
124
Consolidated income statement
Consolidated income statement
in € million
Revenue
Cost of sales
gross profit
Selling expenses
Research and development costs
Administrative expenses
Other income
Other expenses
Profit from at-equity investments
earnings before interest and taxes
Financial income
Financial expenses
net financial expenses
earnings before taxes
income taxes
Current taxes
Deferred taxes
net income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
earnings per share according to ias 33 (in €)
Basic earnings per share
Earnings per share – diluted
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Accounting policies’
note
[8]
2013
4,494.6
– 3,255.2
1,239.4
>> table 033
2012 *
4,726.7
– 3,430.8
1,295.9
[9]
[10]
[11]
[12]
[13]
[14]
[16]
– 538.2
– 113.6
– 290.0
121.7
– 46.7
1.7
374.2
48.5
– 268.4
– 219.8
154.3
– 15.9
– 59.0
43.1
138.4
138.8
– 0.4
1.69
1.69
– 562.5
– 124.5
– 313.2
297.0
– 59.5
15.9
549.1
40.5
– 278.7
– 238.2
310.9
– 149.5
– 122.1
– 27.4
161.4
159.3
2.1
2.52
2.52
We keep the world moving.KION GROUP AG | Annual Report 2013
Consolidated finanCial statements
Consolidated income statement
Consolidated statement of comprehensive income
125
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
>> table 034
in € million
net income
items that will not be reclassified subsequently to profit or loss
Gains / losses on employee benefits
thereof changes in unrealised gains and losses
thereof tax effect
items that may be reclassified subsequently to profit or loss
Impact of exchange differences
thereof changes in unrealised gains and losses
thereof realised gains (–) and losses (+)
Gains / losses on cash flow hedges
thereof changes in unrealised gains and losses
thereof realised gains (–) and losses (+)
thereof tax effect
Gains / losses from at-equity investments
thereof changes in unrealised gains and losses
other comprehensive loss
total comprehensive income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Accounting policies’
note
[28]
[37]
2013
138.4
2012 *
161.4
0.7
– 152.3
0.7
1.8
– 1.1
– 16.7
– 34.0
– 34.4
0.4
17.4
66.3
– 41.4
– 7.5
– 0.1
– 0.1
– 152.3
– 215.4
63.1
8.8
2.8
2.8
0.0
6.1
27.3
– 19.7
– 1.6
– 0.0
– 0.0
– 15.9
– 143.5
122.5
123.1
– 0.6
17.9
15.9
2.0
We keep the world moving.KION GROUP AG | Annual Report 2013 126
Consolidated statement of financial position
Consolidated statement of financial position – assets
>> table 035
in € million
Goodwill
Other intangible assets
Leased assets
Rental assets
Other property, plant and equipment
At-equity investments
Lease receivables
Other non-current financial assets
Deferred taxes
non-current assets
Inventories
Trade receivables
Lease receivables
Current income tax receivables
Other current financial assets
Cash and cash equivalents
Current assets
total assets
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Accounting policies’
note
[17]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[14]
[24]
[25]
[22]
[14]
[23]
[26]
2013
1,494.7
934.0
251.9
461.2
499.4
138.6
308.8
51.7
295.5
2012 *
1,473.2
934.0
191.3
395.1
500.3
154.8
267.1
50.2
264.9
4,435.8
4,231.0
511.8
558.7
170.8
15.4
114.7
219.3
549.9
625.5
132.1
5.5
106.8
562.4
1,590.7
1,982.2
6,026.4
6,213.2
We keep the world moving.KION GROUP AG | Annual Report 2013
Consolidated finanCial statements
Consolidated statement of financial position
127
Consolidated statement of financial position – equity and liabilities
>> table 036
in € million
Subscribed capital
Capital contributions for carrying out the approved capital increase
Capital reserve
Retained earnings
Accumulated other comprehensive loss
Non-controlling interests
equity
Retirement benefit obligation
Non-current financial liabilities
Lease liabilities
Other non-current provisions
Other non-current financial liabilities
Deferred taxes
non-current liabilities
Current financial liabilities
Trade payables
Lease liabilities
Current income tax liabilities
Other current provisions
Other current financial liabilities
Current liabilities
total equity and liabilities
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Accounting policies’
note
[27]
[28]
[29]
[30]
[31]
[32]
[14]
[29]
[35]
[30]
[14]
[31]
[32]
2013
98.7
–
2,223.2
– 524.9
– 192.0
5.0
1,610.0
560.1
971.1
403.7
76.5
392.1
306.2
2012 *
0.5
1,132.6
348.5
– 650.7
– 176.3
6.2
660.7
547.6
2,300.7
329.2
87.7
355.1
308.8
2,709.8
3,929.0
227.5
550.5
213.3
27.7
110.3
577.3
51.8
646.0
145.8
85.0
137.9
557.0
1,706.6
1,623.5
6,026.4
6,213.2
We keep the world moving.KION GROUP AG | Annual Report 2013
128
Consolidated statement of cash flows
Consolidated statement of cash flows
>> table 037
in € million
earnings before interest and taxes
Amortisation, depreciation and impairment charges
of non-current assets
Other non-cash income (–) and expenses (+)
Gains (–) / losses (+) on disposal of non-current assets
Changes in leased assets (excluding depreciation) and
lease receivables / liabilities
Change in rental assets (excluding depreciation)
Change in inventories
Change in trade receivables / payables
Cash payments for defined benefit obligations
Change in other provisions
Change in other operating assets / liabilities
Taxes paid
= Cash flow from operating activities
Cash payments for purchase of non-current assets
Cash receipts from disposal of non-current assets
Dividends received
Interest income received
Acquisitions of subsidiaries, net of cash acquired
Divestments of subsidiaries, net of cash
Cash payments for sundry assets
= Cash flow from investing activities
note
[15]
[18], [22], [30]
[19]
[24]
[25]
[28]
[31]
[34]
[34]
[34]
[5]
[34]
2013
374.2
334.6
14.9
– 5.0
– 65.8
– 170.3
33.8
– 17.2
– 25.1
– 45.0
26.6
– 119.8
336.1
2012
549.1
365.3
– 141.5
– 103.8
– 101.3
– 165.5
20.5
52.9
– 23.3
– 39.9
55.9
– 54.4
414.0
– 125.8
– 155.1
9.9
7.2
7.0
– 25.1
0.0
– 6.7
– 133.5
7.4
5.3
4.5
– 9.7
259.7
– 8.0
104.1
We keep the world moving.KION GROUP AG | Annual Report 2013 Consolidated finanCial statements
Consolidated statement of cash flows
129
Consolidated statement of cash flows
(continued)
>> table 037
in € million
note
2013
2012
Capital contribution from shareholders for the carried out capital increase
Acquisition of own shares
Dividends paid to non-controlling interests
Cash payments from changes in ownership interests in subsidiaries without
loss of control
Capital contributions for carrying out the approved capital increase
Financing costs paid
Proceeds from borrowings
Repayment of borrowings
Interest paid
Cash receipts for other financing activities
= Cash flow from financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
= Change in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
[34]
[27]
[34]
[34]
[34]
[34]
[34]
[34]
[34]
741.8
– 5.6
– 2.1
– 16.3
0.0
– 56.3
1,095.9
– 2,201.6
– 119.6
25.1
– 538.6
0.0
0.0
– 2.4
– 10.2
467.0
– 15.6
7.7
– 664.6
– 129.7
17.8
– 330.1
– 7.0
1.0
– 343.0
188.9
562.4
219.3
373.5
562.4
We keep the world moving.KION GROUP AG | Annual Report 2013
130
Consolidated statement of changes in equity
Consolidated statement of changes in equity
in € million
balance as at 01/01/2012
Effects from first-time adoption IAS 19R*
balance as at 01/01/2012 (restated)
Net income for the year*
Other comprehensive income (loss)*
Comprehensive income (loss)
Capital increase
Transaction costs
Dividends
Effects from the acquisition / disposal
of non-controlling interests
Other changes
balance as at 31/12/2012 (restated)
balance as at 01/01/2013
Effects from first-time adoption IAS 19R*
balance as at 01/01/2013 (restated)
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Capital increase
Transaction costs
Dividends
Acquisition of own shares
Effects from the acquisition / disposal
of non-controlling interests
balance as at 31/12/2013
note
[7]
[27]
[27]
[27]
[27]
[7]
[27]
[27]
[27]
[27]
[27]
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Accounting policies’
Contributions for
carrying out the
approved
capital increase
subscribed
capital
Capital
reserves
348.5
348.5
0.0
0.0
1,137.8
– 5.2
accumulated other comprehensive income (loss)
gains / losses
equity attribu-
retained
earnings
Cumulative
translation
adjustment
on defined
gains / losses
gains / losses
table to share-
non-
benefit
on cash flow
from equity
holders of Kion
controlling
obligation
hedges
investments
group ag
interests
– 806.4
– 3.3
– 809.8
159.3
159.3
– 0.4
0.2
– 647.7
– 3.0
– 650.7
138.8
138.8
– 13.0
– 524.9
– 35.5
– 35.5
2.8
2.8
– 32.8
– 32.8
– 33.7
– 33.7
20.9
4.3
25.2
– 152.2
– 152.2
– 130.4
3.4
– 127.0
0.7
0.7
– 23.0
– 23.0
6.1
6.1
– 16.9
– 16.9
17.4
17.4
0.4
0.4
– 0.0
– 0.0
0.4
0.4
0.4
– 0.1
– 0.1
– 66.5
– 126.3
0.5
0.3
– 494.7
1.0
– 493.6
159.3
– 143.4
15.8
1,137.8
– 5.2
– 0.4
0.2
654.5
654.2
0.3
654.5
138.8
– 15.7
123.1
859.9
– 13.9
– 5.6
– 13.0
1,605.0
7.1
7.1
2.1
– 0.0
2.0
– 2.4
– 0.5
6.2
6.2
6.2
– 0.4
– 0.2
– 0.6
– 2.1
1.6
5.0
total
– 487.6
1.0
– 486.5
161.4
– 143.5
17.9
1,137.8
– 5.2
– 2.4
– 1.0
0.2
660.6
660.3
0.3
660.7
138.4
– 15.9
122.5
859.9
– 13.9
– 2.1
– 5.6
– 11.4
1,610.0
1,132.6
348.5
– 650.7
– 32.8
– 127.0
– 16.9
1,132.6
348.5
1,132.6
348.5
0.0
– 1,132.6
0.0
1,894.0
– 13.9
– 5.4
2,223.2
0.5
0.5
0.0
0.5
0.5
0.5
0.0
98.4
– 0.2
98.7
We keep the world moving.KION GROUP AG | Annual Report 2013
Consolidated statement of changes in equity
>> table 038
Consolidated finanCial statements
Consolidated statement of changes in equity
131
in € million
balance as at 01/01/2012
Effects from first-time adoption IAS 19R*
balance as at 01/01/2012 (restated)
Net income for the year*
Other comprehensive income (loss)*
Comprehensive income (loss)
Capital increase
Transaction costs
Dividends
Effects from the acquisition / disposal
of non-controlling interests
Other changes
balance as at 31/12/2012 (restated)
balance as at 01/01/2013
Effects from first-time adoption IAS 19R*
balance as at 01/01/2013 (restated)
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Capital increase
Transaction costs
Dividends
Acquisition of own shares
Effects from the acquisition / disposal
of non-controlling interests
balance as at 31/12/2013
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Accounting policies’
Contributions for
carrying out the
subscribed
approved
note
capital
capital increase
0.0
1,137.8
– 5.2
0.0
– 1,132.6
1,132.6
348.5
1,132.6
348.5
Capital
reserves
348.5
348.5
0.0
0.0
1,894.0
– 13.9
– 5.4
2,223.2
0.5
0.5
0.0
0.5
0.5
0.5
0.0
98.4
– 0.2
98.7
[7]
[27]
[27]
[27]
[27]
[7]
[27]
[27]
[27]
[27]
[27]
1,132.6
348.5
– 650.7
– 32.8
– 127.0
– 16.9
accumulated other comprehensive income (loss)
Cumulative
translation
adjustment
gains / losses
on defined
benefit
obligation
gains / losses
on cash flow
hedges
gains / losses
from equity
investments
equity attribu-
table to share-
holders of Kion
group ag
non-
controlling
interests
– 35.5
– 35.5
2.8
2.8
20.9
4.3
25.2
– 152.2
– 152.2
– 23.0
– 23.0
6.1
6.1
– 32.8
– 32.8
– 33.7
– 33.7
– 130.4
3.4
– 127.0
0.7
0.7
– 16.9
– 16.9
17.4
17.4
retained
earnings
– 806.4
– 3.3
– 809.8
159.3
159.3
– 0.4
0.2
– 647.7
– 3.0
– 650.7
138.8
138.8
– 13.0
– 524.9
0.4
0.4
– 0.0
– 0.0
0.4
0.4
0.4
– 0.1
– 0.1
– 494.7
1.0
– 493.6
159.3
– 143.4
15.8
1,137.8
– 5.2
– 0.4
0.2
654.5
654.2
0.3
654.5
138.8
– 15.7
123.1
859.9
– 13.9
– 5.6
– 13.0
1,605.0
7.1
7.1
2.1
– 0.0
2.0
– 2.4
– 0.5
6.2
6.2
6.2
– 0.4
– 0.2
– 0.6
– 2.1
1.6
5.0
total
– 487.6
1.0
– 486.5
161.4
– 143.5
17.9
1,137.8
– 5.2
– 2.4
– 1.0
0.2
660.6
660.3
0.3
660.7
138.4
– 15.9
122.5
859.9
– 13.9
– 2.1
– 5.6
– 11.4
1,610.0
– 66.5
– 126.3
0.5
0.3
We keep the world moving.KION GROUP AG | Annual Report 2013
132
Notes to the consolidated financial statements
Basis of presentation
[1] General information on
the Company
standards. All of the IFRSs and IFRICs that had been enacted by the
reporting date and that were required to be applied in the 2013 finan-
cial year have been applied in preparing the consolidated financial
statements. In addition, the changes to the disclosure requirements
pursuant to IAS 36 ‘Impairment of Assets’ for non-financial assets,
At the Shareholders’ Meeting on 25 April 2013, it was decided to
which must be adopted for financial years commencing on or after
transform KION Holding 1 GmbH, whose registered office is at Abra-
1 January 2014, were adopted in advance.
ham-Lincoln-Strasse 21, 65189 Wiesbaden, Germany, into a public
In order to improve the clarity of presentation, certain items are
limited company with the name KION GROUP AG. The transforma-
aggregated on the face of the statement of financial position and the
tion became legally effective when KION GROUP AG was entered in
income statement. The items concerned are disclosed and explained
the commercial register at the Wiesbaden local court under refer-
separately in the notes. Assets and liabilities are broken down into
ence HRB 27060 on 4 June 2013. KION GROUP AG is the parent
current and non-current items in accordance with IAS 1.60. The con-
company of the KION Group in Germany. Superlift Holding S.à r.l.,
solidated income statement is prepared in accordance with the cost
Luxembourg, was the parent company of KION GROUP AG as at
of sales (function-of-expense) method.
31 December 2013.
The consolidated financial statements are prepared in euros,
The KION Group is a leading global supplier of industrial trucks
which is the Group’s functional currency and reporting currency. All
(forklift trucks and warehouse trucks). It generated revenue of
amounts are disclosed in millions of euros (€ million) unless stated
€4,494.6 million in the 2013 financial year from its Linde, Fenwick,
otherwise (disclosed in thousands of euros in the 2012 report). The
STILL, OM-STILL, Baoli and Voltas brands (2012: €4,726.7 million).
addition of the totals presented may result in rounding differences of
The consolidated financial statements and the group manage-
+ / – €0.1 million. The percentages shown are calculated on the basis
ment report were prepared by the Executive Board of KION GROUP
of the respective amounts, rounded to the nearest thousand euros.
AG on 10 March 2014.
[2] Basis of preparation
The separate financial statements included in the consolidation were
prepared as at the same reporting date as the annual financial state-
ments of KION GROUP AG.
financial reporting standards to be adopted for
the first time in the current financial year
The consolidated financial statements of the KION Group for the
financial year ended 31 December 2013 have been prepared in
The following financial reporting standards were adopted for the first
accordance with section 315a of the German Commercial Code
time in 2013:
(HGB) in conjunction with the International Financial Reporting
Standards (IFRSs) of the International Accounting Standards Board
(IASB) applicable as at the reporting date as well as the associated
interpretations (IFRICs) of the IFRS Interpretations Committee (IFRS
IC) as adopted by the European Union in accordance with Regula-
tion (EC) No. 1606/2002 of the European Parliament and of the
– Amendments to IFRS 1 ‘First-time Adoption of International
Financial Reporting Standards’: amendments relating to fixed
transition dates and severe hyperinflation
– Amendments to IFRS 1 ‘First-time Adoption of International
Financial Reporting Standards’: amendments relating to govern-
Council concerning the application of international accounting
ment loans with a below-market rate of interest
We keep the world moving.KION GROUP AG | Annual Report 2013 133
financial reporting standards released
but not yet adopted
In its consolidated financial statements for the year ended 31 Decem-
– Amendments to IFRS 7 ‘Financial Instruments: Disclosures’: off-
– IFRS 13 ‘Fair Value Measurement’: The publication of IFRS 13
setting of financial assets and financial liabilities
’Fair Value Measurement’ introduces a separate standard con-
taining general rules on the measurement of fair value. The KION
ber 2013 the KION Group has not applied the following standards
Group applied these rules for the first time in the 2013 financial
and interpretations, which have been issued by the IASB but are not
year. The main impact of this is enhanced disclosures in the
yet required to be adopted in 2013:
notes to the financial statements.
– Amendments to IAS 1 ‘Presentation of Financial Statements’:
amendments relating to the presentation of items of other com-
prehensive income. The amended IAS 1 results in a revised
presentation of the statement of comprehensive income. Fol-
lowing the amendment to the standard, the items of other com-
prehensive income and loss must be split into items that will
never be reclassified to profit or loss and items that might be
reclassified to profit or loss in future periods.
– Amendments to IAS 12 ‘Income Taxes’: limited amendment to
– Amendments to IAS 19 ‘Employee Benefits’: elimination of the
IAS 12 relating to the recovery of underlying assets
use of the ‘corridor’ approach and amendments relating to the
presentation of items of pension expense. The effects of the
amendments to IAS 19 are described in note [7] ‘Accounting
policies’.
– Amendments to IAS 36 ‘Impairment of Assets’: clarification of
recoverable amount disclosures required for non-financial
assets
– IFRIC 20 ‘Stripping Costs in the Production Phase of a Surface
– Annual Improvements to IFRSs (2009-2011).
Mine’
closures about the transition to IFRS 9 ‘Financial Instruments’
– Amendments to IFRS 7 ‘Financial Instruments: Disclosures’: dis-
– IFRS 9 ‘Financial Instruments’
– Amendments to IFRS 9 ‘Financial Instruments’: mandatory
– Hedge Accounting and Amendments to IFRS 9, IFRS 7 and IAS 39
– IFRS 10 ‘Consolidated Financial Statements’
– Amendments to IFRS 10 ‘Consolidated Financial Statements’,
effective date
IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 27
‘Separate Financial Statements’: amendments relating to the
consolidation of investment entities
plans: employee contributions
– IFRS 11 ‘Joint Arrangements’
– IFRS 12 ‘Disclosure of Interests in Other Entities’
– Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)
– Amendments to IAS 19 ‘Employee Benefits’: defined benefit
– IAS 27R ‘Separate Financial Statements’
– IAS 28R ‘Investments in Associates and Joint Ventures’
– Amendments to IAS 32 ‘Financial Instruments: Presentation’:
– Amendments to IAS 39 ‘Financial Instruments: Recognition and
offsetting of financial assets and financial liabilities
Measurement’: amendments relating to the novation of deriva-
The first-time adoption of these standards and interpretations has
had no significant effect on the presentation of the financial perfor-
mance, financial position or notes to the financial statements of the
KION Group.
tives and continuation of hedge accounting
– IFRIC 21 ‘Levies’
– Annual Improvements to IFRSs (2010 – 2012)
– Annual Improvements to IFRSs (2011 – 2013).
These standards and interpretations will only be applied by the com-
panies included in the KION Group from the date on which they must
be adopted for the first time.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 134
We do not currently expect the first-time adoption of IFRS 10
In the case of acquisitions in stages, previously held equity inter-
‘Consolidated Financial Statements’, IFRS 11 ‘Joint Arrangements’
ests are recognised at their fair value on the date they were acquired.
and IFRS 12 ‘Disclosure of Interests in Other Entities’ to have any
The difference between their carrying amount and fair value is recog-
material effect on the presentation of the financial position or finan-
nised in the consolidated income statement.
cial performance of the KION Group. The first-time adoption of
For the purpose of impairment testing, goodwill is allocated to
IFRS 12 is likely to result in enhanced disclosures in the notes to the
cash-generating units that are likely to benefit from the business
financial statements. The effects of the first-time adoption of the
combination.
other standards and interpretations on the presentation of the finan-
Transaction costs are immediately taken to income. Contingent
cial position and financial performance of the KION Group are
consideration elements are included at fair value at the date of acqui-
expected to be insignificant.
[3] prinCiples of Consolidation
sition when determining the purchase consideration. Contingent
consideration elements may consist of equity instruments or finan-
cial liabilities. Depending on the category, changes in their fair value
are included in subsequent measurements.
The consolidated financial statements include all of the parent
company’s subsidiaries. Intragroup balances, transactions, income
and expenses, and gains and losses on intercompany transactions
Acquisitions are accounted for using the acquisition method. In
are eliminated in full. Deferred taxes are recognised on temporary
accordance with IFRS 3, the identifiable assets and the liabilities
differences arising from consolidation transactions.
assumed on the acquisition date are recognised separately from
Transactions with non-controlling interests are treated as trans-
goodwill, irrespective of the extent of any non-controlling interests.
actions with the Group’s equity providers. Differences between the
The identifiable assets acquired and the liabilities assumed are
consideration paid for the acquisition of a non-controlling interest
measured at their fair value.
and the relevant proportion of the carrying amount of the subsidi-
The amount recognised as goodwill is calculated as the amount
ary’s net assets are recognised in other comprehensive income.
by which the acquisition cost, the amount of non-controlling interests
Gains and losses arising from the sale of non-controlling interests are
in the acquiree and the fair value of all previously held equity interest
also recognised in other comprehensive income, provided there is
at the acquisition date exceeds the fair value of the acquiree’s net
no change in control.
assets. If the cost of acquisition is lower than the fair value of the
Associates and joint ventures that are of material importance to
acquiree’s net assets, the difference is recognised in income.
the presentation of the financial position and financial performance
For each acquisition, the Group decides on a case-by-case
of the KION Group are accounted for using the equity method.
basis whether the non-controlling interest in the acquiree is recog-
nised at fair value or as a proportion of the net assets of the acquiree.
The option to recognise non-controlling interests at fair value is not
currently exercised. Consequently, non-controlling interests are rec-
ognised at the proportionate value of the net assets attributable to
them excluding goodwill.
We keep the world moving.KION GROUP AG | Annual Report 2013 135
[4] Basis of Consolidation
A joint venture is an equity interest in which the entity is jointly
managed by companies in the KION Group and one or more part-
ners on the basis of a contractual agreement.
Associates are entities in which companies in the KION Group
KION GROUP AG’s equity investments include subsidiaries, joint
are able to exercise significant influence, either directly or indirectly,
ventures, associates and financial investments.
over the financial and operating policies of the entity concerned. Sig-
In addition to KION GROUP AG, the consolidated financial state-
nificant influence is assumed when KION GROUP AG holds between
ments of the KION Group include, using the acquisition method, all
20 per cent and 50 per cent of the voting rights.
material subsidiaries in which KION GROUP AG holds a majority of
All other equity interests over which KION GROUP AG is unable
the voting rights, either directly or indirectly, or in which it exercises
to exercise control or a significant influence, or that are not jointly
control i.e. has the power to govern the financial and operating poli-
controlled by KION GROUP AG, are classified as financial invest-
cies of the entity so as to obtain benefits from its activities. Subsidi-
ments and are not consolidated.
aries acquired in the course of the financial year are consolidated
The following table shows the number of equity investments
from the date at which control is transferred, i.e. the date from which
broken down by category: >> Table 039
it is possible to govern their financial and operating policies such that
benefit is obtained. Companies sold in the course of the financial
year are deconsolidated from the date on which control is lost.
Shareholdings by categories
>> Table 039
Consolidated subsidiaries
Domestic
Foreign
At-equity investments in Joint Ventures and Associates
Domestic
Foreign
Subsidiaries and financial investments at amortised cost
Domestic
Foreign
01/01/2013
Additions
Disposals
31/12/2013
98
19
79
10
8
2
39
7
32
6
4
2
–
–
–
14
6
8
5
1
4
2
2
–
–
–
–
99
22
77
8
6
2
53
13
40
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation
136
A total of 22 German and 77 foreign subsidiaries were fully consol-
Ltd., Weifang, China (referred to below as Weichai Power). Linde
idated in addition to KION GROUP AG as at 31 December 2013.
Material Handling GmbH (referred to below as LMH GmbH) contin-
On 11 June 2013, Superlift Holding S.à r.l., Luxembourg, made a
ues to hold the remaining 30 per cent. Linde Hydraulics is included
non-cash capital contribution – including all of the shares in Superlift
in the scope of consolidation as an associate accounted for using
Funding S.à r.l., Luxembourg – to KION GROUP AG as part of a cap-
the equity method.
ital increase. Superlift Funding S.à r.l. was therefore consolidated as
Eight joint ventures and associates were accounted for under
part of the KION Group for the first time in June 2013.
the equity method as at 31 December 2013 (31 December 2012:
In July 2013, the KION Group also acquired the remaining shares
ten). Two insignificant equity investments are no longer accounted
(45.7 per cent) in the French dealer Bretagne Manutention S.A. for a
for using the equity method. In each case, measurement under the
purchase consideration of €16.2 million. As a result, as at 31 Decem-
equity method was performed on the basis of the last available
ber 2013, KION GROUP AG indirectly held all the capital and voting
annual financial statements.
shares in Bretagne Manutention S.A., Pacé, France, via Fen-
53 (2012: 39) companies with minimal business volumes or no
wick-Linde S.à r.l., Elancourt. The shortfall of €13.0 million between
business operations were not included in the consolidation. The
the amount of the non-controlling interest and the fair value of the
unconsolidated subsidiaries and the associates not accounted for
consideration paid is recognised in retained earnings.
using the equity method are of minor importance to the presentation
Furthermore, in September 2013, the KION Group acquired the
of the financial position and financial performance of the KION
remaining shares (49.9 per cent) in the French dealer MANUSOM
Group, both individually and as a whole.
SAS for a purchase consideration of €0.4 million. As a result, as at 31
Where other requirements are met, the following fully consoli-
December 2013, KION GROUP AG indirectly held all the capital and
dated companies are exempt from the requirement to prepare
voting shares in MANUSOM SAS, Rivery, via STILL SAS, Marne la
annual financial statements and management reports in accordance
Vallée, France.
with sections 264 (3) and 264b HGB on account of their inclusion in
Five insignificant subsidiaries were deconsolidated in 2013. In
the consolidated financial statements: >> Table 040
2012, the KION Group sold and deconsolidated its controlling inter-
est of 70 per cent in Linde Hydraulics GmbH & Co. KG, Aschaffen-
A detailed overview of all the direct and indirect shareholdings of
burg (referred to below as Linde Hydraulics), to Weichai Power Co.,
KION GROUP AG is shown in the list of shareholdings in note [45].
German entities exempted from disclosure requirements
Entities exempted
KION Holding 2 GmbH
Klaus Pahlke GmbH & Co. Fördertechnik KG
Schrader Industriefahrzeuge GmbH & Co. KG
LMH Immobilien GmbH & Co. KG
LMH Immobilien Holding GmbH & Co. KG
>> Table 040
Head office
Wiesbaden
Haan
Essen
Aschaffenburg
Aschaffenburg
We keep the world moving.KION GROUP AG | Annual Report 2013
137
[5] aCquisitions
further strengthen the leading position of STILL and the brand com-
pany’s Turkish distribution and service network.
The incidental acquisition costs incurred by this business com-
bination amounted to €0.3 million and have been recognised as an
In May 2013, STILL agreed to acquire 51.0 per cent of the capital and
expense for the current period and reported as administrative
voting shares in Arser İş Makineleri Servis ve Ticaret A.Ş. (referred to
expenses on the face of the consolidated income statement. The
below as Arser), which had previously acted as exclusive dealer for
impact of this acquisition on the consolidated financial statements of
the important Turkish market. The transaction was closed on
KION GROUP AG based on the provisional figures available at the
14 August 2013. The acquisition has enabled the KION Group to
acquisition date is shown in >> Table 041.
Impact of the acquisition on the financial position of the KION Group
>> Table 041
in € million
Goodwill
Other intangible assets
Leased / Rental assets
Lease receivables
Cash and cash equivalents
Other assets
Total assets
Financial liabilities
Lease liabilities
Other liabilities
Total liabilities
Total net assets
thereof non-controlling interests
Cash payment
Consideration transferred
Previously held share of equity (23 per cent in
Willenbrock Fördertechnik Holding GmbH)
Total
Arser
Fair value as at
14/08/2013
Willenbrock
Fair value as at
31/12/2013
Fair value at the
acquisition date
total
4.9
2.3
1.0
20.2
1.6
15.1
45.1
10.4
19.4
9.3
39.0
6.0
0.6
5.5
5.5
0.0
5.5
18.1
13.0
76.7
17.8
0.0
37.7
23.0
15.3
77.7
38.0
1.6
52.8
163.3
208.4
20.1
51.8
56.1
128.0
35.3
4.5
21.3
21.3
9.6
30.8
30.5
71.2
65.4
167.1
41.3
5.0
26.7
26.7
9.6
36.3
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation
138
The gross amounts of the receivables acquired as part of this trans-
The equity-accounted carrying amount of the investment in Wil-
action, which constitute trade receivables, totalled €5.8 million
lenbrock Fördertechnik Holding GmbH, Bremen, immediately prior to
(including insignificant irrecoverable receivables). The acquisition has
the acquisition date came to €2.6 million. Remeasurement of the
not had any material impact on the KION Group’s revenue or net
investment of 23.0 per cent previously held resulted in a fair value of
income (loss). If this business combination had been completed
€9.6 million. The difference of €7.0 million was taken to income and
by 1 January 2013, this would have had no material impact on either
recognised under the share of profit (loss) of equity-accounted invest-
the revenue or the net income (loss) reported by the KION Group for
ments in the consolidated income statement.
the first nine months of this year. The purchase price allocation for
The incidental acquisition costs incurred by this business combi-
the acquisition described above was only provisional as at 31 Decem-
nation were insignificant and have been recognised as an expense for
ber 2013 because some details, particularly in the area of leasing,
the current period and reported as administrative expenses in the con-
had not yet been fully evaluated. Goodwill constitutes the strategic
solidated income statement.
and geographical synergies that the KION Group expects to derive
The impact of this acquisition on the consolidated financial
from this business combination. The goodwill arising from this acqui-
statements of KION GROUP AG based on the final figures at the
sition is currently not tax deductible.
acquisition date is shown in >> Table 041.
The KION Group acquired the German dealer Willenbrock on
The gross amounts of the receivables acquired as part of this
31 December 2013 by purchasing 51.0 per cent of the capital and
transaction, which constitute trade receivables, totalled €12.8 million
voting shares in Willenbrock Fördertechnik Holding GmbH, Bremen,
(of which from affiliated companies: €2.3 million). At the acquisition
Germany. Before this acquisition on 31 December 2013, the KION
date, it was assumed that the trade receivables were fully recovera-
Group already held 23.0 per cent of the capital and voting shares in
ble. Consolidated revenue did not increase as a result of the acquisi-
Willenbrock Fördertechnik Holding GmbH, Bremen. As at 31 Decem-
tion on 31 December 2013. The net income (loss) reported for 2013
ber 2013, KION GROUP AG therefore indirectly held (via Linde Mate-
therefore does not contain any profit attributable to the entity acquired.
rial Handling GmbH, Aschaffenburg, Germany) 74.0 per cent of the
If the business combination had been completed by 1 January 2013,
capital and voting shares in Willenbrock Fördertechnik Holding
this would have generated additional revenue of €90.8 million and
GmbH, Bremen (and, indirectly, in its subsidiaries). Through Willen-
additional net income of €1.8 million for the KION Group in 2013.
brock Fördertechnik Holding, Bremen, the KION Group holds signif-
Goodwill constitutes the strategic synergies that the KION Group
icant equity investments in Willenbrock Arbeitsbühnen GmbH & Co.
expects to derive from this business combination. The goodwill aris-
KG, Bremen (74.0 per cent), Willenbrock Fördertechnik GmbH & Co.
ing from this acquisition is currently not tax deductible.
KG, Bremen (74.0 per cent) and Willenbrock Fördertechnik GmbH &
Co. KG, Hannover (74.0 per cent). Willenbrock – including its assets,
equity and liabilities – was consolidated as a subsidiary of the KION
Group for the first time as at 31 December 2013. The acquisition has
enabled the KION Group to further strengthen the leading position of
Linde and the brand’s German distribution and service network.
We keep the world moving.KION GROUP AG | Annual Report 2013 139
[6] CurrenCy translation
are translated at the average rate for the year. With the exception of
income and expenses recognised as other comprehensive income
(loss), equity is recognised at historical rates. The resulting translation
differences are not taken to income and are recognised in other com-
Financial statements in foreign currencies are translated in accord-
prehensive income (loss) until subsidiaries are disposed of.
ance with the functional currency concept (IAS 21 ‘The Effects of
Transactions of the consolidated companies in foreign currencies
Changes in Foreign Exchange Rates’). The functional currency is the
are translated into the relevant company’s functional currency at the
currency of the primary economic environment in which a company
rate prevailing on the transaction date. On the reporting date, mone-
operates. The modified closing-rate method is used for currency
tary items are translated at the closing rate and non-monetary items at
translation.
the rate prevailing on the transaction date. Currency translation differ-
The assets and liabilities of foreign subsidiaries, including good-
ences are taken to income and recognised in other income / expenses.
will, are translated at the middle spot exchange rate, i.e. at the average
The translation rates below were used for currencies that are
of the bid or offer rates on the reporting date. Income and expenses
material to the financial statements: >> Table 042
Major foreign currency rates in €
>> Table 042
Australia (AUD)
Brazil (BRL)
Switzerland (CHF)
China (CNY)
United Kingdom (GBP)
Russia (RUB)
USA (USD)
Average rate
Closing rate
2013
1.3782
2.8706
1.2308
8.1659
0.8492
42.3328
1.3284
2012
1.2420
2.5114
1.2052
8.1138
0.8112
39.9190
1.2863
2013
1.5414
3.2470
1.2276
8.3218
0.8302
45.2175
1.3746
2012
1.2693
2.7033
1.2079
8.2218
0.8129
40.3252
1.3197
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation
140
[7] aCCountinG poliCies
According to IAS 19R, the return on plan assets is assumed to
equal the discount rate underlying the measurement of the defined
benefit obligation. Net income for the 2012 financial year has also
increased by €1.0 million, while other comprehensive income (after
The accounting policies applied in these consolidated financial state-
deferred taxes) has gone down by €1.0 million owing to the align-
ments are fundamentally the same as those used for the year ended
ment of the expected return on plan assets with the discount rate.
31 December 2012. These consolidated financial statements are
The change in the accounting treatment of provisions for partial
based on the financial statements of the parent company and its
retirement obligations has resulted in a decrease in net income (after
consolidated subsidiaries prepared in accordance with the standard
income taxes) of €0.8 million for the 2012 financial year. The conse-
accounting policies applicable throughout the KION Group.
quences of the above effects for the 2013 financial year were a rise
Changes to accounting policies
of around €0.4 million in net income (after income taxes) and a
decline of €1.4 million in other comprehensive income (loss).
Immediate recognition of past service cost from previous years
led to an increase in the retirement benefit obligation of €1.1 million
The amendments in IAS 19R ‘Employee Benefits’ are required to be
as at 31 December 2012 and of €1.0 million as at 31 December 2013.
applied on a retrospective basis to financial statements for financial
years commencing on or after 1 January 2013. In the KION Group,
actuarial gains and losses, including deferred taxes, were already
revenue recognition
recognised in other comprehensive income (loss). It is not permitted
to reclassify remeasurements recognised in other comprehensive
Revenue is the fair value received for the sale of products and ser-
income (loss) to profit or loss in future periods. Past service cost
vices and rental and lease income (excluding VAT) after deduction of
resulting from a retrospective plan amendment is recognised imme-
trade discounts and rebates. In accordance with IAS 18, revenue is
diately in full. There are also additional disclosures required in the
recognised when it is sufficiently probable that a future economic
notes to the consolidated financial statements.
benefit will accrue to the company and that it can be reliably meas-
First-time adoption of the revised IAS 19 in the KION Group for
ured. Other criteria may arise, depending on each individual transac-
the 2013 financial year has led to an overall decrease in retained
tion, such as:
earnings / net income of €3.3 million with effect from 1 January 2012.
Firstly, this is the result of the revised definition of termination bene-
Sale of goods
fits, according to which partial-retirement bonus payments must be
accumulated as other long-term benefits for employees on a pro-rata
With the exception of items classified as ‘sale with risk’, revenue from
basis over the vesting period. This has led to an increase in retained
the sale of goods is recognised when the KION Group delivers
earnings / net income of €1.8 million with effect from 1 January 2012.
goods to a customer, the goods are accepted by the customer and
Secondly, because the amendment to IAS 19R requires the past ser-
the flow of benefits to the Group is considered to be probable. If a
vice cost to be recognised immediately, retained earnings / net
customer is expected to accept goods but has yet to do so, the corre-
income declined by €0.8 million. Furthermore, alignment of the
sponding revenue is only recognised when the goods are accepted.
expected return on plan assets with the discount rate caused
Appropriate provisions are recognised for risks relating to the sale of
retained earnings / net income to fall by €4.3 million with effect from
goods. In the case of revenue from agreements classified as ‘sale
1 January 2012, while there was an equivalent rise in gains / losses on
with risk’, the revenue is recognised pro rata over the term of the
employee benefits recognised in other comprehensive income (loss).
agreement. The term ‘sale with risk’ and the corresponding revenue
recognition are discussed in the following section and in the section
‘Rental assets’.
We keep the world moving.KION GROUP AG | Annual Report 2013 141
Rendering of services
Government grants
Revenue from the rendering of services is recognised in the year in
Government grants are recognised at fair value provided that the
which the services are rendered. For services provided over several
Group has satisfied the necessary conditions for receiving the grant.
periods, revenue is recognised in accordance with the proportion of
Grants not related to capital expenditure are recognised in the
the total services rendered in each period (stage of completion). Rev-
income statement, under other income, in the period in which the
enue from long-term service agreements is therefore recognised on
expense intended to be covered by the grant is incurred. Grants for
the basis of the average term of the service agreements and in line
capital expenditure are deducted from the cost of the asset con-
with progressive costs (constant margin).
cerned and result in a corresponding reduction in depreciation over
Revenue from financial service transactions is recognised in
the subsequent periods.
the amount of the sales value of the leased asset if classified as a
finance lease and in the amount of the lease payments if classified as
an operating lease. As part of the financial services provided by the
financial income and expenses
Group, industrial trucks are also sold to finance partners who then
enter into leases directly with the end customer (‘indirect leasing’).
Net financial income mainly consists of interest expenses on finan-
If significant risks and rewards remain with the KION Group as a
cial liabilities, interest income from financial receivables, gains and
result of an agreed residual value guarantee that accounts for more
losses on financial instruments recognised through profit or loss,
than 10 per cent of the asset’s value or as a result of an agreed cus-
exchange rate gains and losses on financial activities and the interest
tomer default guarantee (‘sale with risk’), the proceeds from the
expenses on pension provisions. The expected return on plan assets
sale are deferred and recognised as revenue on a straight-line
relating to pension provisions is also included in financial income.
basis over the term until the residual value guarantee or the default
Interest income and expenses are recognised in profit and loss
guarantee expires.
Interest income and royalties
in accordance with the effective interest method. The effective inter-
est method is used for calculating the amortised cost of a financial
asset or financial liability and the allocation of interest income and
interest expenses over the relevant periods. The effective interest
Interest income is recognised pro rata temporis in accordance with
rate is the interest rate at which the estimated future payments
the effective interest method. Income from royalties is deferred in
(including all fees that are part of the effective interest rate, transac-
accordance with the substance of the relevant agreements and rec-
tion costs and other premiums and discounts) are discounted to the
ognised pro rata temporis.
net carrying amount of the financial asset or liability over the expected
Information on the deferral of lease income is contained in the
term of the financial instrument.
disclosures on the accounting treatment of leases.
Dividends are recognised in income when a resolution on distri-
bution has been passed. They are reported in the consolidated
income statement under other financial income / expenses, provided
they are dividends from subsidiaries carried at amortised cost.
Cost of sales
The cost of sales comprises the cost of goods and services sold and
includes directly attributable material and labour costs as well as
directly attributable overheads, including depreciation of production
equipment and amortisation of certain intangible assets, as well as
write-downs of inventories. Cost of sales also includes additions to
warranty provisions, which are recognised in the amount of the esti-
mated cost at the date on which the related product is sold.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 142
Goodwill
The recoverable amount of a CGU is determined by calculating
its value in use on the basis of the discounted cash flow method.
Goodwill has an indefinite useful life and is not amortised. Instead, it
The cash flows forecast for the next five years are included in the
is tested for impairment in accordance with IAS 36 (‘Impairment of
calculation for the impairment test in accordance with IAS 36.33(b).
Assets’) at least once a year, and more frequently if there are indica-
The financial forecasts are based on assumptions relating to the
tions that the asset might be impaired.
development of the global economy, commodity prices and
Impairment testing is performed at the level of the individual
exchange rates. The budget for 2014, the medium-term planning
cash-generating units (CGUs) or groups of CGUs. A CGU is defined
for 2015/2016 and the projections for 2017 to 2018 were used to
as the smallest identifiable group of assets that generates cash
determine the cash flows. Cash flows beyond the five-year plan-
inflows from continuing use that are largely independent of the cash
ning horizon were extrapolated for the LMH and STILL CGUs using
inflows from other assets or groups of assets. CGUs are generally
a growth rate of 1 per cent (2012: 1 per cent). A growth rate of
based on the lowest level of an entity at which – for internal manage-
5.0 per cent (2012: 3.0 per cent) was used for VMH on a perpetuity
ment purposes – the management systematically monitors and con-
basis to take account of forecast trends for the high-growth market
trols the contribution to earnings made by the assets concerned,
of India and the high level of inflation.
including goodwill. However, a CGU may not be larger than an oper-
CGU cash flows are discounted using a weighted average cost
ating segment as defined in IFRS 8 ‘Operating Segments’. In particu-
of capital (WACC) that reflects current market assessments of the
lar, CGUs are considered to be clearly defined and independent if the
specific risks to individual CGUs. The underlying capital structure for
entity’s management has prepared independent forecasts relevant
the LMH and STILL CGUs is determined by comparing peer group
to decision-making for the individual CGUs.
companies in the same sector. The beta factor derived from the peer
For the purposes of internal and external reporting, the activities
group was 1.07 (2012: 1.08). Yield curve data from the European
of the KION Group are broken down into the LMH, STILL, Financial
Central Bank (three-month average, rounded) was used; the risk-free
Services and Other segments on the basis of their characteristics
interest rate as at 1 November 2013 was 2.75 per cent (2012:
and risk profile. The 2013 forecast, the budget for 2014, the
2.5 per cent). The market risk premium derived from empirical stud-
medium-term planning for 2015 to 2016 and the KION Group’s inter-
ies of the capital markets was set at 5.75 per cent (2012: 6.0 per cent)
nal projections for 2017 to 2018 were drawn up on the basis of this
and was within the bandwidth recommended by the technical com-
segment structure.
mittee for business valuation and administration (FAUB) of the Ger-
The relevant CGUs for the purposes of goodwill impairment test-
man Institute of Auditors (IDW), which is 5.5 per cent to 7.0 per cent.
ing and the CGUs to which brand names have been allocated are the
The market risk premium decreased by 0.25 percentage points
LMH and STILL segments and the Voltas Material Handling Private
compared with 2012 owing to the increase in the risk-free base rate
Limited, Pune, India CGU (referred to below as VMH), which is
from 2.50 per cent to 2.75 per cent and the lower inflation forecast of
assigned to the Other segment. The Financial Services segment only
1.75 per cent (2012: 2.0 per cent) for Germany with a generally
generates a finance margin to cover costs and consequently has
declining implied return on equity of currently 8.75 per cent. The
almost no impact on cash flow and does not earn any material
assumed country risk was 0.28 per cent for the LMH CGU (2012:
excess profit. As a result, no goodwill from the original purchase
0.20 per cent) and 0.45 per cent for the STILL CGU (2012:
price allocation (PPA) was allocated to this CGU when the new seg-
0.50 per cent). A leverage ratio of 25.4 per cent (2012: 22.7 per cent)
ment structure was defined in 2012 in accordance with IAS 36.87.
was calculated based on the capital structure determined for the
peer group.
We keep the world moving.KION GROUP AG | Annual Report 2013 143
A leveraged beta of 1.06 (2012: 1.07) was used to determine the
impairment test for goodwill. Assessments of indefinite useful life are
country-specific WACC for VMH. The risk-free interest rate for India
carried out in every period.
as at 1 November 2013 was 8.9 per cent (2012: 8.7 per cent); the
The brand name of VMH, which is allocated to the Other seg-
country-specific risk premium for India was set at 2.4 per cent (2012:
ment, is subject to a usage right with a contractually limited term and
3.0 per cent). The WACC before tax, which is used to discount the
it will therefore be amortised over its useful life.
estimated cash flows, was calculated at 10.5 per cent for LMH (2012:
Development costs are capitalised if the following can be
10.7 per cent), 10.8 per cent for STILL (2012: 11.0 per cent) and
demonstrated:
16.4 per cent (2012: 21.5 per cent) for VMH. The WACC after tax was
7.7 per cent for LMH (2012: 7.8 per cent), 7.9 per cent for STILL (2012:
8.0 per cent) and 14.9 per cent for VMH (2012: 15.8 per cent).
The impairment test carried out as at 31 December 2013 did not
reveal any need to recognise impairment losses for the existing
goodwill of the LMH, STILL and VMH CGUs. Based on the results of
sensitivity analysis, we do not expect that significant impairment
losses will need to be recognised for goodwill, even if key assump-
tions vary within realistic limits.
– the technical feasibility of the intangible asset;
– the intention to complete the intangible asset and use or sell it;
– the ability to use or sell the intangible asset;
– the likelihood that the intangible asset will generate future eco-
– the availability of adequate technical, financial and other
nomic benefits;
resources to complete the development and to use or sell the
intangible asset; and
– the ability to reliably measure the expenditure attributable to the
intangible asset during its development.
other intangible assets
Capitalised development costs include all costs and overheads
Other purchased intangible assets with a finite useful life are carried
directly attributable to the development process. Once they have
at cost less all accumulated amortisation and all accumulated impair-
been initially capitalised, these costs and internally generated
ment losses. If events or market developments suggest impairment
intangible assets – particularly internally generated software – are
has occurred, impairment tests are carried out on the carrying
carried at cost less accumulated amortisation and accumulated
amount of items classified as other intangible assets with a finite use-
impairment losses. Internally generated intangible assets are not
ful life. The carrying amount of an asset is compared with its recov-
qualifying assets so finance costs are not capitalised. All non-
erable amount, which is defined as the higher of its value in use and
qualifying development costs are expensed as incurred and
its fair value less costs to sell. If the reasons for recognising impair-
reported on the income statement under research and develop-
ment losses in the past no longer apply, impairment losses not
ment costs together with research costs and the amortisation on
exceeding the amortised cost of the assets are reversed.
capitalised development costs.
Other intangible assets with an indefinite useful life are carried at
cost and are mainly capitalised brand names. Brand names are not
amortised because they have been established in the market for a
number of years and there is no foreseeable end to their useful life. In
accordance with IAS 36, they are tested for impairment at least once
a year or whenever there are indications that the asset might be
impaired. The impairment test is performed in the same way as the
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 144
The following useful lives are applied in determining the carrying
amounts of other intangible assets: >> Table 043
Useful life of other intangible assets
>> Table 043
Years
4 – 10
10
5 – 7
3 – 15
2 – 10
Customer relationships / client base
Technology
Development costs
Patents and licences
Software
leases / short-term rentals
KION Group companies lease equipment, mainly various industrial
trucks, to their customers in order to promote sales. The leases
may be of a short-term nature (short-term rental) or long-term
nature (leasing).
Companies in the KION Group enter into leases as lessors and
as lessees. In line with IAS 17, these contracts are classified as
finance leases if substantially all of the risks and rewards incidental
to ownership of the leased / rental asset are transferred to the les-
see. All other rentals and leases are classified as operating leases,
again in accordance with IAS 17.
If a KION Group company enters into a finance lease as the lessor,
the future lease payments to be paid by the lessee are recognised
as lease receivables at an amount equal to the net investment in
the lease. Interest income is allocated to each reporting period in
order to ensure a constant return on the outstanding net invest-
ment in the lease.
We keep the world moving.KION GROUP AG | Annual Report 2013
145
leased assets
In an indirect leasing arrangement, industrial trucks are sold to
finance partners who then enter into leases with end customers. If
If the economic ownership of leased assets remains with a KION
LMH and STILL brand companies provide material residual value
Group company as the lessor under an operating lease, the assets
guarantees or a customer default guarantee (‘sale with risk’), these
are reported as leased assets in a separate item in the statement of
transactions, which are classified as sale agreements under civil law,
financial position. The leased assets are carried at cost and depreci-
are recognised in accordance with the provisions on lessors with
ated over the term of the underlying leases.
operating leases in conjunction with the IFRS principles for revenue
To fund leases, industrial trucks are generally sold to leasing
recognition. In this case, the trucks are recognised as assets in the
companies. The industrial trucks are then leased back to companies
statement of financial position at their cost on the date of the sale
in the KION Group (head lease), who sub-lease them to external end
and written down to their guaranteed residual value, or zero, on a
customers (described below as ‘sale and leaseback sub-leases’).
straight-line basis over the period until the residual value guarantee
These long-term leases generally have a term of four to five years. If,
or the customer default guarantee expires. If the KION Group pro-
in the case of sale and leaseback sub-leases, the risks and rewards
vides a residual value guarantee, an amount equivalent to the resid-
incidental to the head lease are substantially borne by KION Group
ual value obligation is recognised under other financial liabilities.
companies and are not transferred to the end customer, the corre-
sponding assets are reported as non-current leased assets. How-
ever, if substantially the risks and rewards incidental to the head
other property, plant and equipment
lease are transferred to the end customer, a corresponding lease
receivable is recognised. In both cases, the funding items for these
Property, plant and equipment are carried at cost less straight-line
long-term customer leases, which are funded for terms that match
depreciation and impairment losses. The cost of internally generated
those of the leases, are recognised as lease liabilities.
machinery and equipment includes all costs directly attributable to
rental assets
the production process and an appropriate portion of production
overheads. This includes production-related depreciation and pro-
portionate costs for administration and social insurance / employee
benefits.
Rental assets are assets resulting from short-term rentals as well as
The cost of property, plant and equipment is reduced by the
industrial trucks in relation to which significant risks and rewards
amount of any government grants received. Expenses for mainte-
remain with the KION Group despite the trucks having been sold
nance and repairs are recognised in income to the extent that they
(‘sale with risk’).
are not required to be capitalised. Borrowing costs are capitalised
In the case of short-term rentals, LMH and STILL brand compa-
for certain items of property, plant and equipment whose acquisition
nies rent industrial trucks to customers directly. Short-term rental
or production exceeds one year as soon as the definition of a quali-
agreements usually have a term of one day to one year. The signifi-
fying asset is met. As was the case in the previous year, there were
cant risks and rewards remain with the LMH and STILL brand com-
no qualifying assets in 2013.
panies. The industrial trucks are carried at cost and depreciated over
Depreciation of property, plant and equipment is recognised on
the normal useful life of between five and seven years, depending on
a straight-line basis and reported in functional costs. The useful lives
the product group.
and depreciation methods are reviewed annually and adjusted to
reflect changes in conditions.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 146
Useful life of other property, plant and equipment
Buildings
Plant and machinery
Office furniture and equipment
>> Table 044
Years
10 – 50
3 – 15
2 – 15
The useful lives above are applied in determining the carrying
If there are certain indications of impairment of the property, plant
amounts of items of property, plant and equipment. >> Table 044
and equipment, the assets are tested for impairment by comparing
the residual carrying amount of the assets with their recoverable
KION Group companies also lease property, plant and equipment for
amount, which is defined as the higher of value in use and fair value
their own use using finance leases, which are recognised as other
less costs to sell. If the residual carrying amount is greater than the
property, plant and equipment. In this case, the lower of the fair value
recoverable amount, an impairment loss is recognised for an asset.
and present value of future lease payments is recognised at the incep-
The KION Group calculates the recoverable amount primarily on
tion of the lease. A corresponding liability to the lessor is recognised
the basis of value in use. In determining value in use, the expected
under other financial liabilities in the statement of financial position.
future cash flows are discounted using a risk-adjusted discount rate,
Property, plant and equipment covered by finance leases is
taking into account the current and future level of earnings and seg-
depreciated over the shorter of its useful life or the term of the lease,
ment-specific, technological, economic and general trends.
unless title to the leased assets passes to the lessee when the lease
If an impairment test for an item of property, plant and equip-
expires, in which case the property, plant and equipment is depreci-
ment is performed at the level of a cash-generating unit to which
ated and the other financial liabilities are reversed over the useful life
goodwill is allocated and results in the recognition of an impairment
of the leased assets.
loss, first the goodwill and, subsequently, the assets must be written
The difference between total finance lease liabilities and the fair
down in proportion to their relative carrying amounts. If the reason
value of the financed leased assets represents the finance charge
for an impairment loss recognised in prior years no longer applies,
which is recognised in the income statement over the term of the
impairment losses not exceeding the amortised cost of the asset
lease at a constant rate of interest on the outstanding balance in
concerned are reversed. This does not apply to goodwill.
each period. At the end of the lease term, the leased assets are
either returned or purchased, or the contract is extended.
We keep the world moving.KION GROUP AG | Annual Report 2013
147
equity-accounted investments
Deferred tax assets also include tax refund claims that arise
from the expected utilisation of existing tax loss carryforwards and
In accordance with the equity method, associates and joint ventures
interest carryforwards in subsequent years and whose utilisation is
are measured as the proportion of the interest in the equity of the
reasonably certain according to current forecasts. On the basis of
investee. They are initially carried at cost. Subsequently, the carrying
this estimate, deferred tax assets have been recognised on some
amount of the equity investment is adjusted in line with any changes
loss carryforwards and interest carryforwards.
to the KION Group’s interest in the net assets of the investee. The
Deferred taxes are determined on the basis of the tax rates that
KION Group’s interest in the profit or loss generated after acquisition
will apply or have been announced at the realisation date in accord-
is recognised in income. Other changes in the equity of associates
ance with the current legal situation in each country concerned. In
and joint ventures are recognised in other comprehensive income
accordance with the provisions in IAS 12, deferred tax assets and
(loss) in the consolidated financial statements in proportion to the
liabilities are not discounted.
Group’s interest in the associate or joint venture.
Deferred tax assets are offset against deferred tax liabilities to
If the Group’s interest in the losses made by an associate or joint
the extent that they have the same maturity and relate to the same
venture exceeds the carrying amount of the proportionate equity
taxation authority.
attributable to the Group, no additional losses are recognised. Any
goodwill arising from the acquisition of an associate or joint venture
is included in the carrying amount of the investment in the associate
inventories
or joint venture. When an associate or joint venture is sold, the
Group’s interest in its goodwill is taken into account in determining
Inventories are carried at the lower of cost and net realisable value.
the proceeds on disposal.
The acquisition costs of raw materials and merchandise are cal-
If there is evidence that an associate or joint venture may be
culated on the basis of an average.
impaired, the carrying amount of the investment in question is tested
The cost of finished goods and work in progress includes direct
for impairment.
income taxes
costs and an appropriate portion of the material and production
overheads and production-related depreciation directly attributable
to the production process. Administrative costs and social insur-
ance / employee benefits are included to the extent that they are
attributable to the production process. Borrowing costs as defined
In the consolidated financial statements, current and deferred taxes
by IAS 23 are not a component of cost as they are not qualifying
are recognised on the basis of the tax laws of the jurisdictions
assets as defined by IAS 23.4. The amount recognised is an average
involved. Deferred taxes are recognised in other comprehensive
value or a value determined in accordance with the FIFO method.
income (loss) if they relate to transactions also recognised in other
Net realisable value is the selling price that can be realised less
comprehensive income (loss).
the estimated costs of completion and the estimated costs neces-
Deferred tax assets and liabilities are recognised in accordance
sary to make the sale.
with the liability method for all temporary differences between the
Write-downs are recognised for inventory risks resulting from
IFRS carrying amounts and the tax base, as well as for temporary
duration of storage, impaired recoverability, etc. Write-downs are
consolidation measures.
reversed up to a maximum of cost if the reasons for their recognition
no longer apply.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 148
trade receivables
Available-for-sale financial assets (AfS) are carried at fair value. If
they are equity investments for which no market price is available,
In the first period in which they are recognised, trade receivables cat-
they are carried at cost. Unrealised gains and losses, including
egorised as loans and receivables (LaR) are carried at fair value
deferred taxes, are reported in other comprehensive income (loss)
including directly attributable transaction costs. In subsequent peri-
until they are realised. The equity investments in subsidiaries that are
ods they are measured at amortised cost using the effective interest
reported in other non-current financial assets are carried at amor-
method. Appropriate valuation allowances are recognised for identi-
tised cost less impairment losses, as observable fair values are not
fiable individual risks. Low-interest or non-interest-bearing receiva-
available and reliable results cannot be obtained using other permit-
bles due in more than one year are carried at their present value.
ted measurement techniques. At present there is no intention to sell
Cash and cash equivalents
these financial instruments.
In the first period they are recognised, other financial assets
which are categorised as loans and receivables (LaR) are carried
at fair value including directly attributable transaction costs. In sub-
Cash and cash equivalents comprise cash, credit balances with
sequent periods they are measured at amortised cost using the
banks and current financial assets that can be transformed into cash
effective interest method. Appropriate valuation allowances are rec-
at any time and are only subject to a minor level of volatility.
ognised for identifiable individual risks. Low-interest or non-inter-
other financial assets
est-bearing receivables due in more than one year are carried at their
present value.
Carrying amounts of financial assets are tested for impairment
on every reporting date and whenever indications of impairment
Primary financial assets are initially recognised and derecognised in
arise. If there is an objective indication of impairment (such as a bor-
the financial statements on their settlement dates.
rower being in significant financial difficulties), an impairment loss
Under IAS 39 (‘Financial Instruments: Recognition and Measure-
must be recognised directly in the income statement.
ment’), financial assets are classified as financial assets held for trad-
If objective facts in favour of reversing impairment losses are
ing and carried at fair value through profit or loss (FAHfT), financial
present on the reporting date, reversals are carried out to an appro-
assets carried at fair value through profit or loss upon initial recogni-
priate extent. Reversals do not exceed the amortised cost that would
tion (FAFVtPL), available-for-sale financial assets (AfS), financial
have arisen if the impairment loss had not been recognised. In the
assets classified as loans and receivables (LaR) or held-to-maturity
case of debt instruments classified as available-for-sale financial
financial assets (HtM).
assets (AfS), reversals of impairment losses are recognised in the
The KION Group did not designate any financial asset as carried
income statement.
at fair value through profit or loss (FAFVtPL) in the reporting year. The
Held-to-maturity financial assets (HtM) are carried at amortised
FAHfT category contains derivative financial instruments that do not
cost less impairment losses in accordance with the effective interest
form part of a formally documented hedge.
method. As in the previous year, the KION Group did not categorise
any financial assets as HtM in the reporting year.
We keep the world moving.KION GROUP AG | Annual Report 2013 149
derivative financial instruments
In the case of hedges of net investments in foreign subsidiaries,
the translation risks resulting from investments with a different func-
Derivative financial instruments are measured at their fair value and
tional currency are hedged. Unrealised gains and losses on hedging
are reported as financial assets or financial liabilities as at the report-
instruments are reported in other comprehensive income (loss) until
ing date. They are initially recognised and derecognised in the finan-
the company is sold. In the past financial year, KION Group compa-
cial statements on their settlement dates.
nies have not entered into any hedges for net investments in foreign
Derivative financial instruments in the KION Group comprise
subsidiaries.
currency forwards and interest-rate swaps and are used for hedging
Further information on risk management and accounting for
purposes to mitigate currency and interest-rate risks. In addition, the
derivative financial instruments can be found in notes [35] and [36].
options on the remaining shares in Linde Hydraulics are reported as
derivative financial instruments (see note [35]).
In accordance with IAS 39 (Financial Instruments: Recognition
retirement benefit obligation
and Measurement), all derivative financial instruments must be
measured at their fair value irrespective of an entity’s purpose or
The retirement benefit obligation is calculated in accordance with the
intention in entering into the derivative contract. Changes in the fair
projected unit credit method. Future pension obligations are meas-
value of derivative financial instruments in a formally documented
ured on the basis of the pro rata vested benefit entitlements as at the
hedge are reported in the income statement (for fair value hedges) or
reporting date and discounted to their present value. The calcula-
in other comprehensive income (loss) (for cash flow hedges).
tions include assumptions about future changes in certain parame-
The KION Group currently only uses cash flow hedges for cur-
ters, such as expected salary and pension increases and biometric
rency and interest-rate risks.
factors affecting the amount of future benefits. Pension provisions
In the case of cash flow hedges, derivatives are employed to
are reduced by the fair value of the plan assets used to cover the
hedge future cash flow risks from existing underlying transactions or
Group’s benefit obligations. Plan assets are measured at fair value.
planned transactions. The effective portion of changes in the fair
Remeasurements, including deferred taxes, are recognised in
value of derivatives is initially recognised in other comprehensive
other comprehensive income (loss). It is not permitted to reclassify
income (loss), and is subsequently reclassified to the income state-
remeasurements recognised in other comprehensive income (loss)
ment when the revenue from the corresponding underlying transac-
to profit or loss in future periods. The cost of additions to pension
tion is realised. The ineffective portion of the changes in fair value is
provisions is allocated to functional costs. The interest cost on pen-
recognised immediately in net financial income / expenses.
sion obligations and the interest income from plan assets are netted
If the criteria for hedge accounting are not satisfied, changes in
and reported in net financial income / expenses. Further details can
the fair value of derivative financial instruments are recognised in the
be found in note [28].
income statement.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 150
other provisions
share-based payments
Other provisions are recognised when the Group has a legal or con-
IFRS 2 distinguishes between equity-settled and cash-settled share-
structive obligation to a third party as the result of a past event that
based payment transactions.
is likely to lead to a future outflow of resources and that can be relia-
The portion of the fair value of cash-settled share-based payments
bly estimated. Where there is a range of possible outcomes and
that is attributable to service provided up to the valuation date is recog-
each individual point within the range has an equal probability of
nised as an expense in functional costs and is also reported under other
occurring, a provision is recognised in the amount of the mean of the
provisions. The fair value is recalculated on each reporting date until the
individual points. Measurement is at full cost. Provisions for identifia-
end of the performance period. Any change in the fair value of the obli-
ble risks and contingent liabilities are recognised in the amount that
gation must be recognised (pro rata) as an expense.
represents the best estimate of the cost required to settle the obliga-
tions. Recourse claims are not taken into account. The settlement
amount also includes cost increases identifiable as at the reporting
date. Provisions with a maturity of more than twelve months are dis-
counted using the standard market interest rate. The discount rate is
financial liabilities, other financial liabilities,
trade payables
a before-tax rate that reflects current market expectations for the
These liabilities are initially recognised at fair value at the time they
time value of money and the specific risks inherent in the liability.
are entered into. Directly attributable transaction costs are deducted
Accrued interest is recognised in interest expenses.
for all financial liabilities that are not subsequently designated as at
Warranty provisions are recognised on the basis of past or esti-
fair value through profit or loss.
mated future claim statistics. The corresponding expense is recog-
Non-current financial liabilities and other financial liabilities are
nised in cost of sales at the date on which the revenue is recog-
then carried at amortised cost. Any differences between historical
nised. Individual provisions are recognised for claims that are
cost and the settlement amount are recognised in accordance with
known to the Group.
the effective interest method.
Provisions for expected losses from onerous contracts and
other business obligations are measured on the basis of the work yet
to be performed.
A restructuring provision is recognised when a KION Group
company has prepared a detailed, formal restructuring plan and this
plan has raised a valid expectation in those affected that the com-
pany will carry out the restructuring by starting to implement that
plan or announcing its main features to those affected by it. The
measurement of a restructuring provision only includes the direct
expenditures arising from the restructuring and not associated with
the ongoing activities of the company concerned.
We keep the world moving.KION GROUP AG | Annual Report 2013 151
assumptions and estimates
Significant estimates are involved in calculating provisions for tax.
These estimates may change on the basis of new information and
The preparation of the IFRS consolidated financial statements
experience (see also note [14]). Where necessary, the KION Group’s
requires the use of assumptions and estimates for certain line items
accounting departments receive assistance from external legal advi-
that affect recognition and measurement in the statement of financial
sors and tax consultants when making the estimates required.
position and the income statement. The actual amounts realised
The recognition and measurement of other provisions is based
may differ from estimates. Assumptions and estimates are applied in
on an estimate of the probability of the future outflow of resources,
particular:
– in assessing the need for and the amount of impairment
losses on intangible assets, property, plant and equipment, and
inventories;
– in determining the useful life of non-current assets;
– in classifying leases;
– in measuring options;
– in the recognition and measurement of defined benefit pension
– in assessing the recoverability of deferred tax assets.
obligations, provisions for tax, and other provisions; and
supplemented by past experience and the circumstances known to
the Group at the reporting date. Accordingly, the actual outflow of
resources for a given event may be different from the amount recog-
nised in other provisions. Further details can be found in note [31].
Deferred tax assets on tax loss carryforwards and interest carry-
forwards are recognised on the basis of an estimate of the future
recoverability of the tax benefit, i.e. an assumption as to whether
sufficient taxable income or tax relief will be available against which
the carryforwards can be utilised. The actual amount of taxable
income in future periods, and hence the actual utilisation of tax loss
carryforwards and interest carryforwards, may be different from the
estimates made when the corresponding deferred tax assets were
Goodwill is tested for impairment annually at the level of the
recognised.
cash-generating units to which goodwill is allocated, applying the
The impact of a change to an estimate is recognised in profit or
budget for 2014 and the medium-term planning for 2015 to 2016
loss prospectively when it becomes known and assumptions are
combined with the growth predicted in the market forecasts for the
adjusted accordingly.
projections for 2017 to 2018 and assuming division-specific growth
rates for the period thereafter. Any material changes to these and
other factors might result in the recognition of impairment losses.
Further information on goodwill can be found earlier in this note and
in note [17].
Information on leases can be found in the sections on
leases / short-term rentals, leased assets, rental assets and other
property, plant and equipment in this note.
Defined benefit pension obligations are calculated on the basis
of actuarial parameters. As differences due to remeasurements are
taken to other comprehensive income (loss), any change in these
parameters would not affect the net profit for the current period. For
further details about sensitivity analysis of the impact of significant
material assumptions, please refer to the information about the
retirement benefit obligation in note [28].
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsBasis of presentation 152
Notes to the consolidated income statement
[8] revenue
The revenue generated by the KION Group in the year under review
broken down by product category is as follows: >> Table 045
Revenue by product category
>> Table 045
in € million
New business
Hydraulics
Service offering
- After sales
- Rental business
- Used trucks
- Other
Total revenue
Further information on revenue can be found in the segment report
in note [38].
2013
2,519.6
–
1,975.0
1,174.2
443.1
226.4
131.3
2012
2,651.5
167.8
1,907.4
1,149.8
427.6
213.0
117.0
4,494.6
4,726.7
We keep the world moving.KION GROUP AG | Annual Report 2013
153
>> Table 046
2012
18.9
5.2
10.6
211.8
4.0
2.7
43.8
297.0
2013
24.2
10.6
8.4
8.1
7.3
2.0
61.0
121.7
[9] other inCome
The breakdown of other income is as follows: >> Table 046
Other income
in € million
Foreign currency exchange rate gains
Income from reversal of provisions
Profit from release of deferred lease profits
Net gains on the Weichai transactions
Gains on disposal of non-current assets
Rental income
Sundry income
Total other income
The foreign currency exchange rate gains and losses result from the
measurement of financial receivables and liabilities denominated in
foreign currency and the measurement of corresponding derivatives.
The foreign currency exchange rate gains include gains amounting
to €7.6 million (2012: €9.7 million) on derivative financial instruments
used to hedge operating currency risk. These gains were offset by
foreign currency exchange rate losses (other expenses) of €7.3 mil-
lion in 2013 (2012: €5.1 million). Overall, this resulted in a net gain of
€0.3 million on derivative financial instruments used to hedge oper-
ating currency risk (2012: €4.6 million).
The sundry income of €61.0 million reported for 2013 also
included earnings from commission collected, which are not
reported under revenue.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated income statement
154
[10] other expenses
The breakdown of other expenses is as follows: >> Table 047
Other expenses
in € million
Foreign currency exchange rate losses
Losses on disposal of non-current assets
Impairment of non-current assets
Sundry expenses
Total other expenses
>> Table 047
2012
23.3
3.3
21.1
11.8
59.5
2013
22.3
1.8
1.2
21.4
46.7
The change in foreign currency exchange rate gains and losses is
attributable to exchange rate movements (see also note [9]).
The impairment recognised on non-current assets in the
reporting year comprised impairment losses of €1.2 million on
intangible assets (2012: €4.8 million). In the previous year, impair-
[11] share of profit (loss) of
equity-aCCounted investments
ment losses of €16.3 million had been recognised on other prop-
The share of profit of equity-accounted investments amounted to
erty, plant and equipment. The impairment losses in 2012 were
€1.7 million in the reporting year (2012: €15.9 million). This amount
largely caused by the planned closure of production sites.
includes income of €7.0 million arising from the remeasurement of an
existing equity-accounted investment of 23.0 per cent held in Willen-
brock Fördertechnik Holding GmbH, Bremen, Germany, over which
a controlling influence can be exerted following the acquisition of fur-
ther shares (see note [5]). The amount for the previous year included
income of €8.0 million arising from the remeasurement of an existing
equity-accounted investment of 49.0 per cent held in Linde Creighton
Ltd., Basingstoke, United Kingdom. Further details on equity-ac-
counted investments can be found in note [21].
We keep the world moving.KION GROUP AG | Annual Report 2013
155
>> Table 048
2012
12.1
22.5
1.2
4.8
40.5
2013
13.6
27.2
1.1
6.6
48.5
[12] finanCial inCome
Financial income breaks down as follows: >> Table 048
Financial income*
in € million
Foreign currency exchange rate gains (financing)
Interest income from leases
Net interest income from defined benefit plans
Other interests and similar income
Total financial income
* Financial income for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
The interest income from leases relates to the interest portion of
lease payments in financial services transactions in which KION
Group companies operate as lessors (finance leases).
Gains on exchange differences – financing – include gains of
€6.2 million from the repayment of a foreign-currency loan denomi-
nated in US dollars (2012: €9.1 million, translation of a foreign-
currency loan denominated in US dollars) and a gain of €6.8 million
on hedging transactions (2012: €0.1 million).
The line item ‘Net interest income from defined benefit plans’
relates to the net interest income on the net assets of four pension
plans in the United Kingdom in which plan assets exceed pension
obligations.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated income statement
156
[13] finanCial expenses
Financial expenses break down as follows: >> Table 049
Financial expenses*
>> Table 049
in € million
Interest expense from loans
Interest expense from corporate bond
Interest cost of leases
Amortisation of finance costs
Net interest expense from defined benefit plans
Foreign currency exchange rate losses (financing)
Interest cost of shareholder loan
Interest cost of non-current financial liabilities
Other interest expenses and similar charges
Total financial expenses
* Financial expenses for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
2013
59.1
65.2
43.0
30.2
18.7
9.6
–
1.2
41.5
268.4
2012
121.1
34.5
39.6
11.4
21.0
7.6
27.7
2.2
13.7
278.7
Interest expenses arising from loan liabilities essentially include inter-
addition, interest-rate hedging instruments that had been used in
est costs of €32.4 million arising from variable-rate loan liabilities
the past for the acquisition finance arrangements were ended pre-
under the senior facilities agreement (2012: €101.2 million) and losses
maturely, which led to an amount of €18.3 million being recognised
of €26.7 million on interest-rate swaps (2012: €19.9 million).
under financial expenses as interest expenses arising from loan lia-
Financial expenses were negatively affected by a number of
bilities. Adjusted for these three non-recurring items, net financial
non-recurring items totalling €57.5 million in 2013. The remeasure-
expenses amounted to €162.4 million in 2013, compared with
ment of the options in connection with the 30 per cent equity
€238.2 million in 2012. This sustained reduction in net financial
investment in Linde Hydraulics resulted in an expense of €14.7 mil-
expenses was due, in particular, to conversion of the shareholder
lion in 2013 that is reported under other interest expense and simi-
loan of €670.8 million provided by Superlift Holding S.à r.l. into
lar charges. Repayment in full of the long-term bank loans under
equity at the end of 2012, conversion of the loan provided by
the acquisition finance arrangements (Senior Facilities Agreement
Superlift Holding to Superlift Funding (tranche G) into equity, full
or SFA) and the early redemption of the 2011/2018 floating rate note
repayment of the acquisition finance and cheaper funding under
resulted in deferred borrowing costs of €24.5 million being recog-
the new loan facility.
nised as an expense as amortisation of borrowing costs in 2013. In
We keep the world moving.KION GROUP AG | Annual Report 2013
157
Net interest expense from retirement benefit obligations relates
Deferred taxes are recognised for temporary differences
to the net interest cost of the net liability of pension plans applying
between the tax base and IFRS carrying amounts. Deferred taxes
the discount rate for plans in which pension obligations exceed
are determined on the basis of the tax rates that will apply or have
plan assets.
been announced at the realisation date in accordance with the cur-
The interest cost of leases relates to the interest portion of
rent legal situation in each country concerned. The current corpo-
lease payments in financial services transactions in which the
rate income tax rate in Germany is 15.0 per cent plus the solidarity
material risks and rewards are borne by KION Group companies as
surcharge (5.5 per cent of corporate income tax). Taking into
lessees (finance leases). Sale and finance leaseback-operating
account the average trade tax rate of 14.14 per cent, the combined
sub-leases (SALB-FL-OL) incurred interest expenses of €24.0 mil-
nominal tax rate for companies in Germany was virtually unchanged
lion (2012: €20.7 million). The income from corresponding customer
on 2012 at 30.0 per cent. The income tax rates for foreign compa-
agreements is, according to IAS 17, a component of the rental and
nies used in the calculation of deferred taxes are between
lease payments received and is therefore reported within revenue
10.0 per cent and 37.6 per cent (2012: between 10.0 per cent and
rather than as interest income.
38.1 per cent).
The foreign currency exchange rate losses – financing – include
No deferred taxes have been recognised on temporary differ-
losses on derivative financial instruments amounting to €6.6 million
ences of €88.5 million (2012: €96.1 million) between the net assets
(2012: €7.6 million).
[14] inCome taxes
reported in the consolidated financial statements for the Group
companies and the tax base for the shares in these Group compa-
nies (outside basis differences) because the KION Group is in a
position to manage the timing of the reversal of temporary differ-
ences and there are no plans to dispose of investments in the fore-
seeable future.
The income tax expense of €15.9 million (2012: expense of €149.5 mil-
lion) consisted of €59.0 million in current tax expense (2012:
€122.1 million) and €43.1 million in deferred tax income (2012:
deferred tax expense of €27.4 million). The current tax expense
includes expenses of €9.1 million (2012: expenses of €8.8 million)
relating to previous financial years.
At the reporting date there were income tax assets of €15.4 mil-
lion receivable from tax authorities (2012: €5.5 million) and income
tax liabilities of €27.7 million (2012: €85.0 million).
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated income statement 158
Deferred tax assets are allocated to the following items in the state-
ment of financial position: >> Table 050
Deferred tax assets*
in € million
Intangible assets and property, plant and equipment
Financial assets
Current assets
Deferred charges and prepaid expenses
Provisions
Liabilities
Deferred income
Tax loss carryforwards and interest carryforwards
Offsetting
Total deferred tax assets
* Deferred tax assets for 2012 was adjusted due to the retrospective application of IAS 19R (2011)
Deferred tax liabilities are allocated to the following items in the state-
ment of financial position: >> Table 051
Deferred tax liabilities
in € million
Intangible assets and property, plant and equipment
Financial assets
Current assets
Deferred charges and prepaid expenses
Provisions
Liabilities
Deferred income
Offsetting
Total deferred tax liabilities
>> Table 050
2012
107.1
4.1
33.8
8.6
121.4
251.0
46.4
31.8
– 339.3
264.9
>> Table 051
2012
452.4
3.3
150.4
0.4
23.7
15.4
2.6
– 339.3
308.8
2013
115.1
2.6
45.1
0.8
112.0
317.4
41.0
62.2
– 400.7
295.5
2013
489.1
7.8
167.7
0.3
21.9
19.8
0.3
– 400.7
306.2
We keep the world moving.KION GROUP AG | Annual Report 2013
159
The deferred tax liabilities essentially relate to the purchase price
The KION Group’s corporation-tax loss carryforwards in Ger-
allocation in the acquisition of the KION Group, particularly for intan-
many as at 31 December 2013 amounted to €169.8 million
gible assets and property, plant and equipment.
(31 December 2012: €289.8 million), while trade-tax loss carryfor-
In April 2013, KION GROUP GmbH, Wiesbaden (controlling com-
wards stood at €140.5 million (31 December 2012: €270.8 million).
pany; since renamed KION Material Handling GmbH), and Linde
There were also foreign tax loss carryforwards totalling €228.5 million
Material Handling GmbH, Aschaffenburg (subordinated company),
(31 December 2012: €190.5 million).
concluded a control and profit-and-loss transfer agreement. The
The interest that can essentially be carried forward indefinitely in
agreement came into effect upon entry in the commercial register on
Germany as at 31 December 2013 amounted to €359.0 million
17 May 2013 and established a tax group for these two companies
(31 December 2012: €463.5 million).
(single entity for tax purposes) for the 2013 tax assessment period
The table below shows the reconciliation of expected income
onwards. As a result of this arrangement, additional deferred tax
tax expense to effective income tax expense. The Group reconcilia-
assets totalling €41.8 million were recognised in 2013 in respect of tax
tion is an aggregation of the individual company-specific reconcilia-
loss carryforwards that it had previously not been possible to utilise.
tions prepared in accordance with relevant local tax rates, taking into
Of this amount, €12.7 million had been utilised by 31 December 2013.
account consolidation effects recognised in income. The expected
Deferred tax assets amounting to €139.0 million
(2012:
tax rate applied in the reconciliation is 30.0 per cent (2012:
€233.2 million) have not been recognised because it is unlikely that
29.9 per cent). >> Table 052
the corresponding benefit can be utilised given the current tax laws.
Unrecognised deferred tax assets relate to tax loss carryforwards of
€49.7 million (2012: €108.6 million), interest carryforwards of
€89.1 million (2012: €124.0 million) and other temporary differences
of €0.2 million (2012: €0.6 million).
Deferred taxes are recognised on tax loss carryforwards and
interest carryforwards to the extent that sufficient future taxable
income is expected to be generated against which the losses can
be utilised. The total amount of unrecognised deferred tax assets
relating to loss carryforwards was €49.7 million (2012: €108.6 million),
of which €41.0 million concerns tax losses that can be carried
forward indefinitely.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated income statement 160
Income taxes*
in € million
Earnings before taxes
Anticipated income taxes
Deviations due to the trade tax base
Deviations from the anticipated tax rate
Change in valuation allowance on deferred taxes**
Losses for which deferred taxes have not been recognised
Change in tax rates and tax legislation
Interest carryforwards for which deferred taxes have not been recognised
Non-deductible expenses
Permanent differences
Tax-exempt income
Taxes relating to other periods
Deferred taxes prior periods
Other
Effective income taxes (current and deferred taxes)
* Income taxes for 2012 were adjusted due to the retrospective application of IAS 19R (2011)
**Mainly due to the actual usability of tax loss carryforwards of KION Material Handling GmbH
[15] other inCome statement
disClosures
>> Table 052
2012
310.9
– 93.1
– 3.9
– 0.3
– 0.6
– 20.0
– 1.5
– 7.1
– 20.2
0.0
20.9
– 8.8
– 11.2
– 3.8
– 149.5
2013
154.3
– 46.2
– 4.0
13.3
41.7
– 7.1
0.1
– 7.0
– 8.1
5.7
2.2
– 9.1
– 1.1
3.7
– 15.9
instead reported under financial expenses as a component of inter-
est cost of the defined benefit obligation. Pension expenses essen-
tially comprised the pension entitlements of €23.0 million (2012:
€16.2 million) and unrecognised past service income of €1.7 million
(2012: unrecognised past service cost of €0.3 million) arising from
The cost of materials declined by €58.3 million in the reporting year
plan amendments and curtailments.
to €2,121.7 million (2012: €2,180.0 million).
Impairment losses and depreciation expenses on property,
Personnel expenses went down by €59.0 million to €1,143.8 mil-
plant and equipment together with impairment losses and amortisa-
lion in 2013 (2012: €1,202.7 million). These personnel expenses
tion expenses on intangible assets amounted to €335.0 million in the
included wages and salaries of €900.5 million (2012: €946.6 million),
reporting year (2012: €365.3 million). Inventories were written down
social security contributions of €203.7 million (2012: €222.1 million)
by €13.7 million (2012: €8.2 million).
and expenses for pensions of €39.5 million (2012: €34.0 million). The
The breakdown of rental and lease payments expensed in the
interest cost from the unwinding of the discount on estimated pen-
period and arising in connection with operating leases in which KION
sion obligations is not recognised under personnel expenses and is
Group companies are lessees is as follows: >> Table 053
We keep the world moving.KION GROUP AG | Annual Report 2013
161
Lessee: Expenses recognised for operating lease payments
>> Table 053
in € million
Procurement lease contracts
Sublease contracts
Total recognised expenses for lease payments
2013
75.1
20.3
95.4
2012
80.5
19.0
99.4
The expenses in connection with sub-leases relate to leases and
well as the capital increases from company funds in the first half of
rental agreements in which KION Group companies are both lessors
2013. As a result, the applicable number of shares was adjusted by
and lessees. These expenses were offset by income of €40.9 million
63,700,000 no-par-value shares as at 1 January 2013. Due to the
in 2013 (2012: €53.6 million).
[16] earninGs per share
additional capital increases carried out in June 2013 (see note [27]),
the number of shares to be taken into account in accordance with
IAS 33 rose from 63,950,000 no-par-value shares as at 1 January
2013 to 98,700,000 no-par-value shares as at 31 December 2013.
This did not include the 200,000 no-par-value treasury shares which
were repurchased by KION GROUP AG between 28 August and
26 September 2013 as part of a buy-back programme. Similarly, the
Basic earnings per share are calculated by dividing the net income
calculation for the prior-year period shown is based on an adjusted
(loss) accruing to the KION GROUP AG shareholders by the weighted
weighted average number of shares outstanding of 63,181,642 no-
average number of shares outstanding during the reporting period
par-value shares.
(2013: 81,980,688 no-par-value shares). The net income accruing to
As at 31 December 2013, there were no equity instruments that
the shareholders of KION GROUP AG was €138.8 million (2012:
diluted the earnings per share for the number of shares issued.
€159.3 million). Information about determining the net income (loss)
As described in note [7], the first-time adoption of the revised
accruing to the KION GROUP AG shareholders can be found in the
IAS 19 caused the net income for 2013 accruing to the KION
consolidated income statement. The number of shares taken into
GROUP AG shareholders to rise by €0.4 million (and by €0.3 million
account was adjusted in accordance with the calculation method in
for 2012). However, this did not lead to a material increase in earn-
IAS 33 and reflected a stock split from €2.00 to €1.00 per share as
ings per share.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated income statement
162
Notes to the consolidated statement of financial position
[17] Goodwill and other
intanGible assets
Goodwill is allocated to the segments as follows: >> Table 054
Goodwill broken down by segment
in € million
LMH
STILL
Other
Total goodwill
The change in goodwill in 2013 mainly resulted from the acquisition
of Willenbrock and STILL Arser, from which goodwill of €18.1 million
and €5.0 million arose respectively, and from countervailing currency
effects. The goodwill arising from the acquisition of Willenbrock is
allocated to the LMH segment, while the goodwill from the acquisi-
tion of STILL Arser is allocated to the STILL segment.
>> Table 054
2012
907.8
552.2
13.2
2013
925.1
556.5
13.1
1,494.7
1,473.2
We keep the world moving.KION GROUP AG | Annual Report 2013
163
Intangible assets
>> Table 055
in € million
Balance as at 01/01/2012
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Reclassification
Balance as at 31/12/2012
Gross carrying amount as at 31/12/2012
Accumulated amortisation
Balance as at 01/01/2013
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Balance as at 31/12/2013
Gross carrying amount as at 31/12/2013
Accumulated amortisation
Goodwill
Brand names
Technology &
development
Sundry intangible
assets
1,538.0
16.3
– 0.5
0.2
– 80.7
–
–
–
1,473.2
1,473.2
–
1,473.2
23.1
– 1.6
– 0.0
–
–
–
1,494.7
1,494.7
– 0.0
594.4
–
– 0.1
–
–
– 0.3
–
–
593.9
594.5
– 0.5
593.9
1.5
– 0.5
–
–
– 0.3
–
594.7
595.4
– 0.7
251.7
–
0.4
51.2
– 25.1
– 55.5
– 4.8
– 0.1
217.9
426.7
– 208.8
217.9
–
– 0.4
45.7
– 0.0
– 45.1
– 1.2
216.9
470.4
– 253.5
131.5
4.7
0.2
18.9
– 3.4
– 29.8
– 0.1
0.2
122.1
232.9
– 110.8
122.1
13.8
– 1.4
17.0
– 0.9
– 28.2
–
122.4
253.4
– 131.0
Total
2,515.6
21.0
– 0.0
70.4
– 109.2
– 85.7
– 4.8
0.1
2,407.2
2,727.4
– 320.2
2,407.2
38.4
– 3.8
62.6
– 0.9
– 73.6
– 1.2
2,428.7
2,813.9
– 385.2
The Group intends to retain and further strengthen the Linde, STILL,
life. A value of €1.8 million was attributed to the Voltas brand name
OM STILL and KION brand names on a long-term basis. Brand
and allocated to the Other segment. This brand name is amortised
names worth €473.6 million are assigned to the LMH segment
over its useful life of five years. As at 31 December 2013, the brand
(31 December 2012: €473.8 million) and brand names worth
names allocated to the Other segment had a residual value of
€115.3 million to the STILL segment (31 December 2012: €114.0 mil-
€5.8 million (31 December 2012: €6.2 million).
lion). These assets are not amortised as they have an indefinite useful
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
164
The total carrying amount for technology and development
Other intangible assets relate in particular to the intangible
assets as at 31 December 2013 was €216.9 million (31 Decem-
assets identified in the course of purchase price allocation for the
ber 2012: €217.9 million). Development costs of €45.7 million were
acquisition of the KION Group, such as the customer base.
capitalised in the reporting year (2012: €51.2 million). Total research
The amortisation expense and impairment losses on intangible
and development costs of €113.6 million (2012: €124.5 million) were
assets are reported under functional costs.
expensed. Of this amount, €45.1 million (2012: €55.5 million) related
to depreciation and amortisation.
Impairment losses of €1.2 million were recognised on capitalised
development costs and reported within the other expenses in 2013
to reflect the lack of opportunities to use them in future as a result of
the planned closure of a production site. This relates to further
[18] leased assets
impairment losses in connection with the closure of the heavy truck
The changes in leased assets in 2013 and 2012 were as follows:
plant in Merthyr Tydfil (LMH segment).
>> Table 056
Leased assets
in € million
Balance as at 01/01/
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/
Gross carrying amount as at 31/12/
Accumulated depreciation
>> Table 056
2012
167.4
–
0.7
135.1
– 60.6
– 51.2
– 0.1
191.3
453.9
– 262.6
2013
191.3
35.2
– 11.4
146.9
– 59.8
– 58.0
7.8
251.9
603.5
– 351.5
Leased assets are attributable solely to the Financial Services seg-
Leased assets include assets leased over the long term with a
ment and relate to industrial trucks in the amount of €251.6 million
residual value of €201.2 million (31 December 2012: €142.7 million)
(2012: €191.2 million) that are leased to external customers, and to
that are funded by means of sale and leaseback transactions with
office furniture and equipment in the amount of €0.3 million (2012:
leasing companies and leased assets with a residual value of
€0.1 million).
€50.7 million (31 December 2012: €48.7 million) that are funded inter-
nally or by means of bank loans.
We keep the world moving.KION GROUP AG | Annual Report 2013
165
>> Table 057
2012
189.6
80.1
106.1
3.4
2013
225.8
89.6
134.7
1.5
>> Table 058
2012
356.7
1.5
1.5
193.8
– 28.2
– 130.1
– 0.2
395.1
913.0
– 517.9
2013
395.1
42.6
– 6.8
229.4
– 59.1
– 134.3
– 5.6
461.2
949.6
– 488.4
Leased assets resulted in non-cancellable minimum lease pay-
ments from customers amounting to €225.8 million (31 Decem-
ber 2012: €189.6 million).
The following table shows the maturity structure of these
payments: >> Table 057
Minimum lease payments
in € million
Cash receipts from minimum lease payments
due within one year
due in one to five years
due in more than five years
[19] rental assets
The changes in rental assets in 2013 and 2012 were as follows:
>> Table 058
Rental assets
in € million
Balance as at 01/01/
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/
Gross carrying amount as at 31/12/
Accumulated depreciation
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
166
Acquisitions amounting to €127.1 million (2012: €110.1 million)
and disposals amounting to €37.8 million (2012: €19.8 million) were
attributable to the LMH segment. Acquisitions amounting to €102.4 mil-
lion (2012: €85.4 million) and disposals amounting to €21.4 million
(2012: €10.2 million) were attributable to the STILL segment.
The breakdown of rental assets by contract type is shown in the
following table: >> Table 059
Rental assets broken down by contract types
>> Table 059
Operating leases as lessor
Sale with risk
Total
in € million
Industrial trucks
Truck equipment
Total rental assets
2013
375.3
21.5
396.8
2012
323.6
4.6
328.2
2013
64.3
0.1
64.4
2012
66.8
0.1
66.9
2013
439.6
21.5
461.2
2012
390.4
4.7
395.1
Rental assets comprises assets resulting from short-term rentals
(‘operating leases as lessor’) and assets in relation to which signifi-
cant risks and rewards remain with the KION Group although they
were sold (‘sale with risk’).
We keep the world moving.KION GROUP AG | Annual Report 2013
167
[20] other property, plant
and equipment
The changes in the carrying amounts of other property, plant and
equipment were as follows: >> Table 060
Other property, plant and equipment
>> Table 060
in € million
Balance as at 01/01/2012
Group changes
Exchange rate adjustments
Additions
Disposals
Depreciation
Impairment
Reclassification
Balance as at 31/12/2012
Gross carrying amount as at 31/12/2012
Accumulated depreciation
Balance as at 01/01/2013
Group changes
Exchange rate adjustments
Additions
Disposals
Depreciation
Reversal of impairment
Reclassification
Balance as at 31/12/2013
Gross carrying amount as at 31/12/2013
Accumulated depreciation
Plant, machinery,
and office
furniture and
equipment
Advances
paid and
assets under
construction
Land and
buildings
345.2
3.0
– 0.3
9.9
– 19.0
– 14.1
– 12.3
9.9
322.3
637.6
– 315.4
322.3
11.8
– 5.2
6.2
– 3.2
– 14.7
–
2.8
320.0
647.2
– 327.2
188.5
– 0.2
– 0.1
65.7
– 30.4
– 63.1
– 4.0
6.0
162.4
888.0
– 725.6
162.4
6.1
– 2.7
46.5
– 2.9
– 53.1
0.5
1.5
158.3
939.6
– 781.3
20.1
–
– 0.1
17.5
– 6.2
–
–
– 15.7
15.6
15.6
–
15.6
0.6
– 0.2
11.7
– 0.1
–
–
– 6.5
21.1
21.1
–
Total
553.8
2.9
– 0.5
93.2
– 55.6
– 77.2
– 16.3
0.2
500.3
1,541.3
– 1,040.9
500.3
18.5
– 8.1
64.4
– 6.2
– 67.8
0.5
– 2.2
499.4
1,607.9
– 1,108.5
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
168
Land and buildings in the amount of €18.3 million (31 Decem-
ber 2012: €4.2 million) were largely pledged as collateral for accrued
retirement benefits under partial retirement agreements.
The KION Group did not recognise any significant impairment
[21] equity-accounted investments
losses in accordance with IAS 36 on other property, plant and equip-
The KION Group reported equity-accounted investments with a total
ment in 2013. Of the impairment losses recognised in 2012, which
carrying amount of €138.6 million as at 31 December 2013
predominantly related to the planned closure of production sites,
(31 December 2012: €154.8 million). A significant portion of the car-
€12.3 million was attributable to land and buildings and €4.0 million
rying amount of the associates resulted from the shares (30 per cent)
to plant & machinery and office furniture & equipment.
in Linde Hydraulics. The associates and joint ventures can be seen in
Plant & machinery and office furniture & equipment include
the list of shareholdings in note [45]. Their key figures are as shown
assets from procurement leases (finance leases) amounting to
below. >> Table 061
€13.3 million (31 December 2012: €15.5 million). Depreciation on
these assets came to €3.7 million in 2013. The corresponding liabili-
The figures shown in the table are based on a notional 100 per cent
ties are reported as other financial liabilities.
investment.
At-Equity investments
in € million
Associates (100 per cent)
Revenue
Net loss (income)
Assets
Liabilities
Joint ventures (100 per cent)
Revenue
Net income
Assets
Non-current assets
Current assets
Liabilities
Non-current assets
Current assets
>> Table 061
2013
2012
692.2
– 31.7
1,039.5
683.9
99.1
5.3
43.5
21.0
22.4
19.7
4.6
15.0
569.4
15.3
1,073.0
712.9
132.0
4.8
55.0
24.2
30.8
30.2
4.7
25.5
We keep the world moving.KION GROUP AG | Annual Report 2013
169
>> Table 062
2012
443.5
151.0
282.3
10.2
399.3
132.1
257.3
9.8
2013
537.5
194.8
326.9
15.8
479.6
170.8
293.6
15.2
57.9
44.2
[22] lease receivables
In the case of leases under which KION Group companies lease
assets directly to customers as part of the Group’s financial services
activities, the Group’s net investment in the lease is reported as a
lease receivable.
The amounts recognised as lease receivables are based on the
following data: >> Table 062
Lease receivables
in € million
Gross investments
due within one year
due in one to five years
due in more than five years
Present value of outstanding minimum lease payments
due within one year
due in one to five years
due in more than five years
Unrealised financial income
Gross investments include minimum lease payments from non-can-
cellable sub-leases amounting to €434.0 million (31 December 2012:
€345.5 million).
Lease receivables include unguaranteed residual values of
€52.1 million (31 December 2012: €44.1 million).
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
170
[23] other financial assets
Other financial assets of €166.3 million (31 December 2012:
€156.9 million) comprise the following: >> Table 063
Other financial assets
in € million
Pension assets
Investments in non-consolidated subsidiaries
Other investments
Loans receivable
Non-current securities
Derivative financial instruments
Other non-current financial assets
Derivative financial instruments
Financial receivables from affiliated companies and related companies
Financial receivables from third parties
Deferred charges and prepaid expenses
Sundry financial assets
Other current financial assets
>> Table 063
2012
22.8
3.9
2.7
0.7
0.8
19.7
50.2
4.2
8.5
1.1
20.4
72.6
106.8
2013
22.4
7.8
4.1
0.8
0.8
15.7
51.7
3.6
7.6
4.0
25.7
73.8
114.7
Total other financial assets
166.3
156.9
Pension assets relate to asset surpluses from four defined benefit
The sundry financial assets essentially include receivables from
plans in the United Kingdom in which plan assets exceed pension
value added tax amounting to €37.5 million (31 December 2012:
obligations.
€37.2 million) and non-derivative financial receivables amounting to
The non-current derivative financial instruments include the put
€35.7 million (31 December 2012: €35.2 million) that fall within the
option on the remaining shares in Linde Hydraulics amounting to
scope of IFRS 7.
€15.7 million (2012: €19.7 million).
We keep the world moving.KION GROUP AG | Annual Report 2013
171
>> Table 064
2012
120.0
75.0
349.0
5.9
549.9
2013
108.3
66.7
331.2
5.5
511.8
[24] inventories
The reported inventories break down as follows:
>> Table 064
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
The year-on-year reduction in inventories was largely attributable to
the decrease in materials and supplies (down by 9.8 per cent), work
in progress (down by 11.1 per cent) and finished goods (down by
5.1 per cent). In 2013, impairment losses of €13.7 million were recog-
nised on inventories (2012: €8.2 million). Reversals of impairment
losses had to be recognised in the amount of €7.0 million (2012:
€0.8 million) because the reasons for the impairment losses no
longer existed.
[25] trade receivables
The trade receivables break down as follows: >> Table 065
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
172
Trade receivables
in € million
Receivables from third parties
thereof receivables from third parties before valuation allowances
thereof valuation allowances for overdue receivables > 90 days ≤ 180 days
thereof valuation allowances for overdue receivables > 180 days
thereof other valuation allowances for receivables
Trade receivables from affiliated companies
Trade receivables from associated companies and joint ventures
Total trade receivables
Valuation allowances of €42.4 million (31 December 2012: €50.5 mil-
lion) were recognised for trade receivables.
[26] cash and cash equivalents
The change in cash and cash equivalents is shown in the consoli-
dated statement of cash flows. For more detailed information, please
also refer to note [34].
Cash and cash equivalents
in € million
Cash held by banks, on hand and cheque
Pledged cash
Total cash and cash equivalents
>> Table 065
2012
607.3
657.8
– 7.6
– 27.5
– 15.4
3.5
14.7
625.5
2013
540.1
582.6
– 6.2
– 25.8
– 10.4
5.8
12.8
558.7
>> Table 066
2012
561.9
0.5
562.4
2013
219.1
0.3
219.3
We keep the world moving.KION GROUP AG | Annual Report 2013
173
[27] equity
subscribed capital and capital reserves
In addition, the Annual General Meeting on 13 June 2013
approved a further resolution to increase the share capital by
€13.7 million to €81.7 million by way of a share issue. Weichai Power
(Luxembourg) Holding S.à r.l., Luxembourg, subscribed these
shares. The capital increase was entered in the commercial register
on 27 June 2013, as a result of which the share capital grew by
As at 31 December 2013, the Company’s share capital amounted to
€13.7 million and capital reserves went up by €314.7 million.
€98.9 million and was fully paid up. As at 31 December 2012, the
The share capital also increased due to the issue of shares to
nominal capital of KION Holding 1 GmbH was divided into 250,000
investors as part of the IPO. To this end, the Annual General Meeting
shares, each with a value of €2. Subscribed capital increased by a
of KION GROUP AG on 13 June 2013 resolved to increase the share
total of 98,650,000 no-par-value shares to 98,900,000 no-par-value
capital of KION GROUP AG by a further €17.2 million to a total of
shares due to entry of the capital increase in the commercial register
€98.9 million by issuing new shares. An amount of €396.2 million
in January 2013 and to three further capital increases and a stock
was paid into the capital reserves.
split in connection with the IPO in June 2013. The total number of
Total transaction costs of €27.5 million were incurred in connec-
shares outstanding as at 31 December 2013 was 98.7 million no-par-
tion with the capital increases; €19.6 million of this total was directly
value shares. At the reporting date, KION GROUP AG held 0.2 mil-
attributable and was deducted directly from the capital reserves
lion treasury shares. There were changes to the share capital in the
after subtraction of a tax benefit of €5.7 million.
year under review for the following reasons:
Following the successful IPO, the KION Group began prepara-
In December 2012, the Shareholders’ Meeting of KION Holding
tions for an employee share programme to enable staff members,
1 GmbH had approved a resolution to increase the share capital by
initially those in Germany, to derive greater benefit from the success
€0.8 million to €1.3 million. The capital increase was not entered in
of the Company. As authorised by the Annual General Meeting on
the commercial register until 14 January 2013. In addition, capital
13 June 2013, treasury shares were repurchased via the stock
reserves went up by €1,131.8 million.
exchange for this purpose from 28 August 2013 onwards. By
The Shareholders’ Meeting on 25 April 2013 approved not only
26 September 2013, a total of 0.2 million treasury shares had been
the change in legal form but also a resolution to increase the share
repurchased at an average price of €27.89. The total cost was
capital by €62.7 million to €64.0 million from company funds. KION
€5.6 million.
GROUP AG’s transformation and capital increase were entered in
the commercial register on 4 June 2013.
On 11 June 2013, the Annual General Meeting of KION GROUP
retained earnings
AG resolved to increase the share capital by €4.0 million to €68.0 mil-
lion by way of a share issue. The new shares were issued in return for
The development of retained earnings is shown in the consolidated
a non-cash capital contribution from Superlift Holding S.à r.l., Lux-
statement of changes in equity. The retained earnings comprise the
embourg (referred to below as Superlift Holding). The non-cash cap-
net income (loss) for the financial year and past contributions to
ital contribution from Superlift Holding took the form of all shares in
earnings by the consolidated companies, provided they have not
Superlift Funding S.à r.l., Luxembourg (referred to below as Superlift
been distributed.
Funding), and all rights and duties of Superlift Holding arising out of
the agreement between Superlift Holding and Superlift Funding
dated 30 September 2009 for a loan of €100.0 million (plus accrued
interest of €17.0 million). The portion of the non-cash capital contri-
bution that exceeded the capital increase (€114.0 million) was paid
into the capital reserves. The aforementioned capital increase was
entered in the commercial register on 19 June 2013.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position 174
appropriation of profit
The Group does not enter into any obligations above and beyond the
payment of contributions to an external pension fund. The amount of
The Executive Board and Supervisory Board of KION GROUP AG will
future pension benefits is based solely on the amount of the contri-
propose a dividend of €0.35 per share to the Annual General Meeting
butions paid by the employer (and in some cases the beneficiaries
on 19 May 2014. As there are 98,700,000 dividend-bearing shares, this
themselves) to the external pension fund, including income from the
equates to a total dividend payout of €34.5 million. A total of 25 per cent
investment of these contributions. The total expense arising from
of the net income accruing to the KION Group shareholders will there-
defined contribution plans amounted to €57.6 million in 2013 (2012:
fore be distributed in dividends.
€63.9 million). Of this total, contributions paid by employers into gov-
ernment-run schemes came to €52.8 million (2012: €59.7 million).
The defined contribution plan expense is reported within the func-
accumulated other comprehensive income (loss)
tional costs.
Accumulated other comprehensive income (loss) includes the cur-
rency translation differences arising from the translation of the finan-
defined benefit plans
cial statements of foreign subsidiaries, the effects of the fair value
measurement of derivative financial instruments, the share of profit
The KION Group currently grants pensions to almost all employees
(loss) of equity-accounted investments, and the gains and losses in
in Germany and a number of foreign employees. These pensions
connection with defined benefit pension obligations.
consist of fixed benefit entitlements and are therefore reported as
non-controlling interests
defined benefit plans in accordance with IFRS. As at 31 Decem-
ber 2013, the KION Group had set up defined benefit plans in
13 countries. For all of the significant defined benefit plans within the
Group, the benefits granted to employees are determined on the
Non-controlling interests in companies in the KION Group amounted
basis of their individual income, i.e. either directly or by way of inter-
to €5.0 million (31 December 2012: €6.2 million).
mediate benefit arrangements. The largest of the KION Group’s
[28] retirement benefit obliGation
defined benefit plans – accounting for around 91 per cent of the
global defined benefit obligation – are in Germany and the United
Kingdom.
In Germany, the pension benefits granted under the 2001 pen-
sion benefit conditions and 2002 pension benefit conditions depend
on employees’ length of service and gross annual remuneration
The retirement benefit obligation is recognised for obligations to pro-
(pension component entitlement). The pension component is calcu-
vide current and future post-employment benefits. Post-employ-
lated by multiplying a certain percentage by an age-dependent
ment benefit plans are classified as either defined benefit plans or
annuitisation factor. The contribution rate is 3.4 per cent (2001 pen-
defined contribution plans, depending on the substance of the plan
sion benefit conditions) or 2.0 per cent (2002 pension benefit condi-
as derived from its principal terms and conditions.
tions) of the gross remuneration that an employee earns in the com-
defined contribution plans
putation period. Employees receive the pension entitlement that they
have earned in the form of a monthly retirement pension or invalidity
benefit or, in the event of their death, the entitlement is paid to their
surviving dependants in the form of a widow’s / widower’s pension or
In the case of defined contribution pension plans, the Group pays
orphans’ pension. Members of the Executive Board and other exec-
contributions to government or private pension insurance providers
utives are predominantly covered by individual pension plans. For
based on statutory or contractual provisions, or on a voluntary basis.
details of the pension entitlements of KION GROUP AG Executive
We keep the world moving.KION GROUP AG | Annual Report 2013 175
Board members, please refer to the information in note [43]. The
truck plant in Merthyr Tydfil (Wales, United Kingdom) was shut down
amount of the benefits paid to executives depends on the type of
in 2013 as planned, resulting in gains on plan curtailments from two
entitlement. Under the ‘old’ individual pension plans, executives
of the plans in the reporting year.
were entitled to a certain percentage of income as their pension ben-
Each of the four plans is monitored by its own board of trustees,
efit. By contrast, the employer-funded entitlement under the ‘new’
which oversees the running of the plan as well as its funded status
individual pension plans consists of two components: a fixed basic
and the investment strategy. The members of the boards of trustees
pension and a variable top-up pension through which annual com-
comprise people appointed by the companies involved and selected
ponents are earned within a defined contribution system. Both com-
plan beneficiaries.
ponents depend on the seniority of the executive.
Under UK law, the board of trustees is obliged to have a valua-
In addition, employees in Germany are able to pay part of their
tion of the plan carried out at least every three years. The last valua-
salary into a company pension plan, for which KION provides a
tion was carried out as at 1 January 2009. Because there are gaps
defined minimum interest rate to enable employees to build up their
in the coverage according to local valuation rules, the companies
personal pension provision. The pension benefits consist of retire-
involved made a one-off payment of €7.1 million in 2013 in line with
ment, invalidity and surviving dependants’ benefits. Each contribu-
the minimum funding agreements reached with the trustees. A one-
tion made is converted into a capital component on the basis of a
off payment of €6.9 million will have to be made in 2014. This amount
guaranteed minimum interest rate of 3 per cent and depending on
may decrease by €2.3 million depending on the achievement of
the age of the employee. The capital components acquired each cal-
defined KPIs. The trustees and the companies are currently finalising
endar year are added up to give the pension capital. When an
the valuation as at 1 January 2012. The board of trustees and the
insured event occurs, the pension capital is converted into an on-
companies involved have agreed that this valuation can be finalised
going life-long pension or a one-off capital payment.
after the statutory deadline so as to enable the board of trustees to
In Germany, the KION Group also helps employees to build up
take KION GROUP AG’s IPO into consideration in the valuation. The
their own pension provision with an additional matching contribution
new valuation may give rise to additional minimum funding require-
for those employees who pay part of their salary into the KION pen-
ments in future.
sion plan. The additional matching contribution received by execu-
The unsecured guarantees given to the trustees of the four plans
tives is 50.0 per cent of the amount they defer in a calendar year,
by KION GROUP GmbH (now KION Material Handling GmbH) were
although the absolute amount of this contribution is limited to a certain
replaced with letters of support after KION GROUP AG’s successful
percentage of income (ranging from 2.5 per cent to a maximum of
IPO, as set forth in the original guarantees. In these letters of sup-
5.0 per cent). All other employees who participate in the company pen-
port, KION GROUP AG undertakes to ensure – provided that certain
sion scheme receive up to 0.4 per cent of their gross remuneration.
defined conditions are met – that each employer is always in a finan-
Some of the KION Group’s pension obligations in Germany are
cial position to meet its payment obligations under the plan. The like-
financed by way of contractual trust arrangements (CTAs), which
lihood of the guarantee being used is deemed low in view of the posi-
qualify as plan assets within the meaning of IAS 19. There are no
tion of the individual companies with regard to their current and
statutory minimum funding requirements. In the event of the Compa-
future financial and earnings situations.
ny’s insolvency, the company pension scheme is to a large extent
Furthermore, significant asset volumes are invested in external
protected by law by the Pension Security Association.
pension funds with restricted access in Switzerland and the Nether-
In the United Kingdom, defined benefit pension obligations pre-
lands. Decisions on additions to plan assets take into account the
dominantly relate to four plans. The defined benefits include not only
change in plan assets and pension obligations. They also take into
a life-long retirement pension but also surviving dependants’ bene-
account the statutory minimum coverage requirements and the
fits. The amount of the pension depends on employees’ length of
amounts deductible under local tax rules.
service and final salary. All of the plans were closed to new employ-
In accordance with IAS 19 (‘Employee Benefits’), pension provi-
ees more than ten years ago. All beneficiaries in one of the plans are
sions are recognised to cover obligations arising from the current
no longer active employees. Production at the extra heavy-duty
and future pension entitlements of active and (after the vesting period
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position 176
has expired) former employees of the KION Group and their surviving
Benefit obligations are calculated on the basis of current bio-
dependants.
metric probabilities as determined in accordance with actuarial prin-
In the case of defined benefit plans, the beneficiaries are granted
ciples. The calculations also include assumptions about future
a specific benefit by the Group or an external pension fund. Due to
employee turnover based on employee age and years of service and
future salary increases, the benefit entitlement at the retirement age
about the probability of retirement. The defined benefit obligation is
of the beneficiary is likely to be higher than the amount granted as at
calculated on the basis of the significant weighted-average assump-
the reporting date. Pensions are often adjusted after an employee
tions as at the reporting date shown in >> Table 067.
reaches retirement age. The amount of the Group’s obligation, which
The assumed discount rate is determined on the basis of the
is defined as the actuarial present value of the obligation to provide
yield as at the reporting date on AA-rated, investment-grade,
the level of benefits currently earned by each beneficiary, is expressed
fixed-interest corporate bonds with maturities that match the
as the present value of the defined benefit obligation, which includes
expected maturities of the pension obligations. Pension obligations
adjustments for future salary and pension increases.
in foreign companies are calculated on a comparable basis taking
measurement assumptions
into account any country-specific requirements.
Future increases in salaries are estimated on an annual basis
taking into account factors such as inflation and the overall eco-
nomic situation.
The discount rate used to calculate the defined benefit obligation at
The biometric mortality rates used in the calculation are based
each reporting date is determined on the basis of current capital
on published country-specific statistics and empirical values. Since
market data and long-term assumptions about future salary and
31 December 2009, the modified Heubeck 2005 G mortality tables
pension increases in accordance with the best estimate principle.
have been used in Germany as the biometric basis; the modified
These assumptions vary depending on the economic conditions
tables include a somewhat higher life expectancy for males than the
affecting the currency in which benefit obligations are denominated
unmodified tables. The S1NA CMI 2013 with a long-term trend of
and in which fund assets are invested, as well as capital market
1.25 per cent p.a. is applied to the four defined benefit plans in the
expectations.
United Kingdom.
Assumptions underlying provisions for pensions and other postemployment benefits
>> Table 067
Discount rate
Salary increase rate
Rate of pension increase
Germany
UK
Other
2013
3.60 %
2.75 %
1.75 %
2012
3.50 %
2.75 %
1.75 %
2013
4.40 %
4.16 %
3.53 %
2012
4.35 %
4.17 %
2.94 %
2013
2.95 %
2.44 %
0.48 %
2012
2.57 %
2.36 %
0.26 %
We keep the world moving.KION GROUP AG | Annual Report 2013
177
The actuarial assumptions not listed in >> Table 067, such as
with the projected unit credit method is reduced by the fair value of
employee turnover, invalidity, etc., are determined in accordance
the assets of the external pension plan. If the assets of the external
with recognised forecasts in each country, taking into account the
pension plan exceed the pension obligations (net assets), a corre-
circumstances and forecasts in the companies concerned.
sponding asset is recognised in accordance with IAS 19. IAS 19.64
The significant weighted-average assumptions shown in >>
in conjunction with the supplementary explanatory information in
Table 068 were applied to the calculation of the net interest cost and
IFRIC 14 states that the recognition of an asset for an excess of pen-
the cost of benefits earned in the current year (current service cost).
sion plan assets over pension obligations is only permitted if the
Differences between the forecast and actual change in the
company concerned, in its function as the employer, gains economic
defined benefit obligation and changes in related assets (known as
benefits in the form of reductions in future contributions to the plan
remeasurements) are recognised immediately in other comprehen-
or in the form of refunds from the plan. If pension obligations are not
sive income in accordance with IAS 19. This serves to ensure that
covered by the assets of an external pension plan, the net obligation
the pension liability in the statement of financial position is always the
is reported under the retirement benefit obligation.
present value of the defined benefit obligation not covered by assets.
In four defined benefit plans in the United Kingdom, plan assets
In the case of externally financed pension plans, the present
exceed the pension obligations. Stipulations limiting the asset to be
value of the defined benefit obligation as calculated in accordance
recognised in the statement of financial position do not apply.
Assumptions underlying for pensions expenses
>> Table 068
Discount rate
Salary increase rate
Rate of pension increase
Germany
UK
Other
2013
3.50 %
2.75 %
1.75 %
2012
5.65 %
2.75 %
1.75 %
2013
4.35 %
4.17 %
2.94 %
2012
4.85 %
4.18 %
3.18 %
2013
2.57 %
2.36 %
0.26 %
2012
4.01 %
2.31 %
0.38 %
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
178
statement of financial position
The change in the present value of the defined benefit obligation
(DBO) is shown in >> Table 069.
Changes in defined benefit obligation
>> Table 069
in € million
2013
2012
2013
2012
2013
2012
2013
2012
Germany
UK
Other
Total
Present value of defined benefit obligation
as at 01/01/
Group changes
Exchange differences
Current service cost
Past service cost (+) and income (–) from
plan amendments
Past service cost (+) and income (–) from
curtailments
Interest expense on defined benefit obligation
Employee contributions
545.4
0.0
–
18.3
–
–
18.9
–
389.3
– 67.4
–
11.9
–
–
21.7
–
Pension benefits directly paid by company
– 12.1
– 11.3
419.5
390.4
–
– 8.5
1.2
– 6.9
10.3
1.4
98.4
0.0
– 0.8
3.4
0.3
0.3
– 1.3
– 0.7
17.1
0.0
–
–
19.1
0.1
–
Pension benefits paid by funds
Liability transfer out to third parties
Remeasurements
Present value of defined benefit obligation
as at 31/12/
thereof unfunded
thereof funded
–
– 0.4
– 5.1
565.1
237.9
327.2
–
– 17.7
– 16.9
– 0.2
201.5
545.4
231.4
314.0
–
11.0
–
21.7
422.1
419.5
–
–
422.1
419.5
The components of the remeasurements are listed in >> Table 073.
79.4
– 0.2
0.2
2.9
–
–
3.1
0.8
– 2.3
– 3.0
–
17.5
98.4
28.2
70.2
1,063.3
0.1
– 9.2
23.0
859.0
– 74.5
10.5
16.2
– 1.0
0.3
– 0.7
38.4
0.9
– 13.1
– 19.1
– 0.4
0.9
–
43.8
0.9
– 13.6
– 19.9
– 0.2
240.7
1,082.9
1,063.3
265.9
817.1
259.6
803.7
–
2.5
0.9
– 1.0
– 1.4
–
– 5.0
95.7
28.0
67.8
We keep the world moving.KION GROUP AG | Annual Report 2013
179
>> Table 070 shows the change in the fair value of plan assets.
Changes in plan assets
>> Table 070
in € million
Fair value of plan assets as at 01/01/
Group changes
Exchange differences
Interest income on plan assets
Employee contributions
Employer contributions
Pension benefits paid by funds
Remeasurements
Fair value of plan assets as at 31/12/
Germany
UK
Other
Total
2013
40.0
–
–
1.4
–
2.4
–
– 1.9
41.9
2012
38.2
– 1.8
–
2.2
–
–
–
1.5
40.0
2013
439.5
–
– 8.9
18.1
0.0
7.3
– 17.7
3.3
441.6
2012
406.4
– 4.1
10.7
20.0
0.1
7.3
– 16.9
16.0
439.5
2013
58.9
–
– 0.6
1.4
0.9
1.9
– 1.4
0.6
61.7
2012
50.3
–
0.2
1.8
0.8
2.2
– 3.0
6.5
58.9
2013
538.4
–
– 9.5
20.9
0.9
11.6
– 19.1
2.0
545.2
2012
494.9
– 5.9
10.9
24.0
0.9
9.5
– 19.9
24.0
538.4
In 2013, employer contributions in the United Kingdom, which
The reconciliation of funded status and net defined benefit obli-
amounted to €7.3 million, included one-off payments of €7.1 million
gation to the amounts reported in the consolidated statement of
into pension funds on the basis of contractual agreements. In Ger-
financial position as at 31 December is shown in >> Table 071.
many, the Executive Board members’ switch from KION Material
As a result, the funding ratio (ratio of pension assets to pension
Handling GmbH to KION GROUP AG meant that one-off payments
obligations) in the KION Group was 50.3 per cent (2012: 50.6 per cent).
of €2.4 million were made to a German CTA.
The change in the retirement benefit obligation reported in the
The payments expected for the following year amount to
statement of financial position is shown in >> Table 072.
€23.7 million (2013: €24.5 million), which includes expected employer
contributions of €9.2 million to plan assets (2013: €11.2 million) and
expected direct payments of pension benefits amounting to
€14.6 million (2013: €13.3 million) that are not covered by corre-
sponding reimbursements from plan assets. According to local valu-
ation rules, there continue to be gaps in the coverage of four plans in
the United Kingdom, as a result of which the expected employer
contributions in 2014 include one-off payments of €6.9 million in line
with the agreements reached with the trustees.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
180
Funded status and net defined benefit obligation
>> Table 071
in € million
2013
2012
2013
2012
2013
2012
2013
2012
Germany
UK
Other
Total
Present value of the partially or fully funded
defined benefit obligation
Fair value of plan assets
Surplus (+) / deficit (–)
Present value of the
unfunded defined benefit obligation
Net liability (–) / net asset (+) as at
31/12/
– 327.2
– 314.0
– 422.1
– 419.5
– 67.8
– 70.2
– 817.1
– 803.7
41.9
40.0
– 285.3
– 274.0
441.6
19.5
439.5
20.0
61.7
– 6.1
58.9
545.2
538.4
– 11.3
– 271.8
– 265.2
– 237.9
– 231.4
–
–
– 28.0
– 28.2
– 265.9
– 259.6
– 523.1
– 505.4
19.5
– 2.9
20.0
– 2.7
– 34.1
– 34.1
– 39.5
– 39.5
– 537.7
– 524.8
– 560.1
– 547.6
Reported as ‘retirement benefit obligation’
– 523.1
– 505.4
Reported as
‘Other non-current financial assets’
–
–
22.4
22.8
0.0
–
22.4
22.8
Changes in retirement benefit obligation
>> Table 072
in € million
Balance as at 01/01/
Group changes
Exchange differences
Total service cost
Net interest expense
Pension benefits directly paid by
company
Employer contributions to plan assets
Liability transfer out to third parties
Remeasurements
Balance as at 31/12/
Germany
UK
Other
Total
2013
505.4
0.0
–
18.3
17.5
2012
351.1
– 65.5
–
11.9
19.5
– 12.1
– 11.3
– 2.4
– 0.4
– 3.2
523.1
–
– 0.2
200.0
505.4
2013
2012
2.7
–
– 0.1
–
0.1
–
– 0.2
–
0.4
2.9
2.1
–
0.1
–
0.1
–
– 0.2
–
0.7
2.7
2013
39.5
0.0
– 0.2
2.1
1.1
– 1.0
– 1.9
–
– 5.6
34.1
2012
29.1
– 0.2
0.0
2.9
1.3
– 2.3
– 2.2
–
10.9
39.5
2013
547.6
0.1
– 0.2
20.4
18.7
2012
382.2
– 65.8
0.1
14.8
20.9
– 13.1
– 13.6
– 4.5
– 0.4
– 8.4
560.1
– 2.4
– 0.2
211.6
547.6
We keep the world moving.KION GROUP AG | Annual Report 2013
181
In Germany, the KION pension plan for employees holds plan assets
(2012: €19.9 million) was paid from plan assets. Cash contributions
of €23.1 million from employee contributions (2012: €19.5 million)
to plan assets in 2013 amounted to €11.6 million (2012: €9.5 mil-
besides the Company-funded entitlements shown in >> Table 071
lion). Furthermore, pension benefit payments totalling €0.4 million
The plan assets are wholly offset by corresponding liabilities relating
(2012: €0.2 million) were transferred to external pension funds.
to the direct pension entitlement scheme. Employees paid a total of
€2.4 million (2012: €2.7 million) into the KION pension plan in 2013.
income statement
statement of cash flows
In accordance with IAS 19, actuarial computations are performed for
benefit obligations in order to determine the amount to be expensed
In the case of obligations not covered by external assets, payments
in each period in accordance with fixed rules. The expenses recog-
to beneficiaries are made directly by the Company and therefore
nised in the income statement for pensions and similar obligations
have an impact on cash flow from operating activities. If the benefit
consist of a number of components that must be calculated and dis-
obligations are backed by external assets, the payments are made
closed separately.
from existing plan assets and have no effect on the Company’s
The service cost is the new pension entitlement arising in the
cash flow. Instead, any contributions made to the external pension
financial year and is recognised in the income statement. It is calcu-
fund by the Company result in a cash outflow for operating activi-
lated as the present value of that proportion of the expected defined
ties.
benefit obligation when the pension is paid attributable to the year
During the reporting year, pension benefits of €32.2 million
under review on the basis of the maximum length of service achiev-
(2012: €33.5 million) were paid in connection with the main pension
able by each employee.
entitlements in the KION Group, of which €13.1 million (2012:
Past service cost arises if there is a change to the pension enti-
€13.6 million) was paid directly by the Company and €19.1 million
tlement and it is recognised immediately in full.
Cost of defined benefit obligation
>> Table 073
in € million
Current service cost
Past service cost (+) and income (–) from
plan amendments
Past service cost (+) and income (–) from
curtailments
Total service cost
Interest expense on defined benefit obligation
Interest income on plan assets
Net interest expense (+) / income (–)
Total cost of
defined benefit obligation
Germany
UK
Other
Total
2013
18.3
–
–
18.3
18.9
– 1.4
17.5
2012
11.9
–
–
11.9
21.7
– 2.2
19.5
2013
1.2
0.3
– 0.7
0.8
17.1
2012
1.4
0.3
–
1.7
19.1
– 18.1
– 20.0
– 1.0
– 0.9
2013
3.4
– 1.3
–
2.1
2.5
– 1.4
1.1
2012
2.9
–
–
2.9
3.1
– 1.8
1.3
2013
23.0
2012
16.2
– 1.0
0.3
– 0.7
21.2
38.4
– 20.9
17.6
–
16.5
43.8
– 24.0
19.8
35.8
31.4
– 0.2
0.8
3.2
4.2
38.8
36.4
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
182
The net interest cost / income, which is calculated by multiplying
other comprehensive income (loss)
the net liability (pension obligation minus plan assets) or the net
assets (if the plan assets exceed the pension obligation) by the dis-
The breakdown of the remeasurement of the defined benefit obliga-
count rate at the start of the year, is also recognised in the income
tion recognised in the statement of comprehensive income in 2013 is
statement.
as follows: >> Table 074
The breakdown of the net cost of the defined benefit obligation
(expenses less income) recognised in the income statement for 2013
is shown in >> Table 073.
The KION Group’s net financial income / expenses includes a net
interest cost of €17.6 million (2012: €19.8 million). All other compo-
nents of pension expenses are recognised under functional costs.
The actual total return on plan assets in 2013 was €22.9 million
(2012: €48.0 million).
Accumulated other comprehensive income (loss)
>> Table 074
Germany
UK
Other
Total
in € million
2013
2012
2013
2012
2013
2012
2013
2012
Accumulated other comprehensive
income / loss as at 01/01/
Effects from the first time adoption
of IAS 19 (rev. 2011)
Group changes
Exchange differences
Gains (+) and losses (–) arising from
remeasurements of defined benefit obligation
thereof effect of changes in
demographic assumptions
thereof effect of changes in
financial assumptions
thereof experience adjustments
Gains (+) and losses (–) arising from
remeasurements of plan assets
Accumulated other comprehensive
income / loss as at 31/12/
– 118.0
81.5
– 37.0
– 37.0
– 20.2
– 10.2
– 175.1
34.3
–
–
–
0.6
–
–
–
–
4.4
2.2
0.6
– 1.0
–
–
0.1
1.0
–
0.0
–
–
0.7
6.0
2.2
– 0.9
5.1
– 201.5
– 11.0
– 21.7
5.0
– 17.5
– 0.9
– 240.7
–
–
2.7
0.1
10.1
– 5.0
– 199.2
– 2.3
– 13.2
– 0.5
– 16.5
– 5.3
– 1.9
1.5
3.3
16.0
0.1
4.1
0.9
0.6
– 1.0
2.8
– 0.9
– 17.5
1.0
6.5
1.0
– 4.7
– 233.2
– 6.6
2.0
24.0
– 114.8
– 118.0
– 44.1
– 37.0
– 14.4
– 20.2
– 173.3
– 175.1
We keep the world moving.KION GROUP AG | Annual Report 2013
183
The first-time adoption of IAS 19 (rev. 2011) resulted in a €4.3 million
increase in equity as at 1 January 2012 (after deferred taxes) in rela-
tion to defined benefit pension entitlements. Further information can
be found in note [7].
The gains and losses on the remeasurement of plan assets are
attributable entirely to experience adjustments. The changes in esti-
mates relating to defined benefit pension entitlements resulted in a
€0.7 million increase in equity as at 31 December 2013 (after deferred
taxes).
composition of plan assets
The plan assets of the main pension plans consist of the following
components: >> Table 075
Fair value of plan assets
>> Table 075
in € million
Securities
Fixed-income securities
Real estate
Insurance policies
Other
Total plan assets
thereof total assets that do not have
a quoted price in active markets
Insurance policies
Other
Germany
UK
Other
Total
2013
10.2
15.7
2.1
–
13.9
41.9
9.0
–
9.0
2012
7.1
18.3
1.6
–
13.0
40.0
9.0
–
9.0
2013
96.0
2012
86.9
344.8
259.6
–
–
0.8
441.6
–
–
–
–
–
93.0
439.5
–
–
–
2013
2012
8.4
12.1
4.0
33.9
3.2
61.7
34.7
33.9
0.8
8.5
11.7
3.9
32.6
2.2
58.9
32.6
32.6
–
2013
114.6
372.7
6.1
33.9
18.0
545.2
43.7
33.9
9.8
2012
102.5
289.6
5.4
32.6
108.3
538.4
41.6
32.6
9.0
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
184
The plan assets do not include any real estate or other assets used
risks
by the KION Group itself. The Other category largely comprises infla-
tion-linked UK government bonds for four large plans in the United
The funding ratio, the defined benefit obligation and the associated
Kingdom.
sensitivity analysis
costs depend on the performance of financial markets. The return on
plan assets is assumed to equal the discount rate, which is deter-
mined on the basis of the yield earned on AA-rated, invest-
ment-grade, fixed-interest corporate bonds. If the actual return on
plan assets falls below the discount rates applied, the net obligation
The present value of the defined benefit obligation is based on the
arising out of the pension plans increases. The amount of the net
assumptions detailed in >> Table 067 above. If one assumption were
obligation is also particularly affected by the discount rates, and the
to vary and the other assumptions remained unchanged, the
current low level of interest rates – especially in the eurozone – is
impact on the present value of the defined benefit obligation would
resulting in a comparatively large net obligation.
be as shown in >> Table 076.
The plan assets are predominantly invested in corporate bonds
and inflation-linked UK government bonds, particularly in the
Sensitivity is determined using the same methods (projected unit
United Kingdom. The market risk attaching to plan assets – above
credit method) as for the measurement of the obligation recognised
all in the case of equities – is mitigated by defining an investment
in the consolidated statement of financial position as at 31 Decem-
strategy and guidelines and constantly monitoring the assets’ per-
ber 2013.
formance. Moreover, a downward trend on financial markets could
In line with IAS 19.173 (b), no comparative figures for 2012 are
have a significant effect on minimum funding requirements, some
disclosed for the sensitivity analysis.
of which apply outside Germany.
duration
The KION Group also bears the full risk of possible future pen-
sion adjustments resulting from changes in longevity and inflation.
Payroll-based contributions by employees in Germany are
invested in fund units. If the actual returns on these fund units fall
As at the reporting date, the weighted average duration of the obliga-
below the interest rate of 3.0 per cent that has been guaranteed to
tion was 17.4 years (2012: 16.6 years).
participating employees, the KION Group’s personnel expenses rise.
Sensitivity defined benefit obligation
>> Table 076
Discount rate
Salary increase rate
Pension increase rate
Increase by 1.0 percentage point
Reduction by 1.0 percentage point
Increase by 0.5 percentage point
Reduction by 0.5 percentage point
Increase by 0.25 percentage point
Reduction by 0.25 percentage point
Life expectancy
Increase by 1 year
2013
– 159.4
207.8
12.9
– 11.7
32.7
– 27.5
34.1
We keep the world moving.KION GROUP AG | Annual Report 2013
185
[29] financial liabilities
The financial liabilities reported by the KION Group essentially com-
prise interest-bearing liabilities to banks and capital market liabilities
in connection with the corporate bonds that were issued. The liabili-
ties to banks stem largely from the new revolving loan facility.
The following table shows the maturity structure of the financial
liabilities: >> Table 077
Maturity structure of financial liabilities
>> Table 077
in € million
Liabilities to banks
due within one year
due in one to five years
due in more than five years
Corporate bond
due within one year
due in one to five years
due in more than five years
Other liabilities
due within one year
due in one to five years
due in more than five years
Total current liabilities
Total non-current liabilities
2013
233.7
224.6
9.1
–
958.3
–
319.5
638.8
6.6
2.9
–
3.7
227.5
971.1
2012
1,858.4
51.2
1,692.1
115.2
489.5
–
–
489.5
4.5
0.6
–
3.9
51.8
2,300.7
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
186
loan agreement
current financial assets and expensed over the term of the loan facil-
ity. Combined with lower margins, this loan facility offers more
In connection with its acquisition of Linde AG’s material handling
favourable credit terms in line with those typically available to com-
business, the KION Group signed a loan agreement (a senior facili-
parable listed companies.
ties agreement and a subordinated facility agreement, referred to
below as ‘SFA’) for a total original amount of €3,300.0 million with the
lead banks Barclays Bank Plc, Bayerische Hypo- und Vereinsbank
corporate bond
AG, Credit Suisse (London branch), Goldman Sachs International
Bank, Lehman Commercial Paper Inc. (UK branch) and Mizuho Cor-
The KION Group issued a corporate bond for €650.0 million through
porate Bank Ltd. on 23 December 2006.
the consolidated subsidiary KION Finance S.A., Luxembourg, in
In 2013, the long-term bank loans under the acquisition finance
February 2013. Of the bond’s total par value of €650.0 million,
arrangements (tranches B and C) of €1,714.1 million were repaid in
€450.0 million is repayable at a fixed interest rate of 6.75 per cent
full along with the interest that was due as a bullet payment on matu-
p.a., while €200.0 million carries a floating interest rate based on
rity. The floating-rate tranche (tranche H1b) of the corporate bond of
three-month Euribor plus a margin of 4.5 percentage points. The
€175.0 million that was issued in 2011 and was due to mature in
payout amount for the variable portion was €1.0 million below the par
2018 was repaid early in full. On repayment of the SFA liabilities and
value (discount). The interest on the fixed-rate tranche is paid
the floating rate note due in 2018, an amount of €24.5 million repre-
semi-annually, while interest on the floating-rate tranche is paid once
senting the proportion of the related deferred borrowing costs was
a quarter. Excluding early repayment options, the contract stipulates
recognised as a financial expense. Of this total, €21.2 million related
repayment as a bullet payment on maturity in February 2020. Of the
to the repaid bank liabilities and €3.3 million related to the repaid
total proceeds of €649.0 million, €636.0 million was used to repay
capital market liabilities. The funds for the repayment were gener-
existing liabilities under the SFA. A further €12.7 million relates to set-
ated by the corporate bond issued in February 2013 (tranches H2a
tlement of the transaction costs incurred for the issuance of the cor-
and H2b), the inflows from the IPO and the Weichai capital increase.
porate bond, which is allocated pro rata to the two tranches and
In 2013, financial expenses of €18.3 million arising from the unwind-
expensed over their terms. In addition, the floating-rate tranche,
ing of interest-rate hedges were also incurred in connection with
which was due to mature in 2018 and amounted to €175.0 million,
repayment of the SFA liabilities, of which €14.4 million impacted cash
was repaid in full on 19 July 2013. Upon repayment, associated
flow.
transaction costs of €3.3 million were derecognised and taken to
The loan (tranche G) of €100.0 million (plus accrued interest of
income. The fixed-rate tranche of the bond issued in 2011, which has
€17.0 million) was converted into equity in June 2013. In doing so,
a volume of €325.0 million and a maturity date of 2018, remains
Superlift Holding S.à r.l., Luxembourg, transferred all rights and
unchanged.
duties arising out of the loan with Superlift Funding S.à r.l., Luxem-
bourg and all of the shares in the latter to KION GROUP AG as part
of a capital increase.
In connection with the IPO, the KION Group agreed a new
revolving loan facility with a group of banks under the SFA for
€995.0 million with a term to maturity of five years after the IPO. The
loan facility was increased to €1,045.0 million in December 2013. As
at 31 December 2013, €184.4 million had been drawn down under
this newly agreed revolving loan facility of €1,045.0 million – including
other loan liabilities of individual Group companies outside Germany
and contingent liabilities. The directly attributable transaction costs
of €9.3 million have been recognised as prepaid expenses under
We keep the world moving.KION GROUP AG | Annual Report 2013 187
changes in net financial debt
In 2013, the KION Group made payments totalling €1,714.1 million to
repay long-term SFA bank liabilities and €175.0 million to fully repay
The KION Group uses its net financial debt as a key internal figure for
the floating-rate tranche of the corporate bond issued in 2011 that
analysing the changes in its financial liabilities. Net financial debt is
was due to mature in 2018. The funds for the repayment were gen-
defined as the difference between financial liabilities (excluding lease
erated by issuance of a new corporate bond in February 2013
liabilities) and cash and cash equivalents.
(€649.0 million after deduction of the discount of €1.0 million), the
The inflows from the IPO and the capital increases were predom-
inflows from the IPO and the Weichai capital increase, which together
inantly used for the repayments. As a result, net financial debt fell sig-
totalled €732.5 million (after deduction of banking fees), part of the
nificantly in 2013. The table below gives a breakdown of the KION
new revolving loan facility and existing cash reserves.
Group’s net financial debt as at 31 December 2013: >> Table 078
Net financial debt
in € million
Corporate bond – fixed rate (2011/2018) – gross
Corporate bond – floating rate (2011/2018) – gross
Corporate bond – fixed rate (2013/2020) – gross
Corporate bond – floating rate (2013/2020) – gross
Liabilities to banks (gross)
Liabilities to non-banks (gross)
./. Capitalised borrowing costs
Financial debt
./. Cash and cash equivalents
Net financial debt
>> Table 078
2012
325.0
175.0
–
–
1,882.1
4.5
– 34.1
2,352.4
562.4
1,790.1
2013
325.0
–
450.0
200.0
233.7
6.6
– 16.7
1,198.6
219.3
979.3
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
188
The table below gives details of the changes in financial debt and
lists the applicable terms and conditions: >> Table 079
Credit terms
>> Table 079
Interest rate
Notional amount
Maturity
in € million
Term Loan Facility B1 (EUR)
Term Loan Facility B2 (EUR)
Term Loan Facility B1 (USD)
Term Loan Facility B2 (USD)
Term Loan Facility C1 (EUR)
Term Loan Facility C2 (EUR)
Term Loan Facility C1 (USD)
Term Loan Facility C2 (USD)
Term Loan Facility G
EURIBOR + Margin
EURIBOR + Margin
LIBOR + Margin
LIBOR + Margin
EURIBOR + Margin
EURIBOR + Margin
LIBOR + Margin
LIBOR + Margin
EURIBOR + Margin
Term Loan Facility H1a (Corporate bond – fixed rate)
Fixed rate
Term Loan Facility H1b (Corporate bond – floating rate)
3-M-EURIBOR+Margin
Term Loan Facility H2a (Corporate bond – fixed rate)
Fixed rate
Term Loan Facility H2b (Corporate bond – floating rate)
3-M-EURIBOR+Margin
Multicurrency Revolving Credit Facility 3
EURIBOR + Margin
Multicurrency Capex Restructuring and
Acquisition Facility
Other liabilities to banks
Other financial liabilities to non-banks
./. Capitalised borrowing costs
Total financial debt
EURIBOR + Margin
2013
–
–
–
–
–
–
–
–
–
325.0
–
450.0
200.0
130,0
–
103,7
6,6
– 16,7
1,198.6
2012
138.5
411.1
108.0
79.1
286.6
382.8
227.1
81.3
116.0
325.0
175.0
–
–
–
18.2
33.3
4.5
– 34.1
2,352.4
2014
2017
2014
2017
2015
2017
2015
2017
2018
2018
2018
2020
2020
2018
2013
We keep the world moving.KION GROUP AG | Annual Report 2013
189
financial covenants
The collateral includes guarantees, the assignment of shares in
the guarantors (with the exception of shares in KION Material Han-
The SFA and the contractual terms and conditions governing the
dling GmbH (formerly KION GROUP GmbH)), the assignment of cer-
issuance of the corporate bond require compliance with certain
tain bank accounts and certain guarantor receivables, the assign-
undertakings and covenants. The SFA also requires compliance with
ment of claims arising from and in connection with the share
specific financial covenants during the term of the agreement. The
purchase agreement between Linde Material Handling GmbH and
financial covenants specify required ratios for the financial position
Linde AG dated November 5, 2006 relating to the shares in the for-
and financial performance of the KION Group. The covenants are
mer KION GROUP GmbH, the assignment of shares in KION Infor-
expressed in the form of key figures relating to gearing, available
mation Management Services GmbH and assignments and trans-
liquidity, EBITDA, interest paid and capital expenditure. Since the
fers of title to intellectual property rights by guarantors in Germany.
IPO and the associated amendment of the credit terms under the
The statutory provisions in the United Kingdom and the agreements
SFA, only the financial covenant for gearing (the ratio of net financial
entered into mean that all the assets of the UK guarantors are
debt to EBITDA) now applies. If undertakings or financial covenants
pledged as security.
are breached, this may, for example, give lenders the right to termi-
The carrying amounts of the financial assets pledged as collat-
nate the SFA or permit bondholders to call the corporate bond prior
eral amounted to €348.7 million as at the reporting date (31 Decem-
to its maturity date.
ber 2012: €566.3 million).
All the financial covenants were complied with in the past
As had been the case at the end of 2012, no material liabilities to
financial year.
banks were secured by mortgage charges at the end of 2013.
loan collateral
[30] lease liabilities
Under the SFA, the KION Group is under an obligation to provide col-
lateral for its obligations and liabilities. This obligation also extends to
the corporate bonds (tranches H1a, H2a and H2b). By the reporting
Lease liabilities relate solely to finance lease obligations arising from
date, a total of 26 (31 December 2012: 26) KION Group companies
sale and leaseback transactions for the funding of long-term leases
(guarantors) in five countries – Germany, the UK, France, Spain and
with customers.
Italy – had provided the necessary collateral.
The amounts recognised as lease liabilities are based on the fol-
lowing data: >> Table 080
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position 190
Minimum lease payments
>> Table 080
in € million
Total minimum lease payments (gross)
due within one year
due in one to five years
due in more than five years
Present value of minimum lease payments
due within one year
due in one to five years
due in more than five years
2013
683.8
241.1
425.6
17.1
617.1
213.3
387.3
16.4
2012
524.4
166.8
344.6
13.0
475.0
145.8
316.8
12.4
Interest included in minimum lease payments
66.7
49.4
We keep the world moving.KION GROUP AG | Annual Report 2013
191
[31] other provisions
Other provisions relate to the following items: >> Table 081
Other provisions
>> Table 081
in € million
Balance as at 01/01/2013
thereof non-current
thereof current
Changes in group of consolidated entities
Additions
Utilisations
Reversals
Additions to accrued interest
Exchange differences
Other adjustments
Balance as at 31/12/2013
thereof non-current
thereof current
Provisions
for product
warranties
Provisions for
personnel
Other
obligations
Total other
provisions
64.4
61.4
3.0
0.2
16.8
– 16.5
– 10.4
0.1
– 0.7
– 0.1
53.8
53.5
0.4
88.5
18.4
70.1
0.1
8.4
– 31.2
– 1.1
1.1
– 0.3
– 0.4
65.1
16.8
48.3
72.6
9.4
63.2
4.5
10.6
– 8.3
– 10.9
0.0
– 1.2
0.6
68.0
6.3
61.6
225.5
89.1
136.4
4.8
35.9
– 56.0
– 22.4
1.2
– 2.3
0.1
186.9
76.5
110.3
The provisions for product warranties include contractual and statu-
The KION Group had recognised restructuring provisions
tory obligations arising from the sale of industrial trucks and spare
(including obligations under social plans) totalling €28.9 million in
parts. It is expected that the bulk of the costs will be incurred within
2012, predominantly in connection with the relocation of produc-
the next two years after the reporting date.
tion. In 2013, the KION Group recognised restructuring provisions
The provisions for personnel comprise provisions for partial
(including obligations under social plans) totalling €3.7 million, pre-
retirement obligations, long-service awards, annual bonuses, sev-
dominantly in connection with the planned closure of production
erance pay and obligations under social plans. The provision for
sites. Total restructuring provisions (including obligations under
partial retirement obligations is recognised on the basis of individ-
social plans) came to €43.7 million as at 31 December 2013
ual contractual arrangements.
(31 December 2012: €65.0 million).
Other obligations largely comprise provisions for restructuring,
litigation and expected losses from onerous contracts.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
192
[32] other financial liabilities
Other financial liabilities comprise the following items: >> Table 082
Other financial liabilities
in € million
Liabilities from finance leases
Deferred income
Sundry other liabilities
Derivative financial instruments
Other non-current liabilities
Liabilities from finance leases
Deferred income
Personnel liabilities
Derivative financial instruments
Social security liabilities
Tax liabilities
Advances received from third parties
Liabilities on bills of exchange
Liabilities from accrued interest
Sundry current financial liabilities
Other current liabilities
>> Table 082
2012
208.1
132.7
4.3
10.0
355.1
92.2
84.4
161.6
33.6
40.5
65.9
37.6
2.3
9.6
29.4
557.0
2013
220.0
139.4
5.6
27.2
392.1
143.0
81.3
162.0
1.9
36.4
66.3
32.4
1.8
18.9
33.4
577.3
Total other liabilities
969.4
912.1
We keep the world moving.KION GROUP AG | Annual Report 2013
193
The non-current derivative financial instruments include, among
(2012: €21.4 million). The KION Group has also recognised other
other things, two call options on the remaining shares in Linde
financial liabilities amounting to €18.2 million (31 December 2012:
Hydraulics amounting to €27.2 million (2012: €16.5 million).
€15.2 million) arising from procurement leases, which are classified
The finance lease obligations comprise liabilities arising from the
as finance leases due to their terms and conditions.
financing of industrial trucks for short-term rental of €327.5 million
The finance lease obligations are based on the following future
(2012: €263.7 million) and residual value obligations of €17.3 million
minimum rental payments: >> Table 083
Minimum lease payments
>> Table 083
in € million
Total minimum lease payments (gross)
due within one year
due in one to five years
due in more than five years
Present value of minimum lease payments
due within one year
due in one to five years
due in more than five years
2013
402.2
159.3
235.3
7.5
363.0
143.0
212.9
7.1
2012
331.6
105.5
217.9
8.2
300.3
92.2
200.3
7.9
Interest included in minimum lease payments
39.2
31.2
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
194
[33] continGent liabilities
and other financial
commitments
contingent liabilities
Contingent liabilities
in € million
Liabilities on bills of exchange
Liabilities on guarantees
Collateral security for third-party liabilities
Total contingent liabilities
Guarantees amounting to €2.1 million (2012: €0.8 million) relate to
contingent liabilities assumed jointly with another shareholder of a
joint venture.
litigation
The legal risks arising from the KION Group’s business are typical of
those faced by any company operating in this sector. The Company
is a party in a number of pending lawsuits in various countries. It can-
not assume with any degree of certainty that it will win any of the
lawsuits or that the existing risk provision in the form of insurance or
provisions will be sufficient in each individual case. However, the
Company believes it is unlikely that these ongoing lawsuits will
require funds to be utilised that exceed the provisions recognised.
>> Table 084
2013
2012
1.1
4.5
0.2
5.8
4.4
3.2
0.1
7.7
We keep the world moving.KION GROUP AG | Annual Report 2013
195
other financial commitments
Other financial commitments
>> Table 085
in € million
Commitments under non-cancellable operating leases
Capital expenditure commitments in property, plant and equipment
Capital expenditure commitments in intangible assets
Other financial commitments
Total other financial commitments
The maturity structure of the total future minimum lease payments
under non-cancellable operating leases is as follows: >> Table 086
Minimum lease payments
in € million
Nominal minimum lease payments
due within one year
due in one to five years
due in more than five years
2013
206.0
8.6
2.2
15.3
232.1
2013
206.0
71.2
99.3
35.4
2012
194.2
7.2
2.6
18.5
222.5
>> Table 086
2012
194.2
38.8
90.4
65.0
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsNotes to the consolidated statement of financial position
196
The minimum lease payments relate to payments for leased build-
ings, machinery, office furniture and equipment (procurement leases)
as well as payments for industrial trucks refinanced with a sale and
leaseback and sub-leased to end customers (sale and leaseback
sub-leases). >> Table 087
Minimum lease payments broken down into procurement leases & sale and leaseback sub-leases
>> Table 087
in € million
Minimum lease payments (cash out)
due within one year
due in one to five years
due in more than five years
Minimum lease payments (cash in)
due within one year
due in one to five years
due in more than five years
Procurement leases
Sale and leaseback sub-leases
2013
145.3
38.5
71.4
35.4
–
–
–
–
2012
142.1
21.3
55.7
65.0
–
–
–
–
2013
60.7
32.7
27.9
0.0
3.9
1.7
2.2
0.0
2012
52.1
17.5
34.6
0.0
6.8
3.6
3.3
0.0
The future minimum lease payments for sale and leaseback transac-
tions not recognised in the statement of financial position amounting
to €60.7 million are partially offset by payments received under
non-cancellable sub-leases amounting to €3.9 million. The future
payments also include obligations arising from the refinancing of
industrial trucks for which there are no offsetting receipts under
short-term sub-leases.
We keep the world moving.KION GROUP AG | Annual Report 2013
Notes to the coNsolidated fiNaNcial statemeNts
197
Other disclosures
Other disclosures
[34] Consolidated statement of
Cash flows
The proceeds from the disposal of non-current assets primarily
related to disposals of assets no longer required for the Group’s
operating activities.
Cash flow from financing activities amounted to minus €538.6 mil-
lion (2012: minus €330.1 million). Financial debt increased by
The consolidated statement of cash flows shows the changes in
€649.0 million due to the issuance of the senior secured bond in
cash and cash equivalents in the KION Group resulting from cash
February 2013. In addition, €184.4 million had been drawn down
inflows and outflows in the year under review, broken down into cash
from the new revolving loan facility totalling €1,045.0 million as at
flow from operating, investing and financing activities. The effects on
31 December 2013. As a result of the capital increases from Weichai
cash from changes in exchange rates are shown separately. Cash
and the IPO at the end of June 2013, the capital contributions made
flow from operating activities is presented using the indirect method
up to 31 December 2013 totalled €741.8 million. In total, these trans-
in which the profit or loss for the year is adjusted for non-cash
actions plus existing cash enabled the repayment of financial liabili-
operating items.
ties of €1,714.1 million relating to the Senior Facilities Agreement
Cash flow from operating activities decreased by 18.9 per cent
(SFA) as well as the early redemption of the 2011/2018 floating rate
to €336.1 million in 2013 (2012: €414.0 million). EBIT fell sharply
note amounting to €175.0 million. Gross repayments of all the KION
from €549.1 million in 2012 to €374.2 million in the reporting period,
Group’s financial liabilities (including PIK interest) amounted to a total
although EBIT in the previous year had included, among things,
outflow over the period as a whole of €2,201.6 million. This amount
income of €211.8 million from the sale of the hydraulics business
was partly offset by taking up financial debt of €1,095.9 million –
that did not impact on cash flow from operating activities. The sig-
including the corporate bond issued in 2013. The cash payments for
nificant year-on-year decrease was largely due to one-off tax pay-
costs incurred in connection with the debt and equity transactions
ments of €57.7 million in connection with the sale of the hydraulics
mentioned above amounted to €56.3 million (2012: €15.6 million). In
business in 2012.
the third quarter, 200,000 treasury shares worth €5.6 million were pur-
Net cash used for investing activities amounted to €133.5 million.
chased on the stock exchange for the new employee share pro-
The net cash provided by investing activities in 2012 of €104.1 million
gramme. Regular interest payments were €10.1 million lower than in
included proceeds of €259.7 million from the sale of the hydraulics
2012 and amounted to €119.6 million in the reporting period. These
business. Cash payments for capital expenditure on non-current
interest payments included a non-recurring outflow of funds of
assets and property, plant and equipment came to a total of
€14.4 million resulting from the termination of interest-rate hedging
€125.8 million (2012: €155.1 million). In the Linde Material Handling
instruments in connection with the previous acquisition finance
and STILL operating segments, the volume of capital expenditure
arrangements. The net cash outflow from financing activities in 2012
was below that of the comparable prior-year period because the
(€330.1 million) was also largely attributable to the repayment of loans.
hydraulics business (which had high levels of capital expenditure) in
The inflows from the IPO and the capital increases as well as the
the LMH segment and the new plant in Brazil in the STILL segment
existing cash from 2012 were predominantly used for the repayments.
had led to higher cash payments in 2012. The net cash used for the
Overall, this resulted in a sharp contraction in cash and cash
acquisition of the Arser Group in Turkey amounted to €3.9 million
equivalents, which fell from €562.4 million as at the end of 2012 to
(after deduction of the cash received). The acquisition of 51 per cent
€219.3 million as at 31 December 2013. There was also a decrease
of Willenbrock Fördertechnik Holding GmbH led to a further outflow
in cash and cash equivalents of €7.0 million owing to currency effects
of funds of €21.2 million in December 2013. In the previous year,
(2012: increase of €1.0 million).
€9.7 million of the outflow of funds was attributable to the acquisition
of a majority stake in Linde Creighton.
We keep the world moving.KION GROUP AG | Annual Report 2013 198
[35] information on finanCial
instruments
The following table shows the measurement categories defined
by IAS 39. In line with IFRS 7, the table shows the carrying amounts
and fair values of financial assets and liabilities: >> Tables 088 – 089
The KION Group uses both primary and derivative financial instru-
ments. The following section summarises the relevance of these
financial instruments for the KION Group.
carrying amounts broken down by class and category 2013
>> Table 088
classes
in € million
financial assets
Investments in non-consolidated
subsidiaries / Other investments
Loans receivable
Financial receivables
Available-for-sale investments
Lease receivables*
Trade receivables
Other receivables
thereof non-derivative receivables
thereof derivative receivables
Cash and cash equivalents
financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Lease liabilities*
Trade payables
Other liabilities
thereof non-derivative liabilities
thereof liabilities from finance leases*
thereof derivative liabilities
* as defined by IAS 17
carrying
amount
fahft
afs
laR
htm
flac
flhft
fair value
categories
11.9
0.8
0.8
11.6
558.7
35.7
219.3
18.0
11.9
0.8
11.6
0.8
479.6
558.7
55.0
35.7
19.4
219.3
233.7
958.3
6.6
617.1
550.5
554.4
162.4
363.0
29.1
11.9
0.8
11.6
0.8
478.4
558.7
55.0
35.7
19.4
219.3
234.1
1,040.8
6.6
619.2
550.5
555.5
162.4
364.1
29.1
233.7
958.3
6.6
550.5
162.4
28.0
We keep the world moving.KION GROUP AG | Annual Report 2013 199
carrying amounts broken down by class and category 2012
>> Table 089
classes
in € million
financial assets
Investments in non-consolidated
subsidiaries / Other investments
Loans receivable
Financial receivables
Available-for-sale investments
Lease receivables*
Trade receivables
Other receivables
thereof non-derivative receivables
thereof derivative receivables
Cash and cash equivalents
financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Lease liabilities*
Trade payables
Other liabilities
thereof non-derivative liabilities
thereof liabilities from finance leases*
thereof derivative liabilities
* as defined by IAS 17
carrying
amount
fahft
afs
laR
htm
flac
flhft
fair value
categories
6.2
0.8
0.7
9.6
625.5
35.2
562.4
21.1
6.2
0.7
9.6
0.8
399.3
625.5
59.2
35.2
23.9
562.4
1,858.4
489.5
4.5
475.0
646.0
503.1
159.2
300.3
43.6
6.2
0.7
9.6
0.8
398.2
625.5
59.2
35.2
23.9
562.4
1,858.4
530.9
4.5
475.8
646.0
503.6
159.2
300.8
43.6
1,858.4
489.5
4.5
646.0
159.2
24.0
As at 31 December 2013, trade payables of €550.5 million included
liabilities to affiliated companies of €4.5 million (31 December 2012:
€5.9 million) and liabilities to other long-term investees and investors
of €6.0 million (31 December 2012: €5.6 million).
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 200
The change in valuation allowances for trade receivables was as
follows: >> Table 090
change in valuation allowances
>> Table 090
in € million
Valuation allowances as at 01/01/
Group changes
Additions (cost of valuation allowances)
Reversals
Utilisations
Currency translation adjustments
Valuation allowances as at 31/12/
2013
50.5
– 0.2
9.4
– 7.5
– 9.2
– 0.7
42.4
2012
49.6
– 0.5
12.0
– 2.8
– 7.6
– 0.2
50.5
The net gains and losses on financial instruments are broken down
by IAS 39 category as follows: >> Table 091
Net gains and losses on financial instruments broken down by category
>> Table 091
in € million
Loans and receivables (LaR)
Financial assets held for trading (FAHfT)
Financial liabilities held for trading (FLHfT)
Financial liabilities carried at amortised cost (FLaC)
2013
11.0
3.6
– 17.8
– 152.9
2012
– 1.6
9.0
– 11.9
– 179.2
The above gains and losses do not include losses arising on hedging
transactions amounting to €26.7 million (2012: €19.9 million) because
these losses form part of a documented hedge.
We keep the world moving.KION GROUP AG | Annual Report 2013
201
offsetting of financial instruments
The potential offsetting volume essentially arises from netting
arrangements in framework agreements governing derivatives
trading that the KION Group concludes with commercial banks.
The potential offsetting volume reported in connection with finan-
cial collateral issued relates to collateral provided in the context of
the SFA serving as collateral in case of default for the creditors of
all SFA tranches (including H1 and H2), subject to the usual limita-
tions and agreed recovery principles. The following tables show
actual offsetting and potential offsetting volumes for financial
assets and financial liabilities. >> Tables 092-095
financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
>> Table 092
Potential net amount
Gross
amounts of
recognised
financial
liabilities set
off in the
balance sheet
Net
amounts of
financial assets
presented in
the balance
sheet
Gross
amounts of
recognised
financial
assets
owing to
netting
agreements
in connection
with financial
collaterals
received
Potential
net amount
in € million
Trade receivables
Derivative financial assets
total
560.8
19.4
580.1
– 2.1
–
– 2.1
31/12/2013
558.7
19.4
578.1
–
– 0.9
– 0.9
–
–
–
558.7
18.5
577.2
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
202
financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
>> Table 093
Potential net amount
Gross
amounts of
recognised
financial
liabilities set
off in the
balance sheet
Net
amounts of
financial assets
presented in
the balance
sheet
Gross
amounts of
recognised
financial
assets
owing to
netting
agreements
in connection
with financial
collaterals
received
Potential
net amount
in € million
Trade receivables
Derivative financial assets
total
627.9
23.9
651.9
– 2.5
–
– 2.5
31/12/2012
625.5
23.9
649.4
–
– 3.3
– 3.3
–
–
–
625.5
20.6
646.1
financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
>> Table 094
Potential net amount
Gross
amounts of
recognised
financial
liabilities set
off in the
balance sheet
Net
amounts of
financial assets
presented in
the balance
sheet
Gross
amounts of
recognised
financial
assets
owing to
netting
agreements
in connection
with financial
collaterals
received
Potential
net amount
in € million
Financial liabilities
Trade payables
Derivative financial liabilities
total
1,198.6
552.6
29.1
1,780.3
–
– 2.1
–
– 2.1
31/12/2013
1,198.6
550.5
29.1
1,778.2
–
–
– 0.9
– 0.9
– 348.7
–
–
849.9
550.5
28.2
– 348.7
1,428.7
We keep the world moving.KION GROUP AG | Annual Report 2013
203
financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
>> Table 095
Potential net amount
Gross
amounts of
recognised
financial
liabilities set
off in the
balance sheet
Net
amounts of
financial assets
presented in
the balance
sheet
Gross
amounts of
recognised
financial
assets
owing to
netting
agreements
in connection
with financial
collaterals
received
Potential
net amount
in € million
Financial liabilities
Trade payables
Derivative financial liabilities
total
2,352.4
648.5
43.6
3,044.5
–
– 2.5
–
– 2.5
31/12/2012
2,352.4
646.0
43.6
3,042.0
–
–
– 3.3
– 3.3
– 566.3
1,786.1
–
–
646.0
40.3
– 566.3
2,472.5
fair value measurement
publicly quoted prices in an active market and is therefore classified
as level 1 of the fair value hierarchy. The calculation is based on the
The majority of the cash and cash equivalents, loans, other non-
middle rate applicable on the reporting date.
derivative receivables and liabilities, trade receivables and trade pay-
The fair value of receivables and liabilities from finance leases
ables held by the Group have short remaining terms to maturity. The
corresponds to the present value of the net lease payments, taking
carrying amounts of these financial instruments are roughly equal to
account of the current market interest rate for similar leases.
their fair values. The fair value of liabilities to banks corresponds to
With the exception of derivative financial instruments and availa-
the present value of the outstanding payments, taking account of the
ble-for-sale assets, all financial assets and liabilities are measured at
current interest-rate curve and the Group’s own default risk. This fair
amortised cost.
value, calculated for the purposes of disclosure in the notes to the
The following tables show the assignment of fair values to the
financial statements, is classified as level 2 of the fair value hierarchy.
individual classification levels as defined by IFRS 7 for financial
The fair value of the corporate bonds issued, calculated for dis-
instruments measured at fair value. >> Tables 096 – 097
closure in the notes to the financial statements, is determined using
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
204
financial instruments measured at fair value
>> Table 096
in € million
financial assets
thereof available-for-sale
thereof derivative instruments
financial liabilities
thereof derivative instruments
fair Value hierarchy
level 1
level 2
level 3
0.8
3.6
1.9
15.7
27.2
2013
20.2
0.8
19.4
29.1
29.1
financial instruments measured at fair value
>> Table 097
in € million
financial assets
thereof available-for-sale
thereof derivative instruments
financial liabilities
thereof derivative instruments
fair Value hierarchy
level 1
level 2
level 3
0.8
4.2
19.7
27.1
16.5
2012
24.7
0.8
23.9
43.6
43.6
We keep the world moving.KION GROUP AG | Annual Report 2013
205
Level 1 comprises available-for-sale assets for which the fair value is
market. There were no longer any material interest-rate hedging
calculated using prices quoted in an active market.
instruments as at 31 December 2013. The fair value of currency for-
All interest-rate swaps and currency forwards are classified as
wards is calculated by the system using the discounting method
Level 2. The fair value of derivative financial instruments is
based on forward rates on the reporting date.
determined using appropriate valuation methods on the basis of
The financial assets and liabilities allocated to Level 3 relate to a
the observable market information at the reporting date. The
put option held by Linde Material Handling GmbH, Aschaffenburg,
default risk for the Group and for the counterparty is taken into
and two call options held by Weichai Power on the remaining shares
account on the basis of gross figures. The fair value of interest rate
in Linde Hydraulics. The Black-Scholes model is used to calculate
swaps is calculated as the present value of the estimated future
the fair value of the put option and the two call options. At 31 Decem-
cash flows. Both contractually agreed payments and forward inter-
ber 2013, the material changes in fair value and the impact on the
est rates are used to estimate the future cash flows, which are then
income statement were as follows. >> Tables 098 – 099
discounted on the basis of a yield curve that is observable in the
development of financial assets / liabilities classified as level 3
>> Table 098
in € million
Value as at 1/1/2013
Losses recognised in net financial expenses
Value as at 31/12/2013
Losses of the period relating to financial assets / liabilities held as at 31/12/2013
Change in unrealised losses for the period relating to financial assets / liabilities held as at 31/12/2013
2013
3.2
– 14.7
– 11.5
– 14.7
– 14.7
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
206
significant unobservable inputs of level 3
financial assets / liabilities
input
Initial exercise price (in € million)
Put-Option
Fair value of the remaining shares in Linde Hydraulics (in € million)
Residual time (in years)
Initial exercise price (in € million)
Call-Option 1
Fair value of the remaining shares in Linde Hydraulics (in € million)
Residual time (in years)
Initial exercise price (in € million)
Call-Option 2
Fair value of the remaining shares in Linde Hydraulics (in € million)
Residual time (in years)
>> Table 099
2013
77.4
116.1
1.49 – 3.49
77.4
116.1
3.99
38.7
116.1
1.49 – 3.99
The fair values are measured using probability-weighted scenario
analysis, on which the key, unobservable input parameters in the
[36] finanCial risk reporting
table above are based.
As at 31 December 2013, the net value calculated for the options
on the remaining shares in Linde Hydraulics came to minus
Capital management
€11.5 million (31 December 2012: €3.2 million). If the fair value of the
shares had been 10 per cent lower on the reporting date, the net
One of the prime objectives of capital management is to ensure
value arising from the options would have increased by €9.4 million
liquidity at all times. Measures aimed at achieving these objectives
(31 December 2012: €8.3 million) to minus €2.1 million (31 December
include the optimisation of the capital structure, the reduction of
2012: €11.5 million) and the expense would have decreased by
liabilities and ongoing Group cash flow planning and management.
€9.4 million (31 December 2012: additional gain of €8.3 million). A
The inflows from the IPO and the capital increases as well as the
10.0 per cent rise in the fair value of the shares in Linde Hydraulics
existing cash from 2012 were predominantly used for repayment of
would have reduced the net value arising from the options by
the SFA liabilities and the floating rate note, which had been due in
€9.4 million (31 December 2012: €9.0 million) to minus €20.9 million
2018. Following on from the amendment and extension of the SFA
(31 December 2012: minus €5.8 million) and led to an additional
loan in July 2012, a further corporate bond was issued in
expense of €9.4 million (31 December 2012: €9.0 million).
February 2013 (see ‘Credit terms’ table in note [29]) as another way
In order to eliminate default risk to the greatest possible extent,
of meeting long-term financing requirements.
the KION Group only enters into derivatives with investment-grade
Close cooperation between local units and the Group head
counterparties.
office ensures that the local legal and regulatory requirements faced
If events or changes in circumstances make it necessary to
by foreign group companies are taken into account in capital
reclassify financial instruments as a different level, they are reclassi-
management.
fied at the end of a reporting period. No financial instruments were
transferred between Levels 1, 2 or 3 in 2013.
We keep the world moving.KION GROUP AG | Annual Report 2013
207
Net financial debt – defined as the difference between financial
based on certain credit ratings. The Group only enters into transac-
liabilities (excluding lease liabilities) and cash and cash equivalents –
tions with business partners and banks holding a good credit rating
is the key performance measure used in liquidity planning at Group
and subject to fixed limits. Counterparty risks involving our custom-
level (see note [29]) and amounted to €979.3 million in 2013 (2012:
ers are managed by the individual Group companies.
€1,790.1 million).
The following table shows the age structure of receivables as at
the reporting date: >> Table 100
Credit risk
In certain finance and operating activities, the KION Group is subject
to credit risk, i.e. the risk that partners will fail to meet their contrac-
tual obligations. This risk is limited by diversifying business partners
age structure analysis of receivables
>> Table 100
thereof: Not impaired
at the reporting date, but
thereof: Nei-
ther overdue
nor impaired at
the reporting
date
carrying
amount
thereof:
overdue and
impaired at the
reporting date
up to and
including 90
days overdue
more than 90
days overdue
11.6
479.6
558.7
35.7
9.6
399.3
625.5
35.2
11.6
479.6
452.7
34.6
9.6
399.3
485.6
34.5
–
–
2.8
0.5
–
–
16.8
0.7
–
–
97.2
0.4
–
–
110.2
–
–
–
4.5
0.2
–
–
5.5
0,0
2013
2012
in € million
Financial receivables
Lease receivables
Trade receivables
Other non-derivative receivables
in € million
Financial receivables
Lease receivables
Trade receivables
Other non-derivative receivables
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 208
Impairment losses are based on the credit risk associated with the
bility and solvency. The age structure of financial liabilities is reviewed
receivables, the risk being assessed mainly using factors such as
continually. The inflows from the IPO and the capital increases were
customer credit rating and failure to adhere to payment terms.
predominantly used for the repayments. This led to an improvement
Some of the receivables that were overdue as at the reporting
in the age structure in the reporting year. As a result of the IPO, there
date, but for which no impairment losses had been reported, were
was also a significant improvement in the KION Group’s credit profile,
offset by corresponding trade payables. Apart from this item, the
and consequently in its credit rating. In July 2013, Moody’s upgraded
Group did not hold any significant collateral.
its corporate family rating by three notches, from B3 / positive to
liquidity risk
Ba3 / stable, while Standard & Poor’s also significantly improved its
rating for the KION Group, from B / stable to BB- / positive.
All of the contractually agreed payments under recognised
financial liabilities as at 31 December 2013 and 2012, including deriv-
Based on IFRS 7, a liquidity risk arises if a company is unable to meet
ative financial instruments with negative fair values, are shown in
its financial liabilities. The KION Group maintains a liquidity reserve in
>> Tables 101 – 102
the form of lines of credit and cash in order to ensure financial flexi-
liquidity analysis of financial liabilities and derivatives 2013
>> Table 101
in € million
Primary financial liabilities
Liabilities to banks
Corporate bond
Borrowing costs
Other financial liabilities
Trade payables
Lease liabilities
Other liabilities
derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
carrying amount
2013
cash flow
2014
cash flow
2015 – 2018
cash flow
from 2019
233.7
975.0
– 16.7
1,192.0
6.6
550.5
617.1
525.3
1.9
– 229.7
– 66.0
– 11.1
– 583.7
– 0.1
– 713.6
– 2.9
– 550.5
– 241.1
– 321.7
–
–
– 425.6
– 235.3
147.0
– 148.7
1.5
– 1.7
– 4.1
–
– 17.1
– 7.5
–
–
We keep the world moving.KION GROUP AG | Annual Report 2013
209
liquidity analysis of financial liabilities and derivatives 2012
>> Table 102
in € million
Primary financial liabilities
Liabilities to banks
Corporate bond
Borrowing costs
Other financial liabilities
Trade payables
Lease liabilities
Other liabilities
derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
carrying amount
2012
cash flow
2013
cash flow
2014 – 2017
cash flow
from 2018
1,882.1
500.0
– 34.1
2,347.9
4.5
646.0
475.0
443.0
27.1
– 124.4
– 33.7
– 1,994.4
– 138.4
– 149.8
– 517.9
– 0.6
– 646.0
– 166.8
– 248.1
–
–
– 344.6
– 217.9
438.2
– 452.6
5.0
– 13.8
– 5.3
–
– 13.0
– 8.2
–
–
The calculation of future cash flows for derivative financial liabilities
In some cases, the KION Group retains insignificant rights and
includes all currency forwards and interest-rate swaps that have
duties in connection with fully derecognised financial assets, primar-
negative fair values as at the reporting date.
ily the provision of limited reserves for defaults. The recognised
Bank guarantee lines (e.g. sureties, performance bonds) had
assets that serve as reserves for defaults and are reported under
been issued under the ancillary facility agreements for a total amount
other current financial assets, stood at €1.0 million as at 31 Decem-
in the low double-digit millions as at 31 December 2013. They
ber 2013 (31 December 2012: €0.0 million). However, the short
included guarantees payable ‘on first demand’. No guarantees were
residual maturity of these financial assets meant their carrying
utilised in 2013.
amount was almost the same as their fair value. The maximum
downside risk arising on the transferred and fully derecognised
financial assets amounted to €5.0 million as at 31 December 2013
(31 December 2012: €0.0 million).
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
210
default risk
Because of low default rates, counterparty risk has not been
significant to date in the KION Group. The Group did not identify any
For financial assets, default risk is defined as the risk that a counter-
material year-on-year changes in 2013. The KION Group’s losses
party will default, and hence is limited to a maximum of the carrying
from defaults are also mitigated by its receipt of the proceeds from
amount of the assets relating to the counterparty involved. The
the sale of repossessed trucks. In addition, it primarily offers financial
potential default risk attaching to financial assets is mitigated by
services indirectly via selected funding partners, and the KION
secured forms of lending such as reservation of title, credit insurance
Group bears the counterparty risk in less than 5 per cent of cases.
and guarantees, and potential netting agreements.
The credit risk management system was refined as part of the work
Specific valuation allowances for defaults are recognised to
to transfer financial services activities to a separate segment. In
reflect the risk arising from primary financial instruments. Financial
particular, this involved revising procedures on operational and
transactions are only entered into with selected partners holding
organisational structure as well as processes for risk management
good credit ratings. Investments in interest-bearing securities are
and control.
limited to investment-grade securities.
risks arising from financial services
Currency risk
In accordance with its treasury risk policy, the KION Group hedges
The KION Group’s leasing activities mean that it may be exposed to
currency risks both locally at the level of the individual companies
residual value risks from the marketing of trucks that are returned by
and centrally via KION Material Handling GmbH in order to meet the
the lessee at the end of a long-term lease and subsequently sold or
prescribed minimum hedging ratios.
re-leased. Residual values in the markets for used trucks are there-
The main hedging instruments employed are foreign-currency
fore constantly monitored and forecast.
forwards, provided that there are no country-specific restrictions on
The KION Group regularly assesses its overall risk position aris-
their use.
ing from financial services, recognising write-downs, valuation allow-
At company level, hedges are entered into for highly probable
ances or provisions to cover the risks it identifies. It immediately
future transactions on the basis of rolling 15-month forecasts, as well
takes account of any changes in residual values when calculating
as for firm obligations not reported in the statement of financial
new leases.
position. In accordance with IAS 39, these hedges are generally clas-
In addition, residual values are mainly based on remarketing
sified as cash flow hedges for accounting purposes (see note [37]).
agreements that continued to achieve positive outcomes in 2013;
Foreign-currency forwards are also employed to hedge the
any residual-value risk under these agreements is transferred to the
currency risks arising in the course of internal financing.
external leasing company. Groupwide standards to ensure that
residual values are calculated conservatively reduce risk and provide
the basis on which to create the transparency required. KION also
has an IT system for residual-value risk management.
The KION Group mitigates its liquidity risk and interest-rate risk
by ensuring that most of its transactions and funding loans have
matching maturities. Long-term leases are primarily based on
fixed-interest agreements. The credit facilities provided by various
banks ensure that the Group has sufficient liquidity.
In order to exclude currency risk, KION generally funds its
leasing business in the local currency used in each market.
We keep the world moving.KION GROUP AG | Annual Report 2013 211
The following table shows an overview of the foreign-currency
forwards entered into by the KION Group. >> Table 103
foreign-currency forwards
>> Table 103
fair value
National amount
in € million
Foreign-currency forwards (assets)
Foreign-currency forwards (liabilities)
2013
2012
Hedge
Trading
Hedge
Trading
1.3
2.3
0.7
0.8
2.9
1.3
1.0
7.4
2013
65.0
164.7
33.4
115.7
2012
89.2
103.7
29.8
414.2
Significant currency risks from financial instruments are measured
financial instruments are denominated in a currency other than the
on the basis of value at risk (VaR) as part of internal Group manage-
functional currency of the reporting entity concerned. This means
ment. VaR figures are calculated using a historical variance-
that currency risks resulting from the translation of the separate
covariance matrix. Currency risks from financial instruments as
financial statements of subsidiaries into the Group reporting
defined by IFRS 7 are only included in calculating value at risk if the
currency, i.e. currency translation risks, are not included.
Value-at-Risk
in € million
Currency risk
>> Table 104
2013
18.6
2012
30.3
The value at risk in respect of currency risk as at 31 December 2013
was €18.6 million (31 December 2012: €30.3 million). Value at risk is
the loss that is not expected to be exceeded over a holding period of
one year with a confidence level of 97.7 per cent (2012: 97.7 per cent).
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
212
interest-rate risk
The Group funds itself by, among other things, drawing down loans
under its agreed loan facilities. Until the third quarter, interest-rate
Interest-rate risk within the KION Group is managed centrally. The
derivatives – mainly interest-rate swaps – were used to hedge the
basis for decision-making includes sensitivity analyses of interest -
resultant interest-rate risk. The corresponding interest-rate hedging
rate risk positions in key currencies.
instruments were terminated upon repayment of the floating-rate
The table below shows the cumulative effect of a rise or fall of
liabilities under the SFA, which means that there were no material
100 basis points (bps) in the relevant interest-rate curves, with a rate
interest-rate hedging instruments as at 31 December 2013.
of 0 per cent constituting the lower limit of the calculation.
>> Table 106
>> Table 105
interest-rate sensitivity
in € million
Other comprehensive income (loss)
Net income (loss)
interest-rate swaps
in € million
Interest-rate swaps (assets)
Interest-rate swaps (liabilities)
+100 bps
–100 bps
+100 bps
–100 bps
>> Table 105
2013
–
– 9.7
fair value
2013
–
–
0.4
–
2013
–
9.7
2012
–
–
18.6
–
2012
16.0
– 8.5
2012
– 1.6
8.5
>> Table 106
Notional amount
2013
–
–
13.0
–
2012
–
–
1,670.0
–
Hedge
Trading
Hedge
Trading
We keep the world moving.KION GROUP AG | Annual Report 2013
213
[37] hedge aCCounting
hedging of interest-rate risk
hedging currency risk
The KION Group used hedge accounting in connection with the
hedging of interest-rate risk in 2013.
The KION Group funded itself by, among other things, drawing
down loans with variable interest rates in various currencies. Inter-
In accordance with its treasury risk policy, the KION Group applies
est-rate derivatives denominated in various currencies were used to
hedge accounting in hedging the currency risks arising from highly
hedge the resultant interest-rate risk in 2013. These interest-rate
probable future transactions in various currencies. Foreign-currency
derivatives were terminated in July 2013 when most of the float-
forwards with settlement dates in the same month as the expected
ing-rate loans were repaid. Upon early termination of the interest-rate
cash flows from the Group’s operating activities are used as hedges.
derivatives, the amounts totalling €14.4 million that were recognised
The effectiveness of the Group’s hedging transactions is
in OCI as part of hedge accounting were derecognised and taken to
assessed on the basis of forward rates using the hypothetical
income. Because the KION Group had used interest-rate swaps to
derivative approach under the cumulative dollar-offset method. The
transform 48 per cent of its variable-rate exposure into fixed-rate
effective portion of the changes in the fair value of foreign-currency
obligations in the previous year, it did not fully benefit from the low
forwards is recognised in accumulated other comprehensive income
level of market interest rates. The individual hedges were designated
(loss) and only reversed when the corresponding hedged item is
at the time the swaps were transacted. The KION Group no longer
recognised in income.
had any material interest-rate derivatives as at 31 December 2013.
On account of the short-term nature of the Group’s payment
The effective portion of the hedges was recognised in other
terms, reclassifications to the income statement and the recognition
comprehensive income (loss). As in the previous year, the cumulative
of the corresponding cash flows generally take place in the same
effectiveness of the hedging transactions was almost 100 per cent.
reporting period. A
foreign-currency receivable or
liability
is
Again, as in 2012, there were no material ineffective portions.
recognised when goods are despatched or received. Hedge
In total, variable portions of future interest payments amounting
accounting continues until the corresponding payment is received,
to €6.3 million had been designated as hedged items in 2012. No
with the changes in the fair value of the derivative being recognised
material hedged items had been designated to hedge interest-rate
in the income statement, thereby largely offsetting the effect of the
risk as at 31 December 2013.
measurement of the receivable at the reporting date.
The changes in fair value recognised and reclassified in other
comprehensive income in 2013 are shown in the consolidated state-
ment of comprehensive income. The ineffective portion of the
changes in the fair value of the hedging transactions is recognised
directly in the income statement. There were no significant ineffective
[38] segment report
portions in 2013.
The Executive Board divides the KION Group into financial services
In total, foreign-currency cash flows of €162.1 million (2012:
(FS) activities and the Linde Material Handling (LMH) and STILL
€114.3 million) were hedged and designated as hedged items, of
brands for management purposes. Segment reporting follows the
which €147.6 million is expected by 30 September 2014 (2012:
same breakdown, taking into account the relevant organisational
€99.7 million by 30 September 2013). The remaining cash flows
structures and corporate strategy of the KION Group.
designated as hedged items fall due in the period up to 24 Febru-
ary 2015.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 214
description of the segments
income (loss) for the current period. As at 31 December 2013, ROE –
earnings before tax as a percentage of average equity – remained
The Linde Material Handling (LMH) segment encompasses the
unchanged on the prior year at 13.0 per cent.
Linde, Fenwick and Baoli brands. The 30 per cent stake held in Linde
Intra-group transactions are generally conducted on an arm’s-
Hydraulics is allocated to the LMH segment and accounted for using
length basis. The regular (interest) margin income that FS generates
the equity method.
from its business activities reflects prevailing market conditions.
The STILL segment comprises the STILL and OM STILL brands.
Surpluses from leasing that exceed this interest margin are reflected
FS activities include the financing of long-term leasing business
in the producer margin within the operating profit generated by the
with external customers of the KION Group and short-term rental
LMH and STILL brand segments.
business of the LMH and STILL operating segments as well as risk
Segment reports are prepared in accordance with the same
management. When long-term leasing business is being conducted,
accounting policies as the consolidated financial statements, as
FS operates as a contractual partner to external customers and
described in note [7]. Contrary to these policies, however, the LMH
provides the necessary funding in conjunction with external financial
and STILL brands’ intersegment sales to FS are always treated as
partners. Besides management of residual-value risk, risk manage-
revenue for the brand segments, irrespective of which entity might
ment also includes the management of credit risk. In addition, FS
retain any opportunities and risks.
provides the financing for short-term rental fleets on behalf of the
Assets and liabilities associated with the long-term leasing
LMH and STILL brand segments, which operate and maintain such
business, including related income and expenses, are assigned to
fleets as part of their operational business.
the FS segment.
The Other segment comprises the company operating under the
Whereas the main feature of long-term leasing business is the
Voltas brand as well as holding and service companies in the KION
provision of a financial service for the external lessee, the focus in
Group. Voltas is a KION Group brand company whose manufacturing
short-term rental business is on the service function. External
is based in India and whose business activities focus primarily on the
customers are offered rental trucks from a rental pool – including
Indian volume market. The service companies provide services for all
associated services – for short-term use. Unlike the situation in long-
segments in the KION Group. The bulk of the revenue in this segment
term leasing, financial performance in the short-term business is
is generated by internal IT and logistics services.
largely dependent on the achieved level of utilisation of the rental
segment management
fleet, management of which lies entirely within the responsibility of
the brand segments. Given this structure, the assets associated with
the short-term business remain on the brand segments’ statements
of financial position and the related income and expenses remain on
The KPIs used to manage the brand segments are order intake,
the brand segments’ income statements.
revenue and adjusted EBIT. Segment reporting therefore includes a
In an indirect leasing arrangement, the otherwise typical
reconciliation of externally reported consolidated earnings before
financing function of the FS segment as a lender for the leasing
interest and tax (EBIT) – including KION acquisition items and
transaction no longer applies. As a result of the sale of the leased
non-recurring items – to the adjusted EBIT for the segments
asset to the external finance provider in such transactions, the brand
(‘adjusted EBIT’). To improve comparability and control, the non-
segments view the transactions in the same way as a sale to an end-
recurring items for the Linde Material Handling segment in 2012 also
user. Consequently, these transactions and all the revenue that they
include the elimination of the EBIT items for the hydraulics business,
generate are recognised in the LMH and STILL brand segments.
which was sold at the end of 2012.
Earnings before tax (EBT) and return on equity (ROE) are the
KPIs used to manage the Financial Services segment. ROE is
calculated on the basis of average equity employed excluding net
We keep the world moving.KION GROUP AG | Annual Report 2013 215
The following tables show information on the KION Group’s
operating segments for 2013 and 2012: >> Tables 107 – 108
segment report 2013
>> Table 107
in € million
Revenue from external customers
Intersegment revenue
Total revenue
earnings before taxes
Financial income
Financial expenses
= Net financial expenses
eBit
+ Non-recurring items
+ KION acquisition items
= adjusted eBit
Segment assets
Segment liabilities
Carrying amount of
at-equity investments
Equity result
Capital expenditure 1
Depreciation 2
Order intake
Number of employees 3
lmh
2,629.8
251.2
2,881.1
270.3
9.2
– 21.3
– 12.0
282.4
2.9
23.8
309.1
4,669.4
1,553.3
118.3
– 2.5
67.6
86.0
2,901.8
13,776
still
1,501.8
215.7
1,717.5
75.0
1.7
– 36.6
– 34.9
109.9
8.3
5.7
123.9
2,086.9
1,198.5
4.6
0.7
42.2
38.8
1,692.0
7,704
financial
services
314.7
224.7
539.4
4.7
52.4
– 48.4
4.0
0.7
0.0
0.0
0.7
1,249.4
1,207.7
15.8
3.5
0.0
0.0
539.4
118
other
48.2
186.9
235.1
– 102.6
27.7
– 202.1
– 174.4
71.8
1.7
0.0
73.5
902.9
3,332.0
0.0
0.0
16.0
16.8
235.1
675
consolidation /
Reconciliation
–
– 878.5
– 878.5
– 93.1
– 42.6
40.1
– 2.5
– 90.6
–
–
– 90.6
– 2,882.1
– 2,875.0
–
–
–
–
– 879.1
–
total
4,494.6
0.0
4,494.6
154.3
48.5
– 268.4
– 219.8
374.2
12.8
29.5
416.5
6,026.4
4,416.5
138.6
– 1.7
125.8
141.4
4,489.1
22,273
1 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
2 On intangible assets and property, plant and equipment excl. leased and rental assets
3 Number of employees in full-time equivalents as at 31 December
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
216
segment report 2012
>> Table 108
in € million
Revenue from external customers
Intersegment revenue
Total revenue
earnings before taxes
Financial income
Financial expenses
= Net financial expenses
eBit
+ Non-recurring items
+ KION acquisition items
= adjusted eBit
Segment assets
Segment liabilities
Carrying amount of at-equity
investments
Equity result
Capital expenditure 1
Depreciation 2
Order intake
Number of employees 3
lmh
2,903.2
229.1
3,132.2
506.2
9.7
– 26.4
– 16.7
522.9
– 254.9
33.0
301.0
4,514.0
1,461.7
135.5
13.5
89.1
102.5
3,135.8
13,148
still
1,483.8
192.8
1,676.6
69.6
3.0
– 31.1
– 28.1
97.7
17.1
7.4
122.2
2,068.0
1,190.8
6.1
1.2
51.1
42.7
1,648.6
7,253
financial
services
296.8
212.6
509.3
4.8
44.7
– 41.3
3.4
1.4
0.0
0.0
1.4
1,039.0
997.3
13.2
1.2
0.1
0.0
509.3
112
other
42.9
208.0
250.9
– 205.7
21.7
– 215.2
– 193.5
– 12.2
55.5
1.1
44.4
902.3
4,206.0
0.0
0.0
14.8
17.7
250.9
702
consolidation /
Reconciliation
–
– 842.4
– 842.4
– 63.9
– 38.6
35.3
– 3.3
– 60.6
–
–
– 60.6
– 2,310.2
– 2,303.3
–
–
–
–
– 844.7
–
total
4,726.7
0.0
4,726.7
310.9
40.5
– 278.7
– 238.2
549.1
– 182.2
41.5
408.3
6,213.2
5,552.5
154.8
15.9
155.1
162.9
4,700.1
21,215
1 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
2 On intangible assets and property, plant and equipment excl. leased and rental assets
3 Number of employees in full-time equivalents as at 31 December
We keep the world moving.KION GROUP AG | Annual Report 2013 217
The table below gives a breakdown of the revenue from external cus-
tomers by location. >> Table 109
segment revenue broken down by customer location
>> Table 109
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
2013
3,223.9
369.7
279.4
453.5
168.1
2012
3,363.3
362.8
324.2
485.6
190.7
total segment revenue
4,494.6
4,726.7
Revenue in Germany came to €1,115 million in 2013 (2012:
The assets attributable to the Financial Services segment
€1,225 million). There are no relationships with individual customers
include long-term leases, which were reported as either leased
that generate revenue deemed to be significant as a proportion of
assets or lease receivables, depending on the type of lease. As at
total consolidated revenue.
the reporting date, lease receivables due from unrelated third parties
Financial income and expenses including all interest income and
amounted to €458.1 million (31 December 2012: €379.9 million).
expenses are described in notes [12] and [13].
There were also intra-group lease receivables of €449.1 million
The non-recurring items mainly comprised consultancy costs,
(31 December 2012: €373.4 million), which primarily resulted from
as well as costs incurred in connection with severance payments,
the funding of the short-term rental business of LMH and STILL.
social plan costs and costs relating to the relocation of production
The liabilities attributable to the Financial Services segment
and closure of production sites. They totalled €12.8 million in 2013
largely comprised liabilities to leasing companies of €935.2 million
(2012: €70.9 million).
(31 December 2012: €730.3 million) relating to sale and leaseback
In 2013, these items also included further income and expenses
transactions that resulted from the funding of long-term leases with
connected with the sale of our controlling interest (70 per cent) in
external third parties and intra-group customers. In the reporting
Linde Hydraulics GmbH & Co. KG, Aschaffenburg in December
year, €615.5 million (2012: €470.2 million) of this amount was
2012, and components of the share of profit (loss) of the remaining
attributable to the funding of leases with external customers and
30 per cent of the equity-accounted shares, which amounted to net
€319.7 million (2012: €260.2 million) related to the funding of intra-
income of €0.1 million. For reasons of comparability and control, the
group leases with the LMH and STILL brand companies as lessees,
hydraulic business’s current income of €28.8 million for 2012 was
who had in turn entered into leases with external third parties. More-
also eliminated as a non-recurring item from EBIT in last year’s
over, they include net financial debt of €163.6 million (2012:
segment reporting.
€174.9 million) arising from general corporate finance for the FS
The KION acquisition items relate to the acquisition of the KION
segment.
Group, which was formed at the end of 2006 when it was spun off
from Linde AG, Munich. These items comprise net write-downs on
the hidden reserves identified as part of the purchase price allocation.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
218
Capital expenditure by the Financial Services segment includes
Capital expenditure in Germany came to €82.2 million in 2013
additions to intangible assets and property, plant and equipment.
(2012: €105.0 million).
Leased assets are described in note [18]. >> Table 110
capital expenditure broken down by company location (excl. leased and rental assets)
>> Table 110
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
total capital expenditure
2013
105.0
3.7
2.2
13.9
0.9
125.8
2012
132.9
3.3
8.4
9.9
0.6
155.1
Depreciation / amortisation relates to intangible assets with finite
Non-current assets attributable
to Germany amounted
to
useful lives and property, plant and equipment.
€2,676.6 million in 2013 (2012: €2,552.6 million).
The regional breakdown of non-current assets excluding finan-
cial assets, financial instruments, deferred tax assets and post-em-
ployment benefits is as follows: >> Table 111
Non-current assets broken down by company location
>> Table 111
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
2013
3,316.2
109.6
42.6
130.4
42.4
2012
3,174.8
101.2
46.2
122.2
49.5
total non-current assets (ifRs 8)
3,641.2
3,494.0
We keep the world moving.KION GROUP AG | Annual Report 2013
219
[39] employees
The KION Group employed an average of 21,632 people in the
reporting year (2012: 22,232). The number of employees (including
part-time employees expressed in terms of full-time equivalents) is
broken down by region as follows: >> Table 112
employees (average)
>> Table 112
Germany
France
UK
Italy
Rest of Europe
Asia
Rest of world
total employees
The acquisition of Willenbrock and STILL Arser led to an increase of
542 and 122 employees respectively.
2013
7,625
3,160
1,881
786
3,565
3,438
1,177
2012
8,497
3,245
1,807
884
3,443
3,243
1,113
21,632
22,232
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures
220
[40] related party disClosures
In addition to the subsidiaries included in the consolidated financial
statements, the KION Group has direct or indirect business relation-
ships with a number of unconsolidated subsidiaries, joint ventures
and associates in the course of its ordinary business activities.
Related parties that are controlled by the KION Group, through
which a significant influence can be exerted over the KION Group, or
which are members of the Superlift group are either included in the
list of shareholdings as at 31 December 2013 (see note [45]) or in the
table below: >> Table 113
Related parties
>> Table 113
Superlift Holding S.à r.l., Luxembourg
Kohlberg Kravis Roberts & Co. L.P., New York, USA
Goldman, Sachs & Co., New York, USA
Weichai Power Co. Ltd., Weifang, China
Parent company
Entity with significant influence
Entity with significant influence
Entity with significant influence
The members of the Executive Board and Supervisory Board of
KION GROUP AG are also related parties.
superlift funding s.à r.l., luxembourg
Under a supplementary loan agreement dated 23 September 2009,
investment funds advised by Kohlberg Kravis Roberts & Co. L.P.
(‘KKR’) and The Goldman Sachs Group, Inc. extended the SFA to
include an additional loan of €100.0 million to be paid via Superlift
Funding S.à r.l., Luxembourg. The loan provided by Superlift Holding
to Superlift Funding (including accrued interest) and the investment
in Superlift Funding, together amounting to €118.1 million, were
converted into equity with effect from 11 June 2013.
We keep the world moving.KION GROUP AG | Annual Report 2013
221
advisory agreement
weichai power
On 8 May 2007, KION GROUP GmbH, Kohlberg, Kravis Roberts &
Since exercising its option, which did not come into effect until
Co. L.P. (‘KKR’) and Goldman, Sachs & Co. entered into an advisory
15 January 2014, Weichai Power Co. Ltd., Weifang, China (referred
agreement, under the terms of which KKR and Goldman, Sachs &
to below as Weichai Power) has held a 33.3 per cent stake in KION
Co. were to provide advisory services for the KION Group. These
GROUP AG. Weichai Power also holds a controlling interest (70.0
advisory services related, in particular, to financial and strategic
per cent) in Linde Hydraulics GmbH & Co. KG, Aschaffenburg
issues. The advisory agreement expired when KION GROUP AG was
(referred to below as Linde Hydraulics). The remaining shares (30.0
floated on the stock market. A total of €2.4 million in advisory fees
per cent) in Linde Hydraulics are held by the KION Group. During
was recognised as an expense in respect of this agreement in 2013
2013, the KION Group earned revenue of €17.0 million from selling
(2012: €4.8 million). KION GROUP AG, KKR and Goldman, Sachs &
goods and services to Linde Hydraulics and its subsidiaries. Over
Co. concluded a new global advisory agreement on 7 June 2013,
the same period, companies in the KION Group obtained goods and
which stipulates a fixed annual fee of €125,000. Under the agree-
services from Linde Hydraulics and its subsidiaries amounting to
ment, KKR and Goldman, Sachs & Co. will continue to provide
€114.1 million. The receivables arising from the sale of goods and
limited advisory services for the KION Group after its IPO in the event
services stood at €6.0 million as at 31 December 2013 (31 Decem-
that the KION Group decides it wishes to draw on this expertise. A
ber 2012: €1.0 million). No valuation allowances for trade receivables
total of €0.1 million in advisory fees was recognised as an expense in
had been recognised as at the reporting date, a situation that was
respect of the new agreement in 2013.
unchanged on 31 December 2012. As at 31 December 2013, liabilities
In connection with the issuance of a corporate bond, a banking
to Linde Hydraulics and its subsidiaries resulting from the purchase
fee totalling €1.9 million was paid to KKR and Goldman, Sachs & Co.
of goods and services came to €2.7 million (31 December 2012:
as syndicate members. This fee has been allocated pro rata as
€0.0 million).
transaction costs to each of the tranches and expensed over their
In parallel with its global advisory agreement with KKR and
respective terms.
Goldman, Sachs & Co., KION GROUP AG also concluded a global
As part of the stock market flotation, KKR and Goldman,
advisory agreement with Weichai Power on 7 June 2013. Under the
Sachs & Co. were promised a contractual banking fee totalling
agreement, Weichai Power will provide advisory services related to
€5.1 million, which was reported in other comprehensive income
the Asia-Pacific region for the KION Group after its IPO in the event
(loss) as transaction costs relating to the capital increase.
that the KION Group decides it wishes to draw on this expertise. A
In August 2013, the KION Group began preparations for an
fixed annual fee of €125,000 was agreed for these services. A total of
employee share programme to enable staff members, initially those
€0.1 million in advisory fees was recognised as an expense in respect
in Germany, to derive greater benefit from the success of the
of the new agreement in 2013.
Company. An agreement for handling the share repurchase between
Weichai Power (Luxembourg) Holding S.à r.l. acquired shares by
28 August and 26 September 2013 was signed with Goldman Sachs
way of a capital increase. This capital increase caused the share
International, in which Goldman Sachs International was authorised
capital to rise by €13.7 million and the capital reserves by
to run the buy-back programme on behalf of KION GROUP AG. In
€314.7 million.
2013, a total of €0.1 million was recognised as an expense.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 222
The table below shows the receivables due from related parties as at
the reporting date. >> Table 114
Receivables from related parties
>> Table 114
in € million
Non-consolidated subsidiaries
Associates
Joint ventures
Other related parties
total receivables from related parties
The table below shows the liabilities owed to related parties as at the
reporting date. >> Table 115
liabilities to related parties
in € million
Non-consolidated subsidiaries
Associates
Joint ventures
Other related parties
total liabilities to related parties
2013
10.0
10.9
0.2
5.5
26.6
2013
6.1
67.2
2.1
1.1
76.4
2012
7.4
13.3
2.6
3.4
26.8
>> Table 115
2012
6.0
35.9
4.9
132.5
179.3
We keep the world moving.KION GROUP AG | Annual Report 2013
223
Since the conversion of an existing loan and the investment in Super-
while KION Management Beteiligungs GmbH deferred payment of
lift Funding by Superlift Holding, the loan (plus accrued interest)
the purchase price of the ‘B’ and ‘C’ shares, subject to an interest
provided by Linde Material Handling GmbH to Superlift Funding has
charge. In 2010, the performance-related vesting conditions for the
no longer been reported under liabilities owed to related parties.
‘C’ shares relating to the 2009-2012 plan years were adjusted to take
[41] kion management partnership
plan (mpp)
account of the revised long-term KION business plan. The change in
vesting conditions affected a total of 1,034 ‘C’ shares with an
expected exercise price of €16 thousand each. The total fair value of
the adjustment of the performance-related vesting conditions for the
‘C’ shares was €1,044 thousand. The 1,034 purchase options out-
standing as at 1 January 2013 were all exercised in 2013. The fair
value attributable to the adjustment at the exercise date in 2013
In 2007, the former sole shareholder, Superlift Holding S.à r.l., gave
differed only insignificantly from the corresponding pro-rata exercise
managers in the KION Group the opportunity to invest in what is now
price. No expenses were recognised in respect of the MPP in 2013
KION GROUP AG through KION Management Beteiligungs GmbH &
(2012: €0.16 million).
Co. KG by way of a co-invest agreement. This scheme is known as
the KION management partnership plan (MPP). More managers
joined the MPP in 2007, 2008, 2010 and 2011. At the time of the IPO,
the KION Group’s Executive Board plus around 300 executives
around the world had invested in KION GROUP AG through KION
Management Beteiligungs GmbH & Co. KG.
KION Management Beteiligungs GmbH & Co. KG held an equity
[42] kion performanCe share
plan (psp)
interest of 3.7 per cent in KION GROUP AG at the time of the IPO.
In May 2013, the Company entered into new service contracts with
After the IPO, individual managers used the option open to them as
Executive Board members which were contingent on the Company’s
a result of the IPO to withdraw the shares attributable to them from
IPO going ahead. Consequently, they did not come into force until
KION Management Beteiligungs GmbH & Co. KG or to sell the
the day after the initial listing on the Frankfurt Stock Exchange on
shares through KION Management Beteiligungs GmbH & Co. KG. As
28 June 2013. The provisions of these new service contracts specify
a result, the equity interest of KION Management Beteiligungs GmbH
that long-term variable remuneration (the KION GROUP AG
& Co. KG fell to below 3 per cent. Only the shares held by members
performance share plan) is to be introduced so that the remuneration
of the KION Executive Board and some members of the Manage-
structure is based on the sustainable performance of the Company.
ment Boards of Linde Material Handling GmbH and STILL GmbH
As part of the KION GROUP AG performance share plan, the
remain subject to a lock-up period of one year following the IPO. Of
Executive Board members are allocated virtual shares over a fixed
those shares, 881,471 are held by Executive Board members,
period (two-and-a-half years for the 2013 tranche and three years for
equating to an equity interest in KION GROUP AG of 0.89 per cent.
all subsequent tranches). The remuneration component measured
The Executive Board’s equity interest has remained unchanged
over the long term is based in equal parts on the total shareholder
since the IPO.
return (TSR) of KION GROUP AG shares compared with the STOXX®
The shares in what is now KION GROUP AG were purchased by
Europe TMI Industrial Engineering index as a measure of market per-
managers
in
the KION Group
through KION Management
formance, and with return on capital employed (ROCE) as an internal
Beteiligungs GmbH & Co. KG at fair value, and shareholdings are
measure. It also depends on the performance of KION GROUP AG
divided into virtual ‘A’, ‘B’, and ‘C’ shares. Different terms and
shares during the relevant period.
conditions concerning payment of the purchase price and rights to
The first performance period for the 2013 tranche ends on
purchase attach to these virtual shares. The purchase price for ‘A’
31 December 2015. At the beginning of the performance period, the
shares became payable when participants joined the programme,
Executive Board members were granted a total of 0.3 million virtual
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 224
shares for this tranche with a specific fair value based on an allocation
the performance period by + / – 20 per cent. The maximum amount
value in euros specified in each Executive Board member’s service
payable is limited to 200 per cent of the value of the shares allotted
contract. At the end of the performance period, the number of the
to an individual at the grant date.
virtual shares is amended depending on the degree to which the
The pro-rata expense calculation based on the fair value of the
relevant targets are achieved. The resulting final number of virtual
virtual shares on each valuation date is carried out using Monte-Carlo
shares multiplied by the smoothed price of KION GROUP AG shares
simulation. The following valuation parameters were used to value
at the end of the performance period determines the amount of cash
the virtual shares on the reporting date: >> Table 116
actually paid. The Supervisory Board can also use a discretionary
personal performance factor to adjust the final payment at the end of
significant measurement parameters for the KioN GRoUP aG Performance share Plan
>> Table 116
measurement parameters
Expected volatility of the KION share
Expected volatility of the STOXX® Europe TMI Industrial Engineering Index
Risk-free interest rate
Expected dividend yield
Price of the KION share
Initial value of the KION share (60 days average)
Initial value of the STOXX® Europe TMI Industrial Engineering Index (60 days average)
Expected pay-out for internal target ROCE
Valuation date
31/12/2013
30.0 %
20.0 %
0.2 %
€0.88
€30.73
€26.64
€204.26
100.0 %
The historic volatility of shares in similar companies (peer group) was
virtual shares was €6.2 million on that date. Because the perfor-
used to determine the volatility of KION shares on which the
mance period for the 2013 tranche has been set at 30 months, a
valuation is based. As at 31 December 2013, the fair value of one
liability of €1.2 million was recognised as a pro-rata expense for six
virtual share was €23.74 and the total fair value based on 0.3 million
months in 2013.
We keep the world moving.KION GROUP AG | Annual Report 2013
225
[43] remuneration of the exeCutive
Board and supervisory Board
executive Board
The total remuneration paid to the members of the Executive
Board in 2013 amounted to €7.4 million (2012: €12.0 million). This con-
sisted of short-term remuneration amounting to €4.9 million (2012:
€5.6 million), post-employment benefits totalling €0.6 million (2012:
€0.4 million), termination benefits of €0.0 million (2012: €6.0 million)
and share-based payments of €1.9 million (2012: €0.0 million). The
short-term remuneration comprised non-performance-related com-
Gordon Riske, Chief Executive Officer (CEO), is responsible, among
ponents amounting to €2.8 million (2012: €1.9 million) and perfor-
other things, for the strategic management of the Group, communi-
mance-related components amounting to €2.2 million (2012: €3.6 mil-
cations, governance and compliance. On 11 January 2013, he also
lion). The current service cost resulting from pension provisions for the
took over responsibility for internal audit, KION Warehouse Systems
Executive Board is reported under post-employment benefits. The
and the North and South America regions.
long-term incentive components take the form of a performance share
Klaus Hofer stepped down from the Executive Board of the
plan (see note [42]). In addition, one Executive Board member was
KION Group on 10 January 2013. As Chief Human Resources Officer
promised a special bonus, to be paid in two tranches, that would be
(CHRO), he had been responsible for human resources, legal affairs,
granted in the event of a successful IPO; this bonus also counts as a
health & safety and internal audit. He was also the KION Labour
long-term incentive. The pro-rata expense for share-based payments
Relations Director.
totalled €1.9 million (2012: €0.0 million).
Bert-Jan Knoef is CEO and Labour Relations Director of the
Under section 314 HGB, disclosure of the expense for share-
brand company STILL GmbH and, since 11 January 2013, has also
based payments is not required. Rather, they must be included in the
overseen all cross-brand logistics activities and managed the intra-
Executive Board members’ remuneration for the year in which they
group logistics service provider, Urban.
are granted on the basis of the fair value at the individual grant dates.
Theodor Maurer is CEO and Labour Relations Director of the
The fair value of the share-based payments at their individual grant
brand company Linde Material Handling GmbH and, since 11 Janu-
dates amounted to €6.2 million (2012: €0.0 million). Furthermore,
ary 2013, has also held cross-brand responsibility for quality, facility
post-employment benefits must not be disclosed. On this basis, the
management, health, safety and the environment.
total remuneration paid to the members of the Executive Board pur-
Ching Pong Quek was appointed Chief Asia Pacific Officer with
suant to section 314 HGB came to €11.1 million (2012: €5.6 million).
effect from 11 January 2013 and heads up the KION Group’s entire
No loans or advances were made to members of the Executive
Asia business.
Board in 2013 (2012: loans and advances totalling €0 million). The
Dr Thomas Toepfer, Chief Financial Officer (CFO), is responsible,
present value of the defined benefit obligation in respect of Executive
among other things, for finance (including financial services) and IT
Board members as at 31 December 2013 was €5.9 million (31 Decem-
activities. On 11 January 2013, he also took over responsibility for
ber 2012: €2.3 million).
purchasing, human resources, legal affairs and data protection. He
The total remuneration paid to former members of the Executive
is also the KION Labour Relations Director.
Board in 2013 amounted to €0.2 million (2012: €0.2 million). Defined
The remuneration paid to the Executive Board comprises a fixed
benefit obligations to former members of the Executive Board or
salary and non-cash benefits, pension entitlements and
their surviving dependants amounting to €5.2 million (2012: €3.6 mil-
performance-related components. The variable performance-
lion) were recognised in accordance with IAS 19.
related components are paid each year on the basis of the Group’s
Further details of Executive Board remuneration, including the
performance. In addition, there are performance-based compo-
individual amounts for each member, can be found in the
nents in the form of the KION performance share plan for all Execu-
remuneration report on pages 57 to 65 of this annual report.
tive Board members and a bonus for Dr Thomas Toepfer. The
pension entitlements consist of retirement, invalidity and surviving
dependants’ benefits.
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 226
supervisory Board
Bert-Jan Knoef
Member of the Executive Board / CEO of STILL
The total remuneration paid to the members of the Supervisory
(since 11 January 2013)
Board for the performance of their tasks at the parent company and
subsidiaries in 2013 amounted to €1.2 million including VAT (2012:
Member of the Executive Board of KION Material
€1.0 million). There were no loans or advances to members of the
Handling GmbH, Wiesbaden
Supervisory Board in 2013. Furthermore, the members of the Super-
Chief Executive Officer (CEO) and Labour Relations Director
visory Board did not receive any remuneration or benefits for
of STILL GmbH, Hamburg
services provided as individuals, such as consulting or brokerage
Presidente of the Consiglio di Amministrazione of OM Carrelli
activities.
Elevatori S.p.A., Lainate, Italy
Members of the Supervisory Board also received short-term
Presidente of the Consiglio di Amministrazione of
employee benefits of €0.6 million for employee services (2012:
STILL ITALIA S.p.A., Lainate, Italy
€0.5 million).
Member of the Advisory Board of STILL GmbH i. L., Ljubljana,
[44] memBers of the exeCutive
Board and supervisory Board
executive Board
Gordon Riske
Chief Executive Officer (CEO)
Slovenia
Member of the Advisory Board of STILL Gesellschaft m.b.H.,
Wr. Neudorf, Austria (until 17 January 2013)
Member of the Advisory Board of STILL KFT, Környe, Hungary
(until 30 January 2013)
Member of the Supervisory Board of STILL INTERN TRANSPORT
B.V., Hendrik-Ido-Ambacht, Netherlands (until 30 January 2013)
Member of the Advisory Board of STILL POLSKA, Gądki, Poland
(until 30 January 2013)
Member of the Advisory Board of Supralift Beteiligungs- und
Kommunikationsgesellschaft mbH, Hofheim am Taunus
(until 31 December 2013)
Chief Executive Officer of KION Material
Member of the Advisory Board of Supralift GmbH & Co. KG,
Handling GmbH, Wiesbaden
Hofheim am Taunus (until 31 December 2013)
Member of the Executive Board of KION Holding 2 GmbH,
Member of the Advisory Board of STILL Belgien N.V., Wijnegem
Wiesbaden
(Antwerp), Belgium (until 17 January 2013)
Member of the Asia Pacific Committee of KION Material
Member of the Supervisory Board of STILL Danmark A / S, Kolding,
Handling GmbH, Wiesbaden
Denmark (until 17 January 2013)
Chairman of the Supervisory Board of Linde Material
Member of the Board of Directors of STILL Materials Handling Ltd.,
Handling GmbH, Aschaffenburg
Preston, United Kingdom (until 30 January 2013)
Chairman of the Board of Directors of Linde (China)
Member of the Advisory Board of OOO ‘STILL Forklifttrucks’,
Forklift Truck Co., Ltd., Xiamen, People’s Republic of China
Moscow, Russia (until 1 February 2013)
Chairman of the Supervisory Board of STILL GmbH, Hamburg
Member of the Executive Board of the non-profit Hertie Foundation,
Frankfurt am Main
Non-Executive Director of Weichai Power Co., Ltd.,
Weifang, People’s Republic of China
We keep the world moving.KION GROUP AG | Annual Report 2013 227
theodor maurer
Handling Asia Pacific Pte., Ltd., Singapore, Singapore
Member of the Executive Board / CEO of LMH
Chairman of the Board of Directors of Linde Material
(since 11 January 2013)
Handling Hong Kong Ltd., Hong Kong, People’s Republic of China
Member of the Executive Board of KION Material
dr thomas toepfer
Handling GmbH, Wiesbaden
Member of the Executive Board / CFO
Chief Executive Officer (CEO) and Labour Relations Director of Linde
Material Handling GmbH, Aschaffenburg
Member of the Executive Board of KION Material
Chairman of the Board of Directors of Linde Material
Handling GmbH, Wiesbaden
Handling (UK) Ltd., Basingstoke, United Kingdom
Member of the Executive Board of KION Holding 2 GmbH,
Chairman of the Board of Directors of Linde Heavy Truck
Wiesbaden
Division Ltd., Merthyr Tydfil, United Kingdom
Member of the Asia Pacific Committee of KION Material
Member of the Board of Directors of LMH North America Corp.,
Handling GmbH, Wiesbaden
Summerville, USA
Member of the Supervisory Board of STILL GmbH, Hamburg
Member of the Board of Directors of Linde (China) Forklift
Member of the Supervisory Board of Linde Material Handling
Truck Co. Ltd., Xiamen, People’s Republic of China
GmbH, Aschaffenburg
Member of the Supervisory Board of Linde Hydraulics
Member of the Executive Board of MPP Verwaltungs GmbH,
Verwaltungs GmbH, Aschaffenburg
Wiesbaden
Member of the Comité Consultatif of Fenwick-
Member of the Executive Board of MPP Beteiligungs GmbH,
Linde S.à.r.l., Élancourt, France
Wiesbaden
Member of the Supervisory Board of Schöler Fördertechnik AG,
Administrador Solidario of Islavista Spain S.A., Barcelona, Spain
Rheinfelden
ching Pong Quek
Chairman of the Board of Directors of LMH North
America Corp., Summerville, USA
Member of the Board of Directors of Superlift UK Ltd.,
Member of the Executive Board / Chief Asia Pacific Officer
Basingstoke, United Kingdom
(since 11 January 2013)
Klaus hofer
Member of the Executive Board / Chief Asia Pacific Officer
(until 10 January 2013)
of KION Material Handling GmbH, Wiesbaden
Member of the Asia Pacific Committee of KION Material
Member of the Executive Board / CHRO
Handling GmbH, Wiesbaden
Member of the Supervisory Board of Linde Material Handling GmbH,
Chief Executive Officer of Linde (China) Forklift Truck Corp., Ltd.,
Aschaffenburg (until 10 January 2013)
Xiamen, People’s Republic of China
Member of the Board of KION South Asia Pte Ltd., Singapore,
Singapore
President and CEO of KION Asia Ltd., Hong Kong,
People’s Republic of China
Chairman of KION Baoli Forklift Co., Ltd., Jiangsu,
People’s Republic of China
Member of the Board of Directors of Voltas Material
Handling Pvte. Ltd., Pune, India
Member of the Board of Directors of Linde Material
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 228
supervisory Board
Member of the Shareholder Committee of Xella
International S.à r.l., Luxembourg
dr John feldmann
Chairman of the Supervisory Board of Wincor Nixdorf AG,
Chairman of the Supervisory Board
Paderborn
Member of the Supervisory Board of Wincor Nixdorf International
Chief Executive Officer of the non-profit
GmbH, Paderborn
Hertie Foundation, Frankfurt am Main (until 31 March 2014)
Chairman of the Supervisory Board of KION Material
denis heljic 1
Handling GmbH, Wiesbaden
(since 12 June 2013)
Member of the Supervisory Board of Bilfinger SE, Mannheim
Field technician at STILL GmbH,
Member of the Supervisory Board of Hornbach Baumarkt AG,
Dortmund, and Deputy Chairman of the Works Council
Bornheim
of STILL GmbH, Dortmund plant
Member of the Supervisory Board of Hornbach Holding AG,
Member of the Supervisory Board of KION Material Handling GmbH,
Bornheim
Joachim hartig 1
Wiesbaden
dr martin hintze
Deputy Chairman of the Supervisory Board
Managing Director of Merchant Banking at
Goldman Sachs International, London, United Kingdom
Chairman of the European Works Council of
Member of the Supervisory Board of KION Material
KION GROUP AG, Wiesbaden
Handling GmbH, Wiesbaden
Deputy Chairman of the Supervisory Board of
Member of the Executive Board of Xella International
KION Material Handling GmbH, Wiesbaden
Holdings S.à r.l., Luxembourg
Deputy Chairman of the Supervisory Board of
Member of the Executive Board of Xella HoldCo
Linde Material Handling GmbH, Aschaffenburg
Finance S.A., Luxembourg
holger Brandt 2
Luxembourg
Head of Sales Germany at STILL GmbH, Hamburg
Member of the Executive Board of Xenia S.à r.l.,
Member of the Supervisory Board of KION Material
Luxembourg
Handling GmbH, Wiesbaden
Member of the Supervisory Board of LEG Immobilien AG,
Member of the Supervisory Board of STILL GmbH, Hamburg
Düsseldorf
Member of the Executive Board of Xella Topco S.à r.l.,
dr alexander dibelius
Johannes P. huth
Chairman of the Executive Board of Goldman Sachs AG,
Partner at and member of the Executive Committee of Kohlberg
Frankfurt am Main
Kravis Roberts & Co. Partners LLP, London, United Kingdom
Member of the Supervisory Board of KION Material
Member of the Supervisory Board of KION Material
Handling GmbH, Wiesbaden
Handling GmbH, Wiesbaden
Member of the European Management Committee of
Deputy Chairman of the Supervisory Board of NXP BV,
Goldman Sachs International, London, United Kingdom
Eindhoven, Netherlands
Member of the Board of Directors of OOO Goldman Sachs,
Chairman of the Supervisory Board of ProSiebenSat. 1
Moscow, Russia
Media AG, Unterföhring
Member of the Board of Directors of OOO Goldman Sachs Bank,
Chairman of the Supervisory Board of WMF AG,
Moscow, Russia
Geislingen an der Steige
We keep the world moving.KION GROUP AG | Annual Report 2013 229
Jiang Kui
Kay Pietsch 1
President and Director of Shandong Heavy Industry
Chairman of the Group Works Council of the KION Group and
Group Co., Ltd., Jinan, People’s Republic of China
Chairman of the Works Council of STILL GmbH, Hamburg
Member of the Supervisory Board of KION Material
Member of the Supervisory Board of KION Material Handling
Handling GmbH, Wiesbaden
GmbH, Wiesbaden
Director of Shantui Construction Machinery Co., Ltd.,
Deputy Chairman of the Supervisory Board of STILL GmbH,
Jining, People’s Republic of China
Hamburg
Chairman of the Board of Strong Construction
Machinery Co., Ltd., Linyi, People’s Republic of China
Deputy Chairman of the Board of Weichai
hans Peter Ring
(since 9 June 2013)
Holding Group Co., Ltd., Weifang, People’s Republic of China
Management consultant, Munich
Director of Weichai Power Co., Ltd., Weifang,
Member of the Supervisory Board of KION Material Handling
People’s Republic of China
GmbH, Wiesbaden
Director of Shandong Heavy Industry India
Member of the Supervisory Board of Elbe Flugzeugwerke GmbH,
Private Ltd., Pune, India
Dresden
Director of Weichai Power Hong Kong International
Member of the Supervisory Board of MAG Europe GmbH,
Development Co., Ltd., Hong Kong, People’s Republic of China
Göppingen
Member of the Executive Board of Hydraulics Drive
Member of the Supervisory Board of Fokker Technologies
Technology Beteiligungs GmbH, Aschaffenburg
Holding B.V., Papendrecht, Netherlands
Chairman of the Supervisory Board of Linde Hydraulics
Verwaltungs GmbH, Aschaffenburg
alexandra schädler 1
(since 2 October 2013)
thilo Kämmerer 1
Trade Union Secretary on the National Executive of the
Trade Union Secretary, IG Metall, Bamberg Administrative Office
IG Metall union, Frankfurt am Main
Member of the Supervisory Board of KION Material
Member of the Supervisory Board of KION Material Handling
Handling GmbH, Wiesbaden
GmbH, Wiesbaden
dr Roland Köstler 1
(until 30 September 2013)
Member of the Supervisory Board of Fujitsu Technology Solutions
GmbH, Munich
Head of Business Law at Hans-Böckler-Stiftung,
silke scheiber
Düsseldorf (until 31 July 2013)
Partner at Kohlberg Kravis Roberts & Co. Partners LLP,
Member of the Supervisory Board of KION Material Handling
London, United Kingdom
GmbH, Wiesbaden (until 30 September 2013)
Member of the Supervisory Board of KION Material Handling
Özcan Pancarci 1
(since 12 June 2013)
GmbH, Wiesbaden
Member of the Board of Directors of Jungbunzlauer Holding AG,
Basel, Switzerland
Chairman of the Plants I & II Works Council of Linde Material
Member of the Supervisory Board of WMF AG, Geislingen an der
Handling GmbH, Aschaffenburg
Steige
Member of the Supervisory Board of KION Material Handling
Member of the Supervisory Board of Van Gansewinkel Groep B.V.,
GmbH, Wiesbaden
Rotterdam, Netherlands
Member of the Supervisory Board of Linde Material Handling
GmbH, Aschaffenburg
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 230
tan Xuguang
(since 9 June 2013)
Chief Executive Officer and Chairman of the Board of Directors
of Weichai Power Co. Ltd., Weifang, People’s Republic of China
[45] list of the shareholdings of
kion group ag, wiesBaden
Member of the Supervisory Board of KION Material Handling
The shareholdings of the KION Group as at 31 December 2013 are
GmbH, Wiesbaden
listed below. >> Table 117
Chairman of the Board of Directors of Shandong Heavy Industry
Group Co., Ltd., Jinan, People’s Republic of China
Chairman of the Board of Directors of Weichai Group Holding Co.,
Ltd., Weifang, People’s Republic of China
Chairman of the Board of Directors of Weichai Heavy Machinery
Co., Ltd., Weifang, People’s Republic of China
Chairman of the Board of Directors of Shaanxi Heavy-duty
Motor Co., Ltd., Xi’an, People’s Republic of China
Chairman of the Board of Directors of Shaanxi Fast Gear Co., Ltd.,
Xi’an, People’s Republic of China
hans-Peter Weiß 1
Chairman of the Plant III Works Council of Linde Material Handling
GmbH, Kahl
Member of the Supervisory Board of KION Material Handling
GmbH, Wiesbaden
1 Employee representatives
2 Executive representatives
We keep the world moving.KION GROUP AG | Annual Report 2013 231
list of shareholdings as of december 31, 2013 according to section 313 para. 2 No. 1 – 4 commercial code (hGB)
>> Table 117
No.
Name
Registered
office
country
Parent
company
shareholding
Note
1 KION GROUP AG
Wiesbaden
Germany
consolidated subsidiaries
domestic
2 BlackForxx GmbH
3 Eisenwerk Weilbach GmbH
4 Fahrzeugbau GmbH Geisa
5 KION Financial Services GmbH
6 KION Holding 2 GmbH
7 KION Information Management Services GmbH
8 KION Material Handling GmbH
9 KION Warehouse Systems GmbH
Stuhr
Wiesbaden
Geisa
Wiesbaden
Wiesbaden
Wiesbaden
Wiesbaden
Reutlingen
10 Klaus Pahlke GmbH & Co. Fördertechnik KG
Haan
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
11 Linde Material Handling GmbH
Aschaffenburg
Germany
18
11
18
11
1
8
6
18
11
8
12 LMH Immobilien GmbH & Co. KG
Aschaffenburg
Germany
11 & 13
13 LMH Immobilien Holding GmbH & Co. KG
Aschaffenburg
Germany
14 LMH Immobilien Holding Verwaltungs-GmbH
Aschaffenburg
Germany
15 LMH Immobilien Verwaltungs-GmbH
Aschaffenburg
Germany
16 Schrader Industriefahrzeuge GmbH & Co. KG
17 STILL Financial Services GmbH
18 STILL Gesellschaft mit beschränkter Haftung
Essen
Hamburg
Hamburg
Germany
Germany
Germany
19 Urban-Transporte Gesellschaft mit beschränkter Haftung Unterschleißheim Germany
20 Willenbrock Arbeitsbühnen GmbH & Co. KG
21 Willenbrock Fördertechnik GmbH & Co. KG
22 Willenbrock Fördertechnik GmbH & Co. KG
23 Willenbrock Fördertechnik Holding GmbH
foreign
24 Linde Material Handling Pty. Ltd.
25 STILL N.V.
Bremen
Bremen
Hannover
Bremen
Huntingwood
Wijnegem
26 KION South America Fabricação de Equipamentos para
São Paulo
Armazenagem Ltda.
27 KION Baoli (Jiangsu) Forklift Co., Ltd.
28 Linde (China) Forklift Truck Corporation Ltd.
29 STILL DANMARK A / S
30 BARTHELEMY MANUTENTION SAS
31 Bastide Manutention SAS
32 Bretagne Manutention S.A.
33 FENWICK FINANCIAL SERVICES SAS
34 FENWICK-LINDE S.A.R.L.
35 KION France SERVICES SAS
Jiangjiang
Xiamen
Kolding
Vitrolles
Toulouse
Pacé
Elancourt
Elancourt
Elancourt
Germany
Germany
Germany
Germany
Australia
Belgium
Brazil
China
China
Denmark
France
France
France
France
France
France
11
11
11
11
5
11
11
23
23
23
11
11
18 & 69
18
58
11
18
34
34
34
35
35 & 11
11
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
99.64 %
94.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
74.00 %
74.00 %
74.00 %
74.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
87.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
[1]
[1]
[1]
[1]
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 232
list of shareholdings as of december 31, 2013 according to section 313 para. 2 No. 1 – 4 commercial code (hGB)
>> Table 117
No.
Name
36 LOIRE OCEAN MANUTENTION SAS
37 Manuchar S.A.
38 MANUSOM SAS
Registered
office
country
Saint-Herblain
France
Gond Pontouvre
France
Rivery
39 SAS Société Angoumoisine de Manutention - SAMA
Champniers
40 SM Rental SAS
41 STILL Location Services SAS
42 STILL SAS
43 KION FINANCIAL SERVICES Ltd.
44 Linde Castle Ltd.
45 Linde Creighton Ltd.
46 Linde Heavy Truck Division Ltd.
47 Linde Holdings Ltd.
48 Linde Jewsbury’s Ltd.
49 Linde Material Handling (UK) Ltd.
50 Linde Material Handling East Ltd.
51 Linde Material Handling Scotland Ltd.
52 Linde Material Handling South East Ltd.
53 Linde Severnside Ltd.
54 Linde Sterling Ltd.
55 McLEMAN FORK LIFT SERVICES LTD.
56 STILL Materials Handling Ltd.
57 Superlift UK Ltd.
Roissy Charles
de Gaulle
Marne la Vallée
Marne la Vallée
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Exeter
Basingstoke
France
France
France
France
France
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
58 KION ASIA (HONG KONG) Ltd.
Kwai Chung
Hong Kong
59 Linde Material Handling Hong Kong Ltd.
Kwai Chung
Hong Kong
60 Voltas Material Handling Pvt. Ltd.
61 Linde Material Handling (Ireland) Ltd.
62 KION Rental Services S.p.A.
63 Linde Material Handling Italia S.p.A.
64 OM Carrelli Elevatori S.p.A.
65 QUALIFT S.p.A.
66 STILL ITALIA S.p.A.
67 KION Finance S.A.
68 Superlift Funding S.à r.l.
69 STILL Intern Transport B.V.
70 AUSTRO OM PIMESPO Fördertechnik GmbH
71 Linde Fördertechnik GmbH
72 STILL Gesellschaft m.b.H.
Pune
Walkinstown
Milan
Buguggiate
Lainate
Verona
Lainate
India
Ireland
Italy
Italy
Italy
Italy
Italy
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Hendrik Ido
Ambacht
Linz
Linz
Netherlands
Austria
Austria
Wiener Neudorf
Austria
73 Linde Material Handling Polska Sp. z o.o.
Warsaw
Poland
Parent
company
shareholding
Note
34
34
42
42
34
35
35
57
49
49
49
57
49
47
49
49
49
49
49
45
57
11
11
11
83
47
63 & 64 & 66
11
11 & 66
63
18
–
1
18
64
11 & 70
18
11
86.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
–
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
[2]
[1]
We keep the world moving.KION GROUP AG | Annual Report 2013 233
list of shareholdings as of december 31, 2013 according to section 313 para. 2 No. 1 – 4 commercial code (hGB)
>> Table 117
No.
Name
74 STILL POLSKA Spólka z o.o.
75 OOO ‘Linde Material Handling Rus’
76 OOO ‘STILL Forklifttrucks’
77 STILL MOTOSTIVUITOARE S.R.L.
78 Linde Material Handling AB
79 STILL Sverige AB
80 Linde Material Handling Schweiz AG (for-
merly: Linde Lansing Fördertechnik AG)
81 STILL AG
82 KION South Asia Pte. Ltd.
83 Linde Material Handling Asia Pacific Pte. Ltd.
Registered
office
Gadki
Moscow
Moscow
Giurgiu
Örebro
Malmö
country
Poland
Russia
Russia
Romania
Sweden
Sweden
Dietlikon
Switzerland
Otelfingen
Singapore
Singapore
Switzerland
Singapore
Singapore
Slovakia
Slovakia
Slovenia
Spain
Spain
Spain
Spain
Spain
Spain
84 Linde Material Handling Slovenska republika s.r.o.
Trencin
85 STILL SR, spol. s r.o.
86 Linde Vilicar d.o.o.
87 IBER-MICAR S.L.
88 Islavista Spain S.A.U.
89 KION Rental Services S.A.U.
90 Linde Holding de Inversiones S.R.L.
91 Linde Material Handling Ibérica, S.A.U.
92 STILL, S.A.U.
Nitra
Celje
Gava
L’Hospitalet de
Llobregat
L’Hospitalet de
Llobregat
Pallejá
Pallejá
L’Hospitalet de
Llobregat
93 Linde Material Handling (Pty) Ltd.
Linbro Park
South Africa
94 Linde Material Handling Česká republika s r.o.
Prague
95 Linde Pohony s r.o.
Český Krumlov
96 STILL ČR spol. s r.o
Prague
97 STILL ARSER Iş Makineleri Servis ve Ticaret A.Ş.
Izmir
98 Linde Magyarország Anyagmozgatási Kft.
99 STILL Kft.
Dunaharaszti
Környe
Czech
Republic
Czech
Republic
Czech
Republic
Turkey
Hungary
Hungary
100 Linde Material Handling North America Corp.
Summerville
United States
Parent
company
18
11 & 3
11 & 18
11 & 18
11
18
11
18
11
11
11 & 94
18 & 96
11
11
11
88
88
90
88
11
11 & 18
shareholding
Note
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
11
100.00 %
11 & 18
100.00 %
18
11
18
11
51.00 %
[1]
100.00 %
100.00 %
100.00 %
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 234
list of shareholdings as of december 31, 2013 according to section 313 para. 2 No. 1 – 4 commercial code (hGB)
>> Table 117
No.
Name
Registered
office
country
Parent
company
shareholding
Note
Non-consolidated subsidiaries (at amortised cost)
domestic
101 Klaus Pahlke Betriebsführungs-GmbH
102 OM Deutschland GmbH
Haan
Neuhausen
a. d. Fildern
Germany
Germany
103 proplan Transport- und Lagersysteme GmbH
Aschaffenburg
Germany
104 Schrader Industriefahrzeuge Verwaltung GmbH
105 Trainingscenter für Sicherheit und Transport GmbH
106 Willenbrock Arbeitsbühnen Beteiligungs-GmbH
107 Willenbrock Fördertechnik Beteiligungs-GmbH
Essen
Bremen
Bremen
Bremen
108 Willenbrock Fördertechnik Beteiligungs-GmbH
Hannover
Germany
Germany
Germany
Germany
Germany
11
64
1
11
23
23
23
23
100.00 %
100.00 %
[R]
100.00 %
100.00 %
74.00 %
74.00 %
74.00 %
74.00 %
[1]
[1]
[1]
[1]
foreign
109 Lansing Bagnall (Aust.) Pty. Ltd.
Huntingwood
Australia
49 & 11
100.00 %
110 WHO Real Estate OÜ
111 Baoli France SAS
112 OM PIMESPO FRANCE S.A.S.
113 SCI Champ Lagarde
114 URBAN LOGISTIQUE SAS
115 Castle Lift Trucks Ltd.
116 Creighton Materials Handling Ltd.
117 D.B.S. Brand Factors Ltd.
118 Fork Truck Rentals Ltd.
119 Fork Truck Training Ltd.
120 Lancashire (Fork Truck) Services Ltd.
121 OM PIMESPO (UK) Ltd.
122 Stephensons Enterprise Fork Trucks Ltd.
123 Sterling Mechanical Handling Ltd.
124 Trifik Services Ltd.
125 Urban Logistics (UK) Ltd.
Tallinn
Elancourt
Marne la Vallée
Elancourt
Elancourt
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Estonie
France
France
France
France
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
126 Handling & Storage Equipment (Ireland) Ltd.
Walkinstown
Ireland
127 Carest SRL
128 COMMERCIALE CARRELLI S.r.l.
129 Milano Carrelli Elevatori S.r.l.
130 URBAN LOGISTIKA S.R.L.
131 WHO Real Estate UAB
132 TOO ‘Linde Material Handling Kazakhstan’
133 Linde Material Handling (Malaysia) Sdn. Bhd.
134 Linde Viljuskari d.o.o.
Lainate
Lainate
Monza
Lainate
Vilnius
Almaty
Shah Alam
Belgrade
Italy
Italy
Italy
Italy
Lithuania
Kazakhstan
Malaysia
Serbia
23
35
64
34
19
49
49
54
49
49
54
64
54
49
49
19
61
64
66 & 62
64
19
23
11 & 3
83
71
74.00 %
[1]
100.00 %
100.00 %
[R]
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
100.00 %
[R]
100.00 %
74.00 %
100.00 %
100.00 %
100.00 %
[1]
[1]
We keep the world moving.KION GROUP AG | Annual Report 2013 235
list of shareholdings as of december 31, 2013 according to section 313 para. 2 No. 1 – 4 commercial code (hGB)
>> Table 117
No.
Name
135 STILL VILICAR d.o.o.
136 Linde Material Handling (Thailand) Co., Ltd.
137 Baoli Material Handling Česká republika s r.o.
Registered
office
Ljubljana
Bangkok
Teplice
138 Urban Transporte spol. s.r.o.
Moravany u Brna
139 TOV ‘Linde Material Handling Ukraine’
Kiev
country
Slovenia
Thailand
Czech
Republic
Czech
Republic
Ukraine
Parent
company
18
83
94
19
shareholding
Note
100.00 %
100.00 %
[1]
100.00 %
100.00 %
11 & 3
100.00 %
associates (at-equity investments)
domestic
140 Beutlhauser-Bassewitz GmbH & Co. KG
141 Hans Joachim Jetschke Industriefahrzeuge
Hagelstadt
Hamburg
Germany
Germany
(GmbH & Co.) KG
142 Linde Leasing GmbH
143 Linde Hydraulics GmbH & Co. KG
144 MV Fördertechnik GmbH
145 Pelzer Fördertechnik GmbH
foreign
Wiesbaden
Germany
Aschaffenburg
Germany
Blankenhain
Kerpen
Germany
Germany
146 Linde High Lift Chile S.A.
Santiago de Chile Chile
Joint Ventures (at-equity investments)
foreign
11
11
11
11
11
11
11
25.00 %
21.00 %
45.00 %
30.00 %
25.00 %
24.96 %
45.00 %
147 JULI Motorenwerk s.r.o.
Moravany
Czech
Republic
11 & 18
50.00 %
Joint Ventures (at amortised cost)
domestic
148 Eisengießerei Dinklage GmbH
Dinklage
Germany
18
50.00 %
associates (at amortised cost)
domestic
149 JETSCHKE GmbH
Hamburg
Germany
150 Linde Hydraulics Verwaltungs GmbH
Aschaffenburg
Germany
151 Supralift Beteiligungs- und Kommunikations-
gesellschaft mbH
152 Supralift GmbH & Co. KG
Hofheim
am Taunus
Hofheim
am Taunus
Germany
Germany
11
11
11
11
22.00 %
30.00 %
50.00 %
50.00 %
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 236
list of shareholdings as of december 31, 2013 according to section 313 para. 2 No. 1 – 4 commercial code (hGB)
>> Table 117
No.
Name
foreign
153 Labrosse Equipement S.A.
154 Normandie Manutention S.A.
155 Chadwick Materials Handling Ltd.
156 EUROPA CARRELLI S.R.L.
157 Nordtruck AB
158 Carretillas Elevadoras Sudeste S.A.
159 CAYSA MANUTENCION S.L.
160 Motorové závody JULI CZ s r.o.
other investments (at amortised cost)
foreign
Registered
office
country
Parent
company
shareholding
Note
Saint-Peray
France
Le Grand Quevilly
France
Corsham
Bastia Umbra
U.K.
Italy
Örnsköldsvik
Sweden
Murcia
Valladolid
Moravany
Spain
Spain
Czech
Republic
34
34
49
66
78
91
91 & 158
11
34.00 %
34.00 %
48.00 %
40.00 %
25.00 %
38.53 %
46.71 %
50.00 %
161 TPZ Linde Vilicari Hrvatska d.o.o.
Zagreb
Croatia
11
20.00 %
[3]
[1] New during 2013
[2] Consolidated as required by IAS 27 in conjunction with SIC-12 Consolidation – Special Purpose Entities
[3] No material influence
[R] Dormant company
We keep the world moving.KION GROUP AG | Annual Report 2013 237
[46] auditors’ fees
[49] information on preparation
and approval
The fees recognised as an expense and paid to the auditors of the
consolidated financial statements in 2013 amounted to €0.9 million
The Executive Board of KION GROUP AG prepared the consolidated
(2012: €1.0 million) for the audit of the financial statements, €1.4 mil-
financial statements on 10 March 2014 and approved them for for-
lion (2012: €0.7 million) for other attestation services, €0.4 million
warding to the Supervisory Board. The Supervisory Board has the
(2012: €0.4 million) for tax consultancy services and €0.0 million
task of examining and deciding whether to approve the consolidated
(2012: €0.0 million) for other services.
financial statements.
[47] Comply-or-explain statement
regarding the german Corpo-
rate governanCe Code (dCgk)
Wiesbaden, 10 March 2014
The Executive Board
In December 2013, the Executive Board and Supervisory Board of
KION GROUP AG submitted their comply-or-explain statement for
Gordon Riske
Bert-Jan Knoef
2013 relating to the recommendations of the German Corporate
Governance Code government commission pursuant to section 161
AktG. The comply-or-explain statement has been made perma-
nently available to shareholders on the website of KION GROUP AG
at kiongroup.com/comply_statement.
[48] events after the
reporting date
Theodor Maurer
Ching Pong Quek
In the period between the reporting date and 10 March 2014 there
were no events or developments that would have led to a material
change in the recognition or measurement of the individual assets
and liabilities as at 31 December 2013 or that it would be necessary
to disclose.
Dr Thomas Toepfer
We keep the world moving.KION GROUP AG | Annual Report 2013Notes to the coNsolidated fiNaNcial statemeNtsOther disclosures 238238
Auditors’ opinion
We have audited the consolidated financial statements prepared by
In our opinion, based on the findings of our audit, the consolidated
KION GROUP AG, Wiesbaden / Germany, – comprising the consoli-
financial statements of KION GROUP AG, Wiesbaden / Germany,
dated income statement, consolidated statement of comprehensive
comply with IFRS, as adopted by the EU, as well as the regulations
income, consolidated statement of financial position, consolidated
under German commercial law complementarily applicable under
statement of cash flows, consolidated statement of changes in
§ 315a (1) German Commercial Code (HGB) and give a true and fair
equity and the notes to the consolidated financial statements – and
view of the net assets, financial position and results of operations
the group management report for the business year from 1 January
of the Group in accordance with these requirements. The group
to 31 December 2013. The preparation of the consolidated financial
management report is consistent with the consolidated financial
statements and the group management report in accordance with
statements and as a whole provides a suitable view of the Group’s
IFRS, as adopted by the EU, as well as the regulations under German
position and suitably presents the opportunities and risks of future
commercial law complementarily applicable under § 315a (1) Ger-
development.
man Commercial Code (HGB) are the responsibility of the parent
company’s Executive Board. Our responsibility is to express an opin-
Frankfurt am Main / Germany, 10 March 2014
ion on the consolidated financial statements and on the group man-
agement report based on our audit.
We conducted our audit of the consolidated financial statements in
accordance with § 317 HGB ("German Commercial Code") and Ger-
man generally accepted standards for the audit of financial state-
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
ments promulgated by the Institut der Wirtschaftsprüfer. Those
Signed: Crampton
standards require that we plan and perform the audit such that mis-
Wirtschaftsprüfer
Signed: J. Löffler
Wirtschaftsprüfer
statements materially affecting the presentation of the net assets,
(German Public Auditor)
(German Public Auditor)
financial position and results of operations in the consolidated finan-
cial statements in accordance with the applicable financial reporting
framework and in the group management report are detected with
reasonable assurance. Knowledge of the business activities and the
economic and legal environment of the Group and expectations as
to possible misstatements are taken into account in the determina-
tion of audit procedures. The effectiveness of the accounting-related
internal control system and the evidence supporting the disclosures
in the consolidated financial statements and the group management
report are examined primarily on a test basis within the framework of
the audit. The audit includes assessing the annual financial statements
of those entities included in consolidation, the determination of enti-
ties to be included in consolidation, the accounting and consolida-
tion principles used and significant estimates made by the Executive
Board, as well as evaluating the overall presentation of the consoli-
dated financial statements and the group management report. We
believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
We keep the world moving.KION GROUP AG | Annual Report 2013
Notes to the coNsolidated fiNaNcial statemeNts
239
Auditors’ opinion
Responsibility statement
Responsibility statement
To the best of our knowledge, and in accordance with the applicable
reporting principles for consolidated financial reporting, the consoli-
dated financial statements give a true and fair view of the financial
performance and financial position of the Group, and the manage-
ment report of the Group includes a fair review of the development
and performance of the business and the position of the Group,
together with a description of the principal opportunities and risks
associated with the expected development of the Group.
Wiesbaden, 10 March 2014
The Executive Board
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
We keep the world moving.KION GROUP AG | Annual Report 2013 AdditionAl informAtion
Contents
241
Additional information
QuArterly informAtion
multi-yeAr overview
disclAimer
finAnciAl cAlendAr
contAct
242
243
244
245
245
KION GROUP AG | Annual Report 2013
We keep the world moving.
242
Quarterly information
Kion Group overview
in € million
Order intake
Revenue
EBIT
Adjusted EBIT
Adjusted EBIT margin
Adjusted EBITDA
Adjusted EBITDA margin
Free cash flow
Net financial debt
Q4 2013
1,192.5
1,177.8
107.4
115.6
9.8 %
194.2
16.5 %
134.9
979.3
Q3 2013
1,046.4
1,082.3
88.8
100.5
9.3 %
175.9
16.3 %
52.2
1,056.6
Q2 2013
1,104.8
1,149.3
91.5
107.6
9.4 %
183.5
16.0 %
20.2
1,701.6
>> Table 118
Q1 2013
1,145.3
1,085.2
86.4
92.8
8.5 %
167.9
15.5 %
– 4.7
1,824.4
We keep the world moving.KION GROUP AG | Annual Report 2013
243
Multi-year overview
Kion Group multi-year overview
>> Table 119
in € million
Order intake
Revenue
Order book 1
results of operation
EBITDA
Adjusted EBITDA 2
Adjusted EBITDA margin 2
EBIT
Adjusted EBIT 2
Adjusted EBIT margin 2
2013
4,489.1
4,494.6
693.3
708.8
721.5
16.1 %
374.2
416.5
9.3 %
2012 *
4,590.3
4,559.8
807.8
914.4
700.5
15.4 %
549.1
408.3
9.0 %
2012
4,700.1
4,726.7
807.8
915.4
747.3
15.8 %
550.1
438.2
9.3 %
2011
4,681.9
4,368.4
953.0
569.2
665.3
15.2 %
213.2
364.6
8.3 %
2010
3,859.7
3,534.5
801.3
380.2
462.2
13.1 %
34.6
139.4
3.9 %
2009
3,028.2
3,084.3
533.0
183.0
310.8
10.1 %
– 181.9
– 29.1
– 0.9 %
Net income (loss) 3
138.4
161.4
161.1
– 92.9
– 196.7
– 366.2
financial position 1
Total assets
Equity
Net financial debt
cash flow
Free cash flow 4
Capital expenditure 5
6,026.4
1,610.0
979.3
6,213.2
660.7
1,790.1
6,213.2
660.3
1,790.1
6,066.3
– 487.6
2,631.3
5,758.9
– 399.9
2,626.0
5,814.9
– 213.0
2,464.2
202.6
125.8
518.1
155.1
518.1
155.1
234.2
133.0
76.0
123.5
34.0
108.2
employees 6
22,273
21,215
21,215
21,862
19,968
19,953
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011); Order intake, Revenue, adjusted EBIT and adjusted EBITDA were aligned due to the Hydraulics Business
1 Values as at balance sheet date 31/12/
2 Adjusted for KION acquisition items and one-off items
3 Net income 2012 included a net gain from the Weichai transaction in the amount of €154.8 million
4 Free cash flow is defined as Cash flow from operating activities plus Cash flow used in investing activities
5 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
6 Number of employees in full-time equivalents as at balance sheet date 31/12/
AdditionAl informAtionQuarterly informationMulti-year overviewWe keep the world moving.KION GROUP AG | Annual Report 2013
244244
DIsClAImeR
forward-looking statements
This annual report contains forward-looking statements that relate to the current plans,
objectives, forecasts and estimates of the management of KION GROUP AG. These state-
ments only take into account information that was available up and including the date that this
annual report was prepared. The management of KION GROUP AG makes no guarantee that
these forward-looking statements will prove to be right. The future development of the KION
GROUP AG and its subsidiaries and the results that are actually achieved are subject to a
variety of risks and uncertainties which could cause actual events or results to differ signifi-
cantly from those reflected in the forward-looking statements. Many of these factors are
beyond the control of KION GROUP AG and its subsidiaries and therefore cannot be pre-
cisely predicted. Such factors include, but are not limited to, changes in economic conditions
and the competitive situation, changes in the law, interest rate or exchange rate fluctuations,
legal disputes and investigations, and the availability of funds. These and other risks and
uncertainties are set forth in the 2013 group management report. However, other factors
could also have an adverse effect on our business performance and results. The KION
GROUP AG neither intends to nor assumes any separate obligation to update forward-look-
ing statements or to change these to reflect events or developments that occur after the pub-
lication of this annual report.
rounding
Certain numbers in this annual report have been rounded up or down. There may therefore be
discrepancies between the actual totals of the individual amounts in the tables and the totals
shown as well as between the numbers in the tables and the numbers given in the corre-
sponding analyses in the text of the annual report. All percentage changes and key figures
were calculated using the underlying data in thousands of euros (€ thousand).
We keep the world moving.KION GROUP AG | Annual Report 2013 245245
FINANCIAl CAleNDAR
CONtACt
20 march 2014
contacts for the media
contacts for investors
Financial statements press conference
Publication of 2013 Annual Report
michael Hauger
frank w. Herzog
8 may 2014
Phone: +49 (0) 611.770-655
Phone: +49 (0) 611.770-303
Interim report for the period
michael.hauger@kiongroup.com
frank.herzog@kiongroup.com
Head of Corporate Communications
Head of Corporate Finance
ended 31 March 2014
19 may 2014
Head of Corporate Media Relations
Head of Investor Relations and M&A
Annual General Meeting
Phone: +49 (0) 611.770-752
Phone: +49 (0) 611.770-450
frank.brandmaier@kiongroup.com
silke.glitza@kiongroup.com
frank Brandmaier
silke Glitza
6 August 2014
Interim report for the period
ended 30 June 2014
5 november 2014
Interim report for the nine months
ended 30 September 2014
Subject to change without notice
Securities identification numbers
KION GROUP AG
ISIN: DE000KGX8881
WKN: KGX888
Abraham-Lincoln-Strasse 21
65189 Wiesbaden
Phone: +49 (0) 611.770-0
Fax: +49 (0) 611.770-269
info@kiongroup.com
www.kiongroup.com
This annual report is available in German and English at
kiongroup.com under Investor Relations / Financial Reports.
Only the content of the German version is authoritative.
We keep the world moving.KION GROUP AG | Annual Report 2013AdditionAl informAtionDisclaimerFinancial calendar/Contact Publisher
KION GROUP AG
Corporate Communications
Abraham-Lincoln-Strasse 21
65189 Wiesbaden | Germany
Phone: +49 (0) 611.770-0
Fax: +49 (0) 611.770-269
info@kiongroup.com
www.kiongroup.com