ANNUAL REPORT
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KION Group
– Key figures for 2015
KION Group overview
in € million
Order intake 1
Revenue
Order book 1, 2
Financial performance
EBITDA
Adjusted EBITDA 3
Adjusted EBITDA margin 3
EBIT
Adjusted EBIT 3
Adjusted EBIT margin 3
2015
5,215.6
5,097.9
864.0
824.2
850.0
16.7%
422.8
482.9
9.5%
2014
4,771.2
4,677.9
764.1
714.2
780.4
16.7%
347.0
442.9
9.5%
2013
4,489.1
4,494.6
693.3
708.8
721.5
16.1%
374.2
416.5
9.3%
Change
2015/2014
9.3%
9.0%
13.1%
15.4%
8.9%
–
21.8%
9.0%
–
Net income
221.1
178.2
138.4
24.0%
Financial position 2
Total assets
Equity
Net financial debt
ROCE 4
Cash flow
Free cash flow 5
Capital expenditures 6
6,440.2
1,848.7
573.5
11.9%
332.7
142.6
6,128.5
1,647.1
810.7
11.4%
305.9
133.1
6,026.4
1,610.0
979.3
–
195.6
125.8
5.1%
12.2%
– 29.3%
–
8.8%
7.1%
Employees 7
23,506
22,669
22,273
3.7%
1 Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015.
2 Figures as at balance sheet date 31/12/
3 Adjusted for KION acquisition items and non-recurring items
4 ROCE is defined as the proportion of EBIT adjusted to capital employed.
5 Free cash flow is defined as cash flow from operating activities plus cash flow from investing activities.
6 Capital expenditure including capitalised development costs, excluding leased and rental assets
7 Number of employees (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
presented may result in minor rounding differences. The percentages shown are calculated on the basis of the respective amounts,
rounded to the nearest thousand euros.
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ANNUAL REPORT
2015
I N N O V A T I O N
How do we take
f u l l a d v a n t a g e
o f o u r g l o b a l
s t r u c t u re? –
H ow i s th e fo u r th
i n d u s t r i a l
r e v o l u t i o n
changing our sector?
– How do we
m a k e p r o d u c t s
& p r o d u c t i o n
even more efficient?
– H o w d o
w e b u i l d o n o u r
success and that of
our customers?
Features, background information
and interviews:
We showcase how we are driving innovation
worldwide in our web special at:
kiongroup.com/
innovation
The KION Group sells forklift trucks, warehouse
technology and associated services from its
seven brand companies around the world. It is
the European market leader, number two in the
world and a leading international supplier in China.
Linde and STILL serve the premium segment
worldwide, while Baoli focuses on the economy
segment. 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. Egemin Automation is a leading Belgian
logistics automation specialist.
Building on these strong foundations, the KION
Group and its approximately 23,500 employees
generated revenue of €5.1 billion in 2015, never
losing sight of what is most important: our custo-
mers, innovation and quality. We give concrete
illustrations of how this works in practice in the
innovation section of the report. And because
our passion for innovation extends to our annual
reports too, we provide in-depth features on
our website, where further stories will be added
over the course of the year.
We keep the world moving.
KION Group
– Investment Highlights
ATTRACTIVE
MARKET ...
GLOBAL
LEADER ...
TECHNOLOGY
LEADERSHIP ...
INTEGRATED
BUSINESS
MODEL ...
PROFITABILITY
BENCHMARK ...
STRATEGY
2020 ...
... with growth profile
... strong home base
... drives premium
… robust, with a
... well prepared
... for profitable
above GDP
and well positioned
positioning and
high share of service
for future value
growth
in growth markets
customer value
revenue
creation
KION Group
– Segments
LINDE MATERIAL HANDLING
STILL
FINANCIAL SERVICES (FS)
OTHER
The Linde Material Handling
The STILL and OM STILL
The purpose of the Financial
The Other segment comprises
segment encompasses the Linde,
brands are grouped in the STILL
Services (FS) segment is to act
Egemin Automation as well as
Fenwick, Baoli and Voltas
segment.
as an internal funding partner
holding and service companies,
brands.
for Linde Material Handling and
that provide services across all
STILL, providing finance solutions
segments.
that promote sales.
€3,429.8 million
€1,950.2 million
€740.3 million
€252.8 million
REVENUE
REVENUE
REVENUE
REVENUE
€383.9 million
€144.0 million
– €1.8 million
€155.3 million
ADJUSTED EBIT
ADJUSTED EBIT
ADJUSTED EBIT
ADJUSTED EBIT 1
14,486
EMPLOYEES
8,103
EMPLOYEES
59
EMPLOYEES
858
EMPLOYEES
1 before consolidation
BREAKDOWN OF TOTAL REVENUE IN 2015
BREAKDOWN OF ADJUSTED EBIT IN 2015
60.0%
LINDE MATERIAL
HANDLING
30.8%
STILL
8.2%
FINANCIAL SERVICES
1.0%
OTHER
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
– 10%
79.5%
29.8%
– 0.4%
– 8.9%
LINDE
MATERIAL
HANDLING
STILL
FINANCIAL
SERVICES
OTHER 2
2 including effects of consolidation / reconciliation
KION Group
– Company profile
Linde is a global premium
STILL is predominantly a
The Baoli brand covers the
Egemin Automation offers
brand and a technology
global premium provider
value and economy seg-
customized solutions for
leader that has many years’
of trucks with electric and
ments in China and other
the automation of logistics
experience of hydrostatic
diesel-electric drives. It
emerging markets in Asia,
in warehouses, distribution
drive technology. It has
mainly focuses on the
eastern Europe, the Middle
centres and factories. It de-
also been developing and
European and Latin Ame-
East, Africa, and Central
livers automated warehouse
manufacturing electric drive
rican markets. Its portfolio
and South America.
systems, automated guided
systems for decades and
consists of forklift trucks
makes the resulting expertise
and warehouse trucks plus
available to external custo-
associated services. STILL
mers for use in a variety of
has also positioned itself as
applications.
a leading provider of intelli-
gent intralogistics solutions.
vehicles and in-floor chain
conveyors.
In France, Linde products
In Italy, STILL products are
Voltas is a leading provider
are sold under the Fenwick
sold under the OM STILL
of industrial trucks in India.
brand. Fenwick is the biggest
brand. OM STILL is a market
It manufactures diesel trucks,
material-handling provider
leader in Italy and offers both
electric forklift trucks and
in France. Fenwick and Linde
trucks and fully integrated
warehouse trucks for the
meet customers’ most so-
warehouse systems, including
Indian market and can draw
phisticated requirements in
automation and fleet manage-
on a network of more than
terms of technology, efficiency,
ment solutions.
50 dealers providing sales
functionality and design.
and service.
PRODUCTS AND SERVICES
Diesel and
LPG forklift trucks
Service contracts
Electric forklift trucks
Ad hoc service
Fleet data management
Automation
Warehouse handling
equipment
Platform trucks
and tractors
Spare parts
Stock management and
transport control systems
Rental
RFID systems
Used trucks
Racking systems
Direct sale
Leasing
KION leasing via
Financial Services
PRODUCTS
SERVICE
SOLUTIONS
FINANCING
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ANNUAL REPORT
2015
Register for our
– newsletter
kiongroup.com/
newsletter
Investor
– Relations
kiongroup.com/
ir
Facts, figures –
& key data
reports.kiongroup.com
The KION Group sells forklift trucks, warehouse
technology and associated services from its
seven brand companies around the world. It is
the European market leader, number two in the
world and a leading international supplier in China.
Linde and STILL serve the premium segment
worldwide, while Baoli focuses on the economy
segment. 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. Egemin Automation is a leading Belgian
logistics automation specialist.
Building on these strong foundations, the KION
Group and its approximately 23,500 employees
generated revenue of €5.1 billion in 2015, never
losing sight of what is most important: our custo-
mers, innovation and quality. We give concrete
illustrations of how this works in practice in the
innovation section of the report. And because
our passion for innovation extends to our annual
reports too, we provide in-depth features on
our website, where further stories will be added
over the course of the year.
We keep the world moving.
Contents
A
4
6
8
18
21
B
24
33
38
C
54
66
94
95
D
108
109
110
112
114
116
220
221
E
224
225
226
227
227
TO OUR SHAREHOLDERS
Letter to shareholders
Executive Board
Report of the Supervisory Board
KION shares
Services for shareholders
CORPORATE GOVERNANCE
Corporate governance report
Disclosures relevant to acquisitions
Remuneration report
GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
Report on the economic position
Events after the reporting date
Outlook, risk report and opportunity report
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
Auditors’ report
Responsibility statement
ADDITIONAL INFORMATION
Quarterly information
Multi-year overview
Disclaimer
Financial calendar
Contact
Whether in products, production, sales or
human resources, innovation can be found
throughout the KION Group. And it serves
just one purpose: helping our customers
to create value. Around the world and
around the clock. Features, background
information and interviews showcase how
the KION Group is turning ideas into
innovations. Online.
kiongroup.com/
innovation
Thinking globally
– for greater
added value
Questioning
the status quo
– for optimum
solutions
Integrating machines
and processes
– for intelligent
systems
Understanding
innovation – for a 360° view
of markets and
customers
KION GROUP MAGAZINE
2015
Features,
– background
information
& inter views
We showcase how we are driving
innovation worldwide in our web
special at:
kiongroup.com/
innovation
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02
I N N O VAT I O N
I N T E R V I E W
K I O N G R O U P A G
MOVING FORWARD Gordon Riske
– & Eike Böhm,
a dialogue
03
Mr Riske, what does innovation mean
– E I K E B Ö H M : And the other area is our
to you?
relationship with our customers. Under-
– G O R D O N R I S K E : I would say an idea
standing their business and how we can
turns into innovation when it’s useful for
support them with our solutions is very
the customer. So you come up with a new
important.
product, a new service, a new solution
– G O R D O N R I S K E : Experience shows
that the customer really wants to use. And
that customers are often very willing to pay
we don’t innovate merely for the sake of
even for simple, but incremental innovations.
innovating. We innovate so that our cus-
Innovations that improve their process and
tomers can increase their profitability and
reduce costs.
performance.
– E I K E B Ö H M : And in the end if the cus-
But, ultimately, how does innovation at
tomer is willing to pay for this because it
KION go beyond purely technological
creates benefits, then it is a true innovation.
aspects?
– G O R D O N R I S K E : Innovation touches
Mr Böhm, innovation is your day-to-
every part of our company. Every depart-
day business, how do you tackle this
ment, every function.
issue?
– E I K E B Ö H M : We pursue a very holistic
– E I K E B Ö H M : When I talk about innova-
approach to innovation at KION. We look
tion in my daily job, I have to distinguish
to products, we look to processes, we look
between two main areas. One is the pure
to organisational issues. Most importantly,
technology side. There is innovation in
we have a real innovative spirit throughout
the university and science community that
the entire organisation. Because at the
we at KION have to watch very closely.
end of the day the strength of an organisa-
We have to know and understand what’s
tion’s innovation depends on a healthy
going on there and always ask ourselves:
corporate culture that promotes and facili-
can we use these innovations for our
tates innovation.
customers?
– G O R D O N R I S K E : Monetising those
technology trends that are out there is
crucial for KION.
kiongroup.com/
interview
We keep the world moving.
04
S T R AT E GY
2 0 2 0
K I O N G R O U P A G
MOVING FORWARD S T R AT E GY
2 0 2 0
05
Thinking globally
– for greater
added value
To achieve the full impact of our KION Strategy 2020,
we have to think globally. We are a serious global player,
represented in over 100 countries. Our 23,500-plus
employees play their part each and every day to ensure
that supermarket shelves are always fully stocked, that
online bargains are delivered on schedule, and that
components reach the assembly line just in time. Some
1,400 sales and service outlets with almost 14,000 service
engineers around the world guarantee that the KION
Group and its seven brands are always on track in their
mission to create value for their customers.
And it is no different for our production operations, which
consist of 13 facilities for the production of industrial
trucks in 9 countries. From Hamburg in Germany, or Holland
in the US state of Michigan all the way to Indaiatuba
near São Paulo in Brazil, or Pune in India. From Summer-
ville in South Carolina, USA, to Xiamen or Jingjiang
in eastern China. From Châtellerault in France to Stříbro
in the Czech Republic via Aschaffenburg in Germany.
Our global structure gives us huge potential to work even
more efficiently and strategically to meet our clients’
requirements – no matter where in the world they will be
using our equipment. Because the KION Group intelligently
combines its expertise and its skills. No matter where.
We keep the world moving.
MOVING FORWARD 06
B R O O K F I E L D , W I
U S A
M O V I N G
F O R WA R D
S T R AT E GY
2 0 2 0
The demand:
from the USA
After 25 years in the industry, Jerry
Weidmann really knows his stuff.
And he knows that with a wider
range of Linde products – such as
a vertical order picker – he can
increase his sales.
kiongroup.com/
opportunities
K I O N G R O U P A G
M O V I N G
F O R WA R D
S T R AT E GY
2 0 2 0
07
For instance, the vertical order picker that the KION Group
is developing around the world for the North American
market, where there is growing demand for a warehouse
truck that can load high-bay storage racks. Seven thou-
sand kilometres to the east, at KION Warehouse Systems
in Reutlingen, south-west Germany, a wealth of product
knowledge is being channelled into this project.
And another 9,000 kilometres further east, in the Chinese
city of Xiamen where around a third of our 1,000-plus
developers are based, engineers are taking it from series
development through to production readiness – all to
increase our market share in North America. And the
vertical order picker will be made available in China too.
This is just one example of how the KION Group uses
platforms, and more importantly an example of how
we can exploit the full potential of our Strategy 2020.
Globally.
B R O O K F I E L D , W I
U S A
R E U T L I N G E N
G E R M A N Y
X I A M E N
C H I N A
R E U T L I N G E N
G E R M A N Y
The know-how:
from Reutlingen
Jürgen Greiner: “KWS is the only
site in the KION Group that has the
necessary knowledge and expertise
to develop and manufacture very
narrow aisle trucks.”
X I A M E N
C H I N A
Concept, design
and implementation:
from China
Udo Supp’s team in Xiamen acts as the
bridge between the global sites.
We keep the world moving.
08
I N D U S T R I A L
R E V O LU T I O N
K I O N G R O U P A G
MOVING FORWARD I N D U S T R I A L
R E V O LU T I O N
09
Integrating machines
and processes
– for intelligent systems
The physical and digital worlds are merging, things are
starting to communicate with other things, the personalised
product on the conveyor belt is no longer the stuff of fantasy.
The magic words here are flexibility and efficiency. People
are talking about the fourth industrial revolution. But there
could be no Industry 4.0, no Industrial Internet of Things,
without Intralogistics 4.0. This all revolves around automation,
systems integration and fishing for information from an ocean
of data, resulting in a seamless, flexible and efficient value
creation process in the movement of goods. One of the major
drivers behind this is the booming online retail sector, with
its returns service and the trend towards same-day delivery
of orders.
The KION Group is, of course, geared up for these changes.
Intelligent and fully electronic control systems have long been
a reality for us. We are networking machinery, products and
processes, laying the foundations for Intralogistics 4.0, for
intelligent supply chains in factories and warehouses. Fleet
data management systems such as Linde’s ‘connect:’ or
STILL’s FleetManager enable customers to make use of vast
quantities of data about their trucks, including operating
hours and energy consumption. The goal is higher efficiency
and lower costs.
We already offered award-winning automation solutions such as
the iGoEasy from STILL, but since Egemin Automation became
KION’s seventh brand, our portfolio now includes all-encompassing
intralogistics systems. And in the huge market of North America,
Egemin expanded its own automation offerings at the start of 2016
by acquiring the systems integrator Retrotech – major milestones
on our journey to the very top of a highly attractive market for
automated logistics and materials flow systems.
We keep the world moving.
MOVING FORWARD 10
I N D U S T R I A L
R E V O LU T I O N
Fishing from an
ocean of data
Fleet management solutions like the
ones being used at Villeroy & Boch
have only one objective: getting the
best out of the trucks.
M E T T L A C H
G E R M A N Y
kiongroup.com/
industrial_
revolution
K I O N G R O U P A G
China’s online
boom
Business is booming at online retail-
ers in China such as JD.com. This is
presenting new logistical challenges.
And so automation is the word on
everybody’s lips.
B E I J I N G
C H I N A
kiongroup.com/
industrial_
revolution
MOVING FORWARD M O V I N G
F O R WA R D
I N D U S T R I A L
R E V O LU T I O N
A N T W E R P
B E LG I U M
11
11
“Like a trip to
the moon”
Intralogistics 4.0 and automation
are the focus of our interview
with Yves Gazin, Global Strategic
Solutions Manager at Egemin
Automation.
kiongroup.com/
industrial_
revolution
We keep the world moving.
12
P R O D U C T S A N D
P R O D U C T I O N
K I O N G R O U P A G
MOVING FORWARD P R O D U C T S A N D
P R O D U C T I O N
13
Questioning the
status quo
– for optimum
solutions
It is not often that a company gets the chance to rethink
everything, but that’s precisely what we have done with
the state-of-the-art KION plant in the Czech town of Stříbro.
Existing processes were scrutinised and, where necessary,
redefined and, most importantly, networked and made
transparent. We use computer technology to control,
monitor and document processes. The local workers are
well-trained, the infrastructure is excellent. These factors,
combined with the local cost benefits, ensure efficient
production at the site.
We are also investing in our core Linde and STILL plants
in Aschaffenburg and Hamburg to optimise processes
and to further streamline production. By 2021 a total of
€83 million will have been put into the two facilities over
the course of seven years. The goal is to further improve
the competitiveness and cost efficiency of the core plants
and to create the capacity for medium-term growth.
Besides making our production more efficient, we are
always focused on using innovation to make our products
more efficient and increasing the benefit for our customers.
Fuel cell technology is a case in point. A truck takes
just three minutes to fully refuel with hydrogen and
then it’s ready to be used – for quiet, clean and efficient
operation. KION’s premium brands, Linde and STILL,
are also using highly promising lithium-ion battery tech-
nology. What makes this technology so valuable to
customers is that it gives them constant performance,
high productivity and low energy consumption. Ultimately,
it gives them efficiency.
We keep the world moving.
MOVING FORWARD 14
M O V I N G
F O R WA R D
P R O D U C T S A N D
P R O D U C T I O N
S T Ř Í B R O
C Z E C H R E P U B L I C
As smart as
they come
In 2016, in the Czech Republic, the
KION Group opened its most modern
factory to date. Linde COO Sabine
Neuß talks about challenges and
perspectives.
kiongroup.com/
production
K I O N G R O U P A G
P R O D U C T S A N D
P R O D U C T I O N
15
Future
technology II
The Mercedes-Benz plant in
Düsseldorf is trialling fuel-cell trucks.
Our visit was charged with excitement.
D Ü S S E L D O R F
G E R M A N Y
kiongroup.com/
production
Future
technology I
The market may still be hesitant.
But electric forklift trucks powered
by lithium-ion batteries offer a
whole host of benefits. Just ask
Danone.
L E M O L AY- L I T T R Y
F R A N C E
kiongroup.com/
production
Synergy in action
Weichai Power is not just the KION
Group’s anchor shareholder. Its
engines also power Baoli trucks.
J I N G J I A N G
C H I N A
kiongroup.com/
production
We keep the world moving.
MOVING FORWARD 16
O U R
C U S TO M E R S
K I O N G R O U P A G
MOVING FORWARD O U R
C U S TO M E R S
17
Understanding
innovation – for a
360° view of markets
and customers
For the KION Group, innovation is much more than just
the technology in our products and in our production.
You only have to look at sales and marketing. Potential
customers of any of our brands no longer have to go to
the dealer for an overview of the equipment available.
Whether it’s a new, pre-owned or rental truck – customers
can now find what they’re looking for using an app or the
online product advisor. Or the truck itself comes to the
customer – as with KION North America’s Ranger project.
And the KION Group does not consider innovation to
be the preserve of highly developed countries like those
in western Europe. Our mission to fully understand our
customers’ problems and help them find the most effective
and efficient solution is a mission shared by KION brands
the world over – whether it’s in the tropical heat of Malaysia,
in the sugarcane fields of Brazil, or in the vast warehouses
of India.
Innovation would not be possible without the highly
motivated, highly trained employees who work for the
KION Group – right across the planet. Young female
apprentices in the male-dominated field of mechatronics,
for example at STILL in Hamburg, are as fundamental
to this progression as the development programmes for
future talents in India, who aspire to escape the poverty
of their villages through enthusiasm, skill and commitment
at work. All this is focused on just one goal: helping to
add value for KION Group customers.
We keep the world moving.
MOVING FORWARD 18
O U R
C U S TO M E R S
Innovation...
… does not just take place in the
high-tech R&D departments of the
west. In Malaysia, dealer Dato Sri Lau
Koo San can offer his customers
exactly what they need to make their
businesses a success.
K U A L A L U M P U R
M A L AYS I A
kiongroup.com/
customers
K U A L A L U M P U R
M A L AYS I A
Reaching new
heights in India
In India, too, warehouses are
getting taller and taller. KION
India’s innovative, low-cost solutions
help to meet customers’ ever-
changing needs.
A H M E D A B A D
I N D I A
kiongroup.com/
customers
K I O N G R O U P A G
MOVING FORWARD M O V I N G
F O R WA R D
O U R
C U S T O M E R S
19
K U A L A L U M P U R
M A L AYS I A
... is everywhere
Customers like Syn Hee Container
Services appreciate the benefits that
it brings: “Baoli trucks are more
manoeuvrable and cheaper to operate
than the bulky container handlers,”
says depot manager Tan Han Leng.
kiongroup.com/
customers
We keep the world moving.
20
M O V I N G
F O R WA R D
O U R
C U S T O M E R S
AT L A N TA , G A
U S A
Customer
closeness
Innovation at the KION Group means
being able to go in new directions in
all parts of the business – including in
sales. KION North America’s ‘rangers’
help it to keep its finger on the pulse
of the market.
kiongroup.com/
customers
K I O N G R O U P A G
O U R
C U S TO M E R S
21
Upwardly
mobile
Nurturing talent and rewarding
performance are at the heart of
the KION Group’s success.
No matter where. Shivaji Bajad is
forging an impressive career,
made possible by opportunities
offered by Voltas.
P U N E
I N D I A
kiongroup.com/
customers
Challenging
stereotypes
A traditionally male domain? Not a bit of it.
For Maren Schwabe and Judith Henseler,
training to become a mechatronics engineer
is the most normal thing in the world. And
an exciting one, too.
H A M B U R G
G E R M A N Y
kiongroup.com/
customers
We keep the world moving.
MOVING FORWARD KION GROUP AG
Corporate Communications
Abraham-Lincoln-Strasse 21
65189 Wiesbaden | Germany
Phone: +49 611 770 0
Fax: +49 611 770 269
info@kiongroup.com
www.kiongroup.com
TO OUR SHAREHOLDERS
Contents
3
To our Shareholders
4
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21
LETTER TO SHAREHOLDERS
EXECUTIVE BOARD
REPORT OF THE SUPERVISORY BOARD
KION SHARES
SERVICES FOR SHAREHOLDERS
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KION GROUP AG | Annual Report 2015
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Letter to shareholders
4
Aktionärsbrief
» We are connecting
machinery, products
and processes,
thereby laying the
foundations for
Industry 4.0. «
Gordon Riske
Chief Executive Officer
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Letter to shareholders
5
KION GROUP AG | Annual Report 2015
We keep the world moving. Dear shareholders, customers,
partners, employees and friends
of the KION Group,
We are witnessing a revolution. Not one that sweeps
aside governments but one that will fundamentally affect
how all of us live and work. The distinction between
goods and services in a digital world is becoming
blurred. In factories, products and machines are starting
to talk to each other. Racks determine for themselves
when they need to be replenished, shipping containers
place the order for their loading, forklift trucks organise
themselves autonomously. I am, of course, referring to
the fourth industrial revolution – known as the Industrial
Internet of Things or, in Germany, Industrie 4.0.
A sea change that would be inconceivable without
Intralogistics 4.0.
The ones who are benefiting are our customers as they
can use their warehouses, production lines and distri
bution structures much more efficiently than in the past.
However, it is not employees who are posting their status
on social media, sharing their location or describing what
they are currently doing. It is our trucks. These are gen
uine innovations that offer added value for our customers.
2
Intralogistics 4.0 is already a reality in the KION Group.
Our trucks are controlled intelligently and completely
electronically, with a broad range of assistance sys
tems that mean better safety and efficiency for drivers.
Sophisticated fleet data management solutions, such
as ‘connect:’ from Linde and FleetManager from STILL,
capture and analyse huge quantities of information,
e.g. operating hours, distances covered, speeds and
energy consumption, that can be used for preventive
maintenance and other purposes. The overarching
objective is always to optimise the deployment of trucks
and reduce costs for customers. KION brand compa
nies already offer award winning automation solutions,
such as STILL’s iGoEasy. And since the acquisition of
Egemin Automation, our portfolio has also included
comprehensive intralogistics systems that combine
warehouse management software with automated
trucks. We are connecting machinery, products and
processes, thereby laying the foundations for Industry
4.0, for intelligent supply chains in factories and ware
houses.
3
Together, Egemin Automation – our seventh brand
company – and the KION Group have vast potential for
innovation that will enable us to provide the best possi
ble solutions with which to satisfy future customer
requirements around Intralogistics 4.0. The knowledge
built up by our truck brands over the decades, com
bined with the almost as extensive experience of the
automation experts at Egemin, opens up completely
new opportunities – and is a major unique selling prop
osition for the KION Group. Welcoming Egemin as the
new member of the KION family is a further milestone
in the implementation of our Strategy 2020 and will
help to secure our profitable growth in the years to
come. To see Egemin’s vision for the future of logistics,
please visit kiongroup.com/industrial_revolution.
Focus on quality, customers
and innovation
We have made good progress in turning our Strategy
2020 into reality. We are revamping our plants in
Europe, Asia and the Americas so that they are even
better able to meet future market requirements.
Between now and 2021, we will optimise the efficiency
of our core plants in Aschaffenburg and Hamburg as
part of a sevenyear project involving total capital
4
expenditure of €83 million. Our new plant in Stříbro,
Czech Republic, took around a year to build and is
what is known today as a ‘smart factory’. Manu
facturing got under way at the plant in January 2016.
Constructing it on a greenfield site provided a good
opportunity to design the processes and structures from
a completely new perspective. KION Stříbro is a factory
where digitised manufacturing of the future can take
place. Ultramodern IT systems, such as Extended
Warehouse Management and Manufacturing Execution
System, provide support for the production processes
at the new site, enabling us to monitor and control
assembly digitally. The first elements, such as realtime
process tracking and networking of all processes, are
already up and running, and there are more steps to
come. About 150 people are working in Stříbro for now.
We have capacity to build around 12,000 trucks per
year there. The innovation section of this annual report
gives you an insight into our newest, most modern
KION plant.
Just as important to our profitable growth is our global
modular and platform strategy in which the brand
companies use shared modules to build their own prod
ucts for our core market of western Europe. These
modules include cuttingedge drive technologies, such
5
as lithiumion batteries. In all other parts of the world,
we deploy shared global platforms for the volume and
economy segments. Last year, China was selected as
the first market where we presented eleven new products
based on these platforms. The necessary expertise is
supplied by our developers in the southern Chinese city
of Xiamen, where we have been represented by our Linde
brand for more than 20 years. Our Chinese brand Baoli
also unveiled the D Series, its first economy platform
for global use. The KION Group’s global product devel
opment is exemplified by our vertical order picker for the
North American market, which features in the second
article in the innovation section of this annual report.
All of these are farreaching changes, and our own
organisation too must adapt so that we can meet the
needs of customers and markets even more effec
tively. The regions outside Europe now have more
responsibility, enabling us to respond more flexibly to
our customers’ wishes. At the same time, the brand
companies are collaborating even more closely. This
is demonstrated by KION India: in India, we sell Baoli
forklifts and build trucks for our main Indian brand,
Voltas, partly using triedandtested technology from
our Italian regional brand, OM STILL.
6
Specifically, the realignment of the organisational struc
ture means that the Group is now managed as four
operating units. Competition has become a lot tougher,
especially in Europe. That is why the Linde Material
Handling EMEA and STILL EMEA operating units are
focusing their strengths on Europe, the Middle East
and Africa. The KION APAC and KION Americas oper
ating units hold crossbrand responsibility for the
AsiaPacific region and the Americas respectively.
These four operating units oversee marketing, sales,
services and the factories in their regions. They also
hold P&L responsibility. The units are supported by
overarching group functions and the KION technical
functions, which are now managed centrally.
Synergies in product development
Since summer 2015, Chief Technology Officer Dr Eike
Böhm has held groupwide responsibility for all research
and development activities for counterbalance trucks,
warehouse technology and products destined for the
global markets. He is also in charge of module and
component development, innovation, product strategy,
groupwide procurement, quality management and the
production system. Bringing our Group’s technical
functions together under one roof will play a valuable
7
part in helping to fully harness the potential of cross
brand synergies in product development while we of
course continue to pursue our successful multibrand
strategy. The areas of technology in which we want to
take the innovative strength of the KION brands to
a whole new level are described in the joint interview at
the start of the innovation section of this annual report.
Order intake, revenue and EBIT at
record levels
You can see that we undertook a great deal in 2015 –
and, at the same time, continued to grow profitably
and strengthen our market position. We benefited from
our strong position as market leader in western Europe,
where the market fared well. In China, we were able to
outperform the weak market because we are well
placed with regard to warehouse technology and have
a high proportion of service business.
8
Our global order intake rose both in terms of units
(165,823 trucks, up by 7.0 per cent) and in terms of
value (€5,215.6 million, up by 9.3 per cent). We increased
our revenue by 9.0 per cent to €5,097.9 million while
the order book was up by 13.1 per cent to €864.0 as
at 31 December 2015. And our profitability reached
the same very high level as 2014. Adjusted EBIT of
€482.9 million gave us an adjusted EBIT margin for 2015
of 9.5 per cent – one of the best ratios in our sector.
We owe this success to our around 23,500 extremely
motivated, highly skilled and fully committed employ
ees. I would like to take this opportunity, on behalf of
the entire Executive Board, to offer them my sincere
thanks for their fantastic efforts.
What challenges, opportunities and potential do our
employees see in our Company? This was the question
that we put to around 1,800 managers in mid2015.
The survey gave us a clearer picture of how we want to
take our business and our corporate culture forward
together.
9
KION Group turns ten
The KION Group will mark its tenth anniversary this
year. We have come a long way in a decade, growing
from a European supplier into a global player in the
material handling industry – despite a severe economic
crisis. Around 1.2 million trucks are in operation in our
customers’ companies around the world. These provide
the basis for our profitable service business, from which
we again generated approximately 45 per cent of our
revenue last year.
We are looking to the future – to many new opportuni
ties for adding value for our customers. That is why
the theme of this annual report is ‘Moving Forward –
Innovation’. Always being able to take the next step
means being on a firm footing, knowing which direc
tion to take, always focusing on your destination.
10
After all, we do not want to simply witness the fourth
industrial revolution. Through our forklift trucks, ware
house technologies and services, we touch the lives of
millions and millions of people around the world every
day. That is why we are seizing the opportunities to
help shape this revolution and ensure it creates bene
fits for our customers.
With best wishes,
Gordon Riske
Chief Executive Officer
KION GROUP AG
11
6
Executive Board
GORDON RISKE
Chief Executive Officer (CEO)
of KION GROUP AG
Born in 1957 in Detroit (USA)
DR EIKE BÖHM
Chief Technology Officer (CTO)
of KION GROUP AG
Born in 1962 in Pforzheim (Germany)
CHING PONG QUEK
Chief Asia Pacific Officer
of KION GROUP AG
Born in 1967 in Batu Pahat/Johor
(Malaysia)
DR THOMAS TOEPFER
Chief Financial Officer (CFO) and Labour
Relations Director of KION GROUP AG
Born in 1972 in Hamburg (Germany)
» We again grew
profitably in 2015
and reached record
levels of order intake,
revenue and EBIT.«
Dr Thomas Toepfer
Chief Financial Officer
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Executive Board
7
» We are shaping
Intralogistics 4.0
and have a real
innovative spirit
throughout the
entire organisation.«
Dr Eike Böhm
Chief Technology Officer
» Our cross-regional
platforms for the
volume and economy
segments are enabling
us to leverage valuable
synergies worldwide.«
Ching Pong Quek
Chief Asia Pacific Officer
» We are revamping our
business in EMEA,
Asia-Pacific and
the Americas so that we
are even better able to
meet future market
requirements.«
Gordon Riske
Chief Executive Officer
KION GROUP AG | Annual Report 2015
We keep the world moving.
8
Report of the Supervisory Board of
KION GROUP AG
Dear shareholders,
KION GROUP AG can once again look back on a very successful year. It made some
important strategic decisions in 2015. By purchasing the logistics automation busi
ness of Belgium’s Egemin Group, the KION Group strengthened its expertise going
forward in the design and management of complex automation projects. In addition, it
created a new Executive Board role with central responsibility for research and devel
opment, procurement and quality management. It also announced that it would be
comprehensively reorganising its Group structure from the beginning of 2016. The
aim is to step up collaboration across all brands and regions and to make this collab
oration even more efficient. In terms of business performance, the KION Group gen
erated encouraging revenue and earnings growth and achieved all of its forecasts.
Last year, the Supervisory Board continued to fulfil the tasks and responsibilities
imposed on it by the law, the Company’s articles of incorporation and the German
Corporate Governance Code with dedication and diligence. There were again many
important decisions, transactions requiring approval and other matters to be dis
cussed and resolved upon.
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. The Executive Board always notified the Super
visory Board of every significant aspect of the decisions to be made promptly and in
detail, providing both written and oral reports. Between meetings of the Supervisory
Board and between those of its committees, the chairman of the Supervisory Board,
who is also chairman of the Executive Committee, remained in close contact at all
times with the Executive Board, particularly the Chief Executive Officer and the Chief
Financial Officer. There was also regular contact between the chairman of the Audit
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Report of the Supervisory Board
9
DR JOHN FELDMANN
Chairman
Committee and the Company’s Chief Financial Officer. This ensured that the Super
visory Board was always kept up to date on the Company’s performance and any
significant transactions, even between meetings. The Supervisory Board satisfied
itself at all times that the Company was being managed lawfully and diligently by the
Executive Board. Giving the specified period of notice, the Executive Board presented
to the Supervisory Board 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 so that it could adopt reso
lutions. The Supervisory Board examined closely the resolutions proposed by the
Executive Board and deliberated on them before adopting them.
Main focus areas discussed by the Supervisory Board
The deliberations of the Supervisory Board focused on the continued implementation
of the Strategy 2020, which the Executive Board and Supervisory Board adopted in
2013. Particular attention was paid to generating growth and increasing efficiency in
the reporting year.
KION GROUP AG | Annual Report 2015
We keep the world moving.
10
The trends embodied by the Industrial Internet of Things, or Industry 4.0 – the oppor-
tunities and challenges for our customers’ logistics systems and our own internal
processes presented by digitisation, automation and connectivity – also featured
heavily in the Supervisory Board’s discussions last year. One prominent example
was the acquisition of Egemin NV, a leader in the automation of logistics processes.
The Supervisory Board advised and supported the Executive Board on this project,
as it did on all other projects aimed at growth by acquisition, and where necessary
adopted resolutions to give its consent, having weighed up the opportunities and
risks. Issues relating to the Internet of Things were also on the agenda at the Super-
visory Board’s strategy meeting on 24 September 2015, where the main topics were
integrated and automated logistics solutions and the importance of and prospects for
3D printing in manufacturing.
Other matters examined by the Supervisory Board were increasing profitability – in
particular by improving the effectiveness and efficiency of the Company’s core
operating processes – and transitioning the organisational structure of the Company to
a governance model that caters to changes in the requirements of customers and
markets. Throughout the year, the Executive Board pushed for measures to boost
efficiency, particularly at the large German sites, in its negotiations with workforce
representatives. The Supervisory Board discussed the measures at every meeting in
2015. The Company is updating its organisational structure to reflect the changes
resulting from the growing importance of markets outside Europe, the evolution of
customer requirements and technological progress. The Executive Board discussed
its ideas in this area with the Supervisory Board at the start of the year and fleshed
out its plans as the year progressed. At its meeting on 24 September 2015, the Super-
visory Board consented to the realignment of the organisational structure following
in-depth discussions.
The core elements of this new structure are four decentralised, regional operating
units, each with responsibility for their own profit and loss. These operating units
are supported by a central R&D function and administrative departments. The CTO
organisation, which is headed up by the Chief Technology Officer Dr Eike Böhm,
assumed groupwide responsibility for product strategy, R&D, innovation, production
system, quality assurance and procurement on 1 January 2016. Other administrative
functions will be adapted to meet the requirements of the Group’s new organisational
structure during 2016, which will involve centralising and harmonising them. A Group
Executive Committee (GEC) is being formed to advise the Executive Board in its
decision-making and to coordinate matters at the uppermost level of management.
The GEC will consist of the Presidents of the four regional operating units plus the
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Report of the Supervisory Board
11
four members of the Executive Board. Its purpose is to ensure the Executive Board’s
decisions are made on the basis of the widest possible range of technical and
regional expertise and experience. There will be no changes to the Executive Board’s
decisionmaking powers, however. The Group Executive Committee does not release
the individual Executive Board members or the Executive Board as a whole from their
statutory duties or their responsibility for the daytoday management of the Company.
The Supervisory Board has safeguarded this allocation of roles by introducing a char
ter for the GEC.
Against this background, it was necessary to redistribute responsibility for the differ
ent aspects of the business among the Executive Board members and to update the
list of transactions requiring consent by removing individual transactions from the list
and raising the threshold values for transactions requiring approval.
The Supervisory Board emphatically welcomed the Executive Board’s prompt and
proactive decision to introduce a change management process to support the changes
brought about by these measures. An important element of this change management
was a survey conducted among around 1,800 of the Company’s managers at the start
of the summer. An Organizational Health Index (OHI) was used to gauge the current
state, or ‘health’ of the organisation so that challenges and necessary action areas
could be identified. The Supervisory Board encouraged the Executive Board to tackle
the change issues raised by managers, and they will be targeted as part of the improve
ments to be made to the Company’s management culture. The Supervisory Board
firmly believes that the major changes that have been initiated and will now be imple
mented over the coming months will benefit in the long term if the issues identified
by the OHI are successfully addressed and the management culture at KION is
improved accordingly.
Corporate governance matters
Besides the usual governance matters, the Supervisory Board dealt with a number
of individual issues in the year under review. These included implementing the new
statutory requirements on gender diversity in managerial roles, introducing a sustaina
ble fast close process for preparing the consolidated financial statements, examining
the efficiency of the Supervisory Board’s work and reviewing the remuneration of the
Executive Board and Supervisory Board.
The Supervisory Board carefully studied the requirements of Germany’s ‘Act for the
equal participation of women and men in managerial positions in the private and
KION GROUP AG | Annual Report 2015
We keep the world moving.
12
public sectors’. Despite its reservations about fixed quotas in this area, the Super
visory Board has an open and positive stance as far as the Act’s sociopolitical
objectives are concerned. The targets for the composition of the Executive Board and
other management positions have been set within the realms of what is feasible
and with a view to ensuring that the Company can attract the most suitable people
with the right talents.
The Company intends to present its annual and quarterly financial statements more
quickly than in previous years. To fulfil its core task of monitoring the Company’s
financial reporting systems, the Supervisory Board commissioned the Audit Committee,
which in turn commissioned its chairman, to learn about the fast close process and
its inherent risks. The independent auditors also got involved. The Supervisory Board
was able to satisfy itself that the new structures and processes will enable the
Company to continue preparing correct and reliable financial statements going forward.
The examination of efficiency confirmed that the Company’s Supervisory Board has a
robust structure and follows efficient processes. An external consultancy also scored
the Supervisory Board and its committees highly in comparison with their industry
peers. Suggestions for enhancing individual aspects of the Supervisory Board’s work
were identified with regard to committee size, the timing of when information is pro
vided and the discussion of strategic matters by the full Supervisory Board. The con
sultants presented their report at the Supervisory Board’s meeting in December. The
Supervisory Board has already acted on a number of the suggestions and introduced
or initiated changes. Where necessary, the Executive Board willingly provided its input.
Another area of focus was the remuneration of the Company’s Executive Board and
Supervisory Board. The structure of their remuneration had been revised ahead of the
IPO in 2013. In late 2015, a consultancy reviewed it again, comparing it against the
benchmark. Despite changes to economic conditions and the evolution of best practice,
particularly regarding supervisory board remuneration, the Supervisory Board did
not consider it appropriate to make changes to the structure and level of remuneration
at the current time. However, adjustments will be required in the near future,
including to the structure of the Executive Board’s longterm variable remuneration
and the acquisition of treasury shares by Executive Board members.
The topics on which the Executive Board and individual managers in the Company
regularly submitted reports were the internal control system, risk management,
internal audit and compliance in the Group. The focus was on the processes in place
as well as on the content of the individual reports. As a result of these reports, the
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Report of the Supervisory Board
13
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. It concluded
that the systems and mechanisms at KION GROUP AG are adequate and suitable.
The Supervisory Board keeps a close eye on changes to the German Corporate
Governance Code and to governance standards at international level. At its meeting
on 17 December 2015, the Supervisory Board held its final discussion on the KION
Group’s compliance with the recommendations of the current version of the Code
and issued an updated complyorexplain statement pursuant to section 161 German
Stock Corporation Act (AktG). It has been made permanently available to the public
on the KION GROUP AG website. KION GROUP AG complies with all but one of the
recommendations in the German Corporate Governance Code (version dated
5 May 2015) and intends to continue to do so in future. As in the previous year, the
only recommendation 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 consider
ably more difficult to find independent candidates, in particular candidates from out
side Germany.
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 KION Group in the corporate governance report. This is combined
with the declaration on corporate governance pursuant to section 289a German
Commercial Code (HGB) and can be found on pages 24 to 37 of this annual report
and on the KION GROUP AG website at kiongroup.com/GovernanceReport. For
details of the remuneration of the Executive Board and Supervisory Board for 2015,
please refer to the remuneration report, which can be found on pages 38 to 51 of this
annual report.
Work of the committees
Since the last report, there have not been any material changes to the established
committees.
KION GROUP AG’s Supervisory Board had four committees last year: the Mediation
Committee pursuant to section 27 (3) German Codetermination Act (MitbestG), the
Executive Committee, the Audit Committee and the Nomination Committee. These
KION GROUP AG | Annual Report 2015
We keep the world moving.
14
committees, but primarily the Executive Committee, prepare the matters to be dis
cussed at the meetings of the full Supervisory Board. In individual cases, the Super
visory Board’s decisionmaking 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.
In 2015, the Supervisory Board and its committees dealt with the matters at hand
and made the necessary decisions at a total of 21 meetings (8 full Supervisory Board
meetings and 13 committee meetings). There were also several informal conference
calls for the purpose of providing the members of the Supervisory Board or the rele
vant committees with advance information.
All members of the Supervisory Board attended the Supervisory Board meetings in 2015
apart from the exceptions below. At one meeting, five members sent their apologies, at
three meetings, at each of which one member sent his apology and at two meetings,
at each of which two members sent their apologies. With the exception of five commit
tee meetings at each of which one member sent his apology, all committee meetings
were attended by all members of the respective committee. Supervisory Board member
Tan Xuguang participated in fewer than half of all Supervisory Board meetings.
Engagement of the auditors; audit of the separate and consolidated
financial statements
The Company’s independent auditors, Deloitte & Touche GmbH Wirtschaftsprüfungs
gesellschaft, Munich, Frankfurt am Main branch office (Deloitte & Touche), audited
the Company’s separate financial statements and management report and the con
solidated financial statements and group management report for the year ended
31 December 2015 following their engagement by the Annual General Meeting on
12 May 2015. The corresponding proposal to the Annual General Meeting had been
prepared in meetings held between the chairman of the Audit Committee and the
auditors. They concerned the suitability and independence of the auditors and the
fees. The proposal was discussed at the Audit Committee’s meeting on 10 March
2015 and committee members were given the opportunity to speak to the auditors in
person. The key audit issues were discussed and set out accordingly at the Audit
Committee’s meeting on 10 March 2015. The auditors were appointed by the chairman
of the Supervisory Board on 24 November 2015.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Report of the Supervisory Board
15
The auditors submitted their report and the documents relating to the financial state
ments to the members of the Audit Committee on 2 March 2016 and to the members
of the Supervisory Board on 9 March 2016. The report was discussed in depth at the
Audit Committee meeting on 9 March 2016 and at the full Supervisory Board meeting
on 16 March 2016, both of which were attended by the auditors. At both of those
meetings, the auditors reported in detail on the main findings of the audit and pro
vided comprehensive answers to all questions asked by members of the Audit Com
mittee and Supervisory Board. The auditors issued an unqualified opinion for the sep
arate financial statements, including the management report, for the year ended
31 December 2015 and the consolidated financial statements, including the group
management report, for the year ended 31 December 2015 on 9 March 2016.
Having itself scrutinised the Company’s separate financial statements, consolidated
financial statements, management report and group management report for the year
ended 31 December 2015, the Audit Committee then made a 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 and
taking the auditors’ opinion into consideration, the Supervisory Board held a further
discussion of its own and then approved the results of the independent audit at its
meeting on 16 March 2016. Based on the final outcome of the Supervisory Board’s
own review, no objections were raised. The Supervisory Board approved the Com
pany’s separate financial statements and consolidated financial statements for the
year ended 31 December 2015 prepared by the Executive Board, thereby adopting
the annual financial statements.
At its meeting on 16 March 2016, 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 €0.77 per noparvalue
share. In doing so, the Supervisory Board took account of the Company’s financial
situation and performance, its mediumterm financial and capitalexpenditure planning
and the interests of the shareholders. The Supervisory Board believes the proposed
dividend is appropriate.
Review of the dependency report
Until 31 March 2015, the Company was controlled jointly by Superlift S.à r.l. and
Weichai Power. This joint control ended on 31 March 2015 when the remaining KION
GROUP AG shares held by Superlift S.à r.l. were sold. The Executive Board was
KION GROUP AG | Annual Report 2015
We keep the world moving.
16
therefore obliged to prepare a report on the Company’s relationships with affiliated
entities (dependency report) for that period. The report was examined by the Super
visory Board. The Company’s auditors, Deloitte & Touche, reviewed the dependency
report, prepared an auditors’ report on it and issued the following unqualified opinion
based on their completed audit on 9 March 2016:
Auditor’s opinion
Based on our audit and evaluation conducted in accordance with our professional
duties, we hereby confirm that the factual information presented in the report is accurate.
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 auditors at the Supervisory Board meeting on 16 March 2016. The
auditors reported on the main findings of their 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 on the Executive Board and Supervisory Board
With effect from 15 January 2015, Theodor Maurer and BertJan Knoef stepped
down as members of the KION Group’s Executive Board by mutual agreement with
the Company.
At its meeting on 25 June 2015, the Supervisory Board appointed Dr Eike Böhm as
Chief Technology Officer and as a further ordinary member of the Executive Board
of KION GROUP AG. Dr Böhm is responsible for research and development, product
strategy, production system, innovation, quality assurance and procurement.
There were several changes on the Supervisory Board in 2015. Mr Johannes P. Huth
stepped down from the Supervisory Board on 31 July 2015. Mr Wolfgang Faden
was appointed by the courts as a shareholder representative with effect from
1 August 2015 until the Company’s next Annual General Meeting. In the further course
of discussions regarding succession planning, the Supervisory Board resolved in
December 2015, following the recommendation of the Nomination Committee, to
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Report of the Supervisory Board
17
propose to the Annual General Meeting on 12 May 2016 that Dr Christina Reuter be
elected to the Supervisory Board as a shareholder representative to succeed Mr Faden.
In addition, Mr HansPeter Weiß resigned from his position as an employee representa
tive on the Company’s Supervisory Board with effect from the end of 15 November 2015.
The courts appointed Mr Jörg Milla as his successor with effect from 16 November 2015.
The Supervisory Board would like to thank Mr Huth and Mr Weiß for the great dedica
tion with which they always carried out their work in the interests of the Company.
The details of this report were discussed thoroughly at the Supervisory Board meeting
on 16 March 2016 when it was adopted.
My colleagues on the Supervisory Board and I would like to thank the members of
the Executive Board and the employees of KION GROUP AG and its Group companies
in Germany and abroad for their commitment and outstanding achievements in 2015.
Dr John Feldmann
Chairman
KION GROUP AG | Annual Report 2015
We keep the world moving.
18
KION shares
Highly volatile stock market environment
9.6 per cent. The MDAX climbed by an even more impressive
22.7 per cent to reach 20,775 points, thereby significantly out
The world’s stock markets were very nervous in 2015 and were
performing the bluechip index.
characterised by strong volatility. Equities were a popular asset
class as market interest rates remained very low, and this led to
share price rises, especially in the first half of the year. However,
Strong growth for KION shares
the pricing level reached made the markets highly susceptible to
external shocks. Slower growth in Asia and Latin America, turbu
KION shares finished 2015 considerably higher than where they
lent capital markets in China, uncertainty about future monetary
had begun. They closed at €46.02 on 30 December 2015, which
policy in the United States, geopolitical tension and, not least, the
was 45.0 per cent higher than their 2014 yearend closing price of
Volkswagen scandal resulted in a sharp price correction in the
€31.74. Having reached the lowest price of the year of €30.64 on
third quarter. The DAX, Germany’s main index, ceded virtually all
14 January, the share price moved steadily upward in the first half
of the gains that it had made in the first six months. In the fourth
of the year. Reflecting the trend in the market, the shares fell in the
quarter, however, most indices rose considerably on the back of
third quarter before beginning a steep uptrend in November to
persistently good growth figures from industrialised nations. The
reach their highest price of the year of €48.00 on 7 December.
DAX closed the year at 10,743 points, representing an increase of
Among the positive influencing factors were the inclusion in the
Share price performance between 30 December 2014 and 30 December 2015
KION GROUP + 45.0%
+ 22.7%
+ 9.6%
MDAX
DAX
€48
€46
€44
€42
€40
€38
€36
€34
€ 31.74 *
€32
€30
DIAGRAM 001
€ 46.02 *
* Closing price
01 / 2015
02 / 2015
03 / 2015
04 / 2015
05 / 2015
06 / 2015
07 / 2015
08 / 2015
09 / 2015
10 / 2015
11 / 2015
12 / 2015
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
KION shares
19
STOXX Europe 600 and the release of good growth figures and
strong results. Looking at the year as a whole, the KION Group
comfortably outperformed both the MDAX and the DAX.
> DIAGRAM 001
The KION Group’s market capitalisation was €4.6 billion at the
end of the reporting year. Of this total, 61.5 per cent or €2.8 billion
was in free float. The average daily Xetra trading volume in 2015
was 206 thousand shares or €8.3 million, up considerably on the
prior year. This can be attributed to KION GROUP AG’s inclusion
in the MDAX from September 2014 and the further increase in the
free float. > TABLE 001
Basic information on KION shares
TABLE 001
ISIN
WKN
DE000KGX8881
KGX888
Bloomberg KGX:GR
Reuters
KGX.DE
Share type Noparvalue shares
Index
MDAX, STOXX Europe 600, MSCI Germany Small Cap
Further rise in free float
and share repurchases
Superlift Holding S.à r.l. (Superlift Holding), through which The
Goldman Sachs Group Inc. (Goldman Sachs) and Kohlberg
Kravis Roberts & Co. L.P. (KKR) held their shares in KION, placed
their remaining KION shareholding of 18.8 per cent in February
and March 2015. With this the strategic investors Goldman Sachs
Shareholder structure as at 31 December 2015
DIAGRAM 002
0.2%
KION GROUP AG
38.3%
WEICHAI POWER
61.5%
FREE FLOAT
KION GROUP AG launched another share buyback programme
on 10 September 2015 as part of its employee equity programme.
In the period up to 30 September 2015, a total of 70,000 no
parvalue shares (roughly 0.07 per cent of the share capital)
had been purchased for this purpose. To do so, the KION
GROUP AG used the authorisation granted at the Annual General
Meeting on 13 June 2013.
The purchase of treasury shares left the proportion of shares
held by KION GROUP AG unchanged at 0.2 per cent as at
31 December 2015. The free float accounted for 61.5 per cent at
the end of the year. > DIAGRAM 002
KION shares predominantly recommended
as a buy
and KKR ceased to be shareholders. As part of the final place
17 brokerage houses published regular reports on KION Group in
ment, a block of shares equivalent to around 5.0 per cent was
2015. As at 31 December 2015, eleven analysts recommended
sold to Weichai Power Co. Ltd. in March. Weichai Power, the big
KION shares as a buy and six rated them as neutral. The median
gest single shareholder of the KION Group, with its stake now at
target price specified for the shares was €48.50.
38.3 per cent, has undertaken not to acquire more than
49.9 per cent of KION shares between now and 28 June 2018 (as
part of a standstill agreement).
KION GROUP AG | Annual Report 2015
We keep the world moving.
20
Share data
TABLE 002
Closing price at the end of 2014
High for 2015
Low for 2015
Closing price at the end of 2015
Market capitalisation at the end of 2015
Performance in 2015
€31.74
€48.00
€30.64
€46.02
€4,551.4 million
45.0%
Average daily trading volume in 2015 (no. of shares)
206.0 thousand
Average daily trading volume in 2015 (€)
Share capital
Number of shares
Earnings per share for 2015
Dividend per share for 2015*
Dividend payout rate*
Total dividend payout*
Equity ratio as at 31/12/2015
* Proposed dividend for the fiscal year 2015
€8.3 million
€98,900,000
98,900,000
€2.20
€0.77
35%
€76.0 million
28.7%
Dividend of €0.77 per share planned
Refinancing and credit rating
The Executive Board and Supervisory Board of KION GROUP AG
The fixedrate (6.75 per cent) tranche of the bond issued in
will propose a dividend of €0.77 per share to the Annual General
February 2013, which has a volume of €450.0 million, was part of
Meeting on 12 May 2016. This equates to a dividend payout rate
the Company’s funding structure in 2015 and repaid early and to
of around 35.0 per cent of net income. Earnings per share for
the full extent on 15 February 2016. This bond as well as the
2015 came to €2.20. > TABLE 002
remaining preIPO credit facility have been refinanced with a
€1.5 billion credit facility reflecting investmentgradestyle fea
tures. The new financing significantly reduces interest expenses
and strongly improves KION’s flexibility to pursue its profitable
growth. Two rating agencies publish corporate credit ratings on
the KION Group and improved the ratings in April 2015. Rating
agency Standard & Poor’s now rates the KION Group as BB+
with a stable outlook, while the rating from Moody’s is Ba2 with a
positive outlook.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
TO OUR SHAREHOLDERS
Services for shareholders
21
Services for shareholders
Active investor relations
sented the steps already taken to implement the Strategy 2020 as
well as the planned future milestones. In addition, the Executive
The objective of investor relations is to ensure, through continu
Board held update calls to report on each set of quarterly results.
ous dialogue, that the capital markets value the Company
The transcripts of the conference call on the 2014 financial year
appropriately. The Executive Board and the KION Group’s inves
and the quarterly update calls along with the presentations form
tor relations team continued their active dialogue with investors
part of the extensive information for investors which is available
and analysts last year. Overall, the KION Group participated in
on the Company’s website.
17 investor conferences in Germany and abroad, ran a multitude
Detailed information on KION shares, press releases,
of roadshows and held a number of oneonone meetings.
reports and presentations as well as information about the
On 12 November 2015, the Executive Board of the KION
Annual General Meeting and corporate governance in the Group
Group welcomed around 20 equity analysts to the KION Ana
can be found at kiongroup.com/ir. The KION Group’s annual
lyst Day, which was held at Linde Material Handling’s site in
report is also available here, both as a PDF file and as an interac
Basingstoke, United Kingdom. The brokerage houses, which
tive online version. A printed copy of the annual report can be
regularly write reports on the KION Group, took this opportunity
ordered under IR Contact & Services. The contact details of the
to find out at first hand about the Strategy 2020 and progress on
IR team are also provided here.
its implementation.
Around 120 shareholders participated in the Annual General
Meeting of KION GROUP AG on 12 May 2015. Those in attend
ance, representing 80.4 per cent of the voting share capital,
approved all the draft resolutions put forward by the Company’s
management with a substantial majority, including the resolu
tion to distribute a dividend of €0.55 per share. The total dividend
payout of €54.3 million was equivalent to a dividend payout rate
of roughly 31 per cent of net income. The speeches of the Chief
Executive Officer and the chairman of the Supervisory Board
were broadcast live at kiongroup.com/agm. A webcast of the
Chief Executive Officer’s speech is also available on the Com
pany’s website.
Each of the KION Group’s financial reports was explained in
detail. At publication of the 2014 annual report, the Executive
Board of KION GROUP AG held a conference call where it pre
kiongroup.com/
ir
KION GROUP AG | Annual Report 2015
We keep the world moving.
CORPORATE GOVERNANCE
Contents
23
B
Corporate Governance
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CORPORATE GOVERNANCE REPORT
Declaration
Executive board and supervisory board
shareholdings and directors’ dealings
DISCLOSURES RELEVANT TO ACQUISITIONS
REMUNERATION REPORT
Executive Board remuneration
Supervisory Board remuneration
KION GROUP AG | Annual Report 2015
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Corporate governance report
Corporate governance covers the whole system of managing and
monitoring an enterprise, the principles and guidelines that shape
its business policy and the system of internal and external control
1. Comply-or-explain statement
pursuant to section 161 (1) AktG
and monitoring mechanisms. The Executive Board and Supervi-
Section 161 (1) AktG requires the management board and super-
sory Board of KION GROUP AG believe that an uncompromising
visory board of a publicly listed company to issue an annual dec-
commitment to rigorous corporate governance in accordance
laration stating that the company has complied with, and intends
with the standards is essential to the Company’s long-term suc-
to comply with, the recommendations of the Code or stating the
cess. Compliance with these principles also promotes the trust
recommendations with which it has not complied or does not
that our investors, employees, business partners and the public
intend to comply, and the reasons why. Detailed reasons must be
have in the management and monitoring of the Company.
given for any departure from the recommendations of the Code.
There is a close correlation between the corporate govern-
The comply-or-explain statement must be made permanently
ance report required by section 3.10 of the German Corporate
available to the public on the company’s website.
Governance Code as amended on 5 May 2015 (the Code) and
The Executive Board and Supervisory Board submitted the
the content of the corporate governance declaration required by
Company’s previous comply-or-explain statement on 19 Decem-
section 289a German Commercial Code (HGB). For this reason,
ber 2014.
the Executive Board and the Supervisory Board of KION GROUP
Both decision-making bodies considered the recommenda-
AG have combined the two statements.
tions of the amended Code in detail and, on 14 December and
DECLARATION PURSUANT TO
SECTION 289A GERMAN COMMERCIAL
CODE (HGB)
17 December 2015 respectively, issued the third comply-or-
explain statement of KION GROUP AG as required by sec-
tion 161 (1) AktG as follows:
1. Since the last comply-or-explain statement was issued in
December 2014, KION GROUP AG has complied with all of the
recommendations of the German Corporate Governance
Code (the Code) as amended on 24 June 2014 with one
The corporate governance declaration required by section 289a
exception.
HGB includes the comply-or-explain statement in accordance
In departure from section 3.8 (3) of the Code, the articles
with section 161 German Stock Corporation Act (AktG) (see 1.
of incorporation of KION GROUP AG do not provide for an
below), relevant disclosures on corporate management practices
excess in the D&O insurance policies for members of the
extending beyond statutory requirements (see 2. below), a
Supervisory Board. The Company believes that such an
description of the working methods of the Executive Board and
excess is not typical at international level and would therefore
Supervisory Board, and a description of the working methods
make it considerably more difficult to find independent candi-
and composition of the Supervisory Board committees (see 3.
dates, in particular candidates from outside Germany.
below). The declaration on corporate governance pursuant to
section 289a HGB is part of the management report. According
to section 317 (2) sentence 3 HGB, the information provided in
accordance with section 289a HGB does not have to be included
in the audit of financial statements.
Moving Forward
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KION GROUP AG | Annual Report 2015
CORPORATE GOVERNANCE
Corporate governance report
25
2. The Code as amended on 5 May 2015 was announced in the
German Stock Corporation Act. For example, the Supervisory
German Federal Gazette on 12 June 2015. Since then, KION
Board’s Audit Committee, which was set up partly for this pur-
GROUP AG has complied with all of the recommendations in
pose, received regular reports on the accounting processes and
the Code as amended on 5 May 2015 with the one exception
the effectiveness of the internal monitoring and risk management
described above, and intends to continue to do so in future.
systems and of the audit of financial statements, and then
reported back to the full Supervisory Board on these matters.
Wiesbaden, 14/17 December 2015
2.1 Internal control system
For the Executive Board:
KION GROUP AG has an internal control system designed to
meet the specific needs of the Company. Its processes are
Gordon Riske
Dr Thomas Toepfer
intended to ensure the correctness of the internal and external
For the Supervisory Board:
Dr John Feldmann
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 ongoing basis and refined as necessary.
The Supervisory Board and in particular the Supervisory
Board’s Audit Committee regularly obtain information on the pro-
The comply-or-explain statement is available on the website of
cesses put in place as part of the internal control system and
KION GROUP AG at kiongroup.com/comply_statement.
have satisfied themselves as to their efficiency.
2. Relevant disclosures on corporate
governance
2.2 Accounting-related internal control system
For its accounting process, the KION Group has defined suitable
structures and processes as part of its internal control and risk
The corporate governance of KION GROUP AG is essentially, but
management system and implemented them throughout the
not exclusively, determined by the provisions of the German
Group. Besides defined control mechanisms, it includes, for
Stock Corporation Act and the German Codetermination Act
example, system-based and manual reconciliation processes,
(MitbestG) and also follows the recommendations of the German
clear separation of functions, strict compliance with the dou-
Corporate Governance Code. KION GROUP AG complies with all
ble-checking principle and written policies and procedures. The
the Code’s recommendations, with one exception. These funda-
overarching aim is for the separate financial statements, consoli-
mental principles are combined with a commitment to sustainable
dated financial statements, management report and group man-
business, taking account of society’s expectations in the markets
agement report to be fully compliant with the relevant statutory
in which the Company operates.
and regulatory requirements and, in particular, the applicable
In 2015, the Executive Board and the Supervisory Board (or
financial reporting standards. Changes to these requirements
its committees) regularly discussed corporate governance issues
and standards are analysed on an ongoing basis and taken into
in accordance with a rolling schedule of topics. This ensured that
account as appropriate. Details can be found in the risk report,
the key elements of corporate governance within the KION Group
which is part of the group management report.
were always on the agenda at meetings of the Company’s main
decision-making bodies. The Supervisory Board in particular
complied with the supervisory duties incumbent upon it under the
KION GROUP AG | Annual Report 2015We keep the world moving.
26
2.3 Risk management system
within the Group; the compliance department reports to the Chief
Executive Officer of KION GROUP AG. Responsibility for imple-
For the Company to be managed professionally and responsibly,
menting compliance management has been delegated to the
the Executive Board must use the risk management system
Chief Compliance Officer, the CEOs of the STILL and LMH seg-
established in the Company to regularly gather information about
ments, and the heads of the KION regions. Responsibility for
current risks and how they are evolving, and then report on this to
monitoring of course remains with the CEO of the Group. The
the Supervisory Board’s Audit Committee. The KION Group’s risk
KION compliance department, the KION compliance team and
management system is documented in a Group risk policy that
the KION compliance committee provide operational support to
defines tasks, processes and responsibilities and sets out the
the aforementioned functions. The KION compliance department
rules for identifying, assessing, reporting and managing risk.
focuses mainly on preventing compliance violations by providing
Specific individual risks are then reported by each Group entity
guidance, information, advice and training. It manages the KION
using an online reporting tool. Reporting on cross-segment risks
compliance team, in which local and regional compliance officers
and groupwide risks is carried out by Controlling and the relevant
of the Group are represented.
departments. The risks that have been reported are reviewed on
The members of the compliance team at KION GROUP AG
a quarterly basis and re-assessed until the reason for reporting a
are available to advise all Group employees and answer their
risk no longer exists.
questions at any time. They are also responsible for the imple-
mentation of the compliance programme, particularly for provid-
2.4 Compliance management system
ing advice, information and training.
Actual or suspected incidents of non-compliance can be
The Executive Board and Supervisory Board of KION GROUP AG
reported by post, email or fax. All employees can also report any
consider that adhering uncompromisingly to broad-ranging com-
cases of non-compliance via a compliance hotline and can
pliance standards is essential to sustained financial success.
choose to remain anonymous.
That is why a comprehensive compliance programme, centring
As part of its work, the compliance department at KION
around the KION Group Code of Compliance, has been set up for
GROUP AG cooperates closely with the legal and internal audit
KION GROUP AG and its Group companies worldwide.
departments. The KION compliance committee is staffed by the
The KION Group Code of Compliance, which is available in all
heads of these departments and the head of human resources,
of the main languages relevant to the Group companies of KION
operating as a cross-functional committee that primarily advises
GROUP AG, provides every employee with clear guidance on
on, examines and, if relevant, punishes incidents of non-
how to conduct their business in accordance with sound values
compliance that are reported. While the KION compliance
and ethics and in compliance with the law. The aim is for all
department is responsible for preventing compliance violations,
employees to receive regular training on the most important com-
the internal audit unit is tasked with checking the facts of reported
pliance subjects (e.g. competition law, data protection, communi-
non-compliance cases. On behalf of the Executive Board, the
cation and anti-corruption). Desk-based employees can use
internal auditors also monitor subsidiaries for compliance with
e-learning tools to complete the mandatory training.
regulations. If their audits confirm cases of non-compliance, it is
Compliance activities focus on anti-corruption, foreign trade /
the task of HR or Legal to remedy the violations and sanction
export controls, liability of senior management, directors’ and
those responsible, if appropriate.
officers’ liability, capital markets compliance, IT security and data
The Management Boards of the KION brand parent compa-
protection.
nies and their subsidiaries are responsible for ensuring compli-
KION GROUP AG’s compliance organisation is made up of
ance. The Local Compliance Representatives advise and support
the following committees, functions and duties:
the directors and senior managers in ensuring compliance
The Executive Board of KION GROUP AG bears collective
throughout the Group.
responsibility for the functioning of compliance management
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Corporate governance report
27
2.5 Audit-relevant processes
effect from 24 June 2013, for which the Supervisory Board had
previously given its consent. Appropriate precautions have been
The Company’s independent auditors, Deloitte & Touche GmbH
taken to ensure that this role at a major shareholder of the Com-
Wirtschaftsprüfungsgesellschaft, Munich, Frankfurt am Main
pany does not create a conflict of interest relating personally to
branch office (“Deloitte & Touche”), audited the separate financial
Mr Riske. Formal processes have been put in place to ensure
statements and management report of KION GROUP AG and the
that Mr Riske, in his role as a non-executive director of Weichai
consolidated financial statements and group management report
Power, is not involved in transactions that could give rise to a
for the year under review following their engagement by the
conflict with the interests of the KION Group. Nor is Mr Riske
Annual General Meeting on 12 May 2015. Since the audit of the
involved in transactions relating to the exercise of voting rights by
2014 separate and consolidated financial statements, the global
Weichai Power or its subsidiaries at the Annual General Meeting of
lead service partner at Deloitte & Touche has been Ms Kirsten
KION GROUP AG. It has been ensured that Mr Riske maintains a
Gräbner-Vogel. The separate financial statements and manage-
strict separation between his duties as a non-executive director of
ment report and the consolidated financial statements and group
Weichai Power and his duties as Chief Executive Officer of KION
management report are discussed by the Audit Committee and
GROUP AG and that he fulfils all of his legal obligations in the
then approved by the Supervisory Board.
interests of the Company.
The independent auditors review the condensed consoli-
dated interim financial statements and the condensed interim
group management report for the first half of the year. The Exec-
3. Working methods of the Executive Board
utive Board discusses all interim reports with the Audit Committee
before they are published.
and Supervisory Board and composition of
the committees of the Supervisory Board
2.6 Avoiding conflicts of interest
The Executive Board and Supervisory Board of KION GROUP AG
have a close and trusting working relationship. It focuses on
Conflicts of interest between the governing bodies and other
ensuring the sustained success of the Company. The members
decision-makers in the Company or significant shareholders go
of the Executive Board regularly attend Supervisory Board meet-
against the principles of good corporate governance and are likely
ings, unless the Supervisory Board decides to meet without the
to be harmful to the Company. KION GROUP AG and its govern-
Executive Board.
ing bodies therefore adhere strictly to the Code’s recommenda-
The Executive Board promptly, comprehensively and regu-
tions on this subject. The employees of KION GROUP AG and its
larly reports to the Supervisory Board on the performance of the
investees are made aware of the problem of conflicts of interest
KION Group. Besides the reporting obligations defined by law,
as part of compliance training and are bound by rules on how to
the rules of procedure for the Executive Board of KION GROUP
behave in the event of actual or potential conflicts of interest.
AG set out further reporting requirements and reservations of
The Company attaches high priority to preventing possible
approval in favour of the Supervisory Board.
conflicts of interest from occurring in the first place and to dis-
pelling any impression that they might exist. This is especially
3.1 Working methods of the Executive Board
important given the involvement of Weichai Power, whose stake
has risen to 38.3 per cent. The Company achieves these aims by
Since the appointment of Dr Eike Böhm with effect from 1 August
avoiding business scenarios or personnel scenarios that could give
2015, the Executive Board of KION GROUP AG has comprised
the impression of a conflict of interest and by taking transparent
four members. It is responsible for managing the Company in the
steps that effectively prevent concerns about conflicts of interest.
Company’s interest, i.e. taking account of shareholders, custom-
The Company’s Chief Executive Officer, Mr Gordon Riske,
ers, employees and other stakeholders with the aim of creating
was appointed a non-executive director of Weichai Power with
sustainable added value. The Executive Board develops the
KION GROUP AG | Annual Report 2015We keep the world moving. 28
Company’s strategy, discusses it with the Supervisory Board and
ensures that it is implemented. Every Executive Board member is
responsible for his own area of responsibility and keeps his fellow
board members informed of developments on an ongoing basis.
> TABLE 003
Responsibilities of Executive Board members
TABLE 003
Member
Responsibilities
Ching Pong Quek Member of KION GROUP AG
Responsibilities of Executive Board members
TABLE 003
Member
Responsibilities
Gordon Riske
CEO of KION GROUP AG
CEO of STILL GmbH (since 15 January 2015)
CEO of Linde Material Handling GmbH
(since 15 January 2015)
Strategy / Business Development
Corporate Communications
Corporate Office
Internal Audit
Compliance
KION Warehouse Systems
KION Synergies / Platforms (until 31 July 2015)
North America Region
South America Region
Quality (from 15 January until 31 July 2015)
Bert-Jan Knoef
(until 14 January
2015)
Theodor Maurer
(until 14 January
2015)
Executive Board /
Chief Asia Pacific Officer
Asia Pacific Region
Member of KION GROUP AG
Executive Board
CEO of STILL GmbH
Logistics / Urban
Member of KION GROUP AG
Executive Board
CEO of Linde Material Handling GmbH
Quality
Facility Management / Health Safety
Environment
Every Executive Board member must disclose potential conflicts
of interest to the Supervisory Board immediately and must also
inform the other Executive Board members. All transactions
Dr Thomas Toepfer CFO of KION GROUP AG
between KION GROUP AG and Executive Board members or
Accounting / Tax / Financial Services
Corporate Finance / Investor Relations / M&A
Controlling
HR / Labour Relations Director
Legal
IT
Purchasing (until 31 July 2015)
Data Protection
Logistics / Urban (since 15 January 2015)
Facility Management / Health Safety
Environment (since 15 January 2015)
Dr Eike Böhm
(since 1 August
2015)
CTO of KION GROUP AG
R&D
Product Strategy
Innovation
Production System
Quality & Operations
Purchasing
Moving Forward
Innovation
related parties must be concluded on an arm’s-length basis.
Rules of procedure laid down by the Supervisory Board
define the areas of responsibility of the Executive Board members
and the way in which they work together. The full Executive Board
normally meets every 14 days and meetings are chaired by the
CEO. Individual Executive Board members sometimes take part
via video conference. At the meetings, the board members dis-
cuss measures and business that, under the Executive Board’s
rules of procedure, require the approval of the full Executive
Board. Resolutions of the full Executive Board are passed by
simple majority unless a greater majority is required by law. The
CEO has a casting vote in the event of a tied vote. Resolutions of
the Executive Board may also be adopted between meetings.
Taking account of the requirements of section 90 AktG, the
Executive Board provides the Supervisory Board with regular,
timely and comprehensive information on all matters of relevance
to the business as a whole relating to the intended operating pol-
icy, strategic planning, business performance, financial position,
financial performance and business risks. The Chief Executive
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Corporate governance report
29
Officer discusses these matters regularly with the chairman of
3.3 Objectives for the composition of the Supervisory Board
the Supervisory Board.
The Executive Board’s rules of procedure specify that impor-
The Supervisory Board strives to ensure that its composition is
tant transactions are subject to approval by the Supervisory
appropriate to its responsibilities and obligations. In particular,
Board. Budget planning, major acquisitions or capital expendi-
this means considering members’ individual qualities and skills as
ture, for example, require the consent of the Supervisory Board.
well as the specific requirements resulting from the global busi-
The Company is represented by two members of the Execu-
ness activities of KION GROUP AG and its Group companies.
tive Board, by one member of the Executive Board acting con-
The Supervisory Board is therefore of the opinion that the priority
jointly with a Prokurist (person with full commercial power of rep-
in aiming for a board composition based on diversity must be on
resentation), or by two Prokurists.
the expertise of the individual members and on a balanced mix of
personal qualities, experience, skills, qualifications and knowl-
3.2 Working methods of the Supervisory Board
edge of all members in line with the requirements of the business.
Consequently, it has agreed upon guidelines for the selection of
The Supervisory Board of KION GROUP AG advises and monitors
Supervisory Board members in the form of a diversity statement.
the Executive Board in its management of the Company and reviews
This also means that the Supervisory Board’s aim is to have an
its work. The Supervisory Board is fully involved from an early
appropriate number of women on the Supervisory Board and to
stage in all decisions that are fundamental to KION GROUP AG.
comply with the new statutory requirements for the proportion of
The Supervisory Board of KION GROUP AG consists of 16
female members of supervisory boards. Since the appointment
members, eight of whom are employee representatives and eight
of Ms Birgit A. Behrendt and Ms Xu Ping as members of the KION
are shareholder representatives. The shareholder representatives
GROUP AG Supervisory Board with effect from 1 January 2015,
are elected by the Annual General Meeting by simple majority.
there have been three female members. The Supervisory Board
The Supervisory Board has drawn up rules of procedure for
will also support the inclusion of other female board members
its work. These apply in addition to the requirements of the arti-
who meet the above criteria.
cles of incorporation and also define the Supervisory Board com-
mittees. According to these rules, the chairman of the Supervi-
3.4 Working methods and composition of the committees of
sory Board coordinates its work and the cooperation with the
the Executive Board and Supervisory Board
Executive Board, chairs its meetings and represents it externally.
The Supervisory Board meets in person at least twice in each half
In the year under review, there were four committees at KION
of a calendar year, and adopts its resolutions at these meetings.
GROUP AG whose tasks, responsibilities and work processes
Between these meetings, resolutions may also be adopted in
comply with the provisions of the German Stock Corporation Act
writing, by telephone or by other similar forms of voting, provided
and the German Corporate Governance Code. The chairman of
that the chairman of the Supervisory Board or, in his absence, his
each committee reports regularly to the full Supervisory Board on
deputy, decides on this procedure for the individual case con-
the committee’s work. The committees have each drawn up rules
cerned. The Supervisory Board adopts resolutions by a simple
of procedure that define their tasks and working methods.
majority of the votes cast unless a different procedure is pre-
scribed by law. If a vote is tied, the matter will only be renegotiated
Executive Committee
if the majority of the Supervisory Board vote in favour of this
The Executive Committee consists of four shareholder represent-
option. Otherwise the Board must vote again without delay. If this
atives and four employee representatives. Its chairman is always
new vote on the same matter also results in an equal number of
the chairman of the Supervisory Board. It prepares the meetings
votes for and against, the chairman of the Supervisory Board has
of the Supervisory Board and is responsible for ongoing matters
a casting vote.
between Supervisory Board meetings. The Executive Committee
also prepares the Supervisory Board’s decisions relating to
KION GROUP AG | Annual Report 2015We keep the world moving. 30
corporate governance, particularly amendments to the com-
Mediation Committee
ply-or-explain statement pursuant to section 161 AktG reflecting
The Mediation Committee comprises the chairman of the Super-
changed circumstances and the checking of adherence to the
visory Board, his deputy, an employee representative and a
comply-or-explain statement. It also prepares documents for the
shareholder representative. If the two-thirds-of-votes majority
Supervisory Board when Executive Board members are to be
required by section 27 (3) and section 31 (3) MitbestG is not
appointed or removed and, if applicable, when a new Chief
reached in a vote by the Supervisory Board on the appointment
Executive Officer is to be appointed. Documents relating to any
of an Executive Board member, the Mediation Committee must
matters in connection with Executive Board remuneration are
propose candidates for the post to the Supervisory Board within
also compiled by the Executive Committee. In addition, the
one month. The chairman of the Supervisory Board does not
Executive Committee is responsible for resolutions concerning
have a casting vote on the candidates proposed. The Mediation
the conclusion, amendment and termination of Executive Board
Committee did not need to be convened in 2015.
employment contracts and agreements with Executive Board
members governing pensions, severance packages, consultancy
In 2015, the members of the Mediation Committee were:
and other matters and for resolutions on any matters arising as a
Dr John Feldmann (chairman)
result of such contracts and agreements, unless they relate to
Özcan Pancarci (deputy chairman from 1 January 2016)
remuneration. The responsibilities of the Executive Committee
Joachim Hartig (deputy chairman, until 31 December 2015)
also include resolutions about the extension of loans to Executive
Johannes P. Huth (until 31 July 2015)
Board members, Supervisory Board members and parties
Kay Pietsch
related to them within the meaning of sections 89 and 115 AktG,
Hans Peter Ring (from 1 August 2015)
as well as resolutions to approve contracts with Supervisory
Board members outside their Supervisory Board remit. The
Audit Committee
Executive Committee should – in consultation with the Executive
The Audit Committee has four members, who are elected by the
Board – regularly deliberate on long-term succession planning for
Supervisory Board. Its purpose is to assist the Supervisory Board
the Executive Board.
in performing its task of monitoring accounting processes, com-
The Executive Committee met five times in 2015. The main
pliance matters and reporting. These responsibilities encompass
topics discussed by the Executive Committee in 2015 were those
monitoring the quality and integrity of the consolidated and sep-
concerning the Company’s Annual General Meeting and the
arate financial statements (as well as related disclosures), the
efficiency and governance initiatives. The Executive Committee
internal control mechanisms, risk management and the internal
also discussed the expansion of the Executive Board.
audit system. The Audit Committee also reviews the work car-
ried out by the independent auditors and checks that the inde-
In 2015, the members of the Executive Committee were:
pendent auditors are qualified and independent. It is also respon-
Dr John Feldmann (chairman)
Joachim Hartig (deputy chairman)
Dr Alexander Dibelius
Denis Heljic
sible for engaging the independent auditors, 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.
Johannes P. Huth (until 31 July 2015)
The Audit Committee met seven times in 2015. The main top-
Jiang Kui
Olaf Kunz
Kay Pietsch
ics discussed by the Audit Committee in 2015 were the 2015
annual financial statements, the quarterly financial statements,
the budget and the regular subject of the key elements of corpo-
Hans Peter Ring (from 1 August 2015)
rate governance within the Company.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Corporate governance report
31
In 2015, the members of the Audit Committee were:
4. Targets for the proportion of women
Hans Peter Ring (chairman)
Kay Pietsch (deputy chairman)
Dr John Feldmann
Alexandra Schädler
Germany’s ‘Act for the equal participation of women and men in
managerial positions in the private and public sectors’ came into
force on 24 April 2015. The Act requires the supervisory boards of
companies that are listed or subject to equal shareholder /
The chairman of the Audit Committee, Hans Peter Ring, is an
employee representation to define a target for the percentage of
independent member and has the required expertise in the areas
female executive board members. Also under the new legislation,
of accountancy or auditing specified in sections 100 (5) and
executive boards must set the targets for increasing the propor-
107 (4) AktG.
Nomination Committee
tion of women at the two management levels immediately below
the executive board. Supervisory / executive boards must set time
limits within which the targets are to be achieved. The time limits
The Nomination Committee has four members, all of whom are
must not exceed five years. The first targets must be achieved by
shareholder representatives and are elected by the shareholder
30 June 2017.
representatives on the Supervisory Board. The Nomination Com-
The Executive Board and Supervisory Board of KION
mittee’s only task is to propose new candidates for the Supervi-
GROUP AG studied the new legal requirements carefully. As the
sory Board to the Company’s Annual General Meeting. Accord-
Supervisory Board is not planning any changes to the compo-
ingly, the committee’s activities in 2015 focused on the criteria
sition of the KION GROUP AG Executive Board at present, the
and the selection process for finding suitable candidates to suc-
target for the proportion of female Executive Board members was
ceed Mr Johannes P. Huth as a member of the Supervisory
set at 0 per cent and applies until 30 June 2017.
Board. To this end, the Nomination Committee held a meeting
The Executive Board of KION GROUP AG has set the target
and different members of the committee met potential candi-
for the proportion of women at 10 per cent for the first manage-
dates and then adopted resolutions at meetings or by way of writ-
ment level immediately below the Executive Board and at
ten resolution. In accordance with the committee’s recommenda-
30 per cent for the second level of management below the
tion, Mr Wolfgang Faden was appointed to the Supervisory Board
Executive Board. The targets for both levels are also to be
as a new shareholder representative until the Company’s next
achieved by 30 June 2017.
Annual General Meeting. In December 2015, following the recom-
mendation of the Nomination Committee, the Supervisory Board
resolved to propose to the Company’s Annual General Meeting in
May 2016 that Dr Christina Reuter be elected to succeed Mr
Faden as a shareholder representative on the Company’s Super-
visory Board.
In 2015, the members of the Nomination Committee were:
Dr John Feldmann (chairman)
Dr Alexander Dibelius (deputy chairman from 1 August 2015)
Dr Johannes P. Huth (deputy chairman until 31 July 2015)
Birgit A. Behrendt (from 1 August 2015)
Jiang Kui
KION GROUP AG | Annual Report 2015We keep the world moving. 32
EXECUTIVE BOARD AND SUPER-
VISORY BOARD SHAREHOLDINGS
AND DIRECTORS’ DEALINGS
1. Shareholdings
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
(such as derivatives) if the value of these transactions reaches
As at 31 December 2015, the shares in KION GROUP AG or
€5,000 or more within one calendar year. > TABLE 004
related financial instruments held directly or indirectly by all mem-
bers of the Executive Board and Supervisory Board equated to
less than 1 per cent of all the shares issued by the Company.
Transactions disclosed pursuant to section 15a WpHG in 2015
Buyer / seller
Gordon Riske
Type of transaction
Share price (€)
Number of shares
Sale
35.90
137,000
TABLE 004
Total value (€)
4,950,610.00
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Disclosures relevant to acquisitions
33
Disclosures relevant to acquisitions,
section 315 (4) HGB
The disclosures relevant to acquisitions pursuant to section 315
KION GROUP AG has no rights arising from the treasury
(4) HGB together with the explanatory report form an integral part
shares that it holds (section 71b AktG).
of the group management report.
1. Composition of subscribed capital
3. Direct or indirect shareholdings in
the Company that represent more than
10 per cent of the voting rights
The subscribed capital (share capital) of KION GROUP AG
amounted to €98.9 million as at 31 December 2015. It is divided
As far as the Company is aware, only Weichai Power directly or
into 98.9 million no-par-value bearer shares. The share capital is
indirectly held more than 10 per cent of the voting rights in KION
fully paid up. All of the shares in the Company give rise to the
GROUP AG as at 31 December 2015 and its shareholding was
same rights and obligations. Each share confers one vote and
38.3 per cent.
entitlement to an equal share of the profits. The rights and obliga-
tions arising out of the shares are defined by legal provisions. As
at 31 December 2015, the Company held 160,050 shares in
– Pursuant to the German Securities Trading Act, the share-
holding held by Weichai Power is deemed to belong to the
treasury. The primary intention is to offer these treasury shares to
following other companies: > TABLE 005
staff as part of the KION Employee Equity Programme (KEEP).
2. Restrictions on voting rights or the transfer
of shares
Companies and countries to which
Weichai Power is deemed to belong
TABLE 005
Company
Registered office
There are generally no restrictions with respect to voting rights or
the transfer of shares in the Company. In accordance with the
Shandong Heavy Industry
Group Co., Ltd.
legal provisions applicable to bearer shares, all of the shares in
Weichai Group Holdings Limited
the Company can be traded freely.
The Executive Board understands that the two major share-
Weichai Power Co., Ltd.
Jinan,
People’s Republic of China
Weifang,
People’s Republic of China
Weifang,
People’s Republic of China
holders of KION GROUP AG, Superlift Holding S.à r.l. (‘Superlift’)
and Weichai Power (Luxembourg) Holding S.à r.l. (‘Weichai
Power’) had entered into a shareholder agreement in which they
both undertook to coordinate their voting at the Annual General
Weichai Power Hong Kong Inter-
national Development Co., Ltd.
Hong Kong,
People’s Republic of China
Meeting of the Company in respect of certain resolutions. Fur-
Other
thermore, the Executive Board understands that Superlift and
People’s Republic of China
Weichai Power had 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, but this
Registered office
Beijing,
People’s Republic of China
arrangement expired in the course of 2014. These agreements
Since the reporting date, there may have been further changes
have lapsed as Superlift sold all of its shares in the Company dur-
to the aforementioned shareholdings of which the Company is
ing 2015.
unaware. As the shares in the Company are bearer shares, the
KION GROUP AG | Annual Report 2015We keep the world moving. 34
Company only learns about changes to the size of shareholdings
to stipulate a larger majority than a simple majority in any other
if they are notifiable pursuant to the WpHG or other regulations.
cases has not been exercised in the articles of incorporation.
4. Shares with special rights that confer
authority to exert control over the Company
The Supervisory Board is authorised in article 10 (3) of the
articles of incorporation to amend the articles of incorporation
provided that such amendments relate solely to the wording.
There are no shares with special rights that confer the authority to
7. Authority of the Executive Board to issue or
exert control over the Company.
buy back shares
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
The Extraordinary General Meeting on 13 June 2013 authorised
the Company, in the period up to 12 June 2016, to acquire for
treasury up to 10 per cent of all the shares in issue at the time of
the resolution or in issue on the date the authorisation is exer-
cised, whichever is the lower. Together with other treasury shares
in the possession of the Company or deemed to be in its pos-
There are no cases where employees hold some of the Company’s
session pursuant to section 71a et seq. AktG, the treasury shares
capital and do not exercise their control rights directly themselves.
bought as a result of this authorisation must not exceed
6. Appointment and removal of members of
the Executive Board; amendments to the
articles of incorporation
10 per cent of the Company’s share capital at any time. The Com-
pany may sell the purchased treasury 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 busi-
ness or equity investments. In addition, the treasury shares may
Members of the Company’s Executive Board are appointed and
be offered to employees of the Company or of an affiliated com-
removed in accordance with the provisions of sections 84 and 85
pany as part of an employee share ownership programme. The
AktG and section 31 MitbestG. Pursuant to article 6 (1) of the
treasury shares can also be retired. Share buyback for trading
articles of incorporation of the Company, the Executive Board
purposes is prohibited. The authorisation may be exercised on
must have a minimum of two members. The Supervisory Board
one or more occasions, for the entire amount or for partial
determines the number of Executive Board members. Pursuant
amounts, in pursuit of one or more aims, by the Company, by a
to section 84 AktG and section 6 (3) of the Company’s articles of
Group company or by third parties for the account of the Com-
incorporation, the Supervisory Board may appoint a Chief Exec-
pany or the account of a Group company. At the discretion of the
utive Officer and a deputy.
Executive Board, the shares may be purchased through the stock
Section 179 (1) sentence 1 AktG requires that amendments
exchange, by way of a public purchase offer made to all share-
to the articles of incorporation be passed by resolution of the
holders or by way of a public invitation to shareholders to tender
Annual General Meeting. In accordance with article 23 of the
their shares.
articles of incorporation in conjunction with section 179 (2) sen-
The Company again made use of this authorisation in 2015,
tence 2 AktG, resolutions at the Annual General Meeting on
purchasing 70,000 shares in the period 10 September to 30 Sep-
amendments to the articles of incorporation are passed by simple
tember 2015. During the reporting year, 73,512 of the shares
majority of the votes cast and by simple majority of the share cap-
acquired that were still in treasury were used as part of the KEEP
ital represented in the voting unless a greater majority is specified
Employee Equity Programme for the employees of the Company
as a mandatory requirement under statutory provisions. The option
and certain Group companies.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Disclosures relevant to acquisitions
35
On the basis of a resolution of the Company’s Annual General
In accordance with the resolutions adopted by the Com-
Meeting on 19 May 2014, the Executive Board is authorised, sub-
pany’s Annual General Meeting on 19 May 2014, new shares and
ject to the consent of the Supervisory Board, to increase the
debt instruments can be issued for cash or non-cash contri-
Company’s share capital by up to €9.89 million by issuing up to
butions. They must be offered for subscription to existing share-
9.89 million new no-par-value ordinary bearer shares for cash
holders. Pursuant to section 186 (5) AktG, the new shares can
and / or non-cash contributions on one or more occasions up to
also be acquired by one or more banks provided they undertake
and including 18 May 2019 (2014 Authorised Capital).
to offer them to existing shareholders for subscription (indirect
On the basis of a resolution of the Company’s Annual General
pre-emption right). However, subject to the consent of the Super-
Meeting on 19 May 2014, the Executive Board is also authorised,
visory Board, the Executive Board is authorised to disapply
to issue, on one or more occasions until 18 May 2019, bearer
some or all of the pre-emption rights of existing shareholders in
and / or registered convertible bonds, warrant-linked bonds, prof-
the following cases:
it-sharing rights and / or income bonds with or without conversion
rights, warrants, mandatory conversion requirements or option
obligations, or any combinations of these instruments, which can
be perpetual and / or fixed-term (also referred to jointly as ‘debt
instruments’), for a total par value of up to €800 million. To enable
– in order to remove fractional amounts from shareholders’
– where new shares are issued for cash during a capital
pre-emption rights;
increase and the price at which the new shares are issued is
shares to be allocated to the holders / beneficial owners of the
not significantly lower (as defined by section 186 (3) sentence
convertible bonds, warrant-linked bonds, profit-sharing rights
4 AktG) than the market price for shares in the Company with
and / or income bonds with conversion rights, warrants, manda-
the same rights, or if debt instruments are issued for cash
tory conversion requirements or option obligations issued, on the
and the Executive Board reaches a view after due examina-
basis of the Executive Board’s authorisation, by KION GROUP AG
tion that the issue price is not significantly lower than their
or a German or non-German company in which KION GROUP AG
theoretical market value determined according to recognised
directly or indirectly holds the majority of voting rights and capital,
principles of financial mathematics (section 186 (3) sen-
the share capital was conditionally increased by up to €9.89 million
tence 4 AktG states that pre-emption rights can be excluded
through the issue of up to 9.89 million new, no-par-value bearer
provided the capital increase is less than 10 per cent of
shares in KION GROUP AG (2014 Conditional Capital).
Restrictions were placed on the issuance of new shares and
debt instruments in accordance with the resolutions adopted by
share capital);
– where necessary in order to grant the same pre-emption
rights to holders / beneficial owners of conversion rights or
the Company’s Annual General Meeting on 19 May 2014.
warrants and / or holders / beneficial owners of mandatory
Together, the proportion of the Company’s share capital attribut-
convertible bonds issued or to be issued by KION GROUP AG
able to the shares issued on the basis of the 2014 Authorised
or a company in which it has a majority shareholding as those
Capital and the total number of shares issued to service the debt
to which they would be entitled after exercising conversion
instruments issued on the basis of the aforementioned authorisa-
tion must not exceed 10 per cent of the Company’s share capital,
either on the effective date of the authorisation or the date on
rights or warrants or meeting conversion obligations;
– where new shares are issued during capital increases in
return for non-cash contributions, particularly for the acquisi-
which it is exercised. This 10 per cent limit includes shares that
tion of a business, parts of a business or equity investments
are issued during the term of the authorisation based on the 2014
or if debt instruments are issued in return for non-cash capi-
Authorised Capital, those that are issued, are required to be
tal contributions and the exclusion of pre-emption rights is in
issued or may be issued from the 2014 Conditional Capital to ser-
the interest of the Company.
vice debt instruments, or shares that have been or will be issued
on the basis of a different authorisation, or are still required to be
issued to service a debt instrument or may be issued to do so.
KION GROUP AG | Annual Report 2015We keep the world moving. 36
If new shares are issued from the 2014 Authorised Capital, the
Executive Board is also authorised, subject to the consent of the
Supervisory Board, to exclude shareholders’ pre-emption rights
in order to allot shares to people who are employees or directors
of the Company or its Group companies. This exclusion of
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
pre-emption rights is limited to a maximum of 5 per cent of share
In the event of a change of control resulting from a takeover bid,
capital, both on the effective date of this authorisation and at
certain consequences are set out in the following contracts con-
the time it is exercised.
cluded between Group companies of KION GROUP AG and third
When profit-sharing rights and / or income bonds with no
parties (effective through 31 December 2015):
conversion rights, warrants, mandatory conversion obligations or
option obligations are issued in return for cash or non-cash capi-
tal contributions, the Executive Board is authorised, subject to the
– Covenant agreement dated 14 February 2013 in connection
with the €450,000,000, 6.75 per cent senior secured notes
consent of the Supervisory Board, to exclude all pre-emption
maturing in 2020 issued by KION Finance S.A., concluded
rights of shareholders, provided these profit-sharing rights and / or
between Deutsche Trustee Company Limited as trustee,
income bonds have a debt-like structure and do not give rise to
KION Finance S.A. and KION Group GmbH (now KION Mate-
rights to membership of the Company or entitle the holder to a
rial Handling GmbH).
share of the proceeds of any liquidation and the coupon rate is
not based on levels of net income, distributable profit or divi-
In the event that a third party (with the exception of KKR and
dends. In this case, the coupon rate and issue price of the prof-
Goldman Sachs, companies affiliated with them or funds or
it-sharing rights and / or income bonds must also correspond to
limited partnerships / partnerships owned by them or that are
the market terms and conditions for comparable forms of finance
advised or managed by them) acquires beneficial ownership of
prevailing at the time they are issued.
more than 50 per cent of all shares in KION GROUP AG, KION
Subject to the consent of the Supervisory Board, the Execu-
GROUP AG will be obliged to submit an offer to acquire the
tive Board is authorised to determine the further details of the
aforementioned debt instruments at a price of 101 per cent of
capital increase relating to the 2014 Authorised Capital and its
their nominal value. This offer must remain valid for a minimum of
implementation, particularly the rights conferred by the shares
30 days from the date of the change of control.
and their terms and conditions of issue. In relation to debt instru-
ments, it is authorised to determine further details about their
issuance, terms of issue and the supply of shares or to determine
– Senior facility agreement dated 23 December 2006 (and
amended on several occasions thereafter), concluded
them by mutual consent with the governing bodies of any major-
between KION Group GmbH (now named KION Material
ity-held company that is issuing the debt instruments.
Handling GmbH) and, among others, the London branch of
UniCredit Bank AG.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Disclosures relevant to acquisitions
37
In the event that a third party (with the exception of KKR and
9. Compensation agreements that the
Goldman Sachs, companies affiliated with them or funds or lim-
ited partnerships / 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
Company has signed with the Executive
Board members or employees that will be
triggered in the event of a takeover bid
facilities drawn down would be immediately repayable and any
No such agreements have been concluded between the Com-
that had not been drawn down would be automatically cancelled.
pany and its current Executive Board members or employees.
– Senior facilities agreement dated 28 October 2015, con-
cluded between KION GROUP AG and, among others, the
London branch of UniCredit Bank AG.
In the event that a person, companies affiliated with this person,
or persons acting in concert within the meaning of section 2 (5)
German Securities Acquisition and Takeover Act
(WpÜG)
acquire(s) control over more than 50 per cent of the Company’s
voting shares, the lenders may demand that the loans drawn
down be repaid and may cancel the loan facilities under the
senior facilities agreement.
On 15 February 2016, KION GROUP AG used funds from a
syndicated loan agreement concluded on 28 October 2015 in
order to repay both the corporate bond of €450.0 million and the
remaining liabilities under the syndicated loan of 23 December
2006. This makes the provisions in relation to the eventuality of a
change of control redundant.
– KION Material Handling GmbH has entered into an agree-
ment with Volkswagen AG for the supply of internal combus-
tion engines. This agreement includes a provision under
which either 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.
KION GROUP AG | Annual Report 2015We keep the world moving. 38
Remuneration report
This remuneration report forms an integral part of the group man-
Essential features of the Executive Board
agement report for KION GROUP AG. In accordance with statu-
remuneration system
tory requirements and the recommendations of the German Cor-
porate Governance Code as amended 5 May 2015 (DCGK), the
The remuneration of the Executive Board of KION GROUP AG is
report explains the main features and structure of the remunera-
determined in accordance with the requirements of the German
tion system used for the Executive Board and Supervisory Board
Stock Corporation Act and the DCGK and is focused on the
of KION GROUP AG and also discloses the remuneration of the
Company’s long-term growth. It is determined so as to reflect the
individual members of the Executive Board and Supervisory
size and complexity of the KION Group, its business and financial
Board for the work that they carried out on behalf of the Company
situation, its performance and future prospects, the normal
and its subsidiaries in 2015. The report also reflects the require-
amount and structure of executive board remuneration in compa-
ments of German accounting standard (GAS) 17.
rable companies and the internal salary structure. The Supervi-
KION GROUP AG considers that transparency and clarity
sory Board also takes into account the relationship between the
surrounding both the remuneration system itself and the remuner-
Executive Board remuneration and the remuneration paid to sen-
ation of the individual members of the Executive Board and Super-
ior managers and the German workforce of the Company as a
visory Board are fundamental to good corporate governance.
whole, including changes over the course of time. To this end, the
EXECUTIVE BOARD REMUNERATION
Remuneration system
Supervisory Board has decided how the relevant benchmarks
are to be defined. Other criteria used to determine remuneration
are the individual responsibilities and personal performance of
each member of the Executive Board. To review the Executive
Board’s remuneration, the Supervisory Board draws on remuner-
ation comparisons, particularly comparisons with MDAX compa-
nies, and on recommendations from an external remuneration
consultant who is independent both of the Executive Board and
The Supervisory Board of KION GROUP AG is responsible for set-
of the KION Group. The Supervisory Board regularly reviews the
ting and regularly reviewing the total pay of the individual mem-
structure and appropriateness of Executive Board remuneration.
bers of the Executive Board. According to the rules of procedure
The total remuneration of the Executive Board comprises a
for the Supervisory Board, the Executive Committee prepares all
non-performance-related salary and non-performance-related
Supervisory Board resolutions pertaining to remuneration.
non-cash benefits, performance-related (variable) remuneration
The remuneration system described below has applied to the
and pension entitlements. When setting the variable remunera-
members of the KION GROUP AG Executive Board since 29 June
tion, the emphasis is on creating a measurement basis covering a
2013, the day after KION GROUP AG’s successful IPO and listing
number of years, thus providing the members of the Executive
on the Frankfurt Stock Exchange. It was approved by the Annual
Board with an incentive to contribute to the sustained and long-
General Meeting of KION GROUP AG on 19 May 2014 with a
term growth of the Company. The system specifically allows for
majority of 98.77 per cent. The Supervisory Board of the former
possible positive and negative developments.
KION Holding 1 GmbH had approved this system by adopting a
The regular cash remuneration for a particular year, consisting of
resolution at its meeting on 25 April 2013 in connection with the
a non-performance-related fixed annual salary and performance-re-
Company’s conversion into a public limited company. This reso-
lated (variable) remuneration, has a heavy emphasis on performance.
lution was based on the recommendation of what was then the
If the targets set by the Supervisory Board are completely missed,
Human Resources Committee.
only the fixed salary is paid. Taking account of the cap on one-year
and multiple-year variable remuneration, the cash remuneration con-
sists of the following components in the event that the targets are
significantly exceeded and the share price goes up sufficiently:
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KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Remuneration report
39
– 15 per cent fixed annual salary,
– 24 to 27 per cent one-year variable remuneration,
– 58 to 61 per cent multiple-year variable remuneration.
Quek’s designated place of work is Xiamen or until his service
contract with KION GROUP AG ends.
Performance-related remuneration
The variable components of the cash remuneration make up no
The performance-related remuneration components consist of a
more than 85 per cent, of which approximately two-thirds are
variable remuneration component measured over one year
multiple-year components. Both the one-year and the multi-
(short-term incentive) and a variable remuneration component
ple-year components are linked to key performance indicators
measured over several years in the form of a rolling performance
used by the KION Group to measure its success. The remunera-
share plan with a three-year term (long-term incentive).
tion system is thus closely tied to the success of the Company and,
with a high proportion of multiple-year variable remuneration, has a
One-year variable remuneration
long-term focus aimed at promoting the KION Group’s growth.
The pension entitlements consist of entitlements in respect of
The one-year variable remuneration is a remuneration compo-
retirement, invalidity and surviving dependants’ benefits.
nent linked to the business profitability and productivity of the
KION Group in the relevant financial year. Its amount is deter-
Non-performance-related remuneration
mined by the achievement of the following targets:
The Executive Board members of KION GROUP AG receive non-
performance-related remuneration in the form of a fixed annual
salary (basic remuneration) and additional benefits. The fixed
annual salary 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 service contract ends. The Super-
visory Board reviews the basic remuneration at regular intervals
weighting of 30 per cent,
– earnings before interest, tax and amortisation (EBITA),
– return on capital employed (ROCE), weighting of 30 per cent,
– revenue, weighting of 20 per cent and
– net debt, weighting of 20 per cent.
and makes adjustments if appropriate.
The target values for the financial components are derived from
The additional benefits essentially comprise use of a com-
the annual budget and specified by the Supervisory Board.
pany car and the payment of premiums for accident insurance
No bonus is paid if target achievement is 75 per cent or less
with benefits at a typical market level.
(lower target limit). In cases where the targets are significantly
Additional special benefits have been agreed for Mr Quek
exceeded, the bonus can be doubled at most (capped at
because he has been sent from Singapore to China on foreign
200 per cent). If the targets derived from the annual budget are
assignment.
achieved in full, target achievement is 100 per cent. The target
Under this arrangement, Mr Quek’s remuneration is struc-
achievement levels for the weighted targets (EBITA, ROCE, reve-
tured as if he were liable for taxes and social security contribu-
nue and net debt) are added together to give the total target
tions in Singapore. KION GROUP AG pays the taxes and social
achievement.
security contributions that Mr Quek incurs in China and Germany
The individual performance of the Executive Board members is
over and above the taxes that would theoretically apply in Singa-
assessed by the Supervisory Board, which applies a discretionary
pore. In 2015, this additional amount totalled €1,167 thousand
performance multiple with a factor of between 0.8 and 1.2. When
(2014: €404 thousand). The additional benefits also agreed with
deciding what factor to apply, the Supervisory Board looks at the
Mr Quek include the cost of trips home to Singapore for him and
extent to which the Executive Board members have achieved the
his family, a company car, rental payments in Xiamen, China, and
individual targets set by the Supervisory Board at the start of the
private health insurance. In 2015, the additional benefits for Mr
year. This factor enables the Supervisory Board to increase or
Quek amounted to a total of €158 thousand (2014: €108 thou-
reduce the bonus, calculated on the basis of the total target
sand). These additional benefits will be granted for as long as Mr
achievement for the financial targets derived from the budget, by
KION GROUP AG | Annual Report 2015We keep the world moving. 40
a maximum of 20 per cent depending on the assessment of indi-
shares (average price over the preceding 60 trading days) at the
vidual performance. The one-year variable remuneration is capped
end of the performance period.
at 200 per cent of the contractual target bonus and is paid after
Executive Board members’ individual performance is also
the Annual General Meeting relating to the year in question.
taken into account in the multiple-year variable remuneration. At
In the event that an Executive Board member is not entitled
the start of the performance period, the Supervisory Board
to remuneration for the entire year on which the calculation is
defines individual targets for the three-year period. Depending on
based, the remuneration is reduced pro rata temporis.
achievement of these targets, the Supervisory Board can apply a
discretionary factor to make a final adjustment to the calculation
Multiple-year variable remuneration
of the amount to be paid out at the end of the performance period
by plus or minus 20 per cent, although the maximum payment
For the members of the Executive Board, multiple-year variable
may not exceed 200 per cent of the allocation value.
remuneration has been agreed in the form of a performance share
The plan is a cash-settled long-term incentive plan that does
plan. A very similar plan is offered to the Group’s senior managers.
not include the right to receive any actual shares. Under the
The basis of measurement has been defined as the total share-
requirements of German accounting standard (GAS) 17 and IFRS 2,
holder return (TSR) for KION shares compared with the STOXX®
the total expense arising from share-based payments and the fair
Europe Total Market Index (TMI) Industrial Engineering Index and
value of the performance share plan on the date of granting must
return on capital employed (ROCE). Each has a weighting of
be disclosed. > TABLE 006
50 per cent. The annual tranches granted under the plan have a
term (performance period) of three years and are paid at the end
The total expense in 2015 amounted to €11,203 thousand (2014:
of the term, provided the defined targets have been achieved.
€4,782 thousand). This does not include an amount of €531 thou-
At the start of a performance period, a conditional entitle-
sand already recognised as an expense in 2014 in connection
ment to a certain target number of performance shares is granted.
with the termination agreements of Mr Knoef and Mr Maurer.
This preliminary number is calculated by dividing the allocation
value set out (in euros) in the service contract for the particular
Upper limits on remuneration
Executive Board member by the fair value of one performance
share at the time of grant. At the end of the performance period,
In accordance with the DCGK, remuneration is subject to upper
the preliminary number of performance shares is adjusted
limits on the amounts payable, both overall and also in terms of
depending on achievement of the two targets (relative TSR and
the variable components. The upper limit on the total cash remu-
ROCE) to give the final number of performance shares.
neration to be paid, consisting of the fixed annual salary plus
In respect of the ROCE target, there is no entitlement if target
the one-year and multiple-year variable remuneration, equals
achievement is 75 per cent or less. If the target is significantly
1.7 times the target remuneration (2014: 1.7 times) – excluding the
exceeded (target achievement of 135 per cent or more), the enti-
non-performance-related non-cash remuneration and other ben-
tlement is capped at 150 per cent. Regarding the relative TSR
efits paid in that financial year. Both the one-year and multiple-
target, there is no entitlement if KION shares do not outperform
year variable remuneration are capped at 200 per cent of the
the STOXX® Europe TMI Industrial Engineering Index. If the KION
target value.
shares outperform this index by 15 per cent or more, the entitle-
ment is capped at 150 per cent. If KION shares outperform the
Pension entitlements
STOXX® Europe TMI Industrial Engineering index by 10 per cent
and the ROCE targets defined each year on the basis of the
KION GROUP AG grants its Executive Board members direct
budget are achieved, total target achievement will be 100 per cent.
entitlement to a company pension plan consisting of retirement,
The amount paid for each tranche is determined by the final
invalidity and surviving dependants’ benefits.
number of performance shares multiplied by the price of KION
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KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Remuneration report
41
Performance Share Plan 2013
TABLE 006
Fair value of the
performance
share plan on the
date of grant
(in thousand €)
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
(in €)
Expense for
share-based
remuneration
in 2014
(in thousand €)
Expense for
share-based
remuneration
in 2015 2
(in thousand €)
1,500
1,000
1,000
830
1,000
5,330
73,710
49,140
49,140
40,786
49,140
261,916
20.35
20.35
20.35
20.35
20.35
860
573
573
476
573
3,055
1,790
613
613
1,821
1,194
6,031
Gordon Riske
Bert-Jan Knoef 3
Theodor Maurer 3
Ching Pong Quek
Dr Thomas Toepfer
Total
1 The target number of performance shares 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.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent as part of a tax equalisation agreement. The amounts for Mr Knoef and Mr Maurer include the expenses
recognised in the 2014 figure in connection with their departure.
3 Resigned from office on 14 January 2015; Executive Board service contract ended on 31 March 2015
Performance Share Plan 2014
Fair value of the
performance
share plan on the
date of grant
(in thousand €)
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
(in €)
Expense for
share-based
remuneration
in 2014
(in thousand €)
Expense for
share-based
remuneration
in 2015 2
(in thousand €)
1,500
1,000
1,000
830
1,000
5,330
54,427
36,284
36,284
30,116
36,284
193,395
27.56
27.56
27.56
27.56
27.56
486
324
324
269
324
1,727
1,095
335
335
1,044
730
3,539
Gordon Riske
Bert-Jan Knoef 3
Theodor Maurer 3
Ching Pong Quek
Dr Thomas Toepfer
Total
1 The target number of performance shares 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.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent as part of a tax equalisation agreement. The amounts for Mr Knoef and Mr Maurer include the expenses
recognised in the 2014 figure in connection with their departure.
3 Resigned from office on 14 January 2015; Executive Board service contract ended on 31 March 2015
KION GROUP AG | Annual Report 2015We keep the world moving. 42
Performance Share Plan 2015
TABLE 006
Fair value of the
performance share plan
on the date of grant
(in thousand €)
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
(in €)
Expense for share-
based remuneration
in 2015 2
(in thousand €)
1,500
806
83
83
830
1,000
4,302
53,210
28,576
2,956
2,956
29,443
35,474
152,615
28.19
28.19
28.19
28.19
28.19
28.19
696
193
116
116
578
464
2,164
Gordon Riske
Dr Eike Böhm
Bert-Jan Knoef 3
Theodor Maurer 3
Ching Pong Quek
Dr Thomas Toepfer
Total
1 The target number of performance shares 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.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent as part of a tax equalisation agreement. The amounts for Mr Knoef and Mr Maurer include the expenses
recognised in the 2014 figure in connection with their departure.
3 Resigned from office on 14 January 2015; Executive Board service contract ended on 31 March 2015. The fair value of the performance share plan on the date of grant was recognised
pro rata temporis up to 31 March 2015.
The Chief Executive Officer has a defined benefit entitlement that
event occurs. If higher interest is generated by investing the pension
was granted in his original service contract and was transferred to
account, it will be credited to the pension account when an insured
his Executive Board service contract when the Company changed
event occurs (surplus). The standard retirement age for the statutory
its legal form. The amount of the entitlement is dependent on the
pension applies. Executive Board members are entitled to early
number of years of service and amounts to a maximum of
payment of the pension no earlier than their 62nd birthday. In the
50 per cent of the most recent fixed annual salary awarded in the
event of invalidity or death while the Executive Board member has
original service contract after the end of the tenth year of service.
an active service contract, the contributions that would have been
The present value of the previous defined benefit plan for the
made until the age of 60 are added to the pension account, although
ordinary members of the Executive Board was transferred as a
only a maximum of ten annual contributions will be added. When an
starting contribution for a new defined contribution pension plan
insured event occurs, the pension is paid as a lump sum or, follow-
when the Company changed its legal form. The new plan is struc-
ing a written request, in ten annual instalments.
tured as a cash balance plan and is also applied to new Executive
Board members.
Termination benefits
For each of the other ordinary members of the Executive Board,
a fixed annual contribution of €150 thousand (€124.5 thousand for
In line with the DCGK, all Executive Board service contracts pro-
Mr Quek) is paid into their pension accounts for the duration of the
vide for a severance payment equivalent to no more than two
member’s period of service on the Executive Board. Interest is paid
years’ annual remuneration payable in the event of the contract
on the pension account at the prevailing statutory guaranteed return
being terminated prematurely without good cause. The amount
rate for the life insurance industry (applicable maximum interest rate
of annual remuneration is defined as fixed salary plus the variable
for the calculation of the actuarial reserves of life insurers pursuant
remuneration elements, assuming 100 per cent target achieve-
to section 2 (1) German Regulation on the Principles Underlying the
ment and excluding non-cash benefits and other additional
Calculation of the Premium Reserve (DeckRV)) until an insured
benefits, for the last full financial year before the end of the Exec-
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KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Remuneration report
43
utive Board service contract. If the Executive Board service con-
tract was due to end within two years, the severance payment is
calculated pro rata temporis. If a service contract is terminated for
Remuneration for members of the Executive
Board in 2015
good cause for which the Executive Board member concerned is
In accordance with the recommendations of the DCGK, as
responsible, no payments are made to the Executive Board mem-
amended on 5 May 2015, the remuneration of Executive Board
ber in question. The Company does not have any commitments
members is presented in two separate tables. Firstly, the benefits
for the payment of benefits in the event of a premature termination
granted for the year under review, including the additional bene-
of Executive Board contracts following a change of control.
fits and – in the case of variable remuneration components – the
Executive Board members are subject to a post-contractual
maximum and minimum remuneration achievable are shown.
non-compete agreement of one year. In return, the Company
> TABLE 007
pays the Executive Board member compensation for the duration
of the non-compete agreement amounting to 100 per cent of his
Secondly, > TABLE 008 shows the total remuneration allocated /
final fixed salary. Other income of the Executive Board member is
earned, comprising fixed remuneration, short-term variable remu-
offset against the compensation.
neration and long-term variable remuneration, broken down by
In the event that Mr Riske’s appointment is not extended for
reference year.
reasons for which he is not responsible and he has not reached the
standard retirement age for the statutory pension or in the event that
Mr Riske resigns for good cause before the end of his appointment
Benefits granted pursuant to the DCGK
or suffers permanent incapacity after his period of service as a result
of sickness, he will receive transitional benefits of €276 thousand per
The total remuneration granted to Executive Board members for
annum on the basis of previous contracts. During his current term of
2015 was €9,535 thousand (minimum: €3,194 thousand, maxi-
office, the amount of the transitional benefits will rise by €12 thou-
mum: €15,877 thousand) (2014: €11,840 thousand). Of this
sand each year up to a maximum amount of €300 thousand per
amount, €2,098 thousand (2014: €2,840 thousand) was attribut-
annum. Severance payments in the event of early termination of his
able to fixed non-performance-related remuneration compo-
appointment without good cause, compensation for the post-con-
nents, €6,372 thousand (minimum: €31 thousand, maximum:
tractual non-compete agreement, pension benefits that Mr Riske
€12,713 thousand) (2014: €7,911 thousand) to variable one-year
receives due to his previous work for other employers and income
and multiple-year performance-related remuneration compo-
from other use of his working capacity (with the exception of remu-
nents, €211 thousand (2014: €175 thousand) to non-perfor-
neration for work as a member of a supervisory or advisory board or
mance-related non-cash remuneration and other non-perfor-
a board of directors) will be offset against these transitional benefits.
mance-related benefits, and €854
thousand
(2014: €914
If an Executive Board member suffers temporary incapacity,
thousand) to the pension expense. The figure shown for one-year
he will receive his full fixed salary for a maximum period of six
variable remuneration is based on a target achievement rate of
months plus the one-year variable remuneration. In the event of
100 per cent (minimum: 0 per cent for target achievement of
temporary incapacity for a further six months, the Executive
75 per cent or less, maximum: 200 per cent for target achieve-
Board member will receive 80 per cent of his fixed salary, but only
ment of 135 per cent or more). The figure shown for multiple-year
up to a point at which the service contract is terminated.
variable remuneration is the fair value of the performance share
If an Executive Board member ceases to be employed by the
plans at the date of grant, representing full target achievement
Company as a result of death, the Executive Board member’s
(minimum: zero payment, maximum: 200 per cent of the contrac-
family will be entitled to the fixed monthly remuneration for the
tual allocation value).
month in which the service contract ends and for the three sub-
The additional benefits were measured at the value calcu-
sequent months, but only up to the point at which the service
lated for tax purposes. > TABLE 007
contract would otherwise have come to an end.
KION GROUP AG | Annual Report 2015We keep the world moving. 44
Benefits granted in 2015
Gordon Riske
CEO of KION GROUP AG
Dr Eike Böhm
CTO of KION GROUP AG
Since 1 August 2015
Bert-Jan Knoef
Member of KION GROUP AG Executive Board
Until 14 January 2015
2015 (min.)
2015 (max.)
2014
2015 (min.)
2015 (max.)
2015
2015 (min.)
2015 (max.)
800
21
821
0
0
0
821
622
1,443
800
21
821
1,400
3,000
3,000
5,221
622
5,843
in thousand €
Non-perfor-
mance-related
components
Fixed remuneration
Non-cash remuneration and
other benefits 1
Total
Short-term
incentive
One-year variable
remuneration 2 , 3
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration 2 , 4
Performance share plan
(1 Jan 2014 – 31 Dec 2016)
Performance share plan
(1 Jan 2015 – 31 Dec 2017)
Total
Pension expense 5
Total remuneration
Reconciliation to total remuneration as defined
by section 314 (1) no. 6a HGB in conjunction with GAS 17
Minus the one-year variable
remuneration granted
Plus the expected one-year
variable remuneration
(allocation)
Minus the pension expense
Plus the adjustment of the
one-year variable remunera-
tion for the previous year
Total remuneration as
defined by section 314 (1)
no. 6a HGB in conjunction
with GAS 17
2014
800
19
819
700
2015
800
21
821
700
1,500
1,500
1,500
3,019
510
3,529
1,500
3,021
622
3,643
– 700
– 700
700
– 510
795
– 622
53
159
3,072
3,275
1 Non-performance related, non-cash remuneration and other benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent (2014: 30 per cent) as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent for target achievement of 75 per cent or less,
maximum: 200 per cent for target achievement of 135 per cent or more). The value for Mr Knoef and Mr Maurer is the value defined in their termination agreements.
4 Fair value on the date of grant
5 Service cost (IAS)
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TABLE 007
19
1
20
16
26
26
61
4
65
19
1
20
16
0
0
35
4
39
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2015
208
14
223
167
806
806
1,195
1,195
– 167
189
1,217
208
14
223
0
0
0
223
223
208
14
223
333
1,611
2,167
2,167
1,611
1,000
2014
500
19
519
400
1,000
1,919
102
2,021
400
– 102
71
1,990
19
1
20
16
13
13
48
4
52
16
– 4
9
57
– 400
– 16
KION GROUP AG | Annual Report 2015
CORPORATE GOVERNANCE
Remuneration report
45
Benefits granted in 2015
TABLE 007
Gordon Riske
CEO of KION GROUP AG
Dr Eike Böhm
CTO of KION GROUP AG
Since 1 August 2015
Bert-Jan Knoef
Member of KION GROUP AG Executive Board
Until 14 January 2015
800
21
821
0
0
0
821
622
1,443
800
21
821
1,400
3,000
3,000
5,221
622
5,843
in thousand €
Non-perfor-
mance-related
components
Short-term
incentive
One-year variable
remuneration 2 , 3
Performance-
related
components
Share-based
long-term
incentive
1,500
1,500
(1 Jan 2014 – 31 Dec 2016)
1,500
Fixed remuneration
Non-cash remuneration and
other benefits 1
Total
Multiple-year variable
remuneration 2 , 4
Performance share plan
Performance share plan
(1 Jan 2015 – 31 Dec 2017)
Total
Pension expense 5
Total remuneration
Minus the one-year variable
remuneration granted
Plus the expected one-year
variable remuneration
(allocation)
Minus the pension expense
Plus the adjustment of the
one-year variable remunera-
tion for the previous year
Total remuneration as
defined by section 314 (1)
no. 6a HGB in conjunction
with GAS 17
2014
800
19
819
700
3,019
510
3,529
2015
800
21
821
700
1,500
3,021
622
3,643
– 700
– 700
700
– 510
795
– 622
53
159
3,072
3,275
Reconciliation to total remuneration as defined
by section 314 (1) no. 6a HGB in conjunction with GAS 17
1 Non-performance related, non-cash remuneration and other benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent (2014: 30 per cent) as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent for target achievement of 75 per cent or less,
maximum: 200 per cent for target achievement of 135 per cent or more). The value for Mr Knoef and Mr Maurer is the value defined in their termination agreements.
4 Fair value on the date of grant
5 Service cost (IAS)
2015 (min.)
2015 (max.)
2014
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2015
208
14
223
167
806
806
1,195
1,195
– 167
189
1,217
2015 (min.)
2015 (max.)
208
14
223
0
0
0
223
223
208
14
223
333
2014
500
19
519
400
1,611
1,000
1,000
1,919
102
2,021
1,611
2,167
2,167
2015
2015 (min.)
2015 (max.)
19
1
20
16
13
13
48
4
52
19
1
20
16
0
0
35
4
39
19
1
20
16
26
26
61
4
65
– 400
– 16
400
– 102
71
1,990
16
– 4
9
57
KION GROUP AG | Annual Report 2015We keep the world moving.
46
Benefits granted in 2015 (continued)
Theodor Maurer
Member of KION GROUP AG Executive Board
Until 14 January 2015
Ching Pong Quek
Member of KION GROUP AG Executive Board /
Chief Asia Pacific Officer
Dr Thomas Toepfer
CFO of KION GROUP AG
in thousand €
Non-perfor-
mance-related
components
Fixed remuneration
Non-cash remuneration and
other benefits 1
Total
Short-term
incentive
One-year variable
remuneration 2 , 3
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration 2 , 4
Performance share plan
(1 Jan 2014 – 31 Dec 2016)
Performance share plan
(1 Jan 2015 – 31 Dec 2017)
Total
Pension expense 5
Total remuneration
Reconciliation to total remuneration as defined
by section 314 (1) no. 6a HGB in conjunction with GAS 17
2014
500
18
518
400
1,000
1,000
1,918
104
2,022
2015
2015 (min.)
2015 (max.)
2015 (min.)
2015 (max.)
2015 (min.)
2015 (max.)
19
1
20
16
13
13
48
4
52
19
1
20
16
0
0
35
4
39
19
1
20
16
26
26
61
4
65
Minus the one-year variable
remuneration granted
Plus the expected one-year
variable remuneration
(allocation)
Minus the pension expense
Plus the adjustment of the
one-year variable remunera-
tion for the previous year
Total remuneration as
defined by section 314 (1)
no. 6a HGB in conjunction
with GAS 17
– 400
– 16
– 432
– 498
– 400
– 400
400
– 104
53
1,970
16
– 4
9
57
432
– 97
566
– 107
400
– 101
455
– 117
109
195
32
91
2,268
2,716
1,944
2,062
1 Non-performance related, non-cash remuneration and other benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent (2014: 30 per cent) as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent for target achievement of 75 per cent or less,
maximum: 200 per cent for target achievement of 135 per cent or more). The value for Mr Knoef and Mr Maurer is the value defined in their termination agreements.
4 Fair value on the date of grant
5 Service cost (IAS)
Moving Forward
Innovation
2014
540
108
648
432
1,079
2,158
97
2,255
2015
552
158
710
498
1,245
2,453
107
2,560
552
158
710
0
0
0
710
107
817
552
158
710
996
2,490
4,196
107
4,303
2014
500
12
512
400
1,000
1,912
101
2,013
2015
500
17
517
400
1,000
1,917
117
2,034
1,079
1,245
2,490
1,000
1,000
2,000
TABLE 007
500
17
517
800
2,000
3,317
117
3,434
500
17
517
0
0
0
517
117
634
KION GROUP AG | Annual Report 2015
CORPORATE GOVERNANCE
Remuneration report
47
Benefits granted in 2015 (continued)
TABLE 007
Ching Pong Quek
Member of KION GROUP AG Executive Board /
Chief Asia Pacific Officer
Dr Thomas Toepfer
CFO of KION GROUP AG
2014
540
108
648
432
2015
552
158
710
498
1,079
1,245
1,079
2,158
97
2,255
1,245
2,453
107
2,560
2015 (min.)
2015 (max.)
552
158
710
0
0
0
710
107
817
552
158
710
996
2014
500
12
512
400
2015
500
17
517
400
2,490
1,000
1,000
1,000
1,912
101
2,013
2,490
4,196
107
4,303
1,000
1,917
117
2,034
2015 (min.)
2015 (max.)
500
17
517
0
0
0
517
117
634
500
17
517
800
2,000
2,000
3,317
117
3,434
– 400
– 16
– 432
– 498
– 400
– 400
432
– 97
566
– 107
400
– 101
455
– 117
109
195
32
91
2,268
2,716
1,944
2,062
Theodor Maurer
Member of KION GROUP AG Executive Board
Until 14 January 2015
2015
2015 (min.)
2015 (max.)
19
1
20
16
0
0
35
4
39
19
1
20
16
26
26
61
4
65
in thousand €
Non-perfor-
mance-related
components
Short-term
One-year variable
incentive
remuneration 2 , 3
Performance-
related
components
Share-based
long-term
incentive
Reconciliation to total remuneration as defined
by section 314 (1) no. 6a HGB in conjunction with GAS 17
Fixed remuneration
Non-cash remuneration and
other benefits 1
Total
Multiple-year variable
remuneration 2 , 4
Performance share plan
(1 Jan 2014 – 31 Dec 2016)
Performance share plan
(1 Jan 2015 – 31 Dec 2017)
Total
Pension expense 5
Total remuneration
Minus the one-year variable
remuneration granted
Plus the expected one-year
variable remuneration
(allocation)
Minus the pension expense
Plus the adjustment of the
one-year variable remunera-
tion for the previous year
Total remuneration as
defined by section 314 (1)
no. 6a HGB in conjunction
with GAS 17
2014
500
18
518
400
1,000
1,000
1,918
104
2,022
400
– 104
53
1,970
19
1
20
16
13
13
48
4
52
16
– 4
9
57
1 Non-performance related, non-cash remuneration and other benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 50 per cent (2014: 30 per cent) as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent for target achievement of 75 per cent or less,
maximum: 200 per cent for target achievement of 135 per cent or more). The value for Mr Knoef and Mr Maurer is the value defined in their termination agreements.
4 Fair value on the date of grant
5 Service cost (IAS)
KION GROUP AG | Annual Report 2015We keep the world moving.
48
Allocation pursuant to the DCGK
The figure shown for one-year variable remuneration is based
on a preliminary total target achievement rate of about
The total remuneration allocated to / earned by Executive Board
114 per cent calculated using preliminary earnings figures at the
members for 2015 was €15,199 thousand (2014: €8,156 thou-
beginning of 2016. In departure from this, the value for Mr Knoef
sand). Of this amount, €2,098 thousand (2014: €2,840 thou-
and Mr Maurer was the value defined in their termination agree-
sand) was attributable to fixed non-performance-related remu-
ments. This preliminary variable remuneration for each Execu-
neration com ponents, €12,036
thousand
(2014: €4,227
tive Board member is also subject to adjustment by the Super-
thousand) to variable one-year and multiple-year perfor-
visory Board in line with the individual performance of the
mance-related remuneration components, €211
thousand
Executive Board member. This adjustment may vary by plus or
(2014: €175 thousand) to non-performance-related non-cash
minus 20 per cent of the variable remuneration.
remuneration and other non-performance-related benefits, and
As part of the multiple-year remuneration, the first pay-
€854 thousand (2014: €914 thousand) to the pension expense.
ment from the 2013 tranche of the performance share plan will
Allocation in 2015
Gordon Riske
Dr Eike Böhm
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
CEO of KION GROUP AG
CTO of KION GROUP AG
in thousand €
Non-performance-
related
components
Fixed remuneration
Non-cash remuneration
and other benefits 1
Total
Short-term
incentive
One-year variable
remuneration 2
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration
Performance share plan
(29 Jun 2013 – 31 Dec 2015)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
Total
Pension expense 3
Total remuneration
2014
800
19
819
859
0
1,677
510
2,187
2015
800
21
821
795
3,000
3,000
4,616
622
5,238
Since 1 August 2015
2014
–
–
–
–
–
–
–
–
–
–
–
2015
208
14
223
189
0
412
412
1 Non-performance related, non-cash remuneration and other benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
2 The figure shown for one-year variable remuneration for 2014 is the actual amount paid out, which differs from the estimated value listed in the 2014 consolidated financial statements.
3 Service cost (IAS)
Moving Forward
Innovation
Member of KION GROUP AG
Member of KION GROUP AG
Executive Board
Executive Board
Until 14 January 2015
Until 14 January 2015
Member of KION GROUP AG
Chief Asia Pacific Officer
Executive Board /
CFO of KION GROUP AG
2014
500
19
519
409
0
928
102
1,029
2015
19
1
20
16
1,255
1,255
1,290
4
1,294
2014
500
18
518
409
0
926
104
1,031
2015
19
1
20
16
1,255
1,255
1,290
4
1,294
2015
552
158
710
566
2014
540
108
648
626
0
1,274
97
1,371
3,766
107
3,873
2014
500
12
512
491
755
679
2,437
101
2,538
2,490
1,434
2,000
2,490
2,000
TABLE 008
2015
500
17
517
455
2,971
117
3,088
KION GROUP AG | Annual Report 2015
CORPORATE GOVERNANCE
Remuneration report
49
be made in spring 2016 on the basis of the achievement of the
The total payments made to former members of the Executive
long-term targets that were defined in 2013 at the start of the
Board in 2015 in connection with the termination of their Executive
performance period. The value shown for 2015 is also calcu-
Board service contracts amounted to €8,423 thousand. An appro-
lated on the basis of a preliminary total target achievement rate
priate provision was recognised for these payments in 2014.
of 122 per cent and is subject to the performance-based
These payments consisted of a non-performance-related salary
adjustment by a discretionary performance multiple made by
and non-performance-related non-cash benefits, performance-
the Supervisory Board for individual Executive Board mem-
related remuneration and pension entitlements.
bers. As is the case for the one-year variable remuneration,
Mr Knoef’s total amount of €4,381 thousand breaks down
this performance-based adjustment may vary by plus or minus
into a non-performance-related component of €4,031 thousand,
20 per cent.
a performance-related component without a long-term incentive
The additional benefits were measured at the value calcu-
of €84 thousand, a performance-related component with a long-
lated for tax purposes. > TABLE 008
term incentive – for the 2013 tranche based on a preliminary
Allocation in 2015
in thousand €
Non-performance-
related
components
Short-term
incentive
One-year variable
remuneration 2
Performance-
related
components
Share-based
long-term
incentive
CEO of KION GROUP AG
CTO of KION GROUP AG
Since 1 August 2015
2014
Fixed remuneration
Non-cash remuneration
and other benefits 1
Total
Multiple-year variable
remuneration
Performance share plan
(29 Jun 2013 – 31 Dec 2015)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
Total
Pension expense 3
Total remuneration
2014
800
19
819
859
0
1,677
510
2,187
2015
800
21
821
795
3,000
3,000
4,616
622
5,238
–
–
–
–
–
–
–
–
–
–
–
2015
208
14
223
189
0
412
412
1 Non-performance related, non-cash remuneration and other benefits include expenses and / or benefits in kind, such as the use of a company car and housing costs.
2 The figure shown for one-year variable remuneration for 2014 is the actual amount paid out, which differs from the estimated value listed in the 2014 consolidated financial statements.
3 Service cost (IAS)
Gordon Riske
Dr Eike Böhm
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
TABLE 008
Member of KION GROUP AG
Executive Board
Member of KION GROUP AG
Executive Board
Until 14 January 2015
Until 14 January 2015
Member of KION GROUP AG
Executive Board /
Chief Asia Pacific Officer
CFO of KION GROUP AG
2014
500
19
519
409
0
928
102
1,029
2015
19
1
20
16
1,255
1,255
1,290
4
1,294
2014
500
18
518
409
0
926
104
1,031
2015
19
1
20
16
1,255
1,255
1,290
4
1,294
2014
540
108
648
626
0
2015
552
158
710
566
2014
500
12
512
491
2015
500
17
517
455
2,490
1,434
2,000
2,490
2,000
755
679
2,437
101
2,538
2,971
117
3,088
1,274
97
1,371
3,766
107
3,873
KION GROUP AG | Annual Report 2015We keep the world moving.
50
total target achievement – of €164 thousand and pension
In addition to the remuneration described above for Mr Knoef and
expenses of €101 thousand.
Mr Maurer, the total remuneration paid to former members of the
Mr Maurer’s total amount of €4,042 thousand breaks down
Executive Board amounted to €230 thousand in 2015 (2014: €210
into a non-performance-related component of €3,686 thousand,
thousand). Provisions for defined benefit obligations to former
a performance-related component without a long-term incentive
members of the Executive Board or their surviving dependants
of €84 thousand, a performance-related component with a long-
amounting to €8,758 thousand (2014: €6,082 thousand) were
term incentive – for the 2013 tranche based on a preliminary total
recognised in accordance with IAS 19.
target achievement – of €164 thousand and pension expenses of
In the year under review, no advances were made to mem-
€107 thousand.
bers of the Executive Board, and there were no loans.
The table below shows the pension contributions (additions
to the plan) attributable to each individual Executive Board mem-
ber and their separate present values. > TABLE 009
Pensions
in thousand €
Gordon Riske
Dr Eike Böhm
Bert-Jan Knoef 1
Theodor Maurer 1
Ching Pong Quek
Dr Thomas Toepfer
TABLE 009
Service cost
2015
Service cost
2014
Present value (DBO)
31 Dec 2015
Present value (DBO)
31 Dec 2014
622
4
4
107
117
510
102
104
97
101
5,308
76
317
436
4,562
1,906
638
427
523
1 Resigned from office on 14 January 2015; the present value (DBO) as at 31 December 2015 was recognised under provisions for defined benefit obligations to former members of the
Executive Board or their surviving dependants in accordance with IAS 19.
SUPERVISORY BOARD
REMUNERATION
Remuneration system
Board, €75,000 for the deputy chairman of the Supervisory
Board and €105,000 for the chairman of the Supervisory Board.
Additional remuneration is paid for being a member or chair-
man of a committee, although this does not apply in the case of
the Nomination Committee or the Mediation Committee pursuant
to section 27 (3) German Codetermination Act (MitbestG). The
annual remuneration for members of a committee is €8,000,
The Supervisory Board’s remuneration is defined in article 18 of
while the chairman of a committee receives double this amount.
KION GROUP AG’s articles of incorporation. Members of the
If a member of the Supervisory Board or one of its commit-
Supervisory Board receive fixed remuneration plus reimburse-
tees does not hold their position for a full financial year, remuner-
ment of out-of-pocket expenses. The annual remuneration
ation is reduced pro rata temporis.
amounts to €45,000 for ordinary members of the Supervisory
The members of the Supervisory Board receive an attend-
ance fee of €1,250 per day for meetings of the Supervisory Board
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CORPORATE GOVERNANCE
Remuneration report
51
and its committees, although they only receive this amount once
remuneration paid for committee work (including attendance
if they attend more than one meeting on the same day.
fees) totalled €153,017. The following table shows the breakdown
The Company reimburses each member for any VAT incurred
of remuneration paid to each Supervisory Board member for
in connection with his or her remuneration.
2015: > TABLE 010
A D&O insurance policy without an excess has been taken
out for the members of the Supervisory Board.
In 2015, no company in the KION Group paid or granted any
Remuneration paid to members of the
Supervisory Board in 2015
The total remuneration paid to the Supervisory Board in 2015 was
€1,209,342. Of this amount, €1,056,325 was attributable to remu-
neration for activities carried out by the Supervisory Board. The
remuneration or other benefits to members of the Supervisory
Board for services provided as individuals, such as consulting or
brokerage activities. Nor were any advances or loans granted to
members of the Supervisory Board.
Supervisory Board remuneration
TABLE 010
Fixed remuneration
Committee
remuneration
Attendance fee
Total remuneration
Dr John Feldmann (chairman)
Joachim Hartig (deputy chairman)
Birgit Behrendt
Holger Brandt
Dr Alexander Dibelius
Wolfgang Faden
Denis Heljic
Johannes P. Huth
Jiang Kui
Olaf Kunz
Jörg Milla
Özcan Pancarci
Kay Pietsch
Hans Peter Ring
Alexandra Schädler
Tan Xuguang
Hans-Peter Weiß
Xu Ping
Total
€105,000
€75,000
€45,000
€45,000
€45,000
€18,863
€45,000
€38,240
€65,838
€45,000
€7,521
€45,000
€45,000
€45,000
€45,000
€65,838
€41,178
€65,838
€24,000
€8,000
–
–
€8,000
–
€8,000
€6,798
€11,704
€2,674
–
–
€16,000
€19,353
€8,000
–
–
–
€16,250
€12,500
€7,500
€13,750
€10,000
€2,500
€15,000
€7,315
€14,631
€15,000
€1,250
€13,750
€21,250
€13,750
€20,000
€1,829
€11,250
€10,973
€145,250
€95,500
€52,500
€58,750
€63,000
€21,363
€68,000
€52,353
€92,173
€62,674
€8,771
€58,750
€82,250
€78,103
€73,000
€67,666
€52,428
€76,811
€888,316
€112,529
€208,498
€1,209,342
KION GROUP AG | Annual Report 2015We keep the world moving. GROUP MANAGEMENT REPORT
Contents
53
Group Management Report
54
54
61
64
66
66
69
85
94
95
95
97
FUNDAMENTALS OF THE KION GROUP
Profile of the KION Group
Strategy of the KION Group
Management system
REPORT ON THE ECONOMIC POSITION
Macroeconomic and sector-specific conditions
Financial position and financial performance
Non-financial performance indicators
EVENTS AFTER THE REPORTING DATE
OUTLOOK, RISK REPORT AND OPPORTUNITY REPORT
Outlook
Risk report
104
Opportunity report
KION GROUP AG | Annual Report 2015
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54
Fundamentals of the KION Group
PROFILE OF THE KION GROUP
Organisational structure
provides information about the compliance standards in the
Group. The declaration on corporate governance can be viewed
and downloaded on the Company’s website (kiongroup.com/
governancereport). It also forms part of this annual report.
The essential features of the remuneration system are
described in the remuneration report, which is part of the 2015
The KION Group is the world’s second-largest supplier of forklift
group management report and can be found in the ‘Remunera-
trucks, warehouse trucks and associated services and solutions
tion report’ section of this annual report. The total amounts for
for logistics, warehouse management and automation. It employs
Executive Board remuneration and Supervisory Board remunera-
around 23,500 people, operates in over 100 countries and fulfils
tion are reported in the notes to the consolidated financial state-
the needs of customers through some 1,400 sales and service
ments (note [45]).
outlets. With four international brands – Linde, STILL, Baoli and
Egemin Automation – and three national brands, the KION Group
Disclosures relevant to acquisitions
is represented in all of the major sales markets and price seg-
ments.
The disclosures relevant to acquisitions (pursuant to section 315 (4)
The KION Group’s strategic management holding company,
HGB) together with the explanatory report form an integral part of
KION GROUP AG, is listed on the Frankfurt Stock Exchange and
the group management report and can be found in the ‘Disclo-
is part of the MDAX and the STOXX Europe 600.
sures relevant to acquisitions’ section of this annual report.
The strategic anchor shareholder of KION GROUP AG is
Weichai Power (Luxembourg) Holding S.à r.l., Luxembourg, a
Executive Board
subsidiary of Weichai Power Co. Ltd., which held 38.3 per cent of
the shares at the end of 2015 as far as the Company is aware. The
The Executive Board of KION GROUP AG is responsible for the
free float accounted for 61.5 per cent of the shares, while the
operational management of the KION Group. At the end of 2015
remaining 0.2 per cent were treasury shares.
it had four members. There were a number of personnel changes
Management and control
Corporate governance
in the year under review. With effect from 15 January 2015,
Gordon Riske, in addition to his role as KION Group CEO, took
over as CEO of the two brand companies Linde Material Handling
GmbH and STILL GmbH from the two departing Executive Board
members Bert-Jan Knoef and Theodor Maurer and also assumed
responsibility for quality. At the same time, CFO Dr Thomas Toep-
The KION Group follows generally accepted standards of sound,
fer took charge of facility management/health, safety & environ-
responsible corporate governance. The German Corporate Gov-
ment and logistics/Urban. Dr Eike Böhm was appointed to the
ernance Code (DCGK) provides the framework for management
Executive Board with effect from 1 August 2015, where he holds
and control. As required by section 289a of the German Com-
the newly created post of Chief Technology Officer (CTO).
mercial Code (HGB), the corporate governance standards that
As at 31 December 2015 the responsibilities of the Executive
the Group applies are set out in the declaration on corporate gov-
Board members were as follows:
ernance. This declaration also contains the comply-or-explain
statement pursuant to section 161 of the German Stock Corpora-
tion Act (AktG), which was issued by the Executive Board and
– Gordon Riske is Chief Executive Officer (CEO) and his
responsibilities include strategy/business development, cor-
Supervisory Board of KION GROUP AG on 14/17 Decem-
porate communications, the corporate office, internal audit,
ber 2015, and the corporate governance report pursuant to sec-
compliance, KION Warehouse Systems, the North America
tion 3.10 of the German Corporate Governance Code, which also
region and the South America region. He is also CEO of the
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
55
two brand companies Linde Material Handling GmbH and
It advises the Executive Board in its handling of significant mat
STILL GmbH.
– Dr Thomas Toepfer is Chief Financial Officer (CFO) and his
responsibilities include accounting, tax, financial services,
ters and business transactions. To increase the efficiency of its
work, the Supervisory Board is supported by four committees:
the Nomination Committee, the Executive Committee, the Audit
corporate finance, investor relations, M&A, controlling, HR /
Committee and the Mediation Committee.
Labour Relations Director, legal affairs, IT, data protection,
With effect from 1 January 2015 Silke Scheiber and Dr Martin
facility management / health, safety & environment and logis
Hintze stepped down from the Supervisory Board. At the Annual
tics / Urban.
– Ching Pong Quek is Chief Asia Pacific Officer and heads up
– Dr Eike Böhm, in his role as Chief Technology Officer (CTO),
the KION Group’s entire Asia business.
has groupwide responsibility for research and develop
General Meeting on 12 May 2015, Birgit Behrendt and Xu Ping
were elected in their place as new members of the Supervisory
Board for the period up to the 2017 Annual General Meeting.
Wolfgang Faden has been a shareholder representative on the
Supervisory Board of KION GROUP AG since 1 August 2015.
ment (R&D), product strategy, innovation, production system,
Johannes Huth stepped down from the Supervisory Board with
quality & operations and procurement.
effect from 31 July 2015. HansPeter Weiß resigned as a member
of the Company’s Supervisory Board with effect from the end of
In November 2015 the KION Group announced that it would be
15 November 2015. The courts appointed Jörg Milla as his suc
comprehensively reorganising its Group structure from 2016, with
cessor with effect from 16 November 2015. At its meeting in
the aim of doing even more to meet the specific customer and
December, the Supervisory Board resolved to propose to the
market requirements of the world’s key regions while at the same
Annual General Meeting on 12 May 2016 that Dr Christina Reuter
time sharpening its focus on crossbrand synergies. This will
be elected to succeed Mr Faden on the Supervisory Board.
result in changes in responsibilities at Executive Board level. CEO
Gordon Riske will take charge of the Linde Material Handling
EMEA, STILL EMEA and KION Americas units, while Chief
Business model
AsiaPacific Officer Ching Pong Quek is responsible for the KION
APAC unit. Product strategy, R&D, innovation, production system,
So that it can fully cater to the needs of material handling custom
quality assurance and procurement have now been brought
ers worldwide, the KION Group’s business model covers every
together in the newly created CTO organisation headed by Chief
step of the value chain: product development, manufacturing,
Technology Officer Dr Eike Böhm. Dr Thomas Toepfer will con
sales and logistics, spare parts business, truck rental and used
tinue to be in charge of among other things accounting, financial
trucks, system and software solutions, plus financial services that
services, corporate finance, investor relations, M&A, controlling
support the Group’s core industrial business. The KION Group
and HR, IT and legal affairs. The new Group Executive Commit
operates a multibrand strategy involving the four international
tee (GEC) will advise the Executive Board of KION GROUP AG
brands Linde, STILL, Baoli and Egemin Automation plus the three
and will integrate input from the operating units. The committee
national brands Fenwick, OM STILL and Voltas.
comprises the Executive Board members as well as the presi
The KION Group earns most of its consolidated revenue –
dents of the operating units.
54.5 per cent in the year under review – from the sale of industrial
The Executive Board maintains a relationship of trust with,
trucks. The product portfolio includes counterbalance trucks
and is monitored by, the Company’s Supervisory Board.
powered by an internal combustion engine or electric drive, ware
Supervisory Board
The Supervisory Board, which was formed in accordance with the
German Codetermination Act (MitbestG), comprises 16 people.
house trucks (rideon and handoperated) and towing vehicles for
industrial applications. It covers all load capacities, from one to
18 tonnes.
KION GROUP AG | Annual Report 2015We keep the world moving. 56
Production sites of the KION Group
DIAGRAM 003
K AHL
ASCHAFFENBURG
WEILBACH
HAMBURG
STŘÍBRO
ČESK Ý KRUMLOV
Z WIJNDRECHT
GEISA
HOLL AND, MI
CHÂTELLER AULT
SUMMERVILLE , SC
REUTLINGEN
LUZZ AR A
PUNE
JINGJIANG
XIAMEN
INDAIATUBA / SÃO PAULO
Linde Material Handling
Germany
STILL
Germany
Aschaffenburg: Counterbalance trucks with IC engine or
electric drive, warehouse technology
Hamburg: Counterbalance trucks with IC engine or electric drive,
warehouse technology, components
Weilbach: Component production
Reutlingen: Very narrow aisle trucks
Kahl: Spare parts warehouse, component production
Geisa: Component production
France
Italy
Châtellerault: Warehouse technology
Luzzara: Warehouse technology
Czech Republic
Brazil
Český Krumlov: Component production
Stříbro: Warehouse technology
United States
Summerville, SC: Counterbalance trucks with IC engine or
electric drive, warehouse technology
China
Xiamen: Counterbalance trucks with IC engine or electric drive,
heavy trucks, warehouse technology
Jingjiang: Counterbalance trucks with IC engine or electric drive,
warehouse technology
India
Pune: Counterbalance trucks with IC engine or electric drive,
warehouse technology
Moving Forward
Innovation
Indaiatuba / São Paulo: Counterbalance trucks with IC engine,
warehouse technology
Other (Egemin Automation)
Belgium
Zwijndrecht: Warehouse technology (Automated guided vehicles)
United States
Holland, MI: Warehouse technology (Automated guided vehicles)
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
57
Worldwide research and development activities (R&D) enable the
The service business – spare parts, rental and used trucks,
KION Group to consolidate and extend its technology leadership.
system and software solutions, and financial services – helps to
The Company plays a pioneering role in hydrostatic and diesel-
smooth out fluctuations in consolidated revenue and reduces
electric drive systems and in innovative energy-efficient and
dependency on market cycles. In the reporting year, it contrib-
low-emission drive technologies. As at the end of 2015, the KION
uted 45.5 per cent of consolidated revenue. This business also
Group employed a total of 1,056 developers, of whom 299
strengthens customer relationships, thereby helping to generate
worked in Asia. Details of the Group’s R&D activities can be found
sales of new trucks. Extensive supplementary services are mainly
in the ‘Research and development’ section.
offered for premium products. However, the proportion of service
The KION Group operates a total of 17 production facilities
business is continually increasing in the other price segments too.
for industrial trucks and components in nine countries. These
Financial services support new truck business in many mar-
include the new plant in Stříbro (near Plzeň in the Czech Repub-
kets, forming another pillar of the service business within the inte-
lic), where production commenced in January 2016, and the two
grated business model. Approximately 50 per cent of new trucks
Egemin Automation production sites in Belgium and the USA.
are financed via the KION Group itself or via external banks and
Owing to the particular requirements of its business, the KION
dealers. Offering financial services is therefore part of the truck
Group manufactures major components itself – notably lift masts,
sales process, and end customer finance is generally linked to
axles, counterweights and safety equipment – in order to ensure
a service contract throughout the term of the finance agreement.
security of supply and the availability of spare parts for important
In the main sales markets with a high volume of financing and
components. Other components – such as hydraulic compo-
leasing, financial activities are handled by legally independent
nents, electronic components, rechargeable batteries, engine
financial services companies. These activities include long-term
components and industrial tyres – are purchased through the
leasing to customers and internal financing of the brand compa-
KION Group’s global procurement organisation. > DIAGRAM 003
nies’ short-term rental fleets.
The KION Group offers customers tailor-made solutions and
There are also individual orders for repairs and maintenance
makes trucks specifically to order. More than a third of new trucks
work as well as for spare parts. In addition, the KION Group looks
are fitted with technical components developed especially for a
after entire customer fleets, using special fleet management soft-
particular order. Advantages for customers in terms of total cost of
ware to monitor the trucks in the fleets and to enable customers
ownership (TCO) underpin the Linde and STILL brands’ premium
to efficiently manage their fleets.
positioning. The trucks’ hallmarks are cost-efficiency, high pro-
The brand companies also have extensive used truck and
ductivity, comparatively low maintenance and high residual values.
rental truck businesses, allowing peaks in capacity requirements
The KION brand companies have an extensive sales and
to be met and customers to be supported after their leases have
service network comprising around 1,400 outlets staffed by
expired. Once a lease has expired, the used truck is serviced at a
approximately 14,000 service employees in over 100 countries.
reconditioning centre and can then be rented on a flexible, short-
Approximately half of them are employed by the KION Group. In
term basis, for example. The used and rental truck business is
other cases, the Company relies on external dealers. The sales
integrated into the Linde Material Handling (LMH) and STILL seg-
network in western Europe consists of exclusive dealers and
ments in terms of its operations, and its fleet of well in excess of
Company-owned dealerships. In China, Linde has built up a
50,000 trucks is financed internally by Financial Services.
broad network of more than 100 proprietary sales and service
outlets. By contrast, distribution partners in Asia and South
America usually offer more than one brand of truck.
Market and influencing factors
The worldwide vehicle fleet, which comprised around 1.2 mil-
lion industrial trucks at the end of 2015 and continues to grow,
Industrial trucks are deployed for a wide variety of applications.
provides a stable basis for the spare parts, maintenance and
Material handling products are used for tasks such as loading
repair business within the KION Group’s integrated business model.
and unloading, linking production steps and moving pallets in
KION GROUP AG | Annual Report 2015We keep the world moving. 58
logistics centres or in retail/wholesale operations. They therefore
sumer spending is being fuelled by expansion of industrial and
form part of the production processes and supply chains of many
public infrastructure as well as rising living standards. In mature
different industries around the world.
markets, where supply chains are highly sophisticated, the large
Measured in terms of unit sales of new trucks, the growth of
number of trucks in use provides a strong base for replacement
the market for industrial trucks has exceeded global economic
business. The KION Group estimates that the majority of sales in
growth over the past ten years (2005–2015), rising at an average of
western Europe are currently accounted for by replacement
3.9 per cent per year. However, it should be noted that these sta-
investments.
tistics do not include price effects or the contribution from the ser-
In the long term, due to rising customer expectations in terms
vice business. Nevertheless, the industry is subject to cylical fluc-
of quality, efficiency and eco-friendliness of industrial trucks, the
tuations. Economic conditions in the different regions and the rates
middle (volume) price segment is likely to become increasingly
of growth in global trade are therefore key influencing factors for
important for the growth markets in particular. At the same time,
the KION Group, whose financial situation is also affected by com-
there is mounting competitive pressure as some manufacturers in
petition levels, exchange rates and changes in commodity prices.
the economy segment based in emerging markets are pursuing
The main growth driver across all regions is the advancing
an international expansion strategy. In the premium segment,
interconnectivity of the global economy, which requires additional
customers are much more focused than before on optimising
transport services between what are becoming increasingly frag-
total cost of ownership and on the integration of fully automated
mented value chains and supply chains. In addition, the increasing
intralogistics solutions. In 2015, according to the KION Group’s
specialisation of companies is making logistics processes more
estimates, the premium price segment and the economy price
segmented and more complex. The growth of e-commerce is also
segment each accounted for between 25 and 30 per cent of units
having an ever greater impact. Independent market analyses indi-
ordered. The remainder was attributable to the volume price seg-
cate that in western Europe alone revenue generated by e-com-
ment, making it the largest in terms of units sold.
merce companies will double in the next five years. This will bring
Regulatory frameworks, which include mandatory emissions
a need for new warehouse and logistics capacity and thereby
limits for trucks, have a major impact on the business model.
raise demand for industrial trucks and automation solutions.
The products and services of companies in the KION Group
Measured in terms of units ordered, 39.7 per cent of the
have to comply with the specific legal requirements in their
global market was attributable to diesel trucks in 2015, while elec-
respective markets. Compliance with the different requirements
tric forklift trucks accounted for 17.5 per cent and warehouse
has to be verified or certified. Many of the legal requirements
trucks for 42.8 per cent. Due to increasingly stringent emissions
are enshrined in product-specific standards and other norms
regulations and the continued march of e-commerce, the KION
(e.g. EN, ISO and DIN).
Group expects the segmentation of the market to shift towards
Legal requirements also apply to the construction and oper-
electric forklift trucks and warehouse trucks, partly because
ation of production facilities, including in relation to air pollution
these are suitable for use in buildings. This trend benefits the
avoidance, noise reduction, waste production & disposal and
KION Group with its particularly strong position in these two
health & safety. Furthermore, the KION Group fulfils all of the legal
product categories. In the developed economies, electric forklift
requirements pertaining to exports and financing business.
trucks and warehouse trucks already account for the bulk of the
market volume, whereas in growth regions simple counterbal-
ance trucks with an internal combustion engine (diesel trucks) still
make up a comparatively high proportion of the total volume.
In regional terms, emerging markets such as China, eastern
Europe, Central America and South America are – despite a tem-
porary slump in 2015 – the major sources of market growth.
Demand for logistics services on the back of increasing con-
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
59
Market position
The segments and their products and services
Last year, in terms of unit sales, the KION Group increased its
The KION Group is represented in the market by four international
global market share from 14.2 per cent to 15.0 per cent, thereby
brands – Linde, STILL, Baoli and Egemin Automation – and three
consolidating its position as the world’s second-largest manufac-
national brands, Fenwick (France), OM STILL (Italy) and Voltas
turer of industrial trucks. Moreover, the Group is the world’s
(India). While the brand companies have full operational and com-
leading producer of electric forklift trucks. It also maintained its
mercial responsibility within their markets, KION GROUP AG is
leading position in western Europe across all product categories.
the strategic management holding company and is responsible
In eastern Europe, too, the KION Group is the top manufacturer,
for the groupwide strategy and groupwide business standards.
while in Brazil it is no. 1 for electric forklift trucks and warehouse
> TABLE 011
technology systems. The KION Group is also one of the leading
players in India, where more than one in four trucks sold now
bears the name of a KION brand. In China, it is the leading for-
eign manufacturer and number three overall. In the USA, the
KION Group is looking to move from being a niche provider to a
major market player as part of its Strategy 2020.
Segments 2015
in € million
LMH
STILL
Financial Services
Other
Revenue
Adjusted EBIT ¹
Employees ²
2015
3,429.8
1,950.2
740.3
252.8
2014
3,077.2
1,850.7
620.9
235.7
2015
383.9
144.0
– 1.8
155.3
– 198.5
482.9
2014
339.6
133.6
2.1
135.5
– 167.9
442.9
2015
14,486
8,103
59
858
–
23,506
22,669
TABLE 011
2014
13,945
7,976
60
688
–
Consolidation / reconciliation
– 1,275.2
– 1,106.6
Total
5,097.9
4,677.9
1 Adjusted for KION acquisition items and non-recurring items
2 Number of employees (full-time equivalents) as at balance sheet date 31/12/
KION GROUP AG | Annual Report 2015We keep the world moving. 60
For internal management purposes, the KION Group has divided
The segment’s portfolio consists of forklift trucks and ware-
its business into operating segments that correspond to the
house trucks plus associated services. STILL has also positioned
reportable segments, as required by international financial
itself as a leading provider of intelligent intralogistics solutions,
reporting standards (IFRS 8).
offering trucks and fully integrated warehouse systems, including
Linde Material Handling (LMH) segment
automation and fleet management solutions.
Financial Services (FS) segment
The Linde Material Handling (LMH) segment encompasses the
Linde, Fenwick, Baoli and Voltas brands.
The Financial Services (FS) segment is an internal funding partner
Linde is an international premium brand and a technology
for LMH and STILL, providing finance solutions that promote
leader. Among its other selling points, it has decades of experi-
sales. Its activities comprise the financing of long-term leasing
ence with hydrostatic drive technology and meets customers’
business for external customers of the KION Group, the internal
highest requirements regarding technology, efficiency, functional-
financing of the short-term rental business of the LMH and STILL
ity and design. The product portfolio ranges from warehouse
operating segments, and the related risk management. In the
trucks to heavy trucks and caters to all of the major application
large sales markets with a high volume of financing and leasing,
areas. Linde has been developing and manufacturing electric
legally independent FS companies handle this business.
drive systems for decades and uses the resulting expertise in a
When long-term leasing business is being conducted, FS
variety of applications. In France, Linde products are sold under
itself acts as the contractual partner to external customers and
the Fenwick brand.
offers various leasing models.
Baoli is the international brand for the economy segment.
Operational responsibility for the short-term rental business
Building on its base in China and other growth markets in Asia, it
(short-term rental fleet) lies with the LMH and STILL brand seg-
has established sales structures in Europe as well as in Central
ments. FS acts as the contractual partner to the brand segments,
America and South America. Since the fourth quarter of 2015,
providing the internal financing for this short-term rental fleet.
Baoli has also been represented in North America with a small
FS refinances both long-term leasing with end customers
but growing product portfolio.
and the short-term rental fleet, mostly on the basis of sale and
Voltas is the national brand company for the Indian market
leaseback agreements.
through which the KION India Pvt. Ltd. subsidiary sells electric
In addition, a substantial portion of sales financing for exter-
and IC forklift trucks and warehouse trucks. The company was
nal customers is offered indirectly, with an external leasing com-
integrated into the LMH segment with effect from 1 January 2015.
pany to which the business is referred by the KION Group acting
Previously the entity was in the Other segment.
as lessor rather than the KION Group. The financial services pro-
STILL segment
vider purchases the truck from the KION Group and provides the
finance to the end customer. The KION Group carries out the
majority of the servicing for the truck and, once the financing has
The STILL and OM STILL brands are grouped in the STILL seg-
expired, may also take on its reconditioning and remarketing.
ment. STILL is predominantly an international premium provider
of trucks with electric and diesel-electric drives. It mainly focuses
on the European and Latin American markets, with the national
brand OM STILL serving the Italian market.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
61
Other segment
Besides increasing earnings, the focus here is on how assets
The Other segment comprises holding companies and service
companies that provide services such as IT and logistics across
and finance are to be managed going forward.
– Resilience: The KION Group aims to improve its ability to
cope with economic downturns. It is therefore also diversi-
all segments. Also in this segment is Egemin NV, the subsidiary
fying its business in terms of regions and customer sectors
acquired in August 2015. Based in Zwijndrecht, Belgium, Egemin
alongside its efforts to optimise the production network and
NV is a leading provider of automation solutions that specialises
expand the service business.
in optimising intralogistics processes in warehouses, production
facilities and distribution centres. As well as turnkey project solu-
tions using proprietary software, its portfolio also includes auto-
Strategic focus areas of the Strategy 2020
matic guided vehicle systems and in-floor chain conveyors.
Egemin Automation has sites in Europe, the USA and China. In
The Strategy 2020 essentially encompasses six closely related
2014, the Other segment had also included the KION India sub-
areas of focus.
sidiary, which since the beginning of 2015 has been part of the
LMH segment.
Multi-brand strategy
STRATEGY OF THE KION GROUP
Objectives of the Strategy 2020
The starting point is the further development of the successful
multi-brand strategy. The premium brands, Linde and STILL, are
consolidating their presence at the upper end of the volume seg-
ment on the basis of the platform strategy (see below), particularly
in North America and Asia as well as South America. This means
that Linde, after successful market launches, now covers all
product categories in the middle price segment as well. As the
international brand for the economy segment, Baoli will gain a
The KION Group has clearly outlined its objectives for the next
foothold at the lower end of the volume segment with a product
few years in its Strategy 2020.
and sales strategy that is tailored to regional requirements. The
– Growth: The KION Group wants to accelerate its growth and
close the gap on the global market leader by 2020. To this
KION Group will therefore be represented in all these regions and
in all price segments through its four international brands – Linde,
STILL, Baoli and Egemin Automation. Especially in the premium
end, it is strengthening its leading position in Europe and
segment and at the upper end of the volume segment, the seam-
Brazil so that it can go on to capture additional market share
less integration of material handling products and solutions
in growth markets, particularly those in Asia and North America.
into customer processes is playing an increasingly important
This growth is to be accompanied by a far greater presence
role. IT-based assistance systems, such as fleet data manage-
in the largest price segment (volume).
– Profitability: The KION Group aims to further improve its EBIT
margin in order to entrench its position as the most profitable
ment and truck control systems, look set to bolster sales of trucks
in the premium segment in particular. The wide-ranging offering
of the new international brand company Egemin Automation and
supplier in the market. In doing so, it aims to improve its
the Linde Robotics and STILL iGo products give the KION Group
EBIT margin so it is permanently in the double digits range –
a solid base of expertise in automated industrial trucks and
a target that remains unchanged in communications since
warehouse logistics. As such, it is able to offer its customers
the IPO. This requires not only an increase in the gross mar-
along the entire supply chain solutions that are compatible
gin but also strict control of fixed costs.
– Efficient use of capital: The KION Group is working stead-
fastly to optimise the return on capital employed (ROCE).
with Industry 4.0, or the fourth industrial revolution. The KION
Group is aiming to lever this expertise to become a leading pro-
vider of material handling solutions.
KION GROUP AG | Annual Report 2015We keep the world moving. 62
Global modular and platform strategy
warehouse trucks that had previously been made in Aschaffen-
Further development of the multi-brand strategy requires the
burg. Capital expenditure on this undertaking amounted to
product portfolio to be managed end to end on the basis of a
approximately €12 million. The Aschaffenburg plant is now able to
global modular and platform strategy. For this reason, a Product &
focus on making electric and diesel trucks and structuring its pro-
Module Committee was formed in 2014 as a cross-brand steering
duction processes more efficiently. Again in response to growth
unit. In 2015 the Company also stepped up the level of cross-
in regional sales markets, capacity is being significantly increased
brand collaboration in procurement and coordination with the
and processes optimised at sites in China (Xiamen and Jingjiang),
research and development centres. From 2016 the KION Group
the USA (Summerville) and Brazil (Indaiatuba / São Paulo).
will then be bringing together the technology functions that are
critical for the Company’s success going forward into a central
Regional growth strategies
KION organisation under the new CTO Executive Board role, held
Having enhanced its multi-brand strategy and its modular and
by Dr Eike Böhm.
platform strategy, as well as increasing integration between the
In the volume and economy segments outside western
sites in its production network, the KION Group has put everything
Europe, the KION Group is working with cross-brand, cost-
in place to increase its market share in strategically important
efficient platforms for product development and production that
regions. The main focus is on China and North America.
are also allowing a strong degree of regional differentiation in the
In North America, one of the largest markets for industrial
industrial trucks. The new diesel truck with mature converter
trucks, the KION Group aims to move from being a niche provider
technology, for example, which was launched in the fourth quar-
to a major market player offering a full portfolio of products by
ter of 2015 on the basis of the Baoli platform in China, is being
2020. This will enable it to capture an increasing share of this
localised for use in numerous other markets. There were also new
growing market. In order to achieve this goal, the KION Group is
platforms created and products brought to market for electric
pursuing a multi-brand approach. A Baoli diesel truck was
forklift trucks and warehouse trucks. In western Europe, the
launched in North America in 2015 – the brand’s debut in this
premium brands, Linde and STILL, will continue to use different
market, where it will cater to the lower price segment; other prod-
platforms in order to maintain the defining characteristics of their
ucts will follow in the second half of 2016. In addition, the KION
brands, but will increasingly deploy shared modules. Innovation
North America plant in Summerville is being expanded for the
underpins the premium positioning of the two brands.
production of IC and electric forklift trucks as well as warehouse
trucks in order to close gaps in the portfolio; the various platforms
Global production network
are being adapted specially for the American market.
The KION Group wants to build its industrial trucks close to the
As well as expanding the range of products, KION North
markets in which they will be sold. To this end, production facili-
America is also strengthening its sales and service network,
ties worldwide are being efficiently integrated – harnessing econ-
which encompasses over 70 partners at almost 150 sites. In
omies of scale and ensuring a high level of capacity utilisation.
2015, for example, a new sales app was introduced and collabo-
A programme of capital expenditure is aimed not only at updat-
ration with sales partners was intensified. The KION Group is also
ing and expanding existing plants but also at establishing facto-
looking to gain additional market share in the high-growth mar-
ries in new locations.
kets of Asia, including through new products for the volume seg-
The core element in western Europe is the modernisation of
ment that have been developed on the basis of Baoli’s economy
the plants in Aschaffenburg (Linde) and Hamburg (STILL), with a
platform. China’s fast-growing e-commerce sector is driving
clear focus on increasing capacity, improving processes and
demand for electric forklift trucks and warehouse trucks such as
containing costs. A total of around €83 million has been allocated
LMH’s newly developed pallet stacker.
for this between 2014 and 2021. Both sites are also working
closely with the new plant in Stříbro (near Plzeň in the Czech
Republic). In January 2016 the plant commenced production of
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
63
Aftersales and service business
Reorganisation of the Group structure
The strategy for the aftersales business is designed to unlock
In November 2015 the KION Group announced that it would be
more of the potential offered by the installed base, which is
comprehensively reorganising its Group structure from the begin-
expanding worldwide. This will help to boost revenue. To this end,
ning of 2016. The aim is to step up collaboration across all brands
the KION Group is continually extending its portfolio of services
and regions and make this collaboration even more efficient. The
and improving their quality at every stage of the product lifecycle.
creation of four operating units will sharpen focus on the specific
For example, the KION Group is progressively extending its com-
customer and market requirements of the world’s key regions and
prehensive service offering to also cover the volume and economy
on cross-brand synergies, enabling the Strategy 2020 to be
segments in high-growth markets. As part of this, the rental fleet
implemented in a more rigorous way. The Linde Material Handling
in China was substantially enlarged in 2015, turning the KION
EMEA and STILL EMEA operating units will concentrate on
Group into the country’s biggest provider of rental trucks.
Europe, the Middle East and Africa, while KION APAC and KION
Financial services are also a key component of the service
Americas will hold cross-brand responsibility for the Asia-Pacific
portfolio as they support the KION Group’s core industrial busi-
region and the Americas respectively. In the new organisation, the
ness. The Company intends to further increase its market share
operating units will oversee marketing, sales and service and the
by opening additional service outlets in attractive growth markets
production plants in their regions and will have individual profit
and stepping up the short-term rental business.
and loss responsibility.
Back-office functions
In addition, the KION Group is aligning its groupwide back-office
services to the growing requirements of the global organisation
in order to leverage economies of scale and synergies. For
example, KION Group IT – a global shared services organisation
with four functions: IT governance, key account management,
application services and infrastructure services – is focusing
even more on increasing its contribution to the success of the
Company and on providing cost-efficient and reliable IT ser-
vices. In order to keep the costs of the expanded service offer-
ing low, the KION brand companies will be integrating their
administrative tasks more closely.
KION GROUP AG | Annual Report 2015We keep the world moving. 64
MANAGEMENT SYSTEM
KPIs related to business volume
Core key performance indicators
Order intake and revenue
Order intake and revenue are broken down by segment, region
and product category in the KION Group’s management report-
ing so that growth drivers and pertinent trends can be identified
The KION Group’s strategy, which centres on value and growth,
and analysed at an early stage. Order intake is a leading indicator
is reflected in how the Company is managed. It uses five core key
for revenue. The length of time between receipt and invoicing of
performance indicators (KPIs) to continuously monitor market
an order varies between business units and product groups.
success, profitability, financial strength and liquidity. The perfor-
mance targets of the Group and the segments are based on
Earnings-related KPI
selected financial KPIs, as is the performance-based remunera-
tion paid to managers. In principle, each month, the KPIs are
Adjusted EBIT
measured and made available to the Executive Board in a com-
The key figure used for operational management and analysis of
prehensive report. This enables the management team to take
the KION Group’s financial performance is adjusted earnings
prompt corrective action in the event of variances compared with
before interest and tax (EBIT). It is calculated in the same way as
target figures. > TABLE 012
EBIT, except that it does not take account of the KION Group pur-
chase price allocation or any non-recurring items.
Key performance indicators
in € million
Order intake ¹
Revenue
Adjusted EBIT ²
Free cash flow
2015
2014
2013
5,215.6
4,771.2
4,489.1
5,097.9
4,677.9
4,494.6
482.9
442.9
416.5
332.7
305.9
195.6
1 Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015
2 Adjusted for KION acquisition items and non-recurring items
TABLE 012
ROCE
11.9%
11.4%
–
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
65
Liquidity-related KPI
Other key performance indicators
Free cash flow
Besides the aforementioned core KPIs, the KION Group uses a
Free cash flow is the main KPI for managing leverage and liquidity.
variety of additional financial KPIs. The main ones are net debt,
It is determined by the KION Group’s operating activities and
which is used to manage the capital structure, and the EBIT
investing activities. Free cash flow does not include interest aris-
margin, which together with ROCE is relevant as a component
ing from financing activities. Carefully targeted management of
of remuneration and as a target in the Strategy 2020. There are
working capital and detailed planning of capital expenditure are
also non-financial KPIs, which primarily relate to customers,
used to help in controlling the level of free cash flow.
employees, sustainability and technology. Some of them are
Profitability-related KPI
ROCE
used operationally as leading indicators for the financial KPIs.
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
Return on capital employed (ROCE) has been used since 2015 as
Services segment.
an additional core KPI. It is the ratio of adjusted EBIT to capital
employed. ROCE is measured annually and reported to the Exec-
utive Board. > TABLE 013
ROCE
in € million
Total assets
– less selected assets ¹
– less selected liabilities ²
Capital employed
Adjusted EBIT
ROCE
TABLE 013
2014
6,128.5
– 1,034.3
– 1,218.2
3,876.0
442.9
11.4%
2015
6,440.2
– 1,126.7
– 1,261.9
4,051.6
482.9
11.9%
1 Lease receivables, income tax receivables, cash and cash equivalents, KION acquisition effects and several items of other financial assets respectively other assets
2 Sundry other provisions, trade payables, a major part of other liabilities as well as several items of other financial liabilities
KION GROUP AG | Annual Report 2015We keep the world moving. 66
Report on the economic position
MACROECONOMIC AND
SECTOR-SPECIFIC CONDITIONS
Macroeconomic conditions
one that is driven by consumption and services, it has been
accompanied by a further slowdown in growth. The pace of
growth also tailed off in the other Asian countries. An exception
was India, where the economy continued to rally. Both consumer
spending and industrial output increased visibly here.
Growth in Brazil and Russia continued to be strongly nega-
tive in 2015, in line with expectations, with domestic economic
In 2015 the global economy expanded at a slower rate than in the
problems and low commodity prices having a negative impact.
previous year. This was mainly due to weak growth in key emerg-
The eastern European EU states, however, recorded healthy
ing markets such as China, Russia and Brazil. By contrast, the
growth. The region benefited from low oil prices and high levels of
developed countries generally bolstered the global economy.
consumer spending and from the ongoing recovery in western
Besides GDP growth demand for industrial trucks is driven
Europe.
by industry’s investment confidence and world trade volumes.
Alongside the USA, western and central Europe proved to be
Here, too, there was a marked slowdown in global growth in
a pillar of the global economy. A solid performance from Germany
2015. The main factors in the cooling of global trade were the
and the recovery in southern Europe were the main drivers of
greatly reduced demand for imports in China and the resulting
growth in the eurozone. Most of the momentum came from con-
decline in commodity prices. In particular China’s major trading
sumer spending; global uncertainties meant that companies
partners and the commodity-exporting countries were negatively
remained cautious in their investment decisions.
affected. An increase in consumer spending and growth in the
The USA benefited from an upturn in the labour and housing
service sector had a positive effect, however, particularly on
market. After a weak first quarter, its economy substantially
e-commerce and the demand for additional warehouse space.
picked up the pace as the year progressed. > DIAGRAM 004
In 2015, the Chinese economy saw its weakest growth in a
quarter of a century. As the economy in China is transformed into
Gross domestic product in 2015 – real year-on-year change
INDIA
CHINA
WORLD
UNITED STATES
EU
GERMANY
JAPAN
BRAZIL
– 3.7%
RUSSIA
– 3.8%
2.5%
2.4%
1.8%
1.5%
0.7%
DIAGRAM 004
7.3%
6.9%
– 4.0%
– 3.0%
– 2.0%
– 1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Source: Oxford Economics (as at 15 January 2016)
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
67
Sectoral conditions
Sales markets
global unit sales. In western Europe, there was another substan-
tial release of pent-up demand in the southern European coun-
tries in 2015. Growth in the United Kingdom (up by 14.5 per cent),
Spain (up by 26.4 per cent) and Italy (up by 21.1 per cent) was
In 2015 the global market for industrial trucks grew visibly slower
above the market average, while Germany lagged behind the
than in the prior year, expanding by 1.0 per cent (2014:
market with a growth rate of 8.4 per cent. France expanded by
7.8 per cent). A total of 1.1 million trucks were ordered across all
12.3 per cent.
regions and product types.
Orders in eastern Europe (excluding Russia) rose by
In line with the long-term trends identified by the KION Group,
9.7 per cent. Higher sales figures were recorded in Poland, the
sales in the overall market were easily outstripped by sales of
Czech Republic and Hungary in particular but also in the smaller
warehouse trucks (up by 11.0 per cent) and electric forklift trucks
markets of Romania and Slovakia. The Russian market continued
(up by 6.0 per cent). Demand for these, in combination with auto-
on its steep downward trajectory from 2014, contracting by
mation solutions, is being driven by the growing e-commerce
39.3 per cent.
sector. Electric forklift trucks are also benefiting from increasingly
In China there was a significant decline in orders in 2015
strict emissions regulations across all regions as well as major
(down by 12.8 per cent), after the market had grown by a double-
advances in battery-charging technology. Unit sales of IC trucks
digit percentage amount in the prior year. Only growth in ware-
fell by 9.6 per cent, however, which was primarily due to the sharp
house trucks was on a par with 2014. Brazil, the largest single
decline in unit sales in China.
market in South America, contracted by 44.2 per cent, with sales
Western Europe (up by 11.3 per cent) and North America (up
falling heavily in all product categories, while Chile and Argentina
by 7.1 per cent) were the main contributors to the moderate rise in
posted increases. > TABLE 014
Global industrial truck market (order intake)
in thousand units
Western Europe
Eastern Europe
North America
Central & South America
Asia (excl. Japan)
Rest of world
World
Source: WITS / FEM
2015
321.9
53.5
235.2
42.5
331.0
118.2
2014
289.2
57.6
219.5
48.5
357.5
119.0
1,102.4
1,091.3
TABLE 014
Change
11.3%
– 7.0%
7.1%
– 12.3%
– 7.4%
– 0.7%
1.0%
KION GROUP AG | Annual Report 2015We keep the world moving. 68
Procurement markets
Financial markets
Commodity prices continue to have a direct impact on approxi-
The KION Group bills the bulk of its revenue in euros. In 2015
mately one quarter of the cost of the materials needed to manu-
the proportion was 62.1 per cent, which was slightly below the
facture an industrial truck in the KION Group.
prior-year level (2014: 62.8 per cent). The remaining 37.9 per cent
The average price over the year for steel, the most important
of revenue was billed in foreign currencies, most notably China’s
commodity, fell compared with 2014 owing to the slowdown in
renminbi and pound sterling in the year under review.
growth, particularly in China. Manufacturing costs are also influ-
The currency markets were characterised by strong fluctua-
enced – albeit it to a lesser extent – by the prices for copper and
tions. The value of the euro generally remained at a low level,
rubber, which were also down year on year. The price of oil, a
which impacted positively on the KION Group’s order intake and
useful price indicator for plastic products, was well below the
revenue but also pushed up costs. Against the Chinese renminbi,
2014 average.
the euro was approximately 15 per cent lower on average than in
On the other hand, however, higher payroll and ancillary
2014. Pound sterling appreciated by 10 per cent on average
wage costs had an adverse impact on unit costs. In overall terms,
against the euro, whereas the Brazilian real fell by 19 per cent.
and with the euro weakening even further, producer prices for
> TABLE 015
input goods in the eurozone fell by only a negligible amount.
TABLE 015
2014
1.47
3.12
1.21
8.19
0.81
50.92
1.33
2015
1.48
3.70
1.07
6.98
0.73
68.02
1.11
Currencies
Average rate per Euro
Australia (AUD)
Brazil (BRL)
Switzerland (CHF)
China (CNY)
United Kingdom (GBP)
Russia (RUB)
U.S.A. (USD)
Source: Reuters / Bloomberg
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
69
Business performance
The KION Group expanded its global market share thanks to
gains in Europe and Asia. The service business also made a sig-
In 2015 the KION Group further strengthened its market posi-
nificant contribution to the growth in revenue.
tion in the automation sector by acquiring companies and enter-
Higher demand for electric forklift trucks and warehouse
ing into partnerships. On 7 August 2015 the KION Group paid
trucks resulting from ever more sophisticated intralogistics solu-
€72.5 million to acquire all the shares in Egemin NV, based in
tions and the growing requirements of the e-commerce sector
Zwijndrecht (Belgium), which is the logistics automation division
helped to push up revenue. Revenue also improved because of
of the Belgian automation specialist Agidens International NV
positive exchange rate effects and the first-time consolidation of
(formerly the Egemin Group). Egemin Automation has become
Egemin Automation in August 2015.
the seventh brand in the KION Group and is included in the Other
The rise in order intake by 9.3 per cent, like the increase
segment. With a strong customer focus, it works together with its
in revenue, was due primarily to a continuation of the favourable
sister companies on complex automation projects. Since the
situation in the core European markets. This was also the main
beginning of August 2015, Egemin Automation has been included
driver for the 13.1 per cent rise in the order book, which was
in the consolidated financial statements of the KION Group.
valued at €864.0 million at the end of the year and thereby pro-
Back in February 2015, LMH acquired 10.0 per cent of the
vides a solid basis for 2016.
shares in robotics specialist Balyo and entered into a strategic
EBIT, adjusted for non-recurring items, came to €482.9 mil-
partnership with the company. STILL built on its leading market
lion, a year-on-year increase of 9.0 per cent. The strong growth in
position in lean logistics by taking over LR Intralogistik GmbH in
earnings was helped by the fact that commodity costs only
October 2015. LR Intralogistik specialises in intralogistics con-
increased slightly. At 9.5 per cent, the adjusted EBIT margin
cepts that eschew forklift trucks in favour of tugger trains, which
remained at the same high level as in 2014.
can also be used in automated material flow concepts.
In total, the KION Group generated net income for the year of
On 20 July 2015, the KION Group exercised the put option
€221.1 million. The earnings per share attributable to the share-
vis-à-vis Weichai Power that it holds via Linde Material Hand-
holders in the KION Group amounted to €2.20. KION GROUP AG
ling GmbH on 20.0 per cent of the shares in Linde Hydraulics.
will propose a dividend of €0.77 per share to the Annual General
This has reduced LMH’s stake in Linde Hydraulics to 10.0 per cent
Meeting, €0.22 per share more than in 2014.
and resulted in a cash inflow of €77.4 million on 16 Decem-
In the coming years, as the Strategy 2020 continues to be
implemented as planned, the KION Group will be well placed to
take advantage of opportunities in the market. In key growth
areas, such as automation and intralogistics solutions, the Group
once again substantially improved its position last year.
ber 2015.
FINANCIAL POSITION AND FINANCIAL
PERFORMANCE
Overall assessment of the economic situation
In 2015 the KION Group achieved encouraging growth in revenue
and earnings. Consolidated revenue rose above the €5 billion
mark for the first time, climbing by 9.0 per cent year on year to
reach €5,097.9 million. A strong increase in new truck business
meant that the KION Group and its brand companies largely
avoided the effects of the general slowdown in the global market.
KION GROUP AG | Annual Report 2015We keep the world moving. 70
Comparison between actual and
forecast growth
Factors contributing to the rise in the value of the order
intake included, in addition to higher truck sales, the further
slight increase in the proportion of customised equipment and
In the past year, the KION Group was consistently able to fulfil the
the expansion of the service business. Over the course of 2015,
forecasts for 2015 specified in the outlook section of the 2014
the order book swelled by 13.1 per cent to €864.0 million (2014:
group management report. Order intake, for example, did not rise
€764.1 million).
moderately as forecast, but climbed by 9.3 per cent, partly
because of positive exchange rate effects. At 9.0 per cent, the
Revenue
increase in consolidated revenue was also higher than antici-
pated, again due in part to currency effects. The slight rise in
Revenue in the KION Group amounted to €5,097.9 million, an
adjusted EBIT expected for the year was exceeded. Contrary to
increase of 9.0 per cent on the 2014 figure of €4,677.9 million.
the prediction of a slight decline in free cash flow, a high level of
Positive currency effects amounting to €108.7 million were con-
incoming payments at the end of the year resulted in an increase
tributory factors in addition to higher unit sales and moderate
in free cash flow. Free cash flow actually improved by 8.8 per cent
price effects.
compared with the previous year. The funds generated from free
cash flow were used, as announced, to further bring down bor-
Revenue by product category
rowing, enabling the Group to markedly reduce its net debt in the
year under review.
Business situation and financial performance
of the KION Group
Level of orders
Revenue from new trucks increased by 9.7 per cent to €2,779.9 mil-
lion (2014: €2,533.0 million). There were year-on-year gains in all
product categories – even the revenue from diesel trucks was
higher than in 2014. The growth in revenue from electric forklift
trucks and warehouse trucks was particularly strong.
Revenue from the service business advanced by 8.1 per cent
to reach €2,318.0 million (2014: €2,144.9 million). This growth was
attributable both to the rising volume of servicing and mainte-
Order intake totalled €5,215.6 million, up by 9.3 per cent on the
nance work under service agreements and to an increase in the
prior-year level (2014: €4,771.2 million). The KION Group’s growth
amount of ad-hoc work. Revenue from the rental and used truck
thus significantly outstripped that of the global market as a whole.
business was also up year on year. Revenue from other business
The two operating segments LMH and STILL contributed equally
areas rose by 23.6 per cent, mainly because of the first-time
to this growth. In addition, positive currency effects raised the
consolidation of Egemin Automation in August 2015. In total, the
value of the order volume by €114.1 million.
service business contributed 45.5 per cent (2014: 45.9 per cent)
Orders for new trucks received by the KION Group brand
of the KION Group’s total revenue. > TABLE 016
companies rose by 7.0 per cent to 165.8 thousand units, exceed-
ing the previous record level achieved in 2007. The brand compa-
nies benefited here from the growing demand for electric forklift
trucks and warehouse trucks. Orders for diesel trucks only just
fell short of the previous year’s level and as such performed much
better than the market as a whole, which was badly affected by
falling sales in China and Brazil.
In the reporting year, high-growth markets accounted for
around 33.5 per cent of new truck orders (2014: 34.7 per cent).
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
71
Revenue by product category
in € million
New business
Service business
– Aftersales
– Rental business
– Used trucks
– Other
Total revenue
2015
2,779.9
2,318.0
1,347.0
524.1
270.4
176.4
2014
2,533.0
2,144.9
1,250.4
486.9
264.9
142.7
5,097.9
4,677.9
TABLE 016
Change
9.7%
8.1%
7.7%
7.7%
2.1%
23.6%
9.0%
Revenue by customer location
growth in eastern Europe, too, despite the current weakness of
the market. Overall revenue was also up in the Americas. The
The LMH and STILL brand segments increased their revenue
decline in revenue in South America was offset by revenue gains
compared with 2014 in virtually all of the KION Group’s core mar-
in North America.
kets. Western Europe was the main contributor: in addition to an
The growth markets outside western Europe together
encouraging level of growth in Germany, there were particularly
accounted for 24.7 per cent of consolidated revenue (2014:
strong increases in the volume of business in France, Italy, Spain
24.8 per cent). The proportion of revenue generated outside
and the United Kingdom. The KION Group generated strong
Germany rose to 75.0 per cent (2014: 73.9 per cent). > TABLE 017
Revenue by customer location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total revenue
2015
3,724.1
432.5
263.0
524.6
153.7
2014
3,411.0
403.3
245.3
470.7
147.5
5,097.9
4,677.9
TABLE 017
Change
9.2%
7.2%
7.2%
11.4%
4.2%
9.0%
KION GROUP AG | Annual Report 2015We keep the world moving.
72
Earnings and profitability
EBIT, EBITDA and ROCE
Earnings before interest and tax, adjusted for non-recur-
ring items and KION acquisition items (adjusted EBIT), rose to
€482.9 million, an increase of 9.0 per cent compared with the
Earnings before interest and tax (EBIT) advanced by 21.8 per cent
previous year (2014: €442.9 million) and the highest ever figure in
to €422.8 million. The prior-year figure of €347.0 million had
the history of the Company. The adjusted EBIT margin was
included an impairment loss of €13.5 million relating to the equity
unchanged year on year at 9.5 per cent. Most of the significant
investment in Linde Hydraulics. This had led to a substantial
improvement in gross profit (up by 11.6 per cent) was offset by
increase in non-recurring items, which amounted to a net expense
higher expenses in the individual functional divisions resulting
of €57.0 million in 2014, compared with a net expense of only
from currency effects, changes to collective bargaining agree-
€33.0 million in 2015. This mainly comprised expenses and
ments and other factors.
impairment losses in connection with the efficiency measures ini-
At 11.9 per cent, return on capital employed (ROCE) was
tiated under the Strategy 2020.
slightly above the prior-year figure (2014: 11.4 per cent). The
increase in adjusted EBIT was partly offset by a moderate rise in
the capital employed. > TABLE 018
EBIT
in € million
Net income
Income taxes
Net financial expenses
EBIT
+ Non-recurring items
+ KION acquisition items
Adjusted EBIT
EBITDA
in € million
EBIT
Amortisation and depreciation
EBITDA
+ Non-recurring items
+ KION acquisition items
Adjusted EBITDA
Moving Forward
Innovation
TABLE 018
Change
24.0%
– 36.4%
– 4.3%
21.8%
– 42.1%
– 30.4%
9.0%
TABLE 019
Change
21.8%
9.3%
15.4%
– 53.6%
– 99.7%
8.9%
2014
178.2
– 80.0
– 88.8
347.0
57.0
38.9
442.9
2014
347.0
367.2
714.2
55.6
10.7
780.4
2015
221.1
– 109.2
– 92.6
422.8
33.0
27.0
482.9
2015
422.8
401.4
824.2
25.8
0.0
850.0
KION GROUP AG | Annual Report 2015
GROUP MANAGEMENT REPORT
Report on the economic position
73
Earnings before interest, tax, depreciation and amortisation
The higher personnel expenses and other administrative expenses
(EBITDA) reached €824.2 million, compared with €714.2 million in
for innovations in drive technology and the further development of
the prior year. Adjusted EBITDA rose to €850.0 million (2014:
the global product platforms were partly offset by savings that
€780.4 million). This equates to an adjusted EBITDA margin of
have already been generated through measures to increase
16.7 per cent, the same as it had been in 2014. > TABLE 019
efficiency. General administrative expenses, which went up by
10.0 per cent to €355.9 million in 2015 (2014: €323.6 million), were
Key influencing factors for earnings
also affected by implementation of the Strategy 2020. Further-
Compared with the rise in revenue, there was a disproportionately
more, currency effects and changes to collective bargaining
low increase of 7.9 per cent in the cost of sales to €3,601.7 million
agreements pushed up costs across all functional divisions.
(2014: €3,337.4 million). Gross profit therefore climbed by 11.6 per
The ‘other’ item of €43.6 million was higher than the previous
cent to €1,496.2 million (2014: €1,340.5 million) and the gross
year’s figure of €26.4 million. This increase was mainly due to the
margin improved from 28.7 per cent to 29.3 per cent. One of
total net income from equity investments of €20.3 million, which is
the factors in this improvement was the higher margin in the
recognised under this item. This includes a share of profit of equity-
new truck business, which resulted in part from a relatively low
accounted investments amounting to €10.6 million. In 2014, the
increase in the cost of materials and higher proportion of custom-
total loss of €33.9 million from the equity-accounted Linde
ised equipment.
Hydraulics resulted in an overall net loss from equity investments
Selling expenses grew by 8.3 per cent to €618.0 million (2014:
of €23.4 million. In addition to net income (loss) from equity invest-
€570.5 million) and thus rose at a slightly lower rate than revenue.
ments and other income and expenses, the ‘other’ item also con-
The increase in research and development costs to €143.0 million
tains income and expenses resulting from exchange differences.
(2014: €125.7 million) was attributable, among other factors, to
The net figure was down by €14.5 million compared with 2014.
expenses in connection with implementing the Strategy 2020.
> TABLE 020
(Condensed) income statement
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
2015
5,097.9
2014
4,677.9
– 3,601.7
– 3,337.4
1,496.2
– 618.0
– 143.0
– 355.9
43.6
422.8
– 92.6
330.2
– 109.2
221.1
1,340.5
– 570.5
– 125.7
– 323.6
26.4
347.0
– 88.8
258.3
– 80.0
178.2
TABLE 020
Change
9.0%
– 7.9%
11.6%
– 8.3%
– 13.8%
– 10.0%
65.5%
21.8%
– 4.3%
27.9%
– 36.4%
24.0%
KION GROUP AG | Annual Report 2015We keep the world moving.
74
Net financial income/expenses
There was a significant improvement in the balance of financial
income and financial expenses, leading to net financial expenses
Business situation and financial performance
of the segments
of €92.6 million compared with a prior-year figure (adjusted for
LMH segment
non-recurring items) of €108.8 million. The main factor here was
the optimisation of the funding structure in 2014 resulting from the
Business performance and order intake
early repayment of two tranches of the corporate bonds. This
The LMH segment reported a significant increase in orders and
resulted in one-off financial expenses of €23.2 million, which were
revenue, strengthening its position as one of the leading global
also included in the financial expenses of €88.8 million reported in
manufacturers of industrial trucks and the market leader in
2014 as well as financial income from the remeasurement of
Europe. Order intake went up by 12.4 per cent to €3,516.3 mil-
options in connection with Linde Hydraulics (€43.2 million).
lion (2014: €3,128.4 million). There were particularly strong
Income taxes
increases in the number of orders in western Europe and the
eastern European EU states. In China, LMH benefited from the
Income tax expenses amounted to €109.2 million (2014:
demand for electric forklift trucks and warehouse trucks and
€80.0 million). This increase of €29.2 million was mainly attributa-
bucked the market trend with an increase in total unit sales that
ble to the rise in earnings in 2015 and to current tax expenses for
was partly due to strong sales of Baoli diesel trucks in the econ-
previous years. It was partly offset by deferred tax income that
omy segment. Currency effects of €124.7 million also had a pos-
resulted mainly from the recognition of deferred tax assets related
itive impact on order intake.
to loss carryforwards and interest carryforwards. The tax rate
In connection with the Strategy 2020, LMH pressed ahead
was 33.1 per cent (2014: 31.0 per cent).
with the construction of the new plant in the Czech Republic,
Net income and appropriation of profit
also a continued drive to strengthen the sales and service
Net income amounted to €221.1 million, exceeding the 2014
network in North America. In India, LMH is building awareness
figure of €178.2 million by 24.0 per cent. Net income of €217.1 mil-
of its brand, which is being targeted at the premium segment. It
lion (2014: €176.7 million) was attributable to the shareholders of
is utilising the existing infrastructure of the Voltas brand (KION
KION GROUP AG. Basic and diluted earnings per share came to
India), whose own new truck business expanded in the year
which went into operation at the beginning of 2016. There was
€2.20 (2014: €1.79) based on an average number of no-par-value
under review.
shares in the year of 98.7 million (2014: 98.7 million). This did not
include 160,050 no-par-value treasury shares that had been
Revenue
repurchased by KION GROUP AG as part of a buy-back to sup-
Revenue went up by 11.5 per cent to €3,429.8 million (2014:
port the KION Employee Equity Programme.
€3,077.2 million). The main influencing factor was the increase in
The Executive Board and Supervisory Board of KION
new truck business, a trend that was primarily attributable to the
GROUP AG will propose a dividend of €0.77 per share to the
growing demand for warehouse trucks and electric forklift trucks
Annual General Meeting on 12 May 2016. As there were
in western Europe. There was also growth across all areas of the
98,739,950 dividend-bearing shares as at 31 December 2015,
service business, with particularly sharp rises in after-sales and
this equates to a total dividend payout of €76.0 million. A total of
rental business. Positive currency effects contributed €125.2 mil-
around 35.0 per cent of the net income accruing to the
lion to the increase in revenue.
KION GROUP AG shareholders will therefore be distributed in
dividends.
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KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
75
2015
3,516.3
3,429.8
545.8
543.2
363.4
383.9
15.8%
11.2%
2014
3,128.4
3,077.2
441.2
486.6
270.3
339.6
15.8%
11.0%
TABLE 021
Change
12.4%
11.5%
23.7%
11.6%
34.4%
13.0%
–
–
Key figures – LMH –
in € million
Order intake *
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
* Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015
Earnings
Revenue
As a result of the increase in revenue, adjusted EBIT advanced by
Revenue in the STILL segment amounted to €1,950.2 million,
13.0 per cent to reach €383.9 million (2014: €339.6 million). The
exceeding the 2014 figure of €1,850.7 million by 5.4 per cent. The
adjusted EBIT margin stood at 11.2 per cent, slightly higher than
increase was attributable to the buoyant new truck business,
the margin of 11.0 per cent in 2014. EBIT including non-recurring
which expanded by 5.1 per cent, and to the service business
items improved to €363.4 million (2014: €270.3 million).
(servicing, spare parts, rentals and used trucks), where revenue
Adjusted EBITDA stood at €543.2 million (2014: €486.6 mil-
was up by 5.6 per cent.
lion). This equates to an adjusted EBITDA margin of 15.8 per cent,
the same as in 2014. > TABLE 021
Earnings
STILL segment
Adjusted EBIT for the segment rose to €144.0 million (2014:
€133.6 million). The adjusted EBIT margin stood at 7.4 per
cent, slightly higher than the margin of 7.2 per cent in 2014.
Business performance and order intake
With the inclusion of non-recurring items, EBIT fell year on year
STILL saw its order intake go up by 4.5 per cent to €1,980.0 mil-
to €117.5 million (2014: €118.4 million). This was because of
lion in 2015 (2014: €1,895.1 million) and it consolidated its strong
expenses in connection with the efficiency measures initiated
position in the key sales markets. Once again in 2015, electric
under the Strategy 2020.
forklift trucks and warehouse trucks accounted for a higher share
Adjusted EBITDA rose to €258.3 million (2014: €240.4 mil-
of new truck orders than before, while unit sales of diesel trucks
lion). The adjusted EBITDA margin was 13.2 per cent (2014:
declined slightly. Whereas some major western and eastern Euro-
13.0 per cent). > TABLE 022
pean markets generated significant growth, orders fell in Russia
and Brazil.
KION GROUP AG | Annual Report 2015We keep the world moving. 76
Key figures – STILL –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
2015
1,980.0
1,950.2
242.1
258.3
117.5
144.0
13.2%
7.4%
2014
1,895.1
1,850.7
231.1
240.4
118.4
133.6
13.0%
7.2%
TABLE 022
Change
4.5%
5.4%
4.8%
7.4%
– 0.8%
7.8%
–
–
Financial Services (FS) segment
rental fleets. The LMH and STILL brand segments manage this
Business performance
business, which is recognised as intra-group revenue. This
brought the total segment revenue up to €740.3 million (2014:
The Financial Services (FS) segment is the central financing part-
€620.9 million). Net financial income in the form of net interest
ner in the KION Group. The FS segment benefited from an
income is a key element of the segment’s earnings and rose to
increase in business in the LMH and STILL brand segments,
€7.1 million (2014: €3.1 million). Earnings before tax came to
enjoying growth in the financing of short-term rental business
€5.3 million, improving only marginally on the figure of €5.2 million
(which is the operational responsibility of the brand segments)
in 2014. The return on equity (ROE) was 13.1 per cent (2014:
and in the long-term leasing business with external end custom-
13.0 per cent).
ers. As in 2014, a large proportion of the financing portfolio was
As at 31 December 2015, total segment assets amounted to
focused on business in western Europe. Outside western Europe,
€1,603.4 million (2014: €1,361.3 million). Of this total, €627.6 mil-
FS recorded its strongest gains in Brazil and China, where long-
lion was accounted for by lease receivables due from external
term financing solutions were offered for the first time.
customers (31 December 2014: €521.9 million), while €549.2 mil-
Funding for the leasing business was secured at all times in
lion (31 December 2014: €473.0 million) related to the financing of
2015 by sufficient lines of credit from our financing partners.
the short-term rental fleet in the LMH and STILL segments.
Because of the good financing conditions, the KION Group was
Leased assets under operating leases relating to external cus-
able to establish new lines of credit with favourable terms and
tomer contracts amounted to €316.1 million (31 December 2014:
renegotiate existing lines. Smaller regional partners were also
€267.4 million).
brought on board.
The funding of leases with external end customers gave rise
to leasing liabilities with external funding partners amounting to
Financial position and financial performance
€853.1 million (31 December 2014: €702.9 million). The funding of
Revenue in the long-term leasing business with external end cus-
the intra-group long-term leases (finance leases) with LMH and
tomers went up to €417.3 million (2014: €350.1 million). Financing
STILL resulted in lease liabilities of €400.6 million (2014:
for short-term rental business grew by 19.3 per cent to €322.9 mil-
€334.5 million). Net financial debt attributable to this segment
lion (2014: €270.7 million) because of the expansion of short-term
came to €185.6 million (2014: €155.1 million). > TABLE 023
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KION GROUP AG | Annual Report 2015
GROUP MANAGEMENT REPORT
Report on the economic position
77
Key figures – Financial Services –
in € million
Revenue
Adjusted EBITDA
Adjusted EBIT
Earnings before taxes (EBT)
Total segment assets
Leased assets
Lease receivables
thereof lease receivables from long-term leases to third parties
thereof lease receivables from LMH and STILL from funding
of the short-term rental business
Lease liabilities ¹
thereof liabilities from funding of the long-term leases with third parties
thereof liabilities from funding of the short-term rental business
of LMH and STILL
Net financial debt
Equity
Return on equity ²
1 Includes liabilities from financing of the short-term rental fleet reported as other financial liabilities
2 Earnings before taxes divided by average equity employed excluding net income (loss) for the current period
2015
740.3
88.7
– 1.8
5.3
2014
620.9
82.6
2.1
5.2
TABLE 023
Change
19.2%
7.5%
<– 100%
1.4%
1,603.4
1,361.3
17.8%
316.1
1,176.8
627.6
549.2
1,253.7
853.1
400.6
185.6
47.5
267.4
994.9
521.9
473.0
1,037.5
702.9
334.5
155.1
46.5
18.2%
18.3%
20.2%
16.1%
20.8%
21.4%
19.8%
19.6%
2.2%
13.1%
13.0%
–
Other segment
Revenue and earnings
Business performance
At €252.8 million, total revenue for this segment was higher than
the 2014 figure of €235.7 million. This resulted mainly from inter-
Group head office functions that do not come under any other
nal IT and logistics services and from Egemin Automation, which
segment, plus Egemin NV along with its eight subsidiaries and
has been consolidated since August 2015. Because of this acqui-
its Egemin Automation brand, are reported in the Other segment.
sition, the revenue generated outside the KION Group increased
In 2015 KION India was transferred from the Other segment to the
to €53.5 million (2014: €47.6 million) in spite of the transfer of KION
LMH segment.
India to the LMH segment. Egemin Automation contributed pro
rata revenue of €33.0 million.
KION GROUP AG | Annual Report 2015We keep the world moving. 78
Key figures – Other –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
2015
268.6
252.8
160.6
187.7
127.3
155.3
2014
236.5
235.7
141.1
152.5
124.1
135.5
TABLE 024
Change
13.6%
7.3%
13.8%
23.1%
2.5%
14.6%
The Other segment reported adjusted EBIT, including intra-group
collects liquidity surpluses of the Group companies in central or
dividend income, of €155.3 million (2014: €135.5 million). Adjusted
regional cash pools and, where possible, covers subsidiaries’
EBITDA came to €187.7 million (2014: €152.5 million). > TABLE 024
funding requirements with intercompany loans. This funding
enables the KION Group to present a united front in the capital
Consolidation/reconciliation
markets and strengthens its hand in negotiations with banks and
other market participants.
Besides the intra-group supply relationships between the brand
As a listed group of companies that was funded in the year
segments and with Financial Services, the main factor in the EBIT
under review using a corporate bond and loan facilities, the
effect of minus €198.5 million (2014: minus €167.9 million) across
KION Group considers the interests of shareholders, bond hold-
all segments was the intra-group dividend income.
ers and banks in its financial management. For the sake of all
Financial position
stakeholders, the KION Group makes sure that it maintains an
appropriate ratio of internal funding to borrowing. The KION
Group’s borrowing is based on a long-term approach. The core
components of this borrowing will become due for repayment in
Principles and objectives of financial management
the years 2018 to 2020. The Group occasionally arranges addi-
tional credit lines for KION Group companies with local banks or
By pursuing an appropriate financial management strategy, the
leasing companies in order to comply with legal, tax and other
KION Group makes sufficient cash and cash equivalents availa-
regulations.
ble at all times to meet the Group companies’ operational and
Among other things, the loan facility and the contractual con-
strategic funding requirements. In addition, the KION Group opti-
ditions relating to the issuance of the corporate bond require
mises its financial relationships with customers and suppliers,
compliance with loan conditions (‘covenants’). The loan facility
manages any collateral security offered and mitigates the finan-
also requires compliance with specific financial covenants during
cial risk to its enterprise value and profitability, notably currency
the term of the agreement. Non-compliance with the covenants
risk, interest-rate risk, price risk, counterparty risk and country
may, for example, give lenders the right to terminate the loan or
risk. In this way, the KION Group creates a stable funding position
permit bondholders to put the corporate bonds back to the issuer
from which to maintain profitable growth.
prior to their maturity date. All covenants and restrictions were
The financial resources within the KION Group are provided
comfortably complied with in the past financial year.
on the basis of an internal funding approach. The KION Group
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KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
79
Depending on requirements and the market situation, the
Analysis of capital structure
KION Group will also avail itself of the funding facilities offered by
the public capital markets in future. The KION Group therefore
Financial debt
seeks to maintain a strong credit profile in the capital and funding
Long-term borrowing fell by €89.5 million from its level at
markets by rigorously pursuing a value-based strategy, imple-
31 December 2014 to reach €557.2 million at the end of 2015.
menting proactive risk management and ensuring a solid funding
As at 31 December 2015, the main components of long-term
structure. In April 2015 the KION Group’s credit rating was raised.
borrowing were the corporate bond (€450.0 million), which was
Rating agency Standard & Poor’s now classifies the KION Group
due to mature in 2020 but was paid back in February 2016, and
as BB+ with a stable outlook, while the rating from Moody’s is
the amounts drawn down from the revolving credit facility
Ba2 with a positive outlook.
(€90.0 million).
The KION Group maintains a liquidity reserve in the form of
As at 31 December 2015, the unused, unrestricted loan
unrestricted, bindingly committed credit lines and cash in order to
facility had risen to €1,090.8 million or – including cash and cash
ensure long-term financial flexibility and solvency.
equivalents – to €1,193.6 million.
In 2015, the KION Group used derivative financial instru-
Because of the free cash flow generated in 2015, the
ments in the form of cash flow hedges and a net investment
improved funding structure and the payment received from the
hedge in order to hedge currency risks.
sale of 20 per cent of Linde Hydraulics (€77.4 million) the financial
debt recognised fell significantly to €676.5 million in comparison
Main capital market activities in the reporting period
with 31 December 2014 (€909.6 million). After deduction of cash
and cash equivalents of €103.1 million, net financial debt fell to a
In September 2015, KION GROUP AG carried out another share
historical low of €573.5 million, compared with €810.7 million at
buyback to support its KION Employee Equity Programme
the end of 2014. Net debt as at 31 December 2015 was therefore
(KEEP), purchasing a total of 70,000 of its own no-par-value
only 0.7 times adjusted EBITDA, compared with 1.0 times in the
shares (around 0.07 per cent of the share capital). To do so, the
prior year. > TABLE 025
KION Group used the authorisation granted at the Annual Gen-
eral Meeting on 13 June 2013. In October 2015, the KION Group
employees entitled to participate in KEEP were given the oppor-
tunity to buy more KION shares. By 31 December 2015, a total of
73,512 shares had been purchased by staff (2014: 87,438 shares).
This increased the number of shares held in treasury to 160,050
as at the reporting date.
KION GROUP AG | Annual Report 2015We keep the world moving. 80
Net financial debt
in € million
Corporate bond (2013 / 2020) – fixed rate (gross)
Liabilities to banks (gross)
Liabilities to non-banks (gross)
./. Capitalized borrowing costs
Financial debt
./. Cash and cash equivalents
Net financial debt
2015
450.0
225.9
6.2
– 5.5
676.5
– 103.1
573.5
2014
450.0
459.9
6.6
– 6.9
909.6
– 98.9
810.7
TABLE 025
Change
0.0%
– 50.9%
– 6.1%
19.5%
– 25.6%
– 4.2%
– 29.3%
On 25 January 2016, the Executive Board of KION GROUP AG
ments to pension plan participants. These contributions are
decided to implement the new funding structure of the
determined by factors such as the funded status, legal and tax
KION Group by redeeming the existing syndicated loan dated
considerations, and local practice. The payments made by the
23 December 2006 comprising a revolving credit facility of
KION Group under retirement pension obligations in 2015
€1,243.0 million and the KION Group corporate bond of
totalled €24.2 million, comprising €15.6 million for direct pension
€450.0 million that was issued in 2013 and is due to mature
payments and €8.5 million for employer contributions to plan
in 2020. The associated repayment was made on 15 February
assets. Transfers to external pension funds resulted in payments
2016 using funds drawn down under the new senior facilities
of €0.1 million.
agreement.
Further details about the retirement benefit obligation are
provided in note [29] in the notes to the consolidated financial
Retirement benefit obligation
statements.
The KION Group supports pension plans in many countries.
These plans comply with legal requirements, standard local prac-
Lease liabilities
tice and the situation in the country in question. They are either
Continuing growth in the leasing business with end customers
defined benefit pension plans, defined contribution pension plans
in 2015 led to a correspondingly higher funding requirement.
or multi-employer benefit plans. As at 31 December 2015, the
Lease liabilities under sale-and-leaseback arrangements rose to
retirement benefit obligation under defined benefit pension
€855.6 million (31 December 2014: €707.7 million). Of this total,
plans amounted to a total of €798.0 million and therefore remained
€617.7 million was accounted for by non-current lease liabilities
at almost the same level as at the end of the previous year
(31 December 2014: €461.7 million) and €237.9 million by current
(31 December 2014: €787.5 million). Most of this obligation related
lease liabilities (31 December 2014: €246.0 million).
to pension plans in Germany. After deduction of the pension plan
The liabilities from the short-term rental fleet and from pro-
assets amounting to €30.2 million, the remaining net obligation
curement leases are reported under other financial liabilities (see
came to €767.8 million (31 December 2014: €765.8 million).
note [34] in the notes to the consolidated financial statements). As
Contributions to pension plans that are entirely or partly
at 31 December 2015, other financial liabilities included liabilities
funded via funds are paid in as necessary to ensure sufficient
of €403.2 million (31 December 2014: €339.1 million) arising from
assets are available and to be able to make future pension pay-
sale-and-leaseback transactions used to finance the short-term
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KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
81
rental fleet. The item also included liabilities from residual value
Funding vehicles not reported on the statement of financial position
guarantees amounting to €17.8 million (31 December 2014:
The KION Group also makes use of funding vehicles not
€18.5 million). The residual-value liabilities relate to residual-value
reported in the statement of financial position. As part of its
guarantees provided in connection with the sale of assets to leas-
financing activities, the KION Group has entered into leases
ing companies, where the guaranteed amount is more than
both for its own use and for transfer to customers. In accord-
10.0 per cent of the fair value of the asset in question.
ance with the relevant IFRS requirements, such leases are not
Equity
reported as either an asset or a liability on the statement of
financial position. The nominal amount of the contractual obliga-
Equity increased to €1,848.7 million (31 December 2014:
tions arising from such leases not reported in the statement of
€1,647.1 million) as a result of the strong net income. The dividend
financial position was €272.7 million as at 31 December 2015
payment of €54.3 million for the 2014 financial year had only a
(31 December 2014: €250.8 million; see note [36] in the notes
minor impact on equity because of the overall gain of €38.9 mil-
to the consolidated financial statements). In addition, the KION
lion recognised in other comprehensive income. The equity ratio
Group sold trade receivables with a total value of €75.1 million
increased to 28.7 per cent (31 December 2014: 26.9 per cent).
(2014: €74.4 million) through factoring transactions and derecog-
> TABLE 026
nised those receivables in full.
(Condensed) statement of financial position – equity and liabilities
TABLE 026
in € million
Equity
Non-current liabilities
thereof:
Retirement benefit obligation
Financial liabilities
Deferred tax liabilities
Lease liabilities
Current liabilities
thereof:
Financial liabilities
Trade payables
Lease liabilities
Total equity and liabilities
2015
1,848.7
in %
28.7%
2014
1,647.1
in %
26.9%
Change
12.2%
2,860.0
44.4%
2,688.3
43.9%
6.4%
798.0
557.2
302.7
617.7
12.4%
8.7%
4.7%
9.6%
787.5
646.8
320.9
461.7
12.8%
10.6%
5.2%
7.5%
1.3%
– 13.8%
– 5.7%
33.8%
1,731.5
26.9%
1,793.0
29.3%
– 3.4%
119.3
574.6
237.9
6,440.2
1.9%
8.9%
3.7%
–
262.9
564.6
246.0
6,128.5
4.3%
9.2%
4.0%
–
– 54.6%
1.8%
– 3.3%
5.1%
KION GROUP AG | Annual Report 2015We keep the world moving. 82
Analysis of capital expenditure
The KION Group’s net cash provided by operating activities
totalled €677.9 million, which was significantly higher than the
Capital expenditure (excluding leased and rental assets) was
prior-year figure (2014: €603.8 million). This increase, which fully
again funded using cash flow from operating activities in the
offset the increase in working capital, the rise in the volume of
reporting year. Capital expenditure rose by 7.1 per cent year on
leasing, and higher tax payments, was attributable to higher
year to reach €142.6 million (2014: €133.1 million). Whereas capi-
contributions to operating profit and to one-off incoming pay-
talised development costs in the LMH and STILL brand segments
ments in the year under review.
were a little lower, there was an increase in capital expenditure at
The net cash used for investing activities rose to €345.2 mil-
the Group’s production and technology sites, the bulk of which
lion (2014: €297.8 million). Cash payments, particularly for capital
was attributable to the LMH segment. The main capital expendi-
expenditure on research and development (R&D) and property,
ture activities were the modernisation of production facilities in
plant and equipment, totalled €142.6 million in 2015 (2014:
Germany and Asia, the construction of a new factory in the Czech
€133.1 million). Owing to the increase in demand for rental trucks,
Republic and the ongoing optimisation of the IT infrastructure.
the KION Group also continued to expand its short-term rental
Analysis of liquidity
fleet business (net) with a volume of spending of €222.9 mil-
lion (2014: €183.4 million). The €84.9 million in total net cash used
for equity investments, in particular the acquisition of Egemin
Liquidity management is an important aspect of central financial
Automation, was almost completely matched by the €77.4 mil-
management. The sources of liquidity are cash and cash equiva-
lion inflow of funds from the sale of 20.0 per cent of the shares in
lents, cash flow from operating activities and amounts available
Linde Hydraulics to Weichai Power.
under credit facilities. Cash and cash equivalents went up slightly
Free cash flow – the sum of cash flow from operating activi-
over the course of 2015 to reach €103.1 million (2014: €98.9 mil-
ties and investing activities – was up by €26.8 million year on year
lion); €0.3 million of this was restricted. Taking into account the
at €332.7 million (2014: €305.9 million).
credit facilities that were still available, the unrestricted cash and
At minus €329.1 million, cash flow from financing activities
cash equivalents available to the KION Group as at 31 Decem-
improved significantly on the prior-year figure (2014: minus
ber 2015 amounted to €1,193.6 million (2014: 939.7 million).
€428.1 million), which had been affected by the repayment of the
(Condensed) statement of cash flows
in € million
EBIT
Cash flow from operating activities
Cash flow from investing activities
Free cash flow
Cash flow from financing activities
Effect of foreign exchange rate changes on cash
Change in cash and cash equivalents
Moving Forward
Innovation
2015
422.8
677.9
– 345.2
332.7
– 329.1
0.5
4.1
2014
347.0
603.8
– 297.8
305.9
– 428.1
1.8
– 120.4
TABLE 027
Change
21.8%
12.3%
– 15.9%
8.8%
23.1%
– 71.3%
> 100%
KION GROUP AG | Annual Report 2015
GROUP MANAGEMENT REPORT
Report on the economic position
83
corporate bonds and other factors. The financial debt taken up,
Due to the overall growth in business, leased assets for
which came to €911.0 million and was mainly used for the ongo-
leases with end customers that are classified as operating leases
ing funding of the working capital and for the funding of acquisi-
increased to €334.4 million (31 December 2014: 279.0 million).
tions, was offset by repayments totalling €1,134.9 million as at
Long-term lease receivables arising from leases with end cus-
31 December 2015. Net cash of €43.3 million was used for
tomers that are classified as finance leases advanced to
regular interest payments (2014: €82.5 million). The distribution of
€472.0 million (31 December 2014: €345.3 million).
a dividend of €0.55 per share resulted in an outflow of funds of
The amount of deferred tax assets recognised on the bal-
€54.3 million (2014: €34.5 million). The acquisition of employee
ance sheet fell by €8.9 million to reach €349.0 million at the end
shares caused a cash outflow of €2.7 million (2014: €1.5 million).
of 2015. Further details regarding the change in deferred tax
> TABLE 027
assets are provided in note [14] in the notes to the consolidated
Net assets
Non-current assets
financial statements.
Current assets
Overall, current assets increased by €26.2 million to €1,629.9 mil-
lion (31 December 2014: €1,603.7 million). While trade receivables
Non-current assets increased to €4,810.3 million (31 Decem-
in particular increased significantly, other current financial assets
ber 2014: €4,524.8 million), primarily due to the expanding leasing
declined, mainly because the put option vis-à-vis Weichai Power
business. Intangible assets accounted for €2,452.5 million
on 20.0 per cent of the shares in Linde Hydraulics was exercised.
(31 December 2014: €2,412.5 million). Within that amount,
By contrast, short-term lease receivables from end custom-
goodwill and the KION Group’s brand names rose to €2,152.2 mil-
ers decreased to €181.7 million at the end of the reporting period
lion owing to currency effects and, in particular, the first-time
(31 December 2014: €202.5 million).
consolidation of Egemin Automation (31 December 2014:
Cash and cash equivalents stood at €103.1 million (31 Decem-
€2,092.4 million).
ber 2014: €98.9 million). Taking into account the unused credit
Rental assets increased to €544.0 million due to the expan-
facility, the cash and cash equivalents available to the KION Group
sion of the rental fleet business in the brand segments (31 Decem-
at 31 December 2015 amounted to €1,193.6 million. > TABLE 028
ber 2014: €487.1 million).
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
2015
115.9
75.0
359.5
3.1
553.5
2014
122.2
71.5
330.8
4.7
529.2
TABLE 028
Change
– 5.1%
4.9%
8.7%
– 35.0%
4.6%
KION GROUP AG | Annual Report 2015We keep the world moving.
84
Working capital (inventories and trade receivables less trade pay-
ables) was €649.3 million as at the reporting date (31 Decem-
ber 2014: €562.8 million). > TABLE 029
(Condensed) statement of financial position – 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 financial assets
Cash and cash equivalents
2015
4,810.3
in %
74.7%
2014
4,524.8
in %
73.8%
Change
6.3%
1,548.1
24.0%
1,497.1
24.4%
604.1
349.0
544.0
334.4
472.0
9.4%
5.4%
8.4%
5.2%
7.3%
595.4
357.9
487.1
279.0
345.3
9.7%
5.8%
7.9%
4.6%
5.6%
3.4%
1.5%
– 2.5%
11.7%
19.9%
36.7%
1,629.9
25.3%
1,603.7
26.2%
1.6%
553.5
670.5
181.7
58.4
103.1
8.6%
10.4%
2.8%
0.9%
1.6%
529.2
598.2
202.5
118.3
98.9
8.6%
9.8%
3.3%
1.9%
1.6%
4.6%
12.1%
– 10.3%
– 50.6%
4.2%
Total assets
6,440.2
–
6,128.5
–
5.1%
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
GROUP MANAGEMENT REPORT
Report on the economic position
85
NON-FINANCIAL PERFORMANCE
INDICATORS
Employees
HR strategy
The KION Group’s success is founded on the capabilities and
The KION Group’s enterprise value is determined not only by
commitment of its employees. The ultimate objective of the KION
financial KPIs but also by non-financial influencing factors. The
Group’s HR strategy is to provide the best possible support to the
non-financial influencing factors are based on the Company’s
targeted implementation of the KION Group Strategy 2020. To
relations with its customers and employees and on its technolog-
this end, the KION Group draws on a wide range of measures to
ical position and on environmental considerations – and they also
ensure that there is always a sufficient number of highly qualified
have an impact on the success of the Strategy 2020. The overar-
and committed employees at all levels of its operations. Attractive
ching objective of establishing the KION Group as the global mar-
working conditions and the opportunities for career progression
ket leader with above-average profitability, efficiency and resil-
afforded by working for an international group of companies play
ience by 2020 can only be achieved if the Group succeeds in:
an important role in this and provide a solid basis for meeting the
competent and committed employees at all sites;
– being an attractive and responsible employer that can retain
– developing products that are closely tailored to customers’
– continually increasing the customer benefits provided by its
needs and environmental requirements now and in future;
products and services and designing production processes
manifold challenges presented by demographic change.
The KION Group has continually strengthened its employer
brands, particularly those of LMH and STILL, at a high level. In
2015, STILL was recognised as one of Germany’s best employers
by the Top Employers Institute, an international certification
organisation, for the fourth time in a row. It also received a ‘Ger-
many’s Top Employers’ award from the CRF Institute.
in such a way that resources are conserved and emissions
are avoided as far as possible.
Headcount
The KION Group firmly believes that these aspects are important
The average number of employees (full-time equivalents (FTEs),
to its positioning as a pioneering company in a highly competitive
including trainees and apprentices) in the KION Group was
environment.
23,129 in 2015 (2014: 22,438 FTEs). As at 31 December 2015,
the KION Group companies employed 23,506 FTEs, 837 more
than a year earlier.
This increase resulted mainly from the acquisition of the
Belgium-based Egemin Automation and growth in the Czech
Republic. > TABLE 030
KION GROUP AG | Annual Report 2015We keep the world moving.
86
Employees (full-time equivalents)*
TABLE 030
31/12/2015
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total
31/12/2014
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total
LMH
8,728
1,234
154
3,805
565
STILL
6,931
687
485
0
0
14,486
8,103
8,607
1,096
138
3,560
544
6,792
671
513
0
0
13,945
7,976
FS
59
0
0
0
0
59
60
0
0
0
0
60
Other
797
0
54
7
0
858
526
0
0
162
0
688
Total
16,515
1,921
693
3,812
565
23,506
15,985
1,767
651
3,722
544
22,669
* Number of employees (full-time equivalents) as at balance sheet date; allocation according to the contractual relationship
Personnel expenses amounted to €1,351.7 million. The main rea-
son for this increase of 9.7 per cent compared with 2014 was the
raise in average headcount for 2015 and changes to collective
bargaining agreements. > TABLE 031
Personnel expenses
in € million
Wages and salaries
Social security contributions
Post-employment benefit costs and other benefits
Total
Moving Forward
Innovation
2015
1,058.1
237.8
55.9
1,351.7
2014
966.4
215.7
49.7
1,231.9
TABLE 031
Change
9.5%
10.2%
12.3%
9.7%
KION GROUP AG | Annual Report 2015
GROUP MANAGEMENT REPORT
Report on the economic position
87
Diversity
such as talent management and training & development pro-
grammes. This helps to systematically identify and support staff
The KION Group sees itself as a global manufacturer with strong
with potential, high performers and experts in key functions.
intercultural awareness: as at 31 December 2015, people from
Organised in cooperation with the European School of Manage-
69 different countries were employed across the KION Group.
ment and Technology (ESMT) and continued from 2014, KION
One of the ways in which the Company promotes interna-
Campus is an international, cross-brand executive development
tional collaboration between employees is the KION expat pro-
programme aimed at the Group’s around 300 top executives. In
gramme, which gives employees the opportunity to transfer to
addition, new managers at STILL continue to receive support
different countries where the KION Group is represented.
under the First Leading programme during their first few years.
The KION Group tackles the challenges of demographic
Prospective managers can enhance their skills through STILL’s
change by providing working conditions that are suited to employ-
Young Professional programme, while highly talented staff around
ees’ age-related requirements and organising healthy-living pro-
the world can participate in the International Junior Circle. The
grammes so that it can continue to benefit from older employees’
STILL Academy offers subject-specific and interdisciplinary train-
experience. As at 31 December 2015, 25.1 per cent of employees
ing courses. Opportunities at Linde Material Handling include a
were over the age of 50 (31 December 2014: 24.2 per cent). A
virtual assessment centre for future managers.
total of 258 employees were participating in partial retirement
models as at the reporting date (31 December 2014: 192).
Training and professional development
Compared with the previous year, the proportion of the KION
Group’s total workforce made up of women remained stable in
The companies in the KION Group currently offer training for
2015, at 16.1 per cent. To help increase the proportion of man-
21 professions in Germany. They employed a total of 571 trainees
agement positions occupied by women, the Executive Board set
and apprentices as at 31 December 2015 (31 December 2014:
targets that are published in the corporate governance report.
577). The ratio of trainees and apprentices to other employees
Going forward, the KION Group intends to fill more management
therefore remains at a steady, high level. Besides providing dual
positions with employees from outside Germany in order to better
vocational training schemes, KION Group companies offer work
reflect the Company’s international make-up.
placements for students combining vocational training with a
The KION Group offers flexible working-time models that
degree course in cooperation with various universities.
promote a good work-life balance. In addition, Linde Material
Handling has implemented a company agreement about ‘tele-
Sharing in the Company’s success
working / home office’, which stipulates the terms on which
employees can work at home on a mutually agreed and volun-
Having successfully floated on the stock exchange, the KION
tary basis.
Group launched the KION Employee Equity Programme (KEEP) in
2014. Initially limited to Germany, the programme was rolled out
Development of specialist workers and executives
to France, the UK, Italy and China last year. Around 1,700 employ-
ees across the five countries participated in this share matching
Finding highly qualified people to fill specialist and executive posi-
programme in 2015, roughly 11 per cent of the total number who
tions is crucial to the KION Group’s success. As a result, one of
are eligible to do so. The programme was especially well received
the focuses of HR work across the Group in 2015 was, as in the
in China, resulting in a participation rate that greatly exceeded the
previous years, the recruitment and development of suitable
original expectation.
young talent.
The total participation rate for KEEP since its inception is now
The KION Group endeavours to offer its employees interest-
around 17 per cent.
ing career opportunities and flexible, family-friendly working-time
models. The Group companies also collaborate closely on areas
KION GROUP AG | Annual Report 2015We keep the world moving. 88
The plan for 2016 is to give employees in other countries the
made good progress with regard to HSE. Last year 14 audits
opportunity to share in the company’s success by participating
were carried out within the KION Group. All audits in the reporting
in KEEP.
year showed a clear improvement in the individual units com-
In 2015 the remuneration of the Group’s around 300 top
pared with 2014.
executives was updated by continuing the long-term remunera-
In 2015 KION also introduced a global system for reporting
tion components that had been introduced in 2014, thereby align-
accidents and incidents. The system requires accidents involv-
ing it with the remuneration of the Executive Board. A second
ing serious injuries, for example that hospitalise the affected
allocation of the KION Long Term Incentive Plan for Top Manage-
individual, to be reported directly to the Executive Board within
ment (LIFT) was issued in the reporting year.
24 hours. Information must also be provided as to whether
Employee commitment
measures to improve safety in the workplace were introduced
as a result of the accident and, if so, what these measures
entailed. The programme thereby serves as a global forum for
The KION Group’s products and services destined for its custom-
health and safety practices.
ers are produced by committed and motivated employees. That
The KION Safety Championship was introduced in 2014 as
is why all KION companies aim to ensure a high level of employee
a way of providing additional impetus and motivation for employ-
commitment. In 2015 the KION Group surveyed around 1,800
ees to engage with HSE matters. All production facilities take
managers on different aspects of employee and corporate man-
part. Based on regular reporting from the individual units, a
agement. The participation rate of approximately 88 per cent
panel of judges decides which units deserve to be rewarded for
was exceptionally high. The results of the survey were presented
special dedication or considerable progress in an area of HSE.
and discussed in various management committees, enabling
The first winner of the competition, the team from KION North
improvement measures to then be identified. The focus here is on
America Corporation, received the Safety Championship award
clarity in the implementation of the organisational changes
in May 2015.
announced in summer 2015 and on further enhancement of
The assessment takes account of the units’ different eco-
management skills.
nomic and cultural situations.
Safety experts at the KION Group’s various production
Health and safety in the workplace
facilities began to collaborate more closely last year. The HSE
managers at all production sites and sales and service outlets
In the reporting year, the KION Group continued to expand
meet annually for an international summit at which they discuss
its activities relating to health, safety & environment (HSE). The
current topics and share best practice.
KION Group’s obligations, in accordance with a corporate policy,
The health rate for 2015 stood at the high level of 96.4 per cent
include taking comprehensive precautions to create a safe work-
(2014: 96.5 per cent). In 2015 the accident rate fell in both pro-
ing environment and ensuring employees know how to avoid
duction and sales and service. A target based on HSE key per-
risks and accidents. In 2015 work began on developing an HSE
formance indicators is one of the factors used to determine the
code of conduct for KION with the aim of establishing groupwide
variable remuneration of the Executive Board members.
minimum standards.
HSE activities centre on an internal audit programme, which
covers all of the Group’s production facilities as well as Group
sales and service. The aim of the regular audits is to systemati-
cally document existing HSE measures and processes and pro-
vide specific ideas for how they can be developed further (more
details can be found in the ‘Sustainability’ section). The audit
conducted as part of this programme shows that the Group has
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
89
Research and development
with environmental targets and regulatory requirements in order to
create highly efficient and competitive products for customers. To
Strategic focus of research and development
this end, and to secure the Company’s position as a leading tech-
nology provider, the product portfolio of the KION Group is contin-
The focus of research and development (R&D) is determined by
ually being enhanced. Another aim is to integrate the KION Group’s
the Strategy 2020. The KION Group pursues the primary objective
logistics solutions into customers’ value chains and open up new
of increasing the customer benefits in all price segments and
application areas for them. In the volume and economy segments,
sales regions and, by adhering to modular and platform strate-
the KION Group is establishing shared, cross-brand and cost-effi-
gies, offering high quality, high-performance products at com-
cient platforms that enable low-cost production yet allow a strong
petitive prices. To this end, R&D is designed to be cost- effective,
degree of regional differentiation in the industrial trucks.
to reduce the complexity and diversity of products and to shorten
development times for new products. R&D essentially works on a
Key R&D figures
cross-brand and cross-region basis, which ensures that research
findings and technological know-how are shared across the
In 2015, the KION Group’s total spending on research and
Group. In addition, special product development teams working
development amounted to €130.5 million. This constituted a year-
for the individual brand companies and in the regions are able to
on-year rise of 9.1 per cent (2014: €119.7 million). Total R&D
deliver customer-specific solutions.
expenditure included €40.9 million in capitalised development
An example that is helping to raise efficiency is the ‘hardware
costs (2014: €43.7 million). These expenses were offset by depre-
in the loop’ (HIL) procedure introduced in 2015, with which com-
ciation and amortisation of €53.3 million (2014: €49.7 million) (see
plex electronic control units and systems can be examined using
note [17] in the notes to the consolidated financial statements).
virtual truck models so that improvements can be made based on
The number of full-time jobs in R&D teams grew by
the findings. This enables innovations to be brought to production
3.2 per cent to reach 1,056. Within the R&D organisation, the
readiness much faster and more cost-effectively.
development centre in the southern Chinese city of Xiamen car-
In the premium segment, the focus for the KION Group’s
ries out cross-brand development work, focusing mainly on the
products remains on total cost of ownership for customers. The
economy and volume price segments in emerging markets. It is
objective is to minimise these costs, which include purchase price,
playing a crucial role in bringing the groupwide platform strategy
maintenance and repair costs and energy use, while complying
to fruition. > TABLE 032
Research and development (R&D)
in € million
Research and development costs (P&L)
Amortisation expense (R&D)
Capitalised development costs
Total R&D spending
R&D spending as percentage of revenue
2015
143.0
– 53.3
40.9
130.5
2.6%
2014
125.7
– 49.7
43.7
119.7
2.6%
TABLE 032
Change
13.8%
– 7.3%
– 6.6%
9.1%
–
KION GROUP AG | Annual Report 2015We keep the world moving.
90
The KION Group takes comprehensive measures to protect the
and on the design of a common electrics/electronics architecture
products it develops against imitations and pursues a specific
for all future trucks made by Linde and STILL.
patent strategy. In 2015, the KION companies were granted a
Since last year, the KION brand companies have also been
total of 70 patents (2014: 140 patents). As at 31 December 2015,
using a cross-brand, cross-platform development software pro-
the companies of the KION Group held a total of 1,641 patent
gramme as a means of shortening product development times
applications and issued patents (31 December 2014: 1,689 pat-
and efficiently managing the module strategy. The software
ent applications and issued patents).
allows the brand companies to work together to optimise compo-
Focus of R&D in 2015
nents that are used at multiple sites. In the long term, procure-
ment, sales and marketing are to be brought on board in addition
to the development teams so that the entire product lifecycle is
Modular and platform strategy
represented in a single, standardised software system.
The KION Group is establishing shared, cross-brand platforms for
product development and production that are geared to the volume
Automation and connectivity
and economy segments. This means the industrial trucks can be
By acquiring Egemin Automation, the KION Group has strength-
adapted to different regions cost-efficiently. Development for the vol-
ened its expertise and opportunities in the design and manage-
ume and economy segments is managed from China, where around
ment of complex logistics automation projects and has devel-
one third of the R&D staff are based. In 2015, eleven trucks and three
oped into one of the leading providers of automation and
new Chinese platforms were brought to market that not only replace
connectivity concepts for intralogistics in the Industry 4.0 era. As
old products of various platforms but also target new customer seg-
well as Egemin Automation’s system solutions for intralogistics
ments. For example, a heavy truck was developed that can be sold
and automation, these concepts include the STILL iGo automa-
worldwide for the first time, having been optimised with regard to
tion solution, the STILL FleetManager and Linde connect: data
maintenance and transportability. A diesel truck with improved
solutions and the geo-navigation solutions from Linde Robotics.
torque converter technology and extended equipment options is to
In 2015, Linde Robotics partnered with Balyo, in which Linde
be localised in China for use in other markets. In addition, the electric
holds a stake, to launch onto the market the first self-driving
forklift truck fleet was completely overhauled and given new features.
trucks that can guide themselves around a warehouse using laser
The premium brands, Linde and STILL, have shared plat-
sensors to detect structures such as walls, racking and pillars.
forms for the Asia-Pacific and Americas regions, whereas their
Linde’s fleet management solution connect: came onto the
products for western Europe are developed using different plat-
market in March 2015 after a successful test phase. The connect:
forms in order to maintain the defining characteristics of the
system provides fleet managers with transparent data on drivers,
brands. In 2015, Linde and STILL established a new platform for
trucks, their use and their location. It therefore contributes to
warehouse trucks that is tailored specifically to e-commerce
improved driving safety, better availability and greater produc-
and logistics.
tivity. In 2015, Linde worked on a special app that helps drivers to
All platforms are part of a global module strategy that enables
check the condition of their truck before beginning their shift and
products to be developed more cost-effectively and at a higher
on a Wi-Fi connection as a second alternative for transmitting
quality because of the growing number of common parts. The
data. In China, connect: was presented at the Storage and Trans-
Group is therefore able to achieve high levels of synergy even in
port Forum in Wuxi under the name Connected Solutions. Linde
western Europe with its different platforms. This is supported by
MH has already successfully implemented the solution at several
a centralised procurement function. Wherever possible, local
major Chinese online retailers.
suppliers are used for regional product features. In 2015, key
STILL extended its FleetManager 4.x system with a function
projects in connection with the module strategy focused on the
called OptiTruck, which automatically allocates trucks to drivers
lithium-ion batteries and drive axles used in electric forklift trucks
and thereby makes better use of a fleet’s capacity. A central ter-
minal is used to collect and return the trucks, meaning the drivers
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
91
can quickly access vacant trucks. For the iGo system, which
Sustainability
enables industrial trucks to be controlled remotely, STILL also
developed an app-based solution last year that should be
Acting responsibly has always been one of the principles by
appearing on the market soon. STILL strengthened its leading
which the KION Group – and its brand companies – operate.
position as a provider of tugger trains and process-oriented
They strive for a balance between environmental, economic and
material flow concepts by acquiring LR Intralogistik GmbH. LR
social considerations in their business activities. This focus on
Intralogistik specialises in the development of bespoke tugger
sustainability is reflected in the Group’s eco-friendly and safe
train systems, including the accompanying trolleys, with a focus
products that help customers to conserve energy, reduce emis-
on process optimisation, cost-efficiency, safety and ergonomics.
sions and comply with strict workplace safety standards (see the
Drive technology
‘Research and development’ section). Furthermore, the KION
Group ensures that its production processes have as minimal an
The development of new drive technologies is focused on lithium-
impact on the environment as possible and that it offers safe and
ion batteries. STILL and Linde are working together to establish a
discrimination-free working conditions.
lithium-ion standard for various electric forklift trucks and ware-
In 2015, the KION Group began to set up a groupwide sys-
house trucks and to gain a competitive edge in this important
tem with which it will manage all sustainability matters across all
future market.
brand companies and regions in future. To start with, a sustain-
After the first warehouse trucks fitted with lithium-ion batter-
ability reporting procedure and system were introduced as a pilot
ies had been incorporated into the product ranges of both brand
project at LMH, incorporating its existing system for analysing
companies in 2014, further trucks with larger lithium-ion batteries
environmental impact using lifecycle assessments.
were added to the product portfolios in 2015.
The first step was to conduct a materiality assessment in
Customers
which the relevant aspects of sustainability were identified. One
of the main tasks was to evaluate the aspects that are particularly
relevant to the most important stakeholders. LMH’s first sustain-
ability report, which was published in December 2015, provides a
Last year, the KION brand companies again regularly exhibited at
detailed explanation of the brand company’s understanding of
the leading trade fairs for their sector in order to strengthen their
sustainability, its strategy in this area and the underlying manage-
relationships with customers and partners. Contact with custom-
ment approach. The sustainability report is available on the LMH
ers at trade fairs also makes it possible to gauge interest in the
website at report.linde-mh.com.
product innovations on show among new and existing customers.
The findings from the pilot project will be used as the basis for
In 2015, the KION brands exhibited at events such as
progressively rolling out sustainability management and reporting
LogiMAT, CeMAT South America, CeMAT Russia and CeMAT
throughout the KION Group. Existing groupwide standards and
Asia. Attracting a great deal of interest from customers, STILL
rules of conduct will also apply.
presented its new pallet stackers at a roadshow that visited
The KION Group Code of Compliance, which was updated
eight towns and cities in Germany. STILL won the prestigious
in April 2015, defines clear rules on various matters, including on
IFOY Award in the ‘Intralogistics Solutions’ and ‘Counter Bal-
the correct way for employees to interact with colleagues, cus-
anced Truck from 3.5t’ categories. Baoli showcased its
tomers, partners and the public. All other standards and initia-
expanded product range at the first countrywide roadshow in
tives relating to health, safety & environment (HSE) are derived
China. Linde Material Handling received two accolades from the
from this code. It is available to the public on the KION Group
Fork Lift Truck Association (FLTA), including one in the safety
website.
category for the Linde Safety Pilot.
The corporate policy on workplace safety, health and the
environment defines a number of requirements for the KION
Group companies, including: as a minimum, complying with all
KION GROUP AG | Annual Report 2015We keep the world moving. 92
relevant national laws, codes of conduct and industry standards;
Aspects of sustainability have been enshrined in the KION
ensuring safe working conditions and providing employees with
Group’s purchasing terms since 2015. This ensures that the
the necessary training; avoiding the release of pollutants, dis-
Group’s suppliers also strive for sustainability in their conduct.
charge and emissions into the environment as far as possible;
Information on the development of the health rate and major
reducing the volume of waste by making better use of raw mate-
projects in the area of health and safety in the KION Group can be
rials and using recyclable materials; using materials, products
found in the ‘Employees’ section (page 88).
and processes that comply with best environmental practice; and
All KION Group plants capture data about their energy con-
using resources, energy and raw materials efficiently.
sumption, volumes of waste and recycling, water consumption
Minimum standards for employment apply at Group level that
and emissions of greenhouse gases and volatile organic com-
are based on the fundamental conventions drawn up by the Inter-
pounds (VOC). Software was implemented in the year under
national Labour Organization (ILO). These include freedom of
review that is gradually being rolled out to all sites and is making
association, the right to collective bargaining, elimination of forced
reporting more efficient.
and child labour, and a ban on discrimination in respect of
The annual internal environmental report contains the infor-
employment and occupation. Furthermore, the KION Group is
mation that is available on consumption and emissions. Data for
committed to ensuring health and safety standards in the work-
2015 was not available at the time this group management report
place and to paying its employees remuneration that is appropri-
was compiled, so the key data from the 2014 environmental
ate to the industry in the particular country and, at the very least,
report is presented below. > TABLE 033
provides a living wage.
Environmental aspects of KION Group production sites
TABLE 033
Volume of waste
Recycling rate
Water consumption
Energy consumption
Emissions of CO2 related to energy consumption (Scope 1,2,3)
Emissions of volatile organic compounds (VOC)
2014 Unit
40.3 1,000 tonnes
92.9 %
314.1 1,000 m³
270.6 GWh
113.0 1,000 tonnes CO2 equ.
154.3 tonnes
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Report on the economic position
93
All of the environmental KPIs are displaying a positive trend. Due
use of a hydrogen drive system in this area is marketable and
to changes to the basis of consolidation, the absolute figures for
each year only have limited comparability with the figures in pre-
vious reports.
financially viable.
– An efficient yet ergonomic solution for transporting large,
awkward loads is provided by LMH’s new forklift truck with
The KION Group’s objective is to gradually establish a certi-
an optional elevating cabin. At the press of a button, the
fied system for quality, environmental and occupational health
driver’s cab glides to a height of up to 5.5 metres in less than
and safety management at all sites. As at 31 December 2015,
ten seconds. From there, the driver can survey the load and
KION sites had been certified in accordance with the following
carry out the loading process from an ergonomically com-
international standards (or comparable national standards), or
were in the process of completing the certification process:
service units
– ISO 9001 (quality management): 15 production sites, 21 sales &
– ISO 14001 (environmental management): 11 production sites,
– ISO 50001 (energy management): 7 production sites
– OHSAS 18001 (occupational health and safety): 9 production
16 sales & service units
sites, 12 sales & service units
This represents a significant increase in the number of certified
sites compared with the previous year. Already certified in accord-
ance with ISO 50001 and OHSAS 18001, LMH’s Aschaffen burg
site is going through the certification process for the updated
2015 version of the ISO 14001 standard, making it one of the
first sites worldwide to do so. STILL’s Hamburg site became a
member of Hamburg’s environmental partnership in 2015, having
undertaken various voluntary measures to reduce its environ-
mental impact.
Sustainability – particularly protection of the environment,
conservation of resources and workplace safety – is an important
consideration when developing new products and enhancing
existing ones. Here are some examples of the successes and
improvements achieved in this regard during 2015:
– In 2015, Linde’s entire product range in China was added to the
– In November 2015, LMH, the BMW Group and the Institute
Chinese directory of green travel and transport technologies.
for Materials Handling, Material Flow and Logistics (fml) at
Munich University of Technology (TUM) presented the results
of a joint project to trial a hydrogen drive system for industrial
trucks. The study, which is supported by the German Federal
Ministry of Transport and Digital Infrastructure, proves that
fortable position.
– STILL has launched its initiative for ‘Zero Emission’: Powered
by efficient diesel-electric drives, STILL trucks emit such few
pollutants that their emissions do not have to be filtered sub-
sequently.
Furthermore, the KION Group acknowledges its corporate social
responsibility. This is demonstrated by the fact that executives
and employees personally support a variety of environmental and
charitable projects in different countries:
– STILL GmbH has donated an RX 50-10 electric forklift truck
– Around 340 employees from Fenwick-Linde supported the
to the German Red Cross.
national donation campaign of the organisation Les Restau-
rants du Coeur – Les Relais du Coeur.
– Egemin Automation supported the To Walk Again organisa-
tion, which arranges sports activities to help children and
adults with disabilities.
– KION North America supported the Dorchester Children’s
Center, a charitable organisation that helps victims of abuse
and their families.
– At its site in Pune, KION India carried out a range of environ-
mental initiatives with the aim of fostering individuals’ sense
of responsibility for green issues.
– The association ‘Stapler Cup hilft e.V.’, which was set up by
LMH employees, donated to various charities in Aschaffen-
burg and supported the German Bone Marrow Donor Centre
(DKMS) during the 2015 StaplerCup, a competition for forklift
truck drivers.
KION GROUP AG | Annual Report 2015We keep the world moving. 94
Events after the reporting date
Due to current market conditions and the KION Group’s significant
Among other stipulations, the contractual terms of the senior
repayment of debt as a result of and since its IPO, the KION Group
facilities agreement require compliance with certain covenants.
can currently obtain finance on far more favourable terms than has
They also contain a financial covenant that requires adherence
been possible in the past. KION GROUP AG therefore signed a
to a maximum level of gearing (the ratio of financial liabilities to
new syndicated loan agreement (senior facilities agreement) totalling
EBITDA). Non-compliance with the covenants may, for example,
€1,500.0 million with a syndicate of international banks on 28 Octo-
give lenders the right to terminate the new syndicated loan
ber 2015. On 25 January 2016, the Executive Board of KION
agreement.
GROUP AG decided to implement the new funding structure of
The KION Group took over Retrotech Inc., a systems integra-
the KION Group by redeeming the existing syndicated loan dated
tor of automated warehouse and distribution solutions headquar-
23 December 2006 comprising a revolving credit facility of
tered in Rochester, New York State, with effect from 1 March 2016
€1,243.0 million and the KION Group corporate bond of €450.0 mil-
by acquiring 100.0 per cent of the capital and voting shares. The
lion that was issued in 2013 and was due to mature in 2020. The
provisional purchase price for the net assets acquired is around
associated repayment was made on 15 February 2016 using
€26.0 million. In 2015, Retrotech Inc. employed over 150 highly
funds drawn down under the new senior facilities agreement.
specialised employees and generated revenue of roughly
An amount of €5.4 million representing the proportion of the
€62.0 million.
deferred borrowing costs relating to the corporate bond at the
time of early repayment and a cash payment of €15.2 million rep-
resenting early repayment charges were recognised as financial
expenses in February 2016 along with an amount of €5.1 million
representing the proportion of the deferred borrowing costs relat-
ing to the previous syndicated loan at the time of early redemption
of that previous syndicated loan.
The new senior facilities agreement comprises a revolving
credit facility of €1,150.0 million maturing in February 2021 and a
fixed-term tranche B of €350.0 million maturing in February 2019.
KION GROUP AG has issued guarantees to the banks for all of
the payment obligations under the new senior facilities agreement.
Unlike the previous syndicated loan and the repaid corporate bond,
the new syndicated loan agreement is not collateralised. Following
repayment after the reporting date of the syndicated loan from
23 December 2006, all collateral furnished under the previous loan
agreement has now been released.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Events after the reporting date
Outlook, risk report and opportunity report
95
Outlook, risk report and opportunity report
OUTLOOK
Assumptions
Forward-looking statements
The forecasts in this section are derived from the KION Group’s
multiple-year market, business and financial plan, which is based
on certain assumptions. Market planning takes into account
macroeconomic and industry-specific performance, which is
The forward-looking statements and information given below are
described below. Business planning and financial planning are
based on the Company’s current expectations and assessments.
based on expected market performance, but also draw on other
Consequently, they involve a number of risks and uncertainties.
assumptions, such as those relating to changes in the cost of
Many factors, several of which are beyond the control of the KION
materials, the KION Group’s ability to command higher prices
Group, affect the Group’s business activities and profitability. Any
from customers and movements in exchange rates.
unexpected developments in the global economy would result in
the KION Group’s performance and profits differing significantly
Expected macroeconomic conditions
from those forecast below. The KION Group does not undertake
to update forward-looking statements to reflect subsequently
According to the January outlook of the International Monetary
occurring events or circumstances. Furthermore, the KION Group
Fund (IMF), the pace of global economic growth will gradually
cannot guarantee that future performance and actual profits
accelerate in 2016, both in the developed economies (growth of
generated will be consistent with the stated assumptions and
2.1 per cent) and in the emerging markets (growth of 4.3 per cent).
estimates and can accept no liability in this regard.
The IMF believes that China’s contribution to worldwide growth is
Actual business performance may deviate from our forecasts
likely to fall further in view of its economic restructuring. Overall,
due, among other factors, to the opportunities and risks described
the IMF expects the global economy to grow at a rate of
here. Performance particularly depends on macroeconomic and
3.4 per cent and the eurozone at 1.7 per cent in 2016. The IMF
industry-specific conditions and may be negatively affected by
also predicts comparatively low growth in global trade.
increasing uncertainty or a worsening of the economic and polit-
The outlook for macroeconomic conditions is based on the
ical situation.
Forecast for 2015
assumption that monetary policy in the eurozone will remain
expansionary, interest rates will rise slightly in the United States
and the oil price will stay low, which will boost consumption.
Expected sectoral conditions
The overall assessment of the financial situation compares the
forecasts included in the 2014 group management report and
The overall market for industrial trucks will continue to depend
subsequent interim reports with actual performance in 2015.
heavily on economic conditions in key sales markets, with the
level of capital investment and the growth in global trade being
particularly crucial. Given the overall economic prospects, the
KION Group expects a slower rate of global market growth this
year. The 2015 trend is likely to continue, with a sustained rise in
the number of trucks ordered in Europe and North America
along with further contraction of the Russian and Brazilian mar-
kets. Following a sharp decline last year, KION expects China to
stabilise although conditions will remain challenging.
Market expectations remain positive over the longer-term
perspective. Over the coming years, the KION Group expects the
KION GROUP AG | Annual Report 2015We keep the world moving. 96
average growth of the global market to be higher than that of
above the margin of 9.5 per cent that was generated in 2015. This
global gross economic growth (GDP), with above-average growth
improvement will stem from significant positive effects, such as a
in demand for electric forklift trucks and warehouse trucks. More-
further increase in the efficiency of the production network. Free
over, the increasing number of trucks in the field – around nine
cash flow is expected to be in a range between €280 million and
million new trucks sold worldwide over the past ten years alone,
€320 million after taking account of the acquisition of Retrotech
spurs additional demand for spare parts and other aftersales ser-
Inc. ROCE is expected to go up slightly. The forecast is based on
vices. Further potential for the future is also offered by increasing
the assumption that material prices will hold steady and the cur-
connectivity and automation, not only in terms of products but
rent exchange rate environment will remain as it is.
also in relation to services and end-to-end system solutions.
Expected business situation and financial
performance
Expected financial position
The fixed-rate (6.75 per cent) tranche of the bond issued in Feb-
ruary 2013, which has a volume of €450.0 million, formed part of
In 2016, the KION Group aims to build on its successful perfor-
the Company’s funding structure during 2015 and was repaid in
mance in 2015 and, based on the forecasts for market growth,
full ahead of schedule on 15 February 2016. This bond, together
achieve further increases in order intake, revenue and adjusted
with amounts drawn down from a credit facility that, like the bond,
EBIT. The order intake of the KION Group is expected to be
dates from before the IPO, were repaid using funds from the new
between €5,350 million and €5,500 million. The target figure for
syndicated loan agreement totalling €1.5 billion, which has been
consolidated revenue is in the range of €5,200 million to €5,350
taken out on terms with investment-grade characteristics. The
million. The KION Group predicts higher volumes of revenue and
new funding significantly reduces interest costs and provides
orders, particularly in western Europe.
KION with considerable flexibility for continuing with its strategy of
The targeted range for adjusted EBIT is €510 million to
profitable growth. In 2016, the KION Group plans to use free cash
€535 million. The adjusted EBIT margin is predicted to increase
flow to lower its net debt still further. > TABLE 034
TABLE 034
2016
5,350 – 5,500
5,200 – 5,350
510 – 535
280 – 320
2015
5,215.6
5,097.9
482.9
332.7
11.9% slightly above previous year
Outlook
in € million
Order intake
Revenue
Adjusted EBIT
Free cash flow
ROCE
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
97
Overall statement on expected performance
Principles of risk management
The basis for the long-term success of the KION Group will con-
The procedures governing the KION Group’s risk management
tinue to be the strong position occupied by its international and
activities are laid down in an internal risk guideline. For certain
national brands in western Europe and the emerging markets.
types of risk, such as financial risk or risks arising from financial
The international brands Linde Material Handling and STILL, in
services, the relevant departments also have guidelines that are
particular, safeguard their technology leadership and underline
specifically geared to these matters and describe how to deal
their status as premium brands by maintaining high levels of cap-
with inherent risks. Risk management is organised in such a way
ital expenditure and R&D spending.
that it directly reflects the structure of the Group itself. Conse-
By pursuing its Strategy 2020 and other measures, the KION
quently, risk officers supported by risk managers have been
Group believes it will continue along its path of profitable growth
appointed for each company and each division. A central Group
and aims to achieve a further improvement in its market position
risk manager is responsible for the implementation of risk man-
worldwide in 2016.
RISK REPORT
Risk strategy
agement processes in line with procedures throughout the
Group. His or her remit includes the definition and implementation
of standards to ensure that risks are captured and evaluated.
The risk management process is organised on a decentral-
ised basis. Firstly, a groupwide risk catalogue is used to capture
the risks attaching to each company. Each risk must be captured
individually. 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 and its Accounting & Finance function are noti-
The business activities of the KION Group necessarily involve
fied immediately. Each risk is documented in an internet-based
risk. Dealing responsibly with risk and managing it in a compre-
reporting system designed specifically for the requirements of
hensive manner is an important element of corporate manage-
risk management. Risks affecting more than one Group com-
ment. The overarching aim is to fully harness business oppor-
pany, such as market risks, competition risks, financial risks and
tunities while ensuring that risk always remains under control.
risks arising from financial services, are not recorded individually
Using its groupwide risk management system, the KION Group
but are instead evaluated at Group level. Consequently, such
contains all identified risks by implementing suitable measures
risks are not quantified.
and takes appropriate precautions. This ensures that the losses
The scope of consolidation for risk management purposes is
expected if these risks arise will be largely covered and therefore
the same as the scope of consolidation for the consolidated
will not jeopardise the Company’s continuation as a going concern.
financial statements. The risks reported by the individual compa-
At the KION Group, risk management has always been
nies are combined to form divisional risk reports as part of a rig-
embedded in the Accounting & Finance function and plays an
orous reporting process. To this end, minuted risk management
active and wide-ranging role due to the strategic focus of
meetings are held once a quarter. Moreover, material risks are
Accounting & Finance. The operational units’ business models,
discussed with the segments at the business review meetings.
strategic perspectives and specific plans of action are examined
The divisional risk reports are then used to compile an aggregate
systematically. This ensures that the risk management is fully
risk portfolio for the KION Group as a whole. To support this, the
integrated into the KION Group’s overall financial planning and
relevant departments of the holding company are consulted each
reporting process.
quarter in order to identify and assess risk – particularly Company-
wide, cross-brand risk affecting areas such as treasury, purchas-
ing, tax, human resources and financial services. The Executive
Board of KION GROUP AG and the Supervisory Board’s Audit
KION GROUP AG | Annual Report 2015We keep the world moving. 98
Committee are informed of the Group’s risk position once a quar-
automated and manual reconciliation processes, separation of
ter. The Internal Audit department audits the risk management
functions, the four eyes principle and adherence to policies
system at regular intervals.
and instructions.
Material features of the internal control and
risk management system pertaining to the
(Group) accounting process
Principles
The employees involved in the Group’s accounting process
receive regular training in this field. Throughout the accounting pro-
cess, the local companies are supported by central points of con-
tact. The consolidated accounts are drawn up centrally using data
from the consolidated subsidiaries. A consolidation department
with specially trained employees carries out the consolidation
activities, reconciliations and monitoring of the stipulated deadlines
and processes. Monthly checklists have been drawn up for the
The main objectives of the accounting-related internal control
consolidation process and are worked through in a standardised
system are to avoid the risk of material misstatements in financial
manner. All postings are managed centrally and documented. This
reporting, to identify material mismeasurement and to ensure
team also monitors the system-based controls and supplements
compliance with the applicable regulations and internal instruc-
them with manual checks. The entire accounting process contains
tions. This includes verifying that the consolidated financial state-
a number of specific approval stages, for which extensive plausi-
ments and group management report comply with the relevant
bility checks have been set up. Employees with the relevant exper-
accounting standards. There can, however, be no absolute cer-
tise provide support on specialist questions and complex issues.
tainty that these objectives are achieved in full and at all times.
The central Internal Audit department also checks, among other
things, the reliability of the accounting work by the subsidiaries in
Material processes and controls in the
Germany and abroad. It focuses primarily on the following aspects:
(Group) accounting process
For its (Group) accounting process, the KION Group has defined
suitable structures and processes within its internal control and risk
management system and implemented them in the organisation.
Changes to the law, accounting standards and other pro-
nouncements are continually analysed with regard to their rele-
vance and effect on the consolidated financial statements and
group management report; the relevant changes are then incor-
porated into the Group’s internal policies and systems.
Executive Board, other policies and internal instructions;
– compliance with legal requirements, directives from the
– integrity and effectiveness of the internal control systems for
– correct performance of tasks and compliance with busi-
– correctness of the accounting and of the financial reporting that
avoiding financial losses;
ness principles;
is based on the accounting in terms of form and substance.
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 pack-
framework enable any risks that might jeopardise compliance of
ages. This manual contains the recognition, measurement and
the consolidated financial statements and group management
disclosure rules to be applied in the KION Group’s accounting in
report with accounting standards to be identified as soon as pos-
accordance with IFRS. The accounting guidelines primarily
sible so that appropriate countermeasures can be taken. Such
explain the financial reporting principles specific to the KION
risks form part of the KION Group’s aggregate risk profile and are
Group’s business. In addition, all companies must adhere to the
classified as operational risk.
schedule defined by head office for preparing the consolidated
financial statements and group management report.
The accounting-based internal control and risk manage-
ment system encompasses defined control mechanisms,
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
99
Risk
Aggregate risk
In 2015, the aggregate risk position was largely unchanged com-
pared with the previous year. With regard to 2016, the risks in the
risk matrix below will be continually observed and evaluated in
terms of their extent and probability of occurrence. For example,
the KION Group considers the probability of market risk material-
ising as low because of the fairly positive market expectations.
However, the possible impact of market risk continues to be rated
at a medium risk level because of the importance of the market
for the KION Group’s business situation and financial perfor-
mance. As things stand at present, there are no indications of any
risks that could jeopardise the Company’s continuation as a
going concern. > DIAGRAM 005
The market risks and competition risks described, the risks along
the value chain, the human resources risks and the legal risks
largely relate to the LMH and STILL segments. By contrast, risks
arising from financial services mainly affect the Financial Services
segment, while financial risks would predominantly impact on the
Other segment.
Market risks and competition risks
Risk matrix
DIAGRAM 005
H
G
H
I
L
E
V
E
L
K
S
I
R
I
M
U
D
E
M
• Market risk
• Procurement risk
• Production risk
W
O
L
• Competition risk
• R&D risk
• IT risk
• Financial risk
• Risk arising from
financial services
• Human resources risk
• Sales risk
• Legal risk
LOW
MEDIUM
HIGH
PROBABILITY OF OCCURRENCE
HIGH RISK
MEDIUM RISK
LOW RISK
Market risks
it earns in the eurozone remains high. As a result, the market con-
Market risk can arise when the economy as a whole or a particu-
ditions that prevail there impact significantly on the KION Group’s
lar sector does not perform as it had been anticipated in the out-
financial performance. In view of the increasing stabilisation of
look. Cyclical fluctuations in macroeconomic activity affect the
economic growth at a low level, the direct market risk arising
market for industrial trucks. Customers’ decisions on whether to
from unfavourable economic trends has reduced for the euro-
invest, particularly in new trucks, depend to a large degree on
zone. However, unfavourable trends affecting major trading
the macroeconomic situation and conditions in their particular
partners, e.g. China, might reduce eurozone customers’ willing-
sector. During an economic downturn, customers tend to post-
ness to invest and consequently the demand for the KION
pone their purchases of new trucks. Although demand for ser-
Group’s products.
vices is less cyclical, it correlates with the degree of utilisation in
Lower forecasts for growth in the emerging markets resulting
the truck fleet – which usually declines during difficult economic
from recent economic developments have already been reflected
periods. As the KION Group can only adjust its fixed costs to fluc-
in the planning. A further weakening of growth could, however,
tuations in demand to a limited extent, reductions in revenue
have a negative effect on global trade volumes and thus on
impact on earnings.
growth in the material handling market. The market risks referred
Despite the KION Group’s strong growth in emerging mar-
to could be heightened by geopolitical risk, possible currency
kets and, prospectively, North America, the proportion of revenue
crises and deflationary tendencies.
KION GROUP AG | Annual Report 2015We keep the world moving.
100
Various measures aimed at making cost structures more flexible –
Group’s sales opportunities. Moreover, predictions of higher vol-
such as the consolidation of production facilities and the platform
umes and margins may lead to overcapacity, which would put
strategy – help to contain the earnings risk arising from reduc-
increased pressure on prices.
tions in revenue caused by economic conditions. Diversification
Although the KION Group’s strengths in the premium seg-
of the customer base in terms of industry and region as well as
ment have enabled it to charge appropriate prices until now, it is
expansion of service activities also play a role in mitigating risk.
taking a variety of steps to contain competition risk. Alliances,
Moreover, the KION Group closely monitors the market and its
partnerships, acquisitions and other measures are playing an
competitors so that it can identify market risks at an early stage
increasing role in improving the KION Group’s competitiveness in
and adjust its production capacities in good time. Besides global
terms of resources, market access and product range. The steps
economic growth and other data, the KION Group also analyses
that the KION Group is taking to mitigate its competition risk also
exchange rates, price stability, the consumer and investment cli-
include making its plants more efficient and securing low-cost
mate, foreign trade activity and political stability in its key sales
sources of supply.
markets, constantly monitoring the possible impact on its finan-
The KION Group also continually evaluates its options for
cial performance and financial position.
strengthening and consolidating its position in emerging markets,
Other risks arise as a result of constant changes in the Com-
in particular through strategic partnerships, the creation of joint
pany’s political, legal and social environment. Because it oper-
ventures or acquisition of local manufacturers. One of the risks of
ates in countries in which the political or legal situation is uncer-
such alliances and acquisitions is that the expected benefits will
tain, the KION Group is exposed to the consequent risk of
materialise only partly or not at all. For example, the organisa-
government regulation, capital controls and expropriations. The
tional integration of new units can harm financial performance for
KION Group mitigates such strategic risks by, for example, carry-
a variety of reasons. It is also possible that a partner will collabo-
ing out in-depth market research, conducting thorough evalua-
rate with competitors if exclusivity agreements are not in place.
tion procedures to assess political and economic conditions and
drafting contracts appropriately.
Risks along the value chain
Competition risks
Research and development risks
Competition risk describes the risk that growing competitive
The KION Group’s market position and business performance
pressure will prevent the KION Group from achieving its predicted
depend to a large extent on its ability to remain a leading provider
margins and market share. The markets in which the KION Group
of technology. This requires the Group to continually develop
operates are characterised by strong competition, often price-
products that meet customer expectations and comply with
driven. Price competition is compounded by some manufacturers
changing regulatory and technological requirements. To this end,
having cost advantages in production, sometimes due to the cur-
the KION Group must anticipate customers’ needs and changing
rency situation and sometimes because local labour costs are
market conditions and has to quickly bring new products to
lower. Competition is therefore fierce, particularly in the economy
market. If the Company does not succeed in doing this, its tech-
and volume price segments, and the impact is especially strong
nological and competitive position could be compromised in the
in emerging markets. Building on their local competitive strength,
long term.
manufacturers in emerging markets are also looking for opportu-
The innovations developed by the KION Group are compre-
nities to expand. Although the high quality expectations and ser-
hensively protected by intellectual property rights, in particular
vice needs of customers in developed markets present a barrier
patents. Nevertheless, there is always the possibility that prod-
to growth for many of these manufacturers, this situation is likely
ucts or product components will be imitated. There is also a risk
to intensify competitive pressures in future.
that patent applications will not be successful.
It is also conceivable that competitors will join forces and
The KION Group mitigates research and development risk by
their resulting stronger position will be detrimental to the KION
focusing firmly on customer benefit in its development of products
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
101
on the basis of overarching modular and platform strategies. Cus-
in the price segments and sales markets that it serves and, as a
tomer needs are incorporated into the development process on
result, could harm its financial situation.
an ongoing basis by ensuring close collaboration between sales
To mitigate these risks, the KION Group carries out preven-
and development units and taking account of all region-specific
tive maintenance, implements fire protection measures, trains its
requirements.
Procurement risks
staff and builds a pool of external suppliers. The Company has
taken out a commercially appropriate level of insurance coverage
against loss. Quality assurance is a high priority throughout the
Procurement activities constitute a potential risk for the KION
value chain and reduces possible quality-related risks arising
Group in terms of the lack of availability of parts and components
from the products and services provided. The KION Group miti-
for logistical or quality reasons and the rising cost of raw materi-
gates its quality-related risks significantly by applying rigorous
als, energy, base products and intermediate products. As a
quality standards to its development activities, conducting strin-
result, there is always the possibility that the KION Group will face
gent controls throughout the process chain and maintaining
backlogs in the supply of individual raw materials and compo-
close contact with customers and suppliers.
nents. KION obtains some of its key components, such as com-
bustion engines, tyres and high-performance forged and elec-
Sales risks
tronic parts, from a limited number of core suppliers.
The main sales risks – besides a drop in revenue caused by market
The risk of supply bottlenecks – for example in the event of a
conditions – result from dependence on individual customers and
shortage of raw materials or financial difficulties at core suppliers –
sectors. For example, it is possible that customers would postpone
cannot be ruled out in future. The KION Group mitigates this risk
or cancel orders during a period of economic difficulty. There have
through appropriate diversification of its supplier structure in the
not been any significant cancellations in previous years, however. It
context of a global procurement organisation. In addition, the
is also conceivable that customers would face a liquidity shortfall
supplier development department, which focuses on improving
and therefore be unable to fulfil their payment obligations immedi-
suppliers’ production processes, helps suppliers to ensure that
ately or even at all. Currently, there is little dependence on individual
their processes are cost-efficient and offer excellent quality.
sectors in the KION Group’s customer portfolio. The KION Group’s
Price changes present another procurement-related risk. In
reliance on individual customers also remains low. Its business is
2015, around 25.8 per cent (2014: 26.5 per cent) of the cost of
also highly diversified from a regional perspective. In addition, the
materials for new trucks was directly influenced by changes in
KION Group supplies companies of all sizes. Experience has
commodity prices. Moreover, conditions in the commodity mar-
shown that the KION Group’s exposure to the risk of possible pay-
kets typically affect component prices after a delay of three to six
ment defaults is low, but this risk can be further mitigated by recov-
months. The KION Group endeavours to pass on price increases
ering any collateral.
to customers but cannot always do so entirely due to market
pressures.
Production risks
IT risks
A high degree of interconnectedness between sites and with cus-
tomers and other companies means that the KION Group also
Production risks are largely caused by quality problems, possible
relies on its IT systems working flawlessly. The KION Group under-
operational disruptions or production downtime at individual
takes ongoing further development of a reliable, extendable and
sites. In such cases, the KION Group’s closely integrated manu-
flexible IT system environment with the aim of countering any IT-
facturing network presents a heightened risk to its ability to deliver
related risks that may arise from the failure of IT systems and IT
goods on time. There is also a risk that structural measures and
infrastructure. Internal IT resources are pooled in KION Information
reorganisation projects will not be implemented owing to disrup-
Management Services GmbH, which has well-established pro-
tion of production or strikes. Delays in delivery or a rise in the
cesses for portfolio management and project planning and control.
number of complaints could harm the KION Group’s positioning
Independent external audits are conducted to provide additional
KION GROUP AG | Annual Report 2015We keep the world moving. 102
quality assurance. Various technical and organisational measures
Group Treasury rigorously complies with and monitors the
protect the data of the KION Group and its Group companies against
strict separation of functions between the front, middle and back
unauthorised access, misuse and loss. These measures include
offices. Each Group company’s liquidity planning is broken down
procedures to validate and log access to the Group’s infrastructure.
by currency and incorporated into the KION Group’s financial
Financial risks
planning and reporting process. Group Treasury checks the
liquidity planning and uses it to determine the funding require-
ments of each company.
Group Treasury is responsible for ensuring that sufficient financial
The funding terms and conditions faced by the lenders them-
resources are always available for the KION Group’s international
selves (manifested, for example, in the payment of liquidity premi-
growth. The main types of financial risk managed by Group Treas-
ums on interbank lending) may result in a future shortage of lines
ury, including risks arising from funding instruments, are liquidity
of credit and / or increased financing costs for companies. How-
risk, currency risk, interest-rate risk and counterparty risk. Coun-
ever, the Group currently does not expect any further changes in
terparty risk consists solely of credit risks attaching to financial
its lines of credit or any excessive increases in margins.
institutions. Risk management procedures issued by Group Treas-
Goodwill and the brands represented 33.4 per cent of
ury stipulate how to deal with the aforementioned risks.
total assets as at 31 December 2015 (31 December 2014:
Long-term borrowing fell by €89.5 million from its level at
34.2 per cent). Pursuant to IFRS, these assets are not amortised
31 December 2014 to reach €557.2 million at the end of 2015. As
and their measurement depends, above all, on future expecta-
at 31 December 2015, the main components of long-term bor-
tions. If these future expectations are not fulfilled, there is a risk
rowing were the corporate bond (€450.0 million), which was due
that impairment losses will have to be recognised on these assets.
to mature in 2020 but was paid back in February 2016, and the
The individual Group companies directly manage counter-
amounts drawn down from the revolving credit facility (€90.0 mil-
party risks involving customers. These counterparty risks have
lion). The unused, unrestricted loan facility stood at €1,090.8 mil-
not changed significantly, despite the financial crisis. Each indi-
lion as at 31 December 2015. The risk position has not changed
vidual Group company has established a credit management
significantly as a result of the adjustments to the funding structure
system for identifying customer-related counterparty risks at an
after the reporting date (see the ‘Events after the reporting date’
early stage and initiating the necessary countermeasures. Analy-
section). Risk arising out of the lending conditions that have been
sis of the maturity structure of receivables is an integral element
agreed was not regarded as material as at 31 December 2015. It
of monthly reporting.
relates in particular to the restrictions in respect of compliance
with financial covenants and upper limits for certain transactions
Risks arising from financial services
and in respect of the obligation to submit special regular reports.
The KION Group complied with all the lending covenants in the
The KION Group’s leasing activities mean that it may be exposed
reporting year.
to residual value risks from the marketing of trucks that are
The Company generally refers to credit ratings to manage
returned by the lessee at the end of a long-term lease and sub-
counterparty risk when depositing funds with a financial institution.
sequently sold or re-leased. Residual values in the markets for
The KION Group only uses derivatives to hedge underlying
used trucks are therefore constantly monitored and forecast. The
operational and financial transactions; they are not used for spec-
KION Group regularly assesses its aggregate risk position arising
ulative purposes. It is exposed to currency risk because of the
from financial services.
high proportion of its business conducted in currencies other
The risks identified are immediately taken into account by the
than the euro. Normally, at least 50 per cent of the currency risk
Company in the costing of new leases by recognising writedowns
related to the planned operating cash flows based on liquidity
or valuation allowances and adjusting the residual values.
planning is hedged by currency forwards in accordance with the
Risk-mitigating factors include the demand for used trucks, which
relevant guideline.
stabilises the residual values of the KION Group’s industrial
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
103
trucks. The majority of the residual values have underlying
enable it to make strategic additions to its portfolio of existing
remarketing agreements that transfer any residual-value risk to
staff and, in this way, avert the risk of possibly losing expertise
the leasing company. This had a positive impact on the financial
and thereby becoming less competitive.
results in 2015. Groupwide standards to ensure that residual val-
Any restructuring measures may result in a risk of strikes and
ues are calculated conservatively, combined with an IT system for
reactions of other kinds by the workforce. As demonstrated sev-
residual-value risk management, reduce risk and provide the
eral times in the past, this risk is contained by collaborating
basis on which to create the transparency required.
closely with employee representatives and, if job losses are nec-
The KION Group mitigates its liquidity risk and interest-rate
essary, taking comprehensive steps to ensure they are achieved
risk attaching to financial services by ensuring that most of its
with the minimum possible social impact.
transactions and funding loans have matching maturities and by
The legal risks arising from the KION Group’s business are
constantly updating its liquidity planning. Long-term leases are
typical of those faced by any company operating in this sector.
primarily based on fixed-interest agreements. The credit facilities
The Group companies are a party in a number of pending law-
provided by various banks and an effective dunning process
suits in various countries. The individual companies cannot
ensure that the Group has sufficient liquidity.
assume with any degree of certainty that they will win any of the
In order to exclude currency risk, the KION Group generally
lawsuits or that the existing risk provision in the form of insurance
funds its leasing business in the local currency used in each market.
or provisions will be sufficient in each individual case. However,
Because of low default rates, counterparty risk has not been
the KION Group is not expecting any of these existing legal pro-
significant to date in the Group. The KION Group has not identi-
ceedings to have a material impact on its financial position or
fied any material changes between 2014 and 2015. The Group
financial performance. These lawsuits relate, among other things,
also mitigates any losses from defaults by its receipt of the pro-
to liability risks, especially as a result of legal action brought by
ceeds from the sale of repossessed trucks. In addition, receiva-
third parties because, for example, the Company’s products were
bles management has been improved by enhancing the dunning
allegedly faulty or the Company allegedly failed to comply with
process. The credit portfolio management system was updated
contractual obligations. Further legal risk may arise as a result of
during 2015. Besides the design of the business processes, it
the environmental restoration of sites that have been shut down in
also encompassed the risk management and control processes.
recent years, for example work required due to contamination.
Moreover, the KION Group offers the majority of financial ser-
Any damage to the environment may lead to legal disputes and
vices indirectly via selected financing partners that bear the risks
give rise to reputational risk.
of the finance transaction. As far as these financial services are
The Company has taken measures to prevent it from incur-
concerned, the KION Group bears the counterparty risk in under
ring financial losses as a result of these risks. Although legal dis-
3 per cent (2014: 5 per cent) of cases.
putes with third parties have been insignificant both currently and
in the past, the Company has a centralised reporting system to
Human resources risks and legal risks
record and assist pending lawsuits. In addition to the high quality
and safety standards applicable to all users of the Company’s
The KION Group relies on having highly qualified managers and
products, with which it complies when it develops and manu-
experts in key roles. If they left, it could have a long-term adverse
factures the products, it has also taken out the usual types of
impact on the Group’s prospects.
insurance to cover any third-party claims. These issues are
That is why the KION Group actively engages in HR work
also tackled by teams whose members come from a variety of
aimed at identifying and developing young professionals with
functions. The aim of the teams is to identify and avoid risks. A
high potential who already work for the Company and retaining
further objective of this cooperation across functions is to ensure
them over the long term, thereby enabling succession planning
compliance with mandatory laws, regulations and contractual
for key roles across the Group. The KION Group also positions
arrangements at all times.
itself in the external market as an employer of choice. This will
KION GROUP AG | Annual Report 2015We keep the world moving. 104
Owing to the KION Group’s export focus, legal risk and reputational
risk arise due to the numerous international and local export con-
trols that apply. The Company mitigates these risks with a variety
of measures. Consequently, export controls are an important part
of the compliance activities carried out by the Group companies.
OPPORTUNITY REPORT
– Strategic opportunities are based on implementation of the
Group’s strategy. They may lead to positive effects that
exceed planning assumptions.
– Business-performance opportunities arise in connection
with operational activities along the value chain, such as
restructuring or cost-cutting measures.
Opportunity situation
Market opportunities
Principles of opportunity management
The economy as a whole may perform better than expected in
Opportunity management, like risk management, forms a central
2016. In addition, circumstances may occur in the wider market
part of the Company’s day-to-day management. In 2015, the
at any time – such as quality problems at competitors or the
aggregate opportunity position was largely unchanged com-
effects of consolidation – that boost demand for products from
pared with the previous year. Individual areas of opportunity are
the KION Group brands. New, unforeseen regulatory initiatives
identified within the framework of the strategy process. Opportu-
could be launched, for example the tightening of health and safety
nities are determined and managed on a decentralised basis in
regulations or emissions standards, that would push up demand
line with the Group strategy.
for premium products offered by the KION Group brands. Aver-
There are monthly reports on the opportunity situation as
age prices for procuring commodities over the year may be
part of the regular Group reporting process. As a result, the KION
cheaper than anticipated.
Group is in a position to ascertain at an early stage whether mar-
Medium- to long-term market opportunities are presented, in
ket trends, competitive trends or events within the Group require
particular, by:
individual areas of opportunity to be re-evaluated. This may lead
to reallocation of the budgets earmarked for the realisation of
opportunities. Such decisions are made on the basis of the
potential of the opportunity, drawing on empirical values. There is
no management system for the evaluation of opportunities com-
parable to the system for risk management.
Categorisation of opportunities
By ‘opportunities’, we mean positive deviations from the expec-
tations set out in the outlook relating to the economic situation
and the KION Group’s position. Opportunities are divided into
three categories:
– Market opportunities describe the potential resulting from
trends in the market and competitive environment and from
the regulatory situation.
Moving Forward
Innovation
– growing demand for intralogistics products and services as a
consequence of globalisation, industrialisation and fragmen-
tation of supply chains;
– high demand for replacement investments, especially in
– the trend towards outsourcing service functions to indus-
developed markets;
trial truck manufacturers and growth in demand for finance
solutions;
– increased use of electric trucks and warehouse trucks –
which count among the KION Group’s particular strengths –
partly in connection with the expanding e-commerce sector;
– growing demand for automation solutions and fleet manage-
ment solutions.
KION GROUP AG | Annual Report 2015 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
105
Strategic opportunities
Business-performance opportunities
Strategic opportunities are presented, above all, by implementing
Business-performance opportunities primarily arise from ongoing
the Strategy 2020, which is described in detail on pages 61 to 63.
activities to modernise and streamline the KION Group’s produc-
The positive impact of strategic activities is already largely
tion facilities and from the worldwide integration of the production
reflected in the expectations regarding the KION Group’s financial
network. By investing in new locations, products can be assem-
performance in 2016. Nevertheless, the individual activities could
bled nearer to the markets in which they are to be sold, econo-
create positive effects that exceed expectations. There is also a
mies of scale can be achieved across the Group and synergies
possibility that new strategic opportunities that were not part of
can be leveraged. Further development of the Group’s back -
the planning may arise over the course of the year, for example in
office services will also help to achieve these objectives.
the form of acquisitions and strategic partnerships.
The following may lead to an increase in profitability in the
The KION Group’s medium- to long-term strategic opportu-
medium term:
nities arise, in particular, from:
– a greater presence in the economy and volume price seg-
ments, particularly as a result of the systematic implementa-
– ongoing efficiency increases at production sites (partly
resulting from more efficient allocation of work now that the
plant in the Czech Republic has come on stream) may boost
tion of the groupwide platform strategy;
– strengthening of its market-leading position in core western
European markets by boosting its technological expertise
and making greater use of shared modules;
– further consolidation of its market position in the premium
segment by offering automation solutions and intralogistics
sales and improve the gross margin;
– effective use of global development capacities within the
framework of an overarching modular and platform strategy
may create synergies and economies of scale.
solutions;
– expansion of the service portfolio, including financial ser-
vices, at every stage of the product lifecycle, taking advan-
tage of the high number of trucks in use;
– harnessing of market potential in fast-growing regions by
– continued focus on expanding the business in North America.
putting suitable production and sales structures in place;
KION GROUP AG | Annual Report 2015We keep the world moving. CONSOLIDATED FINANCIAL STATEMENTS
Contents
107
Consolidated Financial
Statements
108
CONSOLIDATED INCOME STATEMENT
109
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
110
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
112
CONSOLIDATED STATEMENT OF CASH FLOWS
114
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
116
116
134
144
178
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
220
AUDITORS’ REPORT
221
RESPONSIBILITY STATEMENT
KION GROUP AG | Annual Report 2015
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
D
N
O
I
T
A
M
R
O
F
N
I
L
A
N
O
I
T
I
D
D
A
E
108
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 (loss) from equity-accounted investments
Earnings before interest and taxes
Financial income
Financial expenses
Net financial expenses
Earnings before taxes
Income taxes
Current taxes
Deferred taxes
Net income
Note
[8]
[9]
[10]
[11]
[12]
[13]
[14]
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
Earnings per share according to IAS 33 (in €)
[16]
Basic earnings per share
Diluted earnings per share
Moving Forward
Innovation
TABLE 035
2014
4,677.9
– 3,337.4
1,340.5
– 570.5
– 125.7
– 323.6
93.2
– 42.1
– 24.8
347.0
84.4
– 173.2
– 88.8
258.3
– 80.0
– 63.5
– 16.5
178.2
176.7
1.6
1.79
1.79
2015
5,097.9
– 3,601.7
1,496.2
– 618.0
– 143.0
– 355.9
99.6
– 66.6
10.6
422.8
51.4
– 144.0
– 92.6
330.2
– 109.2
– 132.5
23.3
221.1
217.1
3.9
2.20
2.20
KION GROUP AG | Annual Report 2015 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
Consolidated statement of comprehensive income
109
Consolidated statement of
comprehensive income
Consolidated statement of comprehensive income
in € million
Net income
Items that will not be reclassified subsequently to profit or loss
Gains / losses on defined benefit obligation
thereof changes in unrealised gains and losses
thereof tax effect
Changes in unrealised gains and losses from equity-accounted
investments
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 hedge reserves
thereof changes in unrealised gains and losses
thereof realised gains (–) and losses (+)
thereof tax effect
Gains / losses from equity-accounted investments
thereof changes in unrealised gains and losses
Note
[29]
[40]
TABLE 036
2014
178.2
– 143.0
– 138.3
– 199.0
60.6
– 4.7
30.3
34.9
32.2
2.8
– 4.7
– 8.0
1.5
1.9
0.1
0.1
2015
221.1
14.7
12.7
17.3
– 4.5
1.9
24.3
19.9
19.9
–
4.0
– 16.1
20.9
– 0.8
0.4
0.4
Other comprehensive income (loss)
38.9
– 112.7
Total comprehensive income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
260.0
256.5
3.5
65.5
63.8
1.7
KION GROUP AG | Annual Report 2015We keep the world moving. 110
Consolidated statement of financial position
Consolidated statement of financial position – Assets
TABLE 037
in € million
Goodwill
Other intangible assets
Leased assets
Rental assets
Other property, plant and equipment
Equity-accounted investments
Lease receivables
Other financial assets *
Other assets *
Deferred taxes
Non-current assets
Inventories
Trade receivables
Lease receivables
Income tax receivables
Other financial assets *
Other assets *
Cash and cash equivalents
Current assets
Total assets
* Last year’s figures were adjusted due to a change in presentation, for details see note [23] and [34]
Note
[17]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[14]
[25]
[26]
[22]
[14]
[23]
[24]
[27]
2015
1,548.1
904.4
334.4
544.0
508.8
73.6
472.0
45.9
30.2
349.0
4,810.3
553.5
670.5
181.7
7.9
58.4
54.8
103.1
1,629.9
2014
1,497.1
915.5
279.0
487.1
494.1
114.6
345.3
12.7
21.6
357.9
4,524.8
529.2
598.2
202.5
6.6
118.3
49.8
98.9
1,603.7
6,440.2
6,128.5
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
111
Consolidated statement of financial position – Equity and liabilities
TABLE 038
in € million
Subscribed capital
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 financial liabilities *
Other liabilities *
Deferred taxes
Non-current liabilities
Current financial liabilities
Trade payables
Lease liabilities
Income tax liabilities
Other current provisions
Other financial liabilities *
Other liabilities *
Current liabilities
Total equity and liabilities
* Last year’s figures were adjusted due to a change in presentation, for details see note [23] and [34]
Note
[28]
[29]
[30]
[31]
[32]
[34]
[35]
[14]
[30]
[33]
[31]
[14]
[32]
[34]
[35]
2015
98.7
1,996.6
11.3
– 265.5
7.7
1,848.7
798.0
557.2
617.7
83.4
315.6
185.4
302.7
2014
98.7
1,996.2
– 148.2
– 304.9
5.3
1,647.1
787.5
646.8
461.7
83.7
236.6
151.2
320.9
2,860.0
2,688.3
119.3
574.6
237.9
79.8
111.5
194.4
414.0
262.9
564.6
246.0
31.3
84.4
215.9
388.0
1,731.5
1,793.0
6,440.2
6,128.5
KION GROUP AG | Annual Report 2015We keep the world moving. 112
Consolidated statement of cash flows
Consolidated statement of cash flows
TABLE 039
in € million
Earnings before interest and taxes
Amortisation, depreciation and impairment charges of non-
current assets
Other non-cash income (–) / expenses (+)
Gains (–) / losses (+) on disposal of non-current assets
Changes in leased assets (excluding depreciation) and lease
receivables / liabilities
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
Change in rental assets (excluding depreciation)
Dividends received
Acquisition of subsidiaries (net of cash acquired) and other equity investments
Proceeds from disposal of shares from equity investments, net of cash
Cash payments for sundry assets
Cash flow from investing activities
Note
[15]
[18], [22], [31]
[25]
[26], [33]
[29]
[32]
[37]
[37]
[37]
[19]
2015
422.8
401.4
12.9
– 2.4
– 94.9
– 22.1
– 60.9
– 24.2
23.6
106.6
– 84.8
677.9
– 142.6
14.1
– 222.9
18.2
– 84.9
77.4
– 4.5
[37]
– 345.2
2014
347.0
367.2
50.0
6.4
– 66.5
– 9.0
– 25.4
– 20.4
– 17.6
23.1
– 51.0
603.8
– 133.1
7.7
– 183.4
8.1
0.0
4.6
– 1.5
– 297.8
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
113
Consolidated statement of cash flows
(continued)
in € million
Capital increase from issuing of employee shares
Acquisition of treasury shares
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Cash receipts / payments for changes in ownership interests
in subsidiaries without change of control
Financing costs paid
Proceeds from borrowings
Repayment of borrowings
Interest received
Interest paid
Cash payments from 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
Note
[28]
[37]
[37]
[37]
[37]
[37]
[37]
[37]
2015
3.1
– 2.7
– 54.3
– 1.5
0.5
– 5.6
911.0
– 1,134.9
7.1
– 50.4
– 1.2
– 329.1
0.5
4.1
98.9
103.1
TABLE 039
2014
2.7
– 1.5
– 34.5
– 1.6
– 2.8
– 6.6
1,375.2
– 1,676.4
6.2
– 88.7
0.0
– 428.1
1.8
– 120.4
219.3
98.9
KION GROUP AG | Annual Report 2015We keep the world moving. 114
Consolidated statement of changes in equity
Consolidated statement of changes in equity
in € million
Balance as at 1/1/2014
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Withdrawal from capital reserve
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Acquisition of treasury shares
Capital increase from issuing of employee shares
Changes from employee share option programme
Effects from the acquisition / disposal of
non-controlling interests
Changes from application of the equity-method
Other changes
Balance as at 31/12/2014
Balance as at 1/1/2015
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Acquisition of treasury shares
Changes from employee share option programme
Effects from the acquisition / disposal of
non-controlling interests
Changes from application of the equity-method
Other changes
Balance as at 31/12/2015
Moving Forward
Innovation
Note
Subscribed
capital
98.7
Capital
reserves
2,223.2
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
0.0
– 0.1
0.1
98.7
98.7
0.0
– 228.1
– 1.5
2.5
0.1
1,996.2
0.0
0.0
– 0.1
0.1
– 2.6
3.0
98.7
1,996.6
Retained
earnings
– 524.9
176.7
176.7
228.1
– 34.5
9.7
– 3.2
– 148.2
217.1
217.1
– 54.3
– 3.2
– 0.1
11.3
1,996.2
– 148.2
– 31.7
– 264.6
Accumulated other comprehensive income (loss)
Gains / losses
Gains / losses
Equity
Cumulative
translation
adjustment
on defined
Gains / losses
from equity-
attributable to
benefit
obligation
on hedge
reserves
accounted
shareholders of
investments
KION GROUP AG
Non-
controlling
interests
– 66.5
– 126.3
34.8
34.8
– 138.3
– 138.3
– 31.7
– 264.6
20.3
20.3
12.7
12.7
0.5
– 4.8
– 4.8
– 4.2
– 4.2
4.0
4.0
0.3
– 4.6
– 4.6
– 4.3
– 4.3
2.3
2.3
1,605.0
176.7
– 112.9
63.8
0.0
– 34.5
0.0
– 1.5
2.6
0.1
0.0
9.7
– 3.2
1,641.8
1,641.8
217.1
39.4
256.5
– 54.3
0.0
– 2.7
3.1
0.0
– 3.2
– 0.1
Total
1,610.0
178.2
– 112.7
65.5
0.0
– 34.5
– 1.6
– 1.5
2.6
0.1
0.1
9.7
– 3.2
1,647.1
1,647.1
221.1
38.9
260.0
– 54.3
– 1.5
– 2.7
3.1
0.3
– 3.2
– 0.1
– 1.6
5.0
1.6
0.2
1.7
0.0
0.0
0.0
0.0
0.0
0.1
0.0
0.0
5.3
5.3
3.9
– 0.4
3.5
0.0
– 1.5
0.0
0.0
0.3
0.0
0.0
7.7
– 11.4
– 251.9
– 0.2
– 2.0
1,841.0
1,848.7
KION GROUP AG | Annual Report 2015 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
115
Accumulated other comprehensive income (loss)
Gains / losses
on hedge
reserves
Gains / losses
from equity-
accounted
investments
Equity
attributable to
shareholders of
KION GROUP AG
Non-
controlling
interests
Consolidated statement of changes in equity
in € million
Balance as at 1/1/2014
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Withdrawal from capital reserve
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Acquisition of treasury shares
Capital increase from issuing of employee shares
Changes from employee share option programme
Effects from the acquisition / disposal of
non-controlling interests
Changes from application of the equity-method
Other changes
Balance as at 31/12/2014
Balance as at 1/1/2015
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Acquisition of treasury shares
Changes from employee share option programme
Effects from the acquisition / disposal of
non-controlling interests
Changes from application of the equity-method
Other changes
Balance as at 31/12/2015
Note
Subscribed
capital
98.7
Capital
reserves
2,223.2
0.0
– 0.1
0.1
98.7
98.7
– 0.1
0.1
0.0
– 228.1
– 1.5
2.5
0.1
– 2.6
3.0
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
[28]
Retained
earnings
– 524.9
176.7
176.7
228.1
– 34.5
9.7
– 3.2
– 148.2
217.1
217.1
– 54.3
– 3.2
– 0.1
11.3
Cumulative
translation
adjustment
Gains / losses
on defined
benefit
obligation
– 66.5
– 126.3
34.8
34.8
– 138.3
– 138.3
1,996.2
– 148.2
– 31.7
– 264.6
1,996.2
– 31.7
– 264.6
0.0
0.0
20.3
20.3
12.7
12.7
0.5
– 4.8
– 4.8
– 4.2
– 4.2
4.0
4.0
0.3
– 4.6
– 4.6
– 4.3
– 4.3
2.3
2.3
1,605.0
176.7
– 112.9
63.8
0.0
– 34.5
0.0
– 1.5
2.6
0.1
0.0
9.7
– 3.2
1,641.8
1,641.8
217.1
39.4
256.5
– 54.3
0.0
– 2.7
3.1
0.0
– 3.2
– 0.1
98.7
1,996.6
– 11.4
– 251.9
– 0.2
– 2.0
1,841.0
TABLE 040
Total
1,610.0
178.2
– 112.7
65.5
0.0
– 34.5
– 1.6
– 1.5
2.6
0.1
0.1
9.7
– 3.2
1,647.1
1,647.1
221.1
38.9
260.0
– 54.3
– 1.5
– 2.7
3.1
0.3
– 3.2
– 0.1
1,848.7
5.0
1.6
0.2
1.7
0.0
0.0
– 1.6
0.0
0.0
0.0
0.1
0.0
0.0
5.3
5.3
3.9
– 0.4
3.5
0.0
– 1.5
0.0
0.0
0.3
0.0
0.0
7.7
KION GROUP AG | Annual Report 2015We keep the world moving. 116
Notes to the consolidated financial statements
Basis of presentation
[1] GENERAL INFORMATION ON
THE COMPANY
In order to improve the clarity of presentation, certain items
are aggregated in the statement of financial position and the
income statement. The items concerned are disclosed and
explained separately in the notes. Assets and liabilities are broken
down into current and non-current items in accordance with
KION GROUP AG, whose registered office is at Abraham-Lincoln-
IAS 1.60. The consolidated income statement is prepared in
Strasse 21, 65189 Wiesbaden, Germany, is entered in the com-
accordance with the cost of sales (function-of-expense) method.
mercial register at the Wiesbaden local court under reference
The consolidated financial statements are prepared in euros,
HRB 27060.
which is the Group’s functional currency and reporting currency.
The KION Group is a leading global supplier of industrial
All amounts are disclosed in millions of euros (€ million) unless
trucks (forklift trucks and warehouse trucks). It generated revenue
stated otherwise. The addition of the totals presented may
of €5,097.9 million in the 2015 financial year from its Linde,
result in minor rounding differences. The percentages shown
Fenwick, STILL, OM STILL, Baoli, Voltas and Egemin Automation
are calculated on the basis of the respective amounts, rounded to
brands (2014: €4,677.9 million).
the nearest thousand euros. The separate financial statements of
The consolidated financial statements and the group
the subsidiaries included in the consolidation were prepared as at
management report were prepared by the Executive Board of
the same reporting date as the annual financial statements of
KION GROUP AG on 9 March 2016.
KION GROUP AG.
[2] BASIS OF PREPARATION
Financial reporting standards to be adopted
for the first time in the current financial year
The following financial reporting standards were adopted for the
The consolidated financial statements of the KION Group for the
first time in 2015:
financial year ended 31 December 2015 have been prepared in
accordance with section 315a of the German Commercial Code
(HGB) in conjunction with the International Financial Reporting
Standards (IFRSs) of the International Accounting Standards
– IFRIC 21 ‘Levies’
– Annual Improvements to IFRSs (2011–2013).
Board (IASB) applicable as at the reporting date as well as the
The first-time adoption of these standards has had no significant
associated interpretations (IFRICs) of the IFRS Interpretations
effect on presentation of the financial performance, financial
Committee (IFRS IC) as adopted by the European Union in
position or notes to the financial statements of the KION Group.
accordance with Regulation (EC) No. 1606/2002 of the European
Parliament and of the Council concerning the application of
international accounting standards. All of the IFRSs and IFRICs
that had been enacted by the reporting date and that were
required to be applied in the 2015 financial year have been applied
Financial reporting standards released but not
yet adopted
in preparing the consolidated financial statements.
In its consolidated financial statements for the year ended
31 December 2015 the KION Group has not applied the following
Moving Forward
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
117
Basis of presentation
standards and interpretations, which have been issued by the
financial performance and financial position of the KION Group
IASB but are not yet required to be adopted in 2015:
resulting from the first-time adoption of IFRS 9 ‘Financial
– IFRS 9 ‘Financial Instruments’
– Amendments to IFRS 10 ‘Consolidated Financial Statements’,
IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 28
Instruments’, IFRS 16 ‘Leases’ and IFRS 15 ‘Revenue from
Contracts with Customers’, particularly with regard to multiple-
element arrangements and contracts for indirect end customer
finance, are still being analysed. The effects of the first-time
‘Investments in Associates and Joint Ventures’, clarification
adoption of the other standards and interpretations on the
relating to application of the exception to the consolidation
presentation of the financial position and financial performance of
obligation for investment entities
– Amendments to IFRS 10 ‘Consolidated Financial Statements’
and IAS 28 ‘Investments in Associates and Joint Ventures’:
amendments relating to the sale or contribution of assets
between an investor and its associate or joint venture
relating to the acquisition of interests in joint operations
– Amendments to IFRS 11 ‘Joint Arrangements’: clarification
– IFRS 15 ‘Revenue from Contracts with Customers’
– IFRS 16 ‘Leases’
– Amendments to IAS 1 ‘Presentation of Financial Statements’:
– Amendments to IAS 7 ‘Statement of Cash Flows’: amend-
– Amendments to IAS 12 ‘Income Taxes’: amendments relating
amendments in connection with the disclosure initiative
ments in connection with the disclosure initiative
to the recognition of deferred tax assets for unrealised losses
on available-for-sale financial assets
– Amendments to IAS 16 ‘Property, Plant and Equipment’ and
IAS 38 ‘Intangible Assets’: clarification relating to revenue-
based depreciation and amortisation
– Amendments to IAS 16 ‘Property, Plant and Equipment’ and
IAS 41 ‘Agriculture’: amendments relating to the financial
reporting for bearer plants
– Amendments to IAS 19 ‘Employee Benefits’: defined benefit
– Amendments to IAS 27 ‘Separate Financial Statements’:
plans: employee contributions
amendments relating to the application of the equity method
the KION Group are expected to be insignificant.
[3] PRINCIPLES OF CONSOLIDATION
Acquisitions are accounted for using the acquisition method. In
accordance with IFRS 3, the identifiable assets and the liabilities
assumed on the acquisition date are recognised separately from
goodwill, irrespective of the extent of any non-controlling interests.
The identifiable assets acquired and the liabilities assumed are
measured at their fair value.
The amount recognised as goodwill is calculated as the
amount by which the acquisition cost, the amount of non-
controlling interests in the acquiree and the fair value of all
previously held equity interest at the acquisition date exceeds the
fair value of the acquiree’s net assets. If the cost of acquisition is
lower than the fair value of the acquiree’s net assets, the differ-
ence is recognised in income.
For each acquisition, the Group decides on a case-by-case
basis whether the non-controlling interest in the acquiree is rec-
ognised 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 recognised at the proportionate value of the net
for subsidiaries, joint ventures and associates in separate
assets attributable to them excluding goodwill.
financial statements
– Annual Improvements to IFRSs (2010–2012)
– Annual Improvements to IFRSs (2012–2014)
In the case of business combinations in stages, previously
held equity interests are recognised at their fair value at the acqui-
sition date. The difference between their carrying amount and fair
value is recognised in the consolidated income statement.
These standards and interpretations are expected to be applied
For the purpose of impairment testing, goodwill is allocated to
by the entities included in the KION Group only from the date on
cash-generating units that are likely to benefit from the busi-
which they must be adopted for the first time. The effects on the
ness combination.
KION GROUP AG | Annual Report 2015We keep the world moving. 118
Transaction costs are immediately taken to income. Contingent
consideration elements are included at fair value at the date of
acquisition when determining the purchase consideration. Con-
tingent consideration elements may consist of equity instruments
[4] BASIS OF CONSOLIDATION
or financial liabilities. Depending on the category, changes in their
KION GROUP AG’s equity investments include subsidiaries, joint
fair value are included in subsequent measurements.
ventures, associates and financial investments.
The consolidated financial statements include all of the
In addition to KION GROUP AG, the consolidated financial
parent company’s material subsidiaries. Intragroup balances,
statements of the KION Group include, using the acquisition
transactions, income and expenses, and gains and losses on
method, all material subsidiaries over which KION GROUP AG
intercompany transactions are eliminated in full. Deferred taxes
exercises control. KION GROUP AG controls a subsidiary if it has
are recognised on temporary differences arising from consoli-
decision-making power over the main activities of the entity
dation transactions.
and can use this power to affect the amount of the variable
Transactions with non-controlling interests are treated as
returns to which it is exposed as a result of the equity investment.
transactions with the Group’s equity providers. Differences
Subsidiaries acquired in the course of the financial year are con-
between the consideration paid for the acquisition of a non-
solidated from the date on which control is obtained. Companies
controlling interest and the relevant proportion of the carrying
sold in the course of the financial year are deconsolidated from
amount of the subsidiary’s net assets are recognised in equity.
the date on which control is lost.
Gains and losses arising from the sale of non-controlling
A joint venture is an equity interest in which the entity is jointly
interests are also recognised in equity, provided there is no
managed by companies in the KION Group and one or more
change in control.
partners on the basis of a contractual agreement, and these
Associates and joint ventures that are of material impor-
parties have rights to the net assets of the joint venture.
tance to the presentation of the financial position and financial
Associates are entities in which companies in the KION Group
performance of the KION Group are accounted for using the
are able to exercise significant influence, either directly or
indirectly, over the financial and operating policies of the entity
concerned. Significant influence is assumed when KION GROUP AG
holds between 20 per cent and 50 per cent of the voting rights.
Equity interests over which KION GROUP AG is unable
to exercise control or a significant influence, or that are not
jointly controlled by KION GROUP AG, are classified as financial
investments.
The number of equity investments broken down by category
is shown in > TABLE 041.
equity method.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
119
Basis of presentation
Shareholdings by categories
TABLE 041
01/01/2015
Additions
Disposals
31/12/2015
Consolidated subsidiaries
Domestic
Foreign
Equity-accounted associates and joint ventures
Domestic
Foreign
Non-consolidated subsidiaries and other investments
Domestic
Foreign
96
21
75
9
5
4
52
13
39
9
1
8
–
–
–
7
1
6
3
–
3
–
–
–
4
–
4
102
22
80
9
5
4
55
14
41
A total of 22 German (2014: 21) and 80 foreign (2014: 75) sub-
100.0 per cent of the shares in the dealer Moden Diesel S.p.A.
sidiaries were fully consolidated in addition to KION GROUP AG
(formerly MODEN DIESEL S.R.L.), Modena, Italy, were acquired and
as at 31 December 2015. The acquisition of the logistics auto-
carried at fair value. At the end of October 2015, 100.0 per cent of
mation division involved the acquisition of Egemin NV, Zwijndrecht,
the shares in LR Intralogistik GmbH, Wörth an der Isar, Germany,
Belgium, plus its eight subsidiaries (see note [5]). Three insig-
a specialist in intralogistics concepts that eschew forklift trucks
nificant subsidiaries were deconsolidated in October 2015 and
in favour of tugger trains, were acquired and carried at fair value.
will be accounted for at cost in future.
The non-consolidated subsidiaries and other equity investments
As had been the case a year earlier, nine joint ventures and
(joint ventures and associates that are not accounted for using
associates were accounted for under the equity method as at
the equity method, plus financial investments) are of minor impor-
31 December 2015. In each case, measurement under the equity
tance to the presentation of the financial position and financial
method was performed on the basis of the last available annual
performance of the KION Group, both individually and as a whole.
financial statements.
Where other requirements are met, the following fully con-
55 (2014: 52) companies with minimal business volumes
solidated companies are exempt from the requirement to prepare
or no business operations were not included in the consolidation.
annual financial statements and management reports in accord-
In February 2015, the KION Group acquired a 10.0 per cent
ance with sections 264 (3) and 264b HGB on account of their
stake in robotics specialist Balyo SA, Moissy-Cramayel, France.
inclusion in the consolidated financial statements. > TABLE 042
This equity investment is carried at cost. In October 2015,
KION GROUP AG | Annual Report 2015We keep the world moving.
120
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 042
Head office
Wiesbaden
Haan
Essen
Aschaffenburg
Aschaffenburg
A detailed overview of all the direct and indirect shareholdings of
The receivables acquired as part of this transaction, which con-
KION GROUP AG is shown in the list of shareholdings (note [47]).
stitute trade receivables including receivables from construction
[5] ACQUISITION
contracts that have not yet been invoiced to the value of €5.9 mil-
lion, totalled €16.6 million gross. At the acquisition date, it was
assumed that trade receivables of €0.7 million, and receivables
from construction contracts that have not yet been invoiced to
the value of €0.4 million, were not recoverable. Consolidated
revenue rose by €33.0 million as a result of the acquisition. The
On 7 May 2015, the KION Group agreed to purchase the logistics
net income reported for 2015 contains a profit totalling €0.8 mil-
automation division of automation specialist Agidens International
lion attributable to the entities acquired. If the business combina-
NV (formerly the Egemin Group). The transaction was closed on
tion had been completed by 1 January 2015, this would have
7 August 2015. The purchase price for the 100.0 per cent
generated additional revenue of €67.7 million and additional net
stake in Egemin NV, which is headquartered in Belgium, was
income of €0.5 million for the KION Group in 2015.
€72.5 million. Through this acquisition, the KION Group is signif-
The purchase price allocation for the acquisition described
icantly expanding its expertise in system solutions for intralogistics
above was only provisional as at 31 December 2015 because
and automation, fields that are seeing increasingly strong demand
some details, particularly in the area of construction contracts,
and will play a crucial role in connection with Industry 4.0.
had not yet been fully evaluated. Goodwill constitutes the strategic
The incidental acquisition costs incurred by this business
and geographical synergies that the KION Group expects to
combination amounted to €0.5 million and have been recognised
derive from this business combination. The goodwill arising from
as an expense for the current period and reported as administra-
this acquisition is currently not tax deductible.
tive expenses in the consolidated income statement. The impact
The line item ‘Acquisition of subsidiaries (net of cash acquired)
of this acquisition on the consolidated financial statements of
and other equity investments’ in the consolidated statement of
KION GROUP AG based on the provisional figures available at the
cash flows contains a net cash outflow of €68.6 million for the
acquisition date is shown in > TABLE 043.
acquisition of Egemin Automation.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
121
Basis of presentation
Impact of the acquisition on the financial position of the KION Group
in € million
Goodwill
Other intangible assets
Trade receivables
Cash and cash equivalents
Other assets
Total assets
Trade payables
Other current financial liabilities
Other liabilities
Total liabilities
Total net assets
Cash payment
Consideration transferred
TABLE 043
Fair value at the
acquisition date
50.9
25.2
15.5
3.9
13.7
109.2
9.7
17.1
9.9
36.7
72.5
72.5
72.5
[6] CURRENCY TRANSLATION
exception of income and expenses recognised as other compre-
hensive income (loss), equity is recognised at historical rates. The
resulting translation differences are not taken to income and are
recognised in other comprehensive income (loss) until subsidiaries
Financial statements in foreign currencies are translated in
are disposed of.
accordance with the functional currency concept (IAS 21 ‘The
The financial statements of foreign equity-accounted invest-
Effects of Changes in Foreign Exchange Rates’). The functional
ments are also translated using the method described above.
currency is the currency of the primary economic environment in
Transactions of the consolidated entities in foreign currencies
which an entity operates. The modified closing-rate method is
are translated into the relevant company’s functional currency at
used for currency translation.
the rate prevailing on the transaction date. On the reporting date,
The assets and liabilities of foreign subsidiaries, including
monetary items are translated at the closing rate and non-monetary
goodwill, are translated at the middle spot exchange rate, i.e. at
items at the rate prevailing on the transaction date. Currency
the average of the bid or offer rates on the reporting date. Income
translation differences are taken to income and recognised in
and expenses are translated at the average rate. With the
other income / expenses or in net financial income / expenses.
KION GROUP AG | Annual Report 2015We keep the world moving. 122
Major foreign currency rates in €
Australia (AUD)
Brazil (BRL)
Switzerland (CHF)
China (CNY)
United Kingdom (GBP)
Russia (RUB)
U.S.A. (USD)
Average rate
Closing rate
2015
1.4784
3.7006
1.0686
6.9767
0.7264
68.0183
1.1103
2014
1.4727
3.1209
1.2147
8.1914
0.8064
50.9191
1.3294
2015
1.4876
4.3007
1.0872
7.0914
0.7375
79.8372
1.0857
TABLE 044
2014
1.4809
3.2152
1.2029
7.5085
0.7768
70.2294
1.2099
The translation rates above were used for currencies that are
the entity and that it can be reliably measured. Other criteria may
material to the financial statements. > TABLE 044
arise, depending on each individual transaction, such as:
[7] ACCOUNTING POLICIES
Sale of goods
With the exception of items classified as ‘sale with risk’, revenue
from the sale of goods is recognised when the KION Group
delivers goods to a customer, the goods are accepted by the
The accounting policies applied in these consolidated financial
customer and the flow of benefits to the Group is considered to
statements are, besides the aforementioned accounting policies
be probable. If a customer is expected to accept goods but has
to be adopted for the first time in 2015, fundamentally the same
yet to do so, the corresponding revenue is only recognised when
as those used for the year ended 31 December 2014. These
the goods are accepted. Appropriate provisions are recognised
consolidated financial statements are based on the financial
for risks relating to the sale of goods.
statements of the parent company and its consolidated sub-
sidiaries prepared in accordance with the standard accounting
Rendering of services
policies applicable throughout the KION Group.
Revenue recognition
Revenue from the rendering of services is recognised in the
year in which the services are rendered. For services provided
over several periods, revenue is recognised in accordance with
the proportion of the total services rendered in each period
Revenue is the fair value of the consideration received for the
(stage of completion). Revenue from long-term service agree-
sale of products and services and rental and lease income
ments is therefore recognised on the basis of the average term
(excluding VAT) after deduction of trade discounts and rebates.
of the service agreements and in line with progressive costs
In accordance with IAS 18, revenue is recognised when it is
(constant margin).
sufficiently probable that a future economic benefit will accrue to
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
123
Basis of presentation
Revenue from financial service transactions is recognised in
Financial income and expenses
the amount of the sale value of the leased asset if classified as
a finance lease and in the amount of the lease payments if
Financial income and expenses mainly consist of interest
classified as an operating lease. As part of the financial services
expenses on financial liabilities, interest income from financial
provided by the Group, industrial trucks are also sold to finance
receivables, interest income from leases and the interest cost on
partners who then enter into leases directly with the end cus-
leases, exchange rate gains and losses on financial activities and
tomer (‘indirect end customer finance’). If significant risks and
the net interest cost of the defined benefit obligation.
rewards remain with the KION Group as a result of an agreed
Interest income and expenses are recognised in profit and
residual value guarantee that accounts for more than 10 per cent
loss in accordance with the effective interest method. The
of the asset’s value or as a result of an agreed customer default
effective interest method is used for calculating the amortised
guarantee (‘sale with risk’), the proceeds from the sale are
cost of a financial asset or financial liability and the allocation of
deferred and recognised as revenue on a straight-line basis
interest income and interest expenses over the relevant periods.
over the term until the residual value guarantee or the default
The effective interest rate is the interest rate at which the esti-
guarantee expires.
Construction contracts
mated future incoming and outgoing payments (including all fees
that are part of the effective interest rate, transaction costs and
other premiums and discounts) are discounted to the net carrying
amount of the financial asset or liability over the expected term of
Revenue from construction contracts is recognised according
the financial instrument.
to the stage of completion (percentage-of-completion method).
Dividends are recognised in income when a resolution on
For further details, please refer to the ‘Construction contracts’
distribution has been passed. They are reported in the consoli-
section.
dated income statement under other income, provided they are
dividends from subsidiaries carried at cost.
Interest income and royalties
Interest income is recognised pro rata temporis in accordance
Goodwill
with the effective interest method. Income from royalties is
deferred in accordance with the substance of the relevant agree-
Goodwill has an indefinite useful life and is not amortised. Instead,
ments and recognised pro rata temporis.
it is tested for impairment in accordance with IAS 36 (‘Impairment
Information on the deferral of lease income is contained in the
of Assets’) at least once a year, and more frequently if there are
disclosures on the accounting treatment of leases.
indications that the asset might be impaired.
Cost of sales
Impairment testing is performed at the level of the individual
cash-generating units (CGUs) or groups of CGUs. A CGU is
defined as the smallest identifiable group of assets that generates
cash inflows from continuing use that are largely independent of
The cost of sales comprises the cost of goods and services sold
the cash inflows from other assets or groups of assets. CGUs are
and includes directly attributable material and labour costs as
generally based on the lowest level of an entity at which – for
well as directly attributable overheads, including depreciation of
internal management purposes – the management systematically
production equipment and amortisation of certain intangible
monitors and controls the contribution to earnings made by the
assets, as well as write-downs of inventories. Cost of sales also
assets concerned, including goodwill. However, a CGU may
includes additions to warranty provisions, which are recognised
not be larger than an operating segment as defined in IFRS 8
in the amount of the estimated cost at the date on which the
‘Operating Segments’. In particular, CGUs are considered to be
related product is sold.
clearly defined and independent if the entity’s management has
KION GROUP AG | Annual Report 2015We keep the world moving. 124
prepared independent forecasts relevant to decision-making for
1 November 2015 the rate was 1.5 per cent (2014: 2.0 per cent).
the individual CGUs.
The market risk premium derived from empirical studies of the
For the purposes of internal and external reporting, the activ-
capital markets was set at 7.0 per cent (2014: 6.75 per cent)
ities of the KION Group are broken down into the LMH, STILL,
and was at the upper end of the bandwidth recommended by
Financial Services and Other segments on the basis of their
the technical committee for business valuation and administra-
characteristics and risk profile. The 2015 forecast, the budget
tion (FAUB) of the German Institute of Auditors (IDW), which is
for 2016, the medium-term planning for 2017 to 2018 and the
5.5 per cent to 7.0 per cent. The market risk premium increased
KION Group’s internal projections for 2019 to 2020 were drawn
by 0.25 percentage points compared with 2014 owing, among
up on the basis of this segment structure.
other reasons, to the decrease in the risk-free base rate from
The relevant CGUs for the purposes of goodwill impairment
2.0 per cent to 1.5 per cent. The implied return on equity was
testing and the CGUs to which brand names have been allocated
8.5 per cent, which was slightly lower than in the previous year
are the LMH and STILL segments and the Egemin Automation
(2014: 8.75 per cent). The assumed country risk was 0.22 per cent
CGU, which has been assigned to the Other segment since
for the LMH CGU (2014: 0.25 per cent) and 0.37 per cent for the
completion of the acquisition on 7 August 2015. The subsidiary
STILL CGU (2014: 0.42 per cent). A leverage ratio of 25.7 per cent
KION India Pvt. Ltd. was integrated into the LMH segment with
(2014: 27.8 per cent) was calculated based on the capital
effect from 1 January 2015. Previously the entity was in the
structure determined for the peer group.
Other segment. The Financial Services segment only generates a
A leveraged beta of 0.95 was used to determine the country-
finance margin to cover costs and consequently has almost no
specific WACC for Egemin Automation on the basis of the sector-
impact on cash flow and does not earn any material excess profit.
specific peer group. The risk-free interest rate for Belgium as at
As a result, no goodwill from the original purchase price allocation
1 November 2015 was 1.5 per cent; the country-specific risk
(PPA) was allocated to this CGU when the new segment structure
premium for Belgium was set at 0.5 per cent. The WACC before
was defined in 2012 in accordance with IAS 36.87.
tax, which is used to discount the estimated cash flows, was
The recoverable amount of a CGU is determined by calcu-
calculated at 10.4 per cent for LMH (2014: 10.7 per cent),
lating its value in use on the basis of the discounted cash flow
10.5 per cent for STILL (2014: 10.9 per cent) and 11.3 per cent for
method. The cash flows forecast for the next five years are
Egemin Automation. The WACC after tax was 7.5 per cent for
included in the calculation for the impairment test in accord-
LMH (2014: 7.7 per cent), 7.6 per cent for STILL (2014: 7.9 per cent)
ance with IAS 36.33(b). The financial forecasts are based on
and 8.3 per cent for Egemin Automation.
assumptions relating to the development of the global economy,
The impairment test carried out in the fourth quarter of 2015
commodity prices and exchange rates. The budget for 2016, the
did not reveal any need to recognise impairment losses for the
medium-term planning for 2017 / 2018 and the projections for
existing goodwill of the LMH, STILL and Egemin Automation
2019 to 2020 were used to determine the cash flows. Cash flows
CGUs. Sensitivity analysis has enabled us to determine that no
beyond the five-year planning horizon were extrapolated for the
impairment losses need to be recognised for goodwill, even if key
LMH, STILL and Egemin Automation CGUs using a growth rate of
assumptions vary within realistic limits, in particular a variation in
1.0 per cent (2014: 1.0 per cent).
WACC of plus or minus 100 basis points.
CGU cash flows are discounted using a weighted average
cost of capital (WACC) that reflects current market assessments
of the specific risks to individual CGUs. The underlying capital
structure for the LMH and STILL CGUs is determined by com-
paring peer group companies in the same sector. The beta factor
derived from this peer group was 1.07 (2014: 1.09). Yield curve
data from the European Central Bank (three-month average,
rounded) was used to determine the risk-free interest rate; as at
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
125
Basis of presentation
Other intangible assets
Development costs are capitalised if the following can be
demonstrated:
Other purchased intangible assets with a finite useful life are
carried at cost less all accumulated amortisation and all accu-
mulated impairment losses. If events or market developments
suggest impairment has occurred, impairment tests are carried
out on the carrying amount of items classified as other intangible
assets with a finite useful life. The carrying amount of an asset is
compared with its recoverable amount, which is defined as the
higher of its value in use and its fair value less costs to sell. If the
reasons for recognising impairment losses in the past no longer
apply, impairment losses not exceeding the amortised cost of the
assets are reversed.
Other intangible assets with an indefinite useful life are
– 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
– the availability of adequate technical, financial and other
economic 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.
carried at cost and are mainly capitalised brand names. Brand
Capitalised development costs include all costs and overheads
names are not amortised because they have been established
directly attributable to the development process. Once they have
in the market for a number of years and there is no foreseeable
been initially capitalised, these costs and internally generated
end to their useful life. In accordance with IAS 36, they are tested
intangible assets – particularly internally generated software – are
for impairment at least once a year or whenever there are
carried at cost less accumulated amortisation and accumulated
indications that the asset might be impaired. The impairment
impairment losses. Internally generated intangible assets are not
test is performed in the same way as the impairment test for
qualifying assets so finance costs are not capitalised. All
goodwill. Assessments of indefinite useful life are carried out in
non-qualifying development costs are expensed as incurred and
every period.
reported on the income statement under research and develop-
The Voltas brand name at KION India, which has been
ment costs together with research costs and the amortisation on
allocated to the LMH segment since 1 January 2015, is subject to
capitalised development costs.
a usage right with a contractually limited term and it will therefore
Amortisation of intangible assets with a finite useful life is
be amortised over its useful life. Previously KION India and its
recognised on a straight-line basis and reported under functional
Voltas brand name were included in the Other segment.
costs. The impairment losses on intangible assets are reported
under other expenses.
The following useful lives are applied in determining the
carrying amounts of other intangible assets: > TABLE 045
KION GROUP AG | Annual Report 2015We keep the world moving. 126
Useful life of other intangible assets
Customer relationships / client base
Technology
Development costs
Patents and licences
Software
TABLE 045
Years
4 – 15
10
5 – 7
3 – 15
2 – 10
Leases / short-term rentals
Leased assets
KION Group entities lease equipment, mainly various industrial
If the economic ownership of leased assets remains with a
trucks, to their customers in order to promote sales. The leases
KION Group entity as the lessor under an operating lease, the
may be of a short-term nature (short-term rental) or long-term
assets are reported as leased assets in a separate item in the
nature (leasing).
statement of financial position. The leased assets are carried at
Entities in the KION Group enter into leases as lessors and as
cost and depreciated over the term of the underlying leases.
lessees. In line with IAS 17, these contracts are classified as
To fund leases, industrial trucks are generally sold to leasing
finance leases if substantially all of the risks and rewards
companies. The industrial trucks are then leased back to entities
incidental to ownership of the leased / rental asset are transferred
in the KION Group (head lease), who sub-lease them to external
to the lessee. All other rentals and leases are classified as
end customers (described below as ‘sale and leaseback sub-
operating leases, again in accordance with IAS 17.
leases’). These long-term leases generally have a term of four to
If a KION Group entity enters into a finance lease as the
five years. If, in the case of sale and leaseback sub-leases, the
lessor, the future lease payments to be made by the customer are
risks and rewards incidental to the head lease are substantially
recognised as lease receivables at an amount equal to the net
borne by KION Group entities and are not transferred to the end
investment in the lease. Interest income is allocated to each
customer, the corresponding assets are reported as non-current
reporting period in order to ensure a constant return on the
leased assets. However, if substantially the risks and rewards
outstanding net investment in the lease.
incidental to the head lease are transferred to the end customer,
a corresponding lease receivable is recognised. In both cases,
the funding items for these long-term customer leases, which are
funded for terms that match those of the leases, are recognised
as lease liabilities.
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
127
Basis of presentation
Rental assets
Other property, plant and equipment
Rental assets are assets resulting from short-term rentals as well
Property, plant and equipment are carried at cost less straight-
as industrial trucks in relation to which significant risks and
line depreciation and impairment losses. The cost of internally
rewards remain with the KION Group despite the trucks having
generated machinery and equipment includes all costs directly
been sold (‘sale with risk’).
attributable to the production process and an appropriate portion
In the case of short-term rentals, subsidiaries in the LMH and
of production overheads. This includes production-related depre-
STILL segments rent industrial trucks to customers directly.
ciation and proportionate costs for administration and social
Short-term rental agreements usually have a term of one day to
insurance / employee benefits.
one year. The significant risks and rewards remain with the sub-
The cost of property, plant and equipment is reduced by the
sidiaries in the LMH and STILL segments. The industrial trucks
amount of any government grants received, provided the relevant
are carried at cost and depreciated over the normal useful life of
requirements are met. Expenses for maintenance and repairs are
between five and seven years, depending on the product group.
recognised in income to the extent that they are not required to be
In an indirect end customer finance arrangement, industrial
capitalised. Borrowing costs are capitalised for certain items of
trucks are sold to finance partners who then enter into leases
property, plant and equipment whose acquisition or production
with end customers. If subsidiaries in the LMH and STILL seg-
exceeds one year as soon as the definition of a qualifying asset is
ments provide material residual value guarantees or a customer
met. As was the case in the previous year, there were no quali-
default guarantee (‘sale with risk’), these transactions, which
fying assets in 2015.
are classified as sale agreements under civil law, are recognised
Depreciation of property, plant and equipment is recognised
in accordance with the provisions relating to lessors with oper-
on a straight-line basis and reported under functional costs. The
ating leases in conjunction with the IFRS principles for revenue
useful lives and depreciation methods are reviewed annually and
recognition. In this case, the trucks are recognised as assets in
adjusted to reflect changes in conditions.
the statement of financial position at their cost on the date of the
The useful lives below are applied in determining the carrying
sale and written down to their guaranteed residual value, or zero,
amounts of items of property, plant and equipment. > TABLE 046
on a straight-line basis over the period until the residual value
guarantee or the customer default guarantee expires. If the
KION Group provides a residual value guarantee, an amount
equivalent to the residual value obligation is recognised under
other financial liabilities.
Useful life of other property, plant and equipment
Buildings
Plant and machinery
Office furniture and equipment
TABLE 046
Years
10 – 50
3 – 15
2 – 15
KION GROUP AG | Annual Report 2015We keep the world moving.
128
KION Group companies also lease property, plant and equip-
If an impairment test for an item of property, plant and
ment for their own use using finance leases, which are recog-
equipment is performed at the level of a cash-generating unit to
nised as other property, plant and equipment. In this case, the
which goodwill is allocated and results in the recognition of an
lower of the fair value and present value of future lease pay-
impairment loss, first the goodwill and, subsequently, the assets
ments is recognised at the inception of the lease. A correspond-
must be written down in proportion to their relative carrying
ing liability to the lessor is recognised under other financial liabili-
amounts. If the reason for an impairment loss recognised in prior
ties in the statement of financial position.
years no longer applies, impairment losses not exceeding the
Property, plant and equipment covered by finance leases is
amortised cost of the asset concerned are reversed. This does
depreciated over the shorter of its useful life or the term of the
not apply to goodwill.
lease, unless title to the leased assets passes to the lessee
when the lease expires, in which case the property, plant and
equipment is depreciated and the other financial liabilities are
Equity-accounted investments
reversed over the useful life of the leased assets.
The difference between total finance lease liabilities and the
In accordance with the equity method, associates and joint
fair value of the financed leased assets represents the finance
ventures are measured as the proportion of the interest in the
charge which is recognised in the income statement over the
equity of the investee. They are initially carried at cost. Sub-
term of the lease at a constant rate of interest on the outstanding
sequently, the carrying amount of the equity investment is
balance in each period. At the end of the lease term, the leased
adjusted in line with any changes to the KION Group’s interest in
assets are either returned or purchased, or the contract is extended.
the net assets of the investee. The KION Group’s interest in the
If there are certain indications of impairment of the property,
profit or loss generated after acquisition is recognised in income.
plant and equipment, the assets are tested for impairment by
Other changes in the equity of associates and joint ventures
comparing the residual carrying amount of the assets with their
are recognised in other comprehensive income (loss) in the
recoverable amount, which is defined as the higher of value in use
consolidated financial statements in proportion to the Group’s
and fair value less costs to sell. If the residual carrying amount
interest in the associate or joint venture.
is greater than the recoverable amount, an impairment loss is
If the Group’s interest in the losses made by an associate or
recognised for an asset. The impairment losses on property,
joint venture exceeds the carrying amount of the proportionate
plant and equipment are reported under other expenses.
equity attributable to the Group, no additional losses are recog-
The KION Group calculates the recoverable amount primarily
nised. Any goodwill arising from the acquisition of an associate or
on the basis of value in use. In determining value in use, the
joint venture is included in the carrying amount of the investment
expected future cash flows are discounted using a risk-adjusted
in the associate or joint venture.
discount rate, taking into account the current and future level of
If there is evidence that an associate or joint venture may be
earnings and segment-specific, technological, economic and
impaired, the carrying amount of the investment in question is
general trends.
tested for impairment. The carrying amount of the asset is
compared with its recoverable amount. If the carrying amount
is greater than the recoverable amount, an impairment loss is
recognised for the equity investment.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
129
Basis of presentation
Income taxes
Net realisable value is the selling price that can be realised
less the estimated costs of completion and the estimated costs
In the consolidated financial statements, current and deferred
necessary to make the sale.
taxes are recognised on the basis of the tax laws of the juris-
Write-downs are recognised for inventory risks resulting
dictions involved. Deferred taxes are recognised in other
from duration of storage, impaired recoverability, etc. Write-
comprehensive income (loss) if they relate to transactions also
downs are reversed up to a maximum of cost if the reasons for
recognised in other comprehensive income (loss).
their recognition no longer apply.
Deferred tax assets and liabilities are recognised in accord-
ance with the liability method for all temporary differences
between the IFRS carrying amounts and the tax base, as well as
Construction contracts
for temporary consolidation measures.
Deferred tax assets also include tax refund claims that arise
Receivables and revenue from construction contracts are rec-
from the expected utilisation of existing tax loss carryforwards
ognised according to the stage of completion (percentage-
and interest carryforwards in subsequent years and whose
of-completion method). The percentage of completion is the
utilisation is reasonably certain according to current forecasts.
proportion of contract costs incurred up to the reporting date
On the basis of this estimate, deferred tax assets have been rec-
compared to the total estimated contract costs as at the
ognised on some loss carryforwards and interest carryforwards.
reporting date (cost-to-cost method). Under the percentage- of-
Deferred taxes are determined on the basis of the tax rates
completion method, construction contracts are measured at the
that will apply or have been announced at the realisation date in
amount of the contract costs incurred to date plus the pro rata
accordance with the current legal situation in each country con-
profit earned according to the percentage of completion. If it is
cerned. In accordance with the provisions in IAS 12, deferred tax
probable that the total contract costs will exceed the contract
assets and liabilities are not discounted. Deferred tax assets are
revenue, the expected loss is immediately recognised as an
offset against deferred tax liabilities to the extent that they have
expense in the financial year in which the loss becomes apparent.
the same maturity and relate to the same taxation authority.
If the contract costs incurred and the profit and loss recognised
Inventories
exceed the advances received, the excess is recognised as an
asset under trade receivables. If the advances received exceed
the capitalised costs and recognised profit and loss, the excess
is recognised as a liability under other liabilities.
Inventories are carried at the lower of cost and net realisable
If the outcome of a construction contract cannot be reliably
value. The acquisition costs of raw materials and merchandise
estimated, the likely achievable revenue is recognised up to the
are calculated on the basis of an average. The cost of finished
amount of the costs incurred. Contract costs are recognised as
goods and work in progress includes direct costs and an
an expense in the period in which they are incurred. Variations in
appropriate portion of the material and production overheads
the contract work, claims and incentive payments are recognised
and production-related depreciation directly attributable to the
if they are likely to result in revenue and their amount can be
production process. Administrative costs and social insur-
reliably estimated.
ance / employee benefits are included to the extent that they are
attributable to the production process. Borrowing costs as
defined by IAS 23 are not a component of cost as they are not
qualifying assets as defined by IAS 23.5. The amount recognised
is an average value or a value determined in accordance with the
FIFO method.
KION GROUP AG | Annual Report 2015We keep the world moving. 130
Trade receivables
Available-for-sale financial assets (AfS) are carried at fair
value. Unrealised gains and losses, including deferred taxes, are
In the first period in which they are recognised, trade receivables
reported in other comprehensive income (loss) until they are
categorised as loans and receivables (LaR) are carried at fair
realised. If they are equity investments for which no market price
value including directly attributable transaction costs. In sub-
is available, they are carried at cost. Reported in other non-current
sequent periods they are measured at amortised cost using the
financial assets, the shares in Moden Diesel S.p.A. (formerly
effective interest method. Appropriate valuation allowances are
MODEN DIESEL S.R.L.) and in LR Intralogistik GmbH are carried
recognised for identifiable individual risks. Low-interest or non-
at fair value. All other equity investments in non-consolidated
interest-bearing receivables due in more than one year are
subsidiaries and in other equity investments that are reported
carried at their present value.
in other non-current financial assets are carried at cost less
Cash and cash equivalents
impairment losses, as observable fair values are not available
and reliable results cannot be obtained using other permitted
measurement techniques. At present there is no intention to sell
these financial instruments.
Cash and cash equivalents comprise cash, credit balances with
In the first period in which they are recognised, other financial
banks and current financial assets that can be transformed into
assets categorised as loans and receivables (LaR) are carried at
cash at any time and are only subject to a minor level of volatility.
fair value including directly attributable transaction costs. In
Other financial assets
subsequent periods they are measured at amortised cost using
the effective interest method. Appropriate valuation allowances
are recognised for identifiable individual risks. Low-interest or
non- interest-bearing receivables due in more than one year are
Primary financial assets are initially recognised and derecognised
carried at their present value.
in the financial statements on their settlement dates.
Carrying amounts of financial assets are tested for impair-
Under IAS 39, a distinction is made between financial assets
ment on every reporting date and whenever indications of impair-
held for trading and carried at fair value through profit and loss
ment arise. If there is an objective indication of impairment (such
(FAHfT), financial assets carried at fair value through profit or loss
as a borrower being in significant financial difficulties), an impair-
upon initial recognition (FAFVtPL), available-for-sale financial
ment loss must be recognised directly in the income statement.
assets (AfS), financial assets classified as loans and receivables
If objective facts in favour of reversing impairment losses are
(LaR) and held-to-maturity financial assets (HtM).
present on the reporting date, reversals are carried out to an
As in the previous year, the KION Group did not designate
appropriate extent. Reversals do not exceed the amortised cost
any financial assets as carried at fair value through profit and loss
that would have arisen if the impairment loss had not been
(FAFVtPL) in the reporting year. The FAHfT category contains
recognised. In the case of debt instruments classified as
derivative financial instruments that do not form part of a formally
available- for-sale financial assets (AfS), reversals of impairment
documented hedge.
losses are recognised in the income statement.
Held-to-maturity financial assets (HtM) are carried at amor-
tised cost less impairment losses in accordance with the effective
interest method. As in the previous year, the KION Group did not
categorise any financial assets as HtM in the reporting year.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
131
Basis of presentation
Derivative financial instruments
If the criteria for hedge accounting are not satisfied, changes
in the fair value of derivative financial instruments are recognised
Derivative financial instruments are measured at their fair value
in the income statement.
and are reported as financial assets or financial liabilities as at the
Further information on risk management and accounting
reporting date. They are initially recognised and derecognised in
for derivative financial instruments can be found in notes [39]
the financial statements on their settlement dates.
and [40].
Currently, derivative financial instruments in the KION Group
mainly comprise currency forwards that are used for hedging
purposes to mitigate currency risk. In addition, call option 2 on
Retirement benefit obligation
the remaining 10.0 per cent of the shares in Linde Hydraulics are
reported as derivative financial instruments (see note [38]). The
The retirement benefit obligation is calculated in accordance with
KION Group did not have any interest-rate derivatives as at
the projected unit credit method. Future pension obligations are
31 December 2015. In the previous year, interest-rate swaps had
measured on the basis of the pro rata vested benefit entitlements
been used on an insignificant scale to hedge the interest-rate risk.
as at the reporting date and discounted to their present value.
In accordance with IAS 39, all derivative financial instruments
The calculations include assumptions about future changes in
must be measured at their fair value irrespective of an entity’s
certain parameters, such as expected salary and pension
purpose or intention in entering into the derivative contract.
increases and biometric factors affecting the amount of future
Changes in the fair value of derivative financial instruments in
benefits. Pension provisions are reduced by the fair value of the
a formally documented hedge are reported in the income state-
plan assets used to cover the Group’s benefit obligations. Plan
ment (for fair value hedges) or in other comprehensive income
assets are measured at fair value.
(loss) (for cash flow hedges and net investment hedges).
Remeasurements, including deferred taxes, are recognised
The KION Group currently uses cash flow hedges for cur-
in other comprehensive income (loss). It is not permitted to
rency risk as well as one net investment hedge.
reclassify remeasurements recognised in other comprehensive
In the case of cash flow hedges, derivatives are employed to
income (loss) to profit or loss in future periods. The cost of
hedge future cash flow risks from planned transactions and from
additions to pension provisions is allocated to functional costs.
firm obligations not reported in the statement of financial position.
The interest cost on pension obligations and the interest
The effective portion of changes in the fair value of derivatives
income from plan assets are netted and reported in net financial
is initially recognised in other comprehensive income (loss),
income / expenses. Further details can be found in note [29].
and is subsequently reclassified to the income statement when
the revenue from the corresponding underlying transaction is
realised. The ineffective portion of the changes in fair value is
recognised immediately in the income statement.
A derivative is used in a net investment hedge to hedge the
currency risk arising on translation of a foreign subsidiary’s
financial statements into the Group’s reporting currency. The
effective portion of changes in the fair value of the derivative is
initially recognised in other comprehensive income (loss) and
will not be reclassified to the income statement until the foreign
operation is disposed of. The ineffective portion of the changes in
fair value is recognised immediately in the income statement.
KION GROUP AG | Annual Report 2015We keep the world moving. 132
Other provisions
Share-based payments
Other provisions are recognised when the Group has a legal or
IFRS 2 distinguishes between equity-settled and cash-settled
constructive obligation to a third party as the result of a past event
share-based payment transactions.
that is likely to lead to a future outflow of resources and that can
Equity-settled share-based payment transactions are recog-
be reliably estimated. Where there is a range of possible out-
nised at their fair value at the date of grant. The fair value of the
comes and each individual point within the range has an equal
obligation is recognised as an expense under functional costs
probability of occurring, a provision is recognised in the amount
over the vesting period and offset against capital reserves.
of the mean of the individual points. Measurement is at full cost.
The portion of the fair value of cash-settled share-based
Provisions for identifiable risks and contingent liabilities are
payments that is attributable to service provided up to the
recognised in the amount that represents the best estimate of the
valuation date is recognised as an expense under functional
cost required to settle the obligations. Recourse claims are not
costs and is also reported as a liability. The fair value is recal-
taken into account. The settlement amount also includes cost
culated on each reporting date until the end of the performance
increases identifiable as at the reporting date. Provisions with a
period. Any change in the fair value of the obligation must be
maturity of more than twelve months are discounted using the
recognised (pro rata temporis) under expenses.
standard market interest rate. The discount rate is a before-tax
rate that reflects current market expectations for the time value of
money and the specific risks inherent in the liability. Accrued
Financial liabilities and other financial liabilities
interest is recognised in interest expenses.
Warranty provisions are recognised on the basis of past or
Under IAS 39, a distinction is made between financial liabilities
estimated future claim statistics. The corresponding expense is
held for trading and carried at fair value through profit and loss
recognised in cost of sales at the date on which the revenue is
(FLHfT), financial liabilities carried at fair value through profit or
recognised. Individual provisions are recognised for claims that
loss upon initial recognition (FLFVtPL) and financial liabilities
are known to the Group.
measured at amortised cost using the effective interest method
Provisions for expected losses from onerous contracts and
(FLaC).
other business obligations are measured on the basis of the work
As in the previous year, the KION Group did not categorise
yet to be performed.
any financial liabilities as FLFVtPL in the reporting year. The FLHfT
A restructuring provision is recognised when a KION Group
category contains derivative financial instruments that do not
entity has prepared a detailed, formal restructuring plan and this
form part of a formally documented hedge. These are reported
plan has raised the valid expectation in those affected that the
under other financial liabilities and must be carried at fair value
entity will carry out the restructuring by starting to implement that
through profit or loss.
plan or announcing its main features to those affected by it. The
All other financial liabilities reported under financial liabilities
measurement of a restructuring provision only includes the direct
or other financial liabilities must be categorised as FLaC. These
expenditures arising from the restructuring and not associated
liabilities are initially recognised at fair value at the time they are
with the ongoing activities of the entity concerned.
entered into. Directly attributable transaction costs are deducted.
These liabilities are then measured at amortised cost. Any differ-
ences between historical cost and the settlement amount are
recognised in accordance with the effective interest method.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
133
Basis of presentation
Trade payables
Defined benefit pension obligations are calculated on the
basis of actuarial parameters. As differences due to remeasure-
Trade payables are categorised as FLaC and, in the first period in
ments are taken to other comprehensive income (loss), any
which they are recognised, are carried at fair value net of the
change in these parameters would not affect the net profit for
directly attributable transaction costs. In subsequent periods, these
the current period. For further details about sensitivity analysis
liabilities are measured at amortised cost using the effective
in relation to the impact of all significant assumptions, please
interest method. Low-interest or non-interest-bearing liabilities
refer to the information about the retirement benefit obligation
due in more than one year are carried at their present value.
in note [29].
Assumptions and estimates
The recognition and measurement of other provisions is
based on an estimate of the probability of the future outflow of
resources, supplemented by past experience and the circum-
stances known to the Group at the reporting date. Accordingly,
The preparation of the IFRS consolidated financial statements
the actual outflow of resources for a given event may be different
requires the use of assumptions and estimates for certain line
from the amount recognised in other provisions. Further details
items that affect recognition and measurement in the statement
can be found in note [32].
of financial position and the income statement. The actual
Significant estimates are involved in calculating income
amounts realised may differ from estimates. Assumptions and
taxes. These estimates may change on the basis of new infor-
estimates are applied in particular:
mation and experience (see also note [14]). Deferred tax assets
– 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 recognising and measuring defined benefit pension obliga-
– in recognising and measuring current and deferred taxes.
tions and other provisions;
on tax loss carryforwards and interest carryforwards are recog-
nised 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 carry-
forwards 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 recognised.
Where necessary, the KION Group’s accounting depart-
Goodwill is tested for impairment annually at the level of the
ments receive assistance from external legal advisors and tax
cash-generating units to which goodwill is allocated, applying the
consultants when making the estimates required.
budget for 2016 and the medium-term planning for 2017 to 2018
The carrying amounts of the affected line items can be
combined with the growth predicted in the market forecasts for
found in the relevant notes / the consolidated statement of
the projections for 2019 to 2020 and assuming division-specific
financial position.
growth rates for the period thereafter. Any material changes to
The impact of a change to an estimate is recognised
these and other factors might result in the recognition of impair-
prospectively when it becomes known and assumptions are
ment losses. Further information on goodwill can be found earlier
adjusted accordingly.
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.
KION GROUP AG | Annual Report 2015We keep the world moving. 134
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 047
Revenue by product category
in € million
New business
Service business
– Aftersales
– Rental business
– Used trucks
– Other
Total revenue
The ‘Other’ line item includes revenue from construction con-
tracts amounting to €33.0 million (2014: €0.0 million).
Further information on revenue can be found in the segment
report in note [41].
TABLE 047
2014
2,533.0
2,144.9
1,250.4
486.9
264.9
142.7
2015
2,779.9
2,318.0
1,347.0
524.1
270.4
176.4
5,097.9
4,677.9
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
135
TABLE 048
2014
16.2
11.4
9.9
4.6
2.9
48.2
93.2
2015
25.2
5.3
9.9
4.0
1.3
53.8
99.6
[9] OTHER INCOME
The breakdown of other income is as follows: > TABLE 048
Other income
in € million
Foreign currency exchange rate gains
Income from reversal of provisions
Profit from release of deferred lease profits
Gains on disposal of non-current assets
Rental income
Sundry income
Total other income
The change in foreign currency exchange rate gains and losses is
attributable to exchange rate movements and includes gains and
losses on hedging transactions (see also note [10]).
The sundry income that was reported predominantly
included earnings from commission collected of €20.6 million
(2014: €19.0 million), which are not reported under revenue.
Sundry income also included income from non-consolidated
subsidiaries and other equity investments totalling €9.7 million
(2014: €1.4 million).
KION GROUP AG | Annual Report 2015We keep the world moving.
TABLE 049
2014
13.7
10.8
–
17.6
42.1
2015
37.2
1.7
4.1
23.6
66.6
136
[10] OTHER EXPENSES
The breakdown of other expenses is as follows: > TABLE 049
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
The foreign currency exchange rate gains and losses include
losses amounting to €1.2 million (2014: gains of €8.5 million)
on derivative financial instruments used to hedge operating
currency risk.
The impairment recognised on non-current assets in the
reporting year of €4.1 million (2014: €0.0 million) comprised
impairment losses on capitalised development costs (see also
note [17]).
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
137
[11] SHARE OF PROFIT (LOSS) OF
EQUITY-ACCOUNTED INVESTMENTS
The interest income from leases relates to the interest portion of
lease payments in financial services transactions in which
KION Group entities operate as lessors (finance leases).
The change in foreign currency exchange rate gains and
losses (financing) is attributable to exchange rate movements
The share of profit (loss) of equity-accounted investments in the
and includes gains and losses on hedging transactions (see
reporting year amounted to a profit of €10.6 million (2014: loss
also note [13]).
of €24.8 million). In the prior year, the main influences on the
The line item ‘Net interest income from defined benefit plans’
share of profit (loss) of equity-accounted investments were a
relates to the net interest income on the net assets of two pension
downturn in business and the resultant impairment loss that had
plans in the United Kingdom in which plan assets exceed pension
to be recognised on the equity investment in Linde Hydraulics
obligations.
GmbH & Co. KG, Aschaffenburg (referred to below as Linde
On 20 July 2015, the KION Group exercised the put option
Hydraulics). The total non-cash impairment loss recognised in
that it held via Linde Material Handling GmbH, Aschaffenburg, on
2014 was €13.5 million.
20.0 per cent of the shares in Linde Hydraulics. This eliminated
Further details on equity-accounted investments can be
the corresponding call option 1 held by Weichai Power. Measure-
found in note [21].
[12] FINANCIAL INCOME
ment of these two options up to the exercise date in July 2015
and measurement of the remaining call option 2 in 2015 resulted
in total income of €2.4 million, which was recognised under
other interest and similar income. In the previous year, the income
arising from measurement of the options was €43.2 million. The
impairment loss relating to the stake held in Linde Hydraulics
was included in the share of profit (loss) of equity-accounted
Financial income breaks down as follows: > TABLE 050
investments in 2014 (see also note [11]).
Financial income
in € million
Interest income from leases
Foreign currency exchange rate gains (financing)
Net interest income from defined benefit plans
Other interest and similar income
Total financial income
TABLE 050
2014
29.6
4.3
1.1
49.5
84.4
2015
34.8
5.8
0.9
10.0
51.4
KION GROUP AG | Annual Report 2015We keep the world moving.
138
[13] FINANCIAL EXPENSES
Financial expenses break down as follows: > TABLE 051
Financial expense
in € million
Interest expense from loans
Interest expense from corporate bond
Interest cost of leases
Net interest expense from defined benefit plans
Amortisation of finance costs
Foreign currency exchange rate losses (financing)
Interest cost of non-current financial liabilities
Other interest expenses and similar charges
Total financial expense
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Innovation
TABLE 051
2014
12.5
40.5
48.1
20.4
10.3
3.5
1.8
36.2
173.2
2015
10.2
30.4
49.9
17.1
1.3
7.0
0.7
27.3
144.0
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
139
In 2015,
financial expenses decreased by a substantial
€29.2 million year on year. This reduction was largely due to
early repayment in 2014 of the fixed-rate tranche of the corporate
bond issued in 2011, which was due to mature in 2018 and had
[14] INCOME TAXES
a volume of €325.0 million, and the floating-rate tranche of the
The income tax expense of €109.2 million (2014: expense of
corporate bond issued in 2013, which was due to mature in
€80.0 million) consisted of €132.5 million in current tax expense
2020 and had a volume of €200.0 million. Early redemption of
(2014: €63.5 million) and €23.3 million in deferred tax income
the two bond tranches caused interest expenses arising from
(2014: deferred tax expense of €16.5 million). The current tax
capital market liabilities to reduce by €10.1 million year on year.
expense included expenses of €24.9 million (2014: expenses of
In 2014, financial expenses had also included one-off expenses
€6.9 million) relating to previous financial years.
of €8.4 million in connection with the amortisation of borrowing
At the reporting date there were income tax assets of
costs and a payment of €14.8 million representing early repay-
€7.9 million receivable from tax authorities (2014: €6.6 million) and
ment charges, which were reported in other interest expense and
income tax liabilities of €79.8 million (2014: €31.3 million).
similar charges.
Deferred taxes are recognised for temporary differences
The interest cost of leases relates to the interest portion of
between the tax base and IFRS carrying amounts. Deferred taxes
lease payments in financial services transactions in which the
are determined on the basis of the tax rates that will apply or have
material risks and rewards are borne by KION Group entities as
been announced at the realisation date in accordance with the
lessees (finance leases). Sale and finance leaseback operating
current legal situation in each country concerned. The current
sub-leases (SALB-FL-OL) incurred interest expenses of €27.8 mil-
corporate income tax rate in Germany is 15.0 per cent plus the
lion (2014: €27.2 million). The income from corresponding cus-
solidarity surcharge (5.5 per cent of corporate income tax). Taking
tomer agreements is, according to IAS 17, a component of the
into account the average trade tax rate of 14.93 per cent (2014:
rental and lease payments received and is therefore reported
14.63 per cent), the combined nominal tax rate for entities in
within revenue rather than as interest income.
Germany was 30.75 per cent (2014: 30.5 per cent). The income
Net interest expense from defined benefit plans relates to
tax rates for foreign companies used in the calculation of deferred
the net interest cost of the net liability of pension plans applying
taxes are between 10.0 per cent and 37.48 per cent (2014:
the discount rate for plans in which pension obligations exceed
between 10.0 per cent and 35.0 per cent).
plan assets.
No deferred taxes have been recognised on temporary
The foreign currency exchange rate gains and losses (financing)
differences of €164.2 million (2014: €88.8 million) between the
include losses amounting to €0.3 million (2014: gains of €0.3 mil-
net assets reported in the consolidated financial statements for
lion) on derivative financial instruments used to hedge financial
the Group companies and the tax base for the shares in these
currency risk.
Group companies (outside basis differences) because the
KION Group is in a position to manage the timing of the reversal
of temporary differences and there are no plans to dispose of
investments in the foreseeable future.
KION GROUP AG | Annual Report 2015We keep the world moving. 140
Deferred tax assets are allocated to the following items in the
statement of financial position: > TABLE 052
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 liabilities are allocated to the following items in the
statement of financial position: > TABLE 053
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
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Innovation
TABLE 052
2014
136.0
0.1
40.5
0.5
178.1
295.1
46.2
62.1
– 400.6
357.9
TABLE 053
2014
483.7
5.0
196.2
2.1
23.5
10.6
0.5
– 400.6
320.9
2015
97.6
–
41.2
0.3
163.3
324.9
36.2
73.7
– 388.3
349.0
2015
442.6
3.5
201.3
1.0
8.7
31.5
2.3
– 388.3
302.7
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
141
The deferred tax liabilities essentially relate to the purchase price
Deferred taxes are recognised on tax loss carryforwards and
allocation in the acquisition of the KION Group, particularly for
interest carryforwards to the extent that sufficient future taxable
intangible assets and property, plant and equipment.
income is expected to be generated against which the losses can
In 2015, deferred taxes of minus €5.3 million were recognised
be utilised. The total amount of unrecognised deferred tax
in other comprehensive income (loss), resulting in a decrease
assets relating to loss carryforwards was therefore €29.3 million
in equity (2014: €62.5 million, resulting in an increase in equity).
(2014: €34.2 million), of which €27.1 million (2014: €32.3 million)
Of this amount, deferred taxes of minus €4.5 million (2014:
concerns tax losses that can be carried forward indefinitely.
€60.6 million) arose from the remeasurement of the defined
The KION Group’s corporation-tax loss carryforwards in
benefit obligation. Furthermore, deferred taxes of minus €0.8 mil-
Germany as at 31 December 2015 amounted to €156.5 million
lion (2014: €1.9 million) were recognised in connection with
(31 December 2014: €108.2 million), while trade-tax loss carry-
realised and unrealised changes in the fair value of derivatives in
forwards stood at €142.1 million (31 December 2014: €59.9 mil-
cash flow hedges (minus €2.2 million; 2014: €1.9 million) and net
lion). There were also foreign tax loss carryforwards totalling
investment hedges (€1.4 million; 2014: €0.0 million). The purchase
€142.2 million (31 December 2014: €214.4 million).
price allocation for Egemin Automation and the currency effects
The interest that can be carried forward indefinitely in
included in the currency translation adjustment resulted in a total
Germany as at 31 December 2015 amounted to €296.7 million
change in deferred taxes of €8.6 million, which was recognised
(31 December 2014: €332.5 million).
in other comprehensive income (loss).
The table below shows the reconciliation of expected income
In 2014, deferred taxes of €1.0 million had been reclassified
tax expense to effective income tax expense. The Group recon-
from accumulated other comprehensive income (loss) to retained
ciliation is an aggregation of the individual company-specific
earnings in connection with the deconsolidation of Linde Heavy
reconciliations prepared in accordance with relevant local tax
Truck Division Ltd.
rates, taking into account consolidation effects recognised in
In 2015, the parent company and subsidiaries that reported
income. The expected tax rate applied in the reconciliation is
losses for 2015 or 2014 recognised net deferred tax assets from
30.75 per cent (2014: 30.5 per cent). > TABLE 054
temporary differences and loss carryforwards totalling €85.4 mil-
lion (2014: €51.6 million). These assets were considered to be
unimpaired because these companies are expected to generate
taxable income in future.
No deferred tax assets have been recognised on tax loss
carryforwards of €115.8 million (2014: €162.0 million), on interest
carryforwards of €215.8 million (2014: €262.1 million) or on other
temporary differences of €0.0 million (2014: €1.2 million).
KION GROUP AG | Annual Report 2015We keep the world moving. 142
Income taxes
in € million
Earnings before taxes
Anticipated income taxes
Deviations due to the trade tax base
Deviations from the anticipated tax rate
Losses for which deferred taxes have not been recognised
Change in tax rates and tax legislation
Non-deductible expenses
Tax-exempt income
Taxes relating to other periods
Deferred taxes relating to prior periods
Other
Effective income taxes (current and deferred taxes)
TABLE 054
2014
258.3
2015
330.2
– 101.5
– 78.7
– 3.9
11.9
– 9.5
– 7.2
– 1.9
2.3
– 24.9
28.5
– 3.0
– 109.2
– 5.3
8.2
– 5.6
– 1.0
– 5.9
2.6
– 6.9
7.5
5.0
– 80.0
[15] OTHER INCOME STATEMENT
DISCLOSURES
expenses as a component of interest cost of the defined benefit
obligation. Pension expenses essentially comprised the pension
entitlements of €34.7 million vested in 2015 (2014: €23.4 million)
and unrecognised past service income of €4.3 million (2014:
unrecognised past service cost of €2.6 million) arising from plan
The cost of materials rose by €189.5 million in the reporting year
amendments and curtailments.
to €2,410.2 million (2014: €2,220.7 million).
Impairment losses and depreciation expenses on property,
Personnel expenses went up by €119.8 million to €1,351.7 mil-
plant and equipment together with impairment losses and amor-
lion in 2015 (2014: €1,231.9 million). These personnel expenses
tisation expenses on intangible assets amounted to €401.4 mil-
included wages and salaries of €1,058.1 million (2014: €966.4 mil-
lion in the reporting year (2014: €367.2 million). Inventories were
lion), social security contributions of €237.8 million (2014:
written down by €12.5 million (2014: €9.1 million).
€215.7 million) and expenses for pensions of €55.9 million
The breakdown of rental and lease payments expensed in
(2014: €49.7 million). The interest cost from the unwinding of the
the period and arising in connection with operating leases in
discount on estimated pension obligations is not recognised
which KION Group entities are lessees is as follows: > TABLE 055
under personnel expenses and is instead reported under financial
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
143
Lessee: Expenses recognised for operating lease payments
in € million
Procurement lease contracts
Sublease contracts
Total recognised expenses for lease payments
TABLE 055
2014
81.0
16.2
97.1
2015
82.6
39.2
121.8
The expenses in connection with sub-leases relate to leases
Diluted earnings per share are calculated by adding the
and rental agreements in which KION Group entities are both
potential dilutive no-par-value shares that employees can obtain
lessors and lessees. These expenses were offset by income of
for free under the employee share option programme to the
€46.2 million in 2015 (2014: €37.6 million).
weighted average number of shares outstanding during the
reporting period. The calculation of diluted earnings per share
was based on a weighted average of 98,740,662 no-par-value
shares issued (2014: 98,693,221 no-par-value shares). Diluted
earnings per share for the reporting period came to €2.20
(2014: €1.79).
[16] EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net
income (loss) accruing to the KION GROUP AG shareholders by
the weighted average number of shares outstanding during the
reporting period (2015: 98,721,950 no-par-value shares; 2014:
98,692,041 no-par-value shares). The net income accruing to the
shareholders of KION GROUP AG was €217.1 million (2014:
€176.7 million); it is reported in the consolidated income state-
ment. Basic earnings per share for the reporting period came to
€2.20 (2014: €1.79). The 160,050 no-par-value treasury shares
repurchased by KION GROUP AG were not included in this figure
as at 31 December 2015 (31 December 2014: 163,562).
KION GROUP AG | Annual Report 2015We keep the world moving.
144
Notes to the consolidated statement of financial position
[17] GOODWILL AND OTHER
INTANGIBLE ASSETS
Goodwill is allocated to the segments as follows: > TABLE 056
Goodwill broken down by segment
in € million
LMH
STILL
Other
Total goodwill
TABLE 056
2014
927.8
556.7
12.5
2015
941.0
556.2
50.9
1,548.1
1,497.1
The change in the amount of goodwill in 2015 mainly resulted from
the Voltas brand name), of which €475.1 million (31 December 2014:
the acquisition of Egemin Automation, from which goodwill arose of
€474.5 million) was attributable to brand names with an indefinite
€50.9 million. Currency effects also had an impact. In addition,
useful life. In 2015, a value of €8.6 million was attributed to the
goodwill of €12.5 million for KION India was reclassified from the
Egemin Automation brand name and allocated to the Other seg-
Other segment to the LMH segment. The change in the amount of
ment as part of the purchase price allocation. As at 31 Decem-
goodwill in 2014 had been the result of currency effects.
ber 2015, the value of the brand names allocated to the Other
The Group intends to retain and further strengthen the Linde,
segment had therefore risen to €13.7 million (31 December 2014:
STILL, OM STILL and KION brand names on a long-term basis.
€5.5 million for the KION and Voltas brand names), of which
A value of €1.8 million was originally attributed to the Voltas brand
€13.7 million (31 December 2014: €5.1 million) was attributable to
name, which was integrated into the LMH segment with effect
brand names with an indefinite useful life. Brand names worth
from 1 January 2015. This brand name is amortised over its useful
€115.2 million were assigned to the STILL segment (31 Decem-
life of five years. As at 31 December 2015, the brand names
ber 2014: €115.3 million). These assets are not amortised as they
allocated to the LMH segment (Linde and Voltas) had a residual
have an indefinite useful life. > TABLE 057
value of €475.2 million (31 December 2014: €474.5 million without
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
145
Intangible assets
in € million
Goodwill
Brand names
Technology &
development
Sundry intangible
assets
Balance as at 01/01/2014
1,494.7
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Balance as at 31/12/2014
Gross carrying amount as at
31/12/2014
Accumulated amortisation
–
2.3
–
–
–
1,497.1
1,497.1
– 0.0
594.7
–
1.0
–
–
– 0.3
595.4
596.5
– 1.1
Balance as at 01/01/2015
1,497.1
595.4
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Balance as at 31/12/2015
Gross carrying amount as at
31/12/2015
Accumulated amortisation
48.9
2.2
–
–
–
–
1,548.1
1,548.1
–
8.6
0.4
–
–
– 0.3
–
604.1
605.6
– 1.5
TABLE 057
Total
2,428.7
– 0.0
6.0
60.9
– 2.5
– 80.5
216.9
–
1.5
43.7
– 2.4
– 49.7
122.4
– 0.0
1.2
17.2
– 0.1
– 30.5
210.0
110.1
2,412.5
492.5
– 282.5
210.0
–
0.9
40.9
– 0.3
– 53.3
– 4.1
270.0
– 159.9
110.1
16.3
0.7
13.0
– 0.6
– 33.2
–
2,856.0
– 443.5
2,412.5
73.7
4.2
53.8
– 0.9
– 86.9
– 4.1
194.1
106.2
2,452.5
451.3
– 257.3
297.0
– 190.8
2,902.1
– 449.6
KION GROUP AG | Annual Report 2015We keep the world moving.
146
The total carrying amount for technology and development assets
Other intangible assets relate in particular to licences,
as at 31 December 2015 was €194.1 million (31 December 2014:
patents, software and customer relationships.
€210.0 million). Development costs of €40.9 million were capital-
The change to the basis of consolidation in 2015 was due
ised in the reporting year (2014: €43.7 million). Total research and
almost entirely to the acquisition of Egemin Automation.
development costs of €143.0 million (2014: €125.7 million) were
expensed. Of this amount, €53.3 million (2014: €49.7 million)
related to amortisation.
Impairment losses of €4.1 million were recognised on capital-
ised development costs in 2015 to reflect the lack of opportunities
to use them in future following the early discontinuation of pro-
[18] LEASED ASSETS
duction of a model series. They are reported in other expenses.
The changes in leased assets in 2015 and 2014 were as follows:
The impairment losses related to the STILL segment.
> TABLE 058
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 058
2014
251.9
–
– 1.1
172.8
– 73.9
– 69.5
– 1.3
279.0
615.4
– 336.5
2015
279.0
– 1.7
1.8
241.1
– 104.2
– 80.6
– 1.1
334.4
675.3
– 340.9
Leased assets are attributable to the Financial Services segment
Leased assets include assets leased over the long term with
and relate to industrial trucks in the amount of €333.6 million
a residual value of €285.9 million (31 December 2014: €230.5 mil-
(2014: €278.4 million) that are leased to external customers under
lion) that are funded by means of sale and leaseback transactions
operating leases and to office furniture and equipment in the
with leasing companies and leased assets with a residual value of
amount of €0.8 million (2014: €0.6 million).
€48.5 million (31 December 2014: €48.5 million) that are largely
funded internally or by means of bank loans.
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Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
147
Leased assets resulted in non-cancellable minimum lease
payments
from customers amounting
to €325.5 million
(31 December 2014: €285.6 million).
The following table shows the maturity structure of these
payments: > TABLE 059
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 2015 and 2014 were as follows:
> TABLE 060
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
TABLE 059
2014
285.6
107.8
174.9
2.9
2015
325.5
116.2
200.5
8.8
TABLE 060
2014
461.2
– 12.2
2.1
264.9
– 81.4
– 147.4
– 0.1
487.1
899.1
– 412.0
2015
487.1
– 3.1
– 4.1
294.8
– 72.0
– 159.3
0.5
544.0
954.5
– 410.5
KION GROUP AG | Annual Report 2015We keep the world moving.
148
Acquisitions amounting to €165.1 million (2014: €146.0 million)
and disposals amounting to €48.2 million (2014: €50.5 million)
were attributable to the LMH segment. Acquisitions amounting
to €129.5 million (2014: €119.1 million) and disposals amounting
to €23.7 million (2014: €30.9 million) were attributable to the
STILL segment.
The breakdown of rental assets by contract type is shown
in the following table: > TABLE 061
Rental assets broken down by contract types
TABLE 061
Operating leases as lessor
Sale with risk
Total
in € million
Industrial trucks
Truck equipment
Total rental assets
2015
475.8
3.4
479.2
2014
410.9
9.5
420.3
2015
64.7
0.0
64.8
2014
66.7
0.1
66.7
2015
540.6
3.4
544.0
2014
477.5
9.5
487.1
Rental assets comprises assets resulting from short-term rentals
(‘operating leases as lessor’) and assets in relation to which
significant risks and rewards remain with the KION Group
although they were sold (‘sale with risk’).
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
149
[20] OTHER PROPERTY, PLANT AND
EQUIPMENT
accrued retirement benefits under partial retirement agree-
ments.
As in the previous year, the KION Group did not recognise
any significant impairment losses in accordance with IAS 36 on
other property, plant and equipment in 2015.
The changes in the carrying amounts of other property, plant and
Plant & machinery and office furniture & equipment include
equipment are shown in > TABLE 062 below.
assets from procurement leases (finance leases) amounting to
€16.0 million (31 December 2014: €13.1 million). Depreciation on
Land and buildings in the amount of €18.3 million (31 Decem-
these assets came to €4.9 million in 2015 (2014: €5.3 million). The
ber 2014: €18.3 million) were largely pledged as collateral for
corresponding liabilities are reported as other financial liabilities.
Other property, plant and equipment
in € million
Balance as at 01/01/2014
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/2014
Gross carrying amount as at 31/12/2014
Accumulated depreciation
Balance as at 01/01/2015
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/2015
Gross carrying amount as at 31/12/2015
Accumulated depreciation
Land and buildings
Plant, machinery,
and office furniture
and equipment
Advances paid
and assets under
construction
320.0
–
7.1
5.3
– 13.8
– 14.4
4.0
308.1
644.2
– 336.1
308.1
– 0.8
3.7
8.0
– 1.9
– 14.0
2.5
305.7
653.0
– 347.3
158.3
– 1.7
2.2
54.0
– 1.4
– 55.4
8.3
164.3
952.7
– 788.4
164.3
1.1
0.8
62.7
– 7.4
– 56.5
9.2
174.1
996.7
– 822.6
21.1
–
0.2
12.8
– 1.4
–
– 10.9
21.7
21.7
0.0
21.7
0.1
0.1
18.4
– 0.2
–
– 11.1
29.0
29.0
– 0.0
TABLE 062
Total
499.4
– 1.7
9.4
72.1
– 16.6
– 69.8
1.3
494.1
1,618.6
– 1,124.5
494.1
0.4
4.5
89.1
– 9.5
– 70.5
0.6
508.8
1,678.7
– 1,170.0
KION GROUP AG | Annual Report 2015We keep the world moving.
150
[21] EQUITY-ACCOUNTED
INVESTMENTS
of the shares in Linde Hydraulics of €41.0 million were legally
transferred to Weichai Power for a purchase consideration of
€77.4 million. The remaining 10.0 per cent of the shares in Linde
Hydraulics continue to be accounted for under the equity method
because the KION Group can continue to participate in financial
The KION Group reported equity-accounted investments with a
and operating policy decisions as there have been no changes to
total carrying amount of €73.6 million as at 31 December 2015
its contractual rights relating to committee membership.
(31 December 2014: €114.6 million).
The residual carrying amount of the associates mainly
In 2014, the KION Group had held 30.0 per cent of the shares
resulted from the shares (10.0 per cent) in Linde Hydraulics and
in Linde Hydraulics GmbH & Co. KG, Aschaffenburg (referred to
the shares (45.0 per cent) in Linde Leasing GmbH, Wiesbaden.
below as Linde Hydraulics) through Linde Material Handling
The associates and joint ventures can be seen in the list of share-
GmbH, Aschaffenburg. On 20 July 2015, the KION Group exer-
holdings (see note [47]). Their financial information is summarised
cised the put option vis-à-vis Weichai Power Co., Ltd., Weifang,
below. > TABLES 063 – 064
China (referred to below as Weichai Power) that it held via Linde
Material Handling GmbH, Aschaffenburg, on 20.0 per cent of the
The amounts in the tables are based on the share held by the
shares in Linde Hydraulics. In December 2015, the 20.0 per cent
KION Group in the relevant associate or joint venture.
Summarised financial information associates
in € million
Total carrying amount
Profit (+) / loss (–) from continuing operations
Other comprehensive income
Total comprehensive income
Summarised financial information joint ventures
in € million
Total carrying amount
Profit (+) / loss (–) from continuing operations
Other comprehensive income
Total comprehensive income
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TABLE 063
2014
88.5
– 29.8
– 2.6
– 32.3
TABLE 064
2014
26.1
4.9
– 0.9
4.0
2015
45.6
4.1
2.1
6.1
2015
28.0
6.5
0.9
7.4
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
151
[22] LEASE RECEIVABLES
The amounts recognised as lease receivables are based on
the data below. > TABLE 065
In the case of leases under which KION Group entities lease
non-cancellable sub-leases amounting
to €587.1 million
assets directly to customers as part of the Group’s financial
(31 December 2014: €488.8 million).
services activities, the Group’s net investment in the lease is
Lease receivables include unguaranteed residual values of
reported as a lease receivable.
€74.5 million (31 December 2014: €63.9 million).
Gross investments include minimum lease payments from
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
TABLE 065
2014
611.8
228.7
364.6
18.5
547.8
202.5
327.5
17.8
2015
725.8
210.8
489.6
25.4
653.7
181.7
447.5
24.5
Unrealised financial income
72.0
64.0
KION GROUP AG | Annual Report 2015We keep the world moving.
152
[23] OTHER FINANCIAL ASSETS
Other financial assets of €104.3 million (31 December 2014:
€131.0 million) comprise the items stated below. > TABLE 066
Of the change in non-consolidated subsidiaries and other equity
With effect from 31 December 2015, the presentation of other
investments, an amount of €19.6 million resulted from acquisition
financial assets and other financial liabilities was changed in order
of the shares in the Italian dealer Moden Diesel S.p.A. (formerly
to make it more consistent with the presentation of other financial
MODEN DIESEL S.R.L.) and LR Intralogistik GmbH.
instrument disclosures in accordance with IFRS 7. To comply with
On 20 July 2015, the KION Group exercised the put option
IAS 1.55, the line items ‘Other assets’ and ‘Other liabilities’ were
vis-à-vis Weichai Power Co., Ltd., Weifang, China that it held via
added to the statement of financial position as at 31 Decem-
Linde Material Handling GmbH, Aschaffenburg, on 20.0 per cent of
ber 2015. These line items contain other assets and liabilities that
the shares in Linde Hydraulics. In December 2015, the 20.0 per cent
are not covered by the scope of IFRS 7 and are thus shown
of the shares in Linde Hydraulics were transferred to Weichai Power
separately from other financial assets and other financial liabilities.
and the receivable of €34.7 million arising from the exercise of the
The figures for 2014 have been restated to reflect these disclosure
put option was derecognised. As at 31 December 2014, this put
changes. An explanation of other assets can be found in note [24].
option had been recognised under current derivative financial
Other liabilities are explained in note [35].
instruments in the amount of €34.7 million.
Other financial assets
in € million
Investments in non-consolidated subsidiaries and other investments
Loans receivable
Non-current securities
Other non-current financial assets
Derivative financial instruments
Financial receivables
Sundry other financial assets
Other current financial assets
TABLE 066
2014
11.4
0.6
0.8
12.7
43.7
12.4
62.3
118.3
2015
42.4
2.7
0.8
45.9
5.3
15.4
37.7
58.4
Total other financial assets
104.3
131.0
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
153
[24] OTHER ASSETS
Other assets of €85.0 million (31 December 2014: €71.5 mil-
lion) comprise the following: > TABLE 067
Pension assets relate to asset surpluses from two defined
benefit plans in the United Kingdom (31 December 2014: two) in
which plan assets exceed the present value of the defined benefit
obligation (see note [29]).
Other assets
in € million
Pension assets
Other non-current assets
Deferred charges and prepaid expenses
Sundry tax receivables
Sundry other assets
Other current assets
Total other assets
[25] INVENTORIES
The reported inventories break down as follows: > TABLE 068
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
TABLE 067
2014
21.6
21.6
28.8
21.0
0.0
49.8
71.5
TABLE 068
2014
122.2
71.5
330.8
4.7
529.2
2015
30.2
30.2
32.0
22.7
0.1
54.8
85.0
2015
115.9
75.0
359.5
3.1
553.5
KION GROUP AG | Annual Report 2015We keep the world moving.
154
The slight rise in inventories compared with 31 December 2014
was largely attributable to the increase in finished goods (up
by 8.7 per cent) and work in progress (up by 4.9 per cent). By
contrast, there was a decrease in materials and supplies of
[26] TRADE RECEIVABLES
5.1 per cent. In 2015, impairment losses of €12.5 million were
The trade receivables break down as follows: > TABLE 069
recognised on inventories (2014: €9.1 million). Reversals of impair-
ment losses had to be recognised in the amount of €4.6 million
(2014: €4.1 million) because the reasons for the impairment losses
TABLE 069
2014
582.6
622.8
– 6.9
– 22.3
– 11.1
4.7
10.9
–
598.2
2015
631.8
670.3
– 6.5
– 22.1
– 9.9
16.2
20.9
1.5
670.5
no longer existed.
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 non-consolidated subsidiaries
Trade receivables from equity-accounted investments and other investments
Construction contracts with a net credit balance towards customers
Total trade receivables
Valuation allowances of €38.5 million (31 December 2014:
€40.2 million) were recognised for trade receivables. The con-
tract costs incurred and the contract profit recognised (net of
recognised losses) in respect of construction contracts that had
not been completed by the reporting date came to a total of
€47.3 million (31 December 2014: €0.0 million).
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
155
[27] CASH AND CASH EQUIVALENTS
The change in cash and cash equivalents is shown in the consol-
idated statement of cash flows. For more detailed information,
please also refer to note [37]. > TABLE 070
Cash and cash equivalents
in € million
Balances with banks, cash and cheques
Pledged cash
Total cash and cash equivalents
[28] EQUITY
TABLE 070
2014
98.7
0.2
98.9
2015
102.8
0.3
103.1
The total number of shares outstanding as at 31 December
2015 was 98,739,950 no-par-value shares (31 December 2014:
98,736,438 no-par-value shares).
As at 31 December 2015, KION Group employees held options
Subscribed capital and capital reserves
on a total of 53,220 no-par-value shares (31 December 2014:
29,116 no-par-value shares). The share options granted under the
As at 31 December 2015, the Company’s share capital amounted
employee share option programme are not dividend-bearing and
to €98.9 million, which was unchanged on 31 December 2014,
do not confer any voting rights.
and was fully paid up. It was divided into 98.9 million no-par-value
The Annual General Meeting on 19 May 2014 voted to create
shares.
authorised capital that will enable the KION Group to meet its fund-
Between 10 September 2015 and 30 September 2015, a
ing needs quickly and flexibly. Subject to the consent of the Super-
further 70,000 treasury shares were repurchased via the stock
visory Board, the Executive Board is authorised until 18 May 2019
exchange at an average price of €38.74 in order to provide the
to increase the Company’s share capital by up to €9.89 million by
shares for employees’ own investments and the free shares
way of an issue of up to 9,890,000 new no-par-value bearer shares
under the employee share option programme. The total cost was
(2014 Authorised Capital).
€2.7 million. Due to the issue of 73,512 no-par-value shares
To safeguard the Company’s funding options, the Executive
(2014: 87,438 no-par-value shares) under the programme,
Board is also authorised until 18 May 2019 to issue warrant-linked
KION GROUP AG held 160,050 treasury shares at the reporting
bonds, convertible bonds or profit-sharing rights with a total par
date (31 December 2014: 163,562). These are not dividend-bear-
value of up to €800 million that contain pre-emption rights / obli-
ing and do not confer any voting rights. Further details on the KEEP
gations for up to 9,890,000 no-par-value shares. To this end, a
employee share option programme can be found in note [44].
conditional increase was decided upon in order to increase the
KION GROUP AG | Annual Report 2015We keep the world moving.
156
Company’s share capital by up to €9.89 million by way of an
foreign currency of foreign subsidiaries, associates and joint
issue of up to 9,890,000 new no-par-value bearer shares (2014
ventures.
Conditional Capital).
The gains / losses on the defined benefit obligation are the
The total amount attributable to shares that was spent in
result of remeasuring defined benefit pension obligations (see
connection with this approved / conditional capital may not
also note [29]).
exceed 10 per cent of the share capital. In both cases, the
The gains / losses on hedge reserves are the effective portion
pre-emption right of shareholders can be excluded in certain
of the changes in the fair value of the hedging instruments for
circumstances. The corresponding amendments to the articles
cash flow hedges and net investment hedges. The gains/losses
of incorporation were entered in the commercial register on
from equity investments contain the share of other comprehen-
16 June 2014.
sive income (loss) from associates and joint ventures accounted
Retained earnings
for under the equity method.
Non-controlling interests
The development of retained earnings is shown in the consoli-
dated statement of changes in equity in > TABLE 040. The retained
Non-controlling interests in companies in the KION Group
earnings comprise the net income (loss) for the financial year and
amounted to €7.7 million (31 December 2014: €5.3 million).
past contributions to earnings by the consolidated entities, pro-
vided they have not been distributed.
The distribution of a dividend of €0.55 per share (2014:
€0.35 per share) to the shareholders of KION GROUP AG resulted
in an outflow of funds of €54.3 million in 2015 (2014: €34.5 million).
[29] RETIREMENT BENEFIT
OBLIGATION
Appropriation of profit
The retirement benefit obligation is recognised for obligations
to provide current and future post-employment benefits. Post-
The Executive Board and Supervisory Board of KION GROUP AG
employment benefit plans are classified as either defined benefit
will propose a dividend of €0.77 per share to the Annual General
plans or defined contribution plans, depending on the substance
Meeting on 12 May 2016. As there were 98,739,950 dividend-
of the plan as derived from its principal terms and conditions.
bearing shares as at 31 December 2015, this equates to a total
dividend payout of €76.0 million. Roughly 35.0 per cent of the net
income accruing to the KION Group shareholders will therefore
Defined contribution plans
be distributed in dividends.
Accumulated other comprehensive
income (loss)
In the case of defined contribution pension plans, the Group pays
contributions to government or private pension insurance provid-
ers based on statutory or contractual provisions, or on a voluntary
basis. The Group does not enter into any obligations above and
beyond the payment of contributions to an external pension fund.
The breakdown of accumulated other comprehensive income
The amount of future pension benefits is based solely on the
(loss) is shown in > TABLE 040.
amount of the contributions paid by the employer (and in some
The currency translation adjustment contains the exchange
cases the beneficiaries themselves) to the external pension fund,
differences arising from the financial statements prepared in a
including income from the investment of these contributions. The
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
157
total expense arising from defined contribution plans amounted to
tion period. Employees receive the pension entitlement that they
€64.2 million in 2015 (2014: €58.3 million). Of this total, contribu-
have earned in the form of a monthly retirement pension or invalid-
tions paid by employers into government-run schemes came to
ity benefit or, in the event of their death, the entitlement is paid to
€56.3 million (2014: €52.4 million). The defined contribution plan
their surviving dependants in the form of a widow’s / widower’s pen-
expense is reported within the functional costs.
sion or orphans’ pension. Members of the Executive Board and
Defined benefit plans
other executives are predominantly covered by individual pension
plans. For details of the pension entitlements of KION GROUP AG
Executive Board members, please refer to the information in note
[45]. The amount of the benefits paid to executives depends on the
In the case of defined benefit plans, the beneficiaries are granted
type of entitlement. Under the ‘old’ individual pension plans, execu-
a specific benefit by the Group or an external pension fund. Due
tives were entitled to a certain percentage of income as their pen-
to future salary increases, the benefit entitlement at the retirement
sion benefit. By contrast, the employer-funded entitlement under
age of the beneficiary is likely to be higher than the amount
the ‘new’ individual pension plans consists of two components: a
granted as at the reporting date. Pensions are often adjusted
fixed basic pension and a variable top-up pension through which
after an employee reaches retirement age. The amount of the
annual components are earned within a defined contribution sys-
Group’s obligation, which is defined as the actuarial present value
tem. Both components depend on the seniority of the executive.
of the obligation to provide the level of benefits currently earned
In addition, employees in Germany are able to pay part of their
by each beneficiary, is expressed as the present value of the
salary into a company pension plan, for which KION provides a
defined benefit obligation (DBO) including adjustments for future
defined minimum interest rate to enable employees to build up their
salary and pension increases.
personal pension provision. The pension benefits consist of retire-
The KION Group currently grants pensions to almost all
ment, invalidity and surviving dependants’ benefits. Each contribu-
employees in Germany and a number of foreign employees. These
tion made is converted into a capital component on the basis of a
pensions consist of fixed benefit entitlements and are therefore
guaranteed minimum interest rate of 3.0 per cent and depending
reported as defined benefit plans in accordance with IFRS. As at
on the age of the employee. The capital components acquired
31 December 2015, the KION Group had set up defined benefit
each calendar year are added up to give the pension capital. When
plans in 13 countries. For all of the significant defined benefit plans
an insured event occurs, the pension capital is converted into an
within the Group, the benefits granted to employees are deter-
ongoing life-long pension or a one-off capital payment.
mined on the basis of their individual income, i.e. either directly or
In Germany, the KION Group also helps employees to build
by way of intermediate benefit arrangements. The largest of the
up their own pension provision with an additional matching
KION Group’s defined benefit plans – accounting for 91.1 per cent
contribution for those employees who pay part of their salary into
of the global defined benefit obligation (31 December 2014:
the KION pension plan. The additional matching contribution
91.2 per cent) – are in Germany and the United Kingdom.
received by executives is 50.0 per cent of the amount they defer
Germany
in a calendar year, although the absolute amount of this contribu-
tion is limited to a certain percentage of income (ranging from
In Germany, the pension benefits granted under the 2001 pension
2.5 per cent to a maximum of 5.0 per cent). All other employees
benefit conditions and 2002 pension benefit conditions depend on
who participate in the company pension scheme receive up to
employees’ length of service and gross annual remuneration (pen-
0.4 per cent of their gross remuneration.
sion component entitlement). The pension component is calculated
Some of the KION Group’s pension obligations in Germany
by multiplying a certain percentage by an age-dependent annuiti-
are financed by way of contractual trust arrangements (CTAs),
sation factor. The contribution rate is 3.4 per cent (2001 pension
which qualify as plan assets within the meaning of IAS 19. The
benefit conditions) or 2.0 per cent (2002 pension benefit conditions)
trustees are required to follow a defined investment strategy and
of the gross remuneration that an employee earns in the computa-
guidelines. There are no statutory minimum funding requirements.
KION GROUP AG | Annual Report 2015We keep the world moving. 158
In the event of the Company’s insolvency, the company pension
Other countries
scheme in Germany is to a large extent protected by law by the
Furthermore, significant asset volumes are invested in external
insolvency protection scheme (Pensions-Sicherungs-Verein Ver-
pension funds with restricted access in Switzerland and the
sicherungsverein auf Gegenseitigkeit, PSVaG).
Netherlands. Decisions on additions to plan assets take into
United Kingdom
account the change in plan assets and pension obligations. They
also take into account the statutory minimum coverage require-
In the United Kingdom, defined benefit pension obligations pre-
ments and the amounts deductible under local tax rules.
dominantly relate to two plans. The defined benefits include not
only a life-long retirement pension but also surviving dependants’
benefits. The amount of the pension depends on employees’
Measurement assumptions
length of service and final salary.
The two plans were closed to new employees more than ten
In accordance with IAS 19 (‘Employee Benefits’), pension provi-
years ago. Each plan is monitored by its own board of trustees,
sions are recognised to cover obligations arising from the current
which oversees the running of the plan as well as its funded
and future pension entitlements of active and (after the vesting
status and the investment strategy. The members of the board
period has expired) former employees of the KION Group and
of trustees comprise people appointed by the company involved
their surviving dependants. The discount rate used to calculate
and selected plan beneficiaries.
the defined benefit obligation at each reporting date is deter-
Under UK law, the board of trustees is obliged to have a val-
mined on the basis of current capital market data and long-term
uation of the plan carried out at least every three years. In con-
assumptions about future salary and pension increases in
nection with the 2012 valuation of the pension plans for the
accordance with the best estimate principle. These assumptions
employees of the KION Group’s UK companies, the Company
vary depending on the economic conditions affecting the cur-
and the trustees of the pension funds agreed on a calculation
rency in which benefit obligations are denominated and in which
method in May 2014, according to which the deficit for the two
fund assets are invested, as well as capital market expectations.
remaining pension plans amounted to €8.6 million as at
Benefit obligations are calculated on the basis of current
1 July 2013. On this basis, the KION Group agreed with the
biometric probabilities as determined in accordance with actuarial
trustees that it would pay approximately the equivalent of
principles. The calculations also include assumptions about
€5.0 million in 2015 and €2.5 million in 2016 in order to reduce
future employee turnover based on employee age and years
the deficit. However, these payments are subject to the condi-
of service and about the probability of retirement. The defined
tion that the annual review of the pension plans’ funding position
benefit obligation is calculated on the basis of the significant
continues to reveal a deficit. If a payment would result in the
weighted-average assumptions as at the reporting date shown in
pension plans being overfunded, the KION Group would be
> TABLE 071.
exempt from its payment obligation in that year.
The assumed discount rate is determined on the basis of the
The trustees of the two plans were also granted collateral in
yield as at the reporting date on AA-rated, fixed-interest senior
rem in the form of charges on the real estate of Group compa-
corporate bonds with maturities that match the expected maturi-
nies in the UK and flexible collateral in respect of the rental fleets
ties of the pension obligations. Pension obligations in foreign
of UK dealers within a maximum overall limit of approximately
companies are calculated on a comparable basis taking into
€24.4 million (2014: €23.2 million). The term of this collateral is
account any country-specific requirements.
limited to five years (1 July 2018), and the overall limit will not be
Future increases in salaries are estimated on an annual basis
reduced by payments made by the KION Group. The likelihood
taking into account factors such as inflation and the overall
of the guarantee being used is deemed low in view of the posi-
economic situation.
tion of the individual companies with regard to their current and
The biometric mortality rates used in the calculation are
future financial and earnings situations.
based on published country-specific statistics and empirical
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
159
values. Since 31 December 2009, the modified Heubeck 2005 G
(known as remeasurements) are recognised immediately in other
mortality tables have been used in Germany as the biometric
comprehensive income in accordance with IAS 19. This serves
basis; the modified tables include a somewhat higher life expec-
to ensure that the pension liability in the statement of financial
tancy for males than the unmodified tables. The S1NA CMI 2013
position is the present value of the defined benefit obligation.
(standard mortality tables for self-administered pension schemes
In the case of externally financed pension plans, this present
(SAPS) based on normal health) with a long-term trend of
value of the defined benefit obligation is reduced by the fair value
1.25 per cent p.a. is applied to the two defined benefit plans in the
of the assets of the external pension fund (plan assets). If the
United Kingdom.
plan assets exceed the present value of the defined benefit
The actuarial assumptions not listed in > TABLE 071, such as
obligation (net assets), a corresponding asset is recognised in
employee turnover, invalidity, etc., are determined in accordance
accordance with IAS 19. IAS 19.64 in conjunction with the
with recognised forecasts in each country, taking into account
supplementary explanatory information in IFRIC 14 states that
the circumstances and forecasts in the companies concerned.
the recognition of an asset for an excess of plan assets is only
The significant weighted-average assumptions shown in
permitted if the company concerned, in its function as the
> TABLE 072 were applied to the calculation of the net interest cost
employer, gains economic benefits in the form of reductions in
and the cost of benefits earned in the current year (current ser-
future contributions to the plan or in the form of refunds from the
vice cost).
plan. If the present value of the defined benefit obligation is not
Differences between the forecast and actual change in
covered by the plan assets, the net obligation is reported under
the defined benefit obligation and changes in related assets
the retirement benefit obligation.
Assumptions underlying provisions for pensions and other postemployment benefits
TABLE 071
Germany
UK
Other
Discount rate
Salary increase rate
Pension increase rate
2015
2.35%
2.75%
1.75%
2014
2.20%
2.75%
1.75%
2015
3.75%
4.25%
3.13%
2014
3.55%
4.25%
3.18%
2015
1.61%
2.50%
0.42%
2014
1.79%
2.49%
0.42%
Assumptions underlying pensions expenses
Germany
UK
Other
Discount rate
Salary increase rate
Pension increase rate
2015
2.20%
2.75%
1.75%
2014
3.60%
2.75%
1.75%
2015
3.55%
4.25%
3.18%
2014
4.40%
4.16%
3.53%
2015
1.79%
2.49%
0.42%
TABLE 072
2014
2.95%
2.44%
0.48%
KION GROUP AG | Annual Report 2015We keep the world moving.
160
In two defined benefit plans in the United Kingdom, plan assets
The plan curtailments in the reporting year are the result of
exceed the present value of the defined benefit obligation. Stipu-
income in the Netherlands arising in connection with an agree-
lations limiting the asset to be recognised in the statement of
ment reached with the employee representatives. The employees
financial position do not apply.
in the Netherlands switched to a defined contribution plan on
1 January 2016.
The components of the remeasurements are listed in
Statement of financial position
> TABLE 078.
The change in the present value of the defined benefit obligation
> TABLE 074.
(DBO) is shown in > TABLE 073.
Employees in Germany paid a total of €2.9 million (2014:
The DBO in the other countries was predominantly attribut able
€3.2 million) into the KION pension plan in 2015.
The change in the fair value of plan assets is shown in
to subsidiaries in Switzerland (2015: €57.2 million; 2014: €48.7 mil-
lion) and the Netherlands (2015: €33.1 million; 2014: €38.4 million).
Changes in defined benefit obligation
TABLE 073
in € million
2015
2014
2015
2014
2015
2014
2015
2014
Germany
UK
Other
Total
Present value of defined benefit obligation
as at 01/01/
809.6
588.1
438.4
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
–
–
–
–
29.0
19.1
–
–
17.7
2.9
3.4
–
21.3
3.2
Pension benefits directly paid by company
– 14.0
– 12.9
–
23.7
1.1
–
–
Pension benefits paid by funds
Liability transfer out to third parties
– 0.5
– 0.2
– 0.2
– 0.4
– 19.0
– 18.9
–
–
Remeasurements
– 14.9
188.0
– 19.9
38.0
422.1
– 53.2
30.5
1.1
120.8
95.7
1,368.8
1,106.0
–
5.2
4.7
–
1.0
3.1
–
– 53.2
28.9
34.7
31.5
23.4
0.1
– 0.1
– 0.9
– 0.1
2.6
16.3
18.7
–
–
–
–
–
– 4.2
–
2.8
0.9
– 1.6
– 2.2
– 0.0
22.0
– 4.2
36.2
3.9
– 15.6
– 23.8
– 0.2
– 34.6
–
42.7
4.1
– 14.4
– 21.4
– 0.5
247.9
2.2
1.0
– 1.6
– 4.3
–
0.2
Present value of defined benefit obligation
as at 31/12/
thereof unfunded
thereof funded
829.7
342.6
487.0
809.6
334.4
475.2
440.5
438.4
124.0
120.8
1,394.2
1,368.8
0.0
–
440.5
438.4
33.4
90.5
33.6
376.1
368.1
87.2
1,018.1
1,000.7
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
161
Changes in plan assets
TABLE 074
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
Liability transfer out to third parties
Remeasurements
Fair value of plan assets as at 31/12/
Germany
UK
Other
Total
2015
73.6
–
–
1.7
2.9
1.1
– 0.5
– 0.1
1.1
79.8
2014
65.0
–
–
2.1
3.2
1.0
– 0.2
– 0.1
2.6
73.6
2015
455.5
–
24.5
17.1
–
5.1
2014
441.6
– 56.5
31.8
19.6
–
2.4
2015
73.8
2014
61.7
–
4.4
1.3
1.0
2.3
–
0.8
1.7
0.9
2.2
2015
603.0
–
28.8
20.1
3.9
8.5
2014
568.3
– 56.5
32.6
23.4
4.1
5.6
– 19.0
– 18.9
– 4.3
– 2.2
– 23.8
– 21.4
–
– 15.9
467.2
–
35.5
455.5
–
0.8
–
8.8
79.4
73.8
– 0.1
– 14.0
626.4
– 0.1
46.9
603.0
In 2015, employer contributions in the United Kingdom, which
As a result, the funding ratio (ratio of plan assets to the
amounted to €5.1 million, included one-off payments of €5.0 mil-
present value of the defined benefit obligation) in the KION Group
lion (2014: €1.4 million) into pension funds on the basis of contrac-
was 44.9 per cent (2014: 44.0 per cent).
tual agreements. In Germany, one-off payments of €0.6 million
The change in the retirement benefit obligation reported in
(2014: €0.6 million) were also made to a German CTA for the other
the statement of financial position is shown in > TABLE 076.
members of the KION GROUP AG Executive Board.
The payments expected for 2016 amount to €23.2 million
(2015: €22.6 million), which includes expected employer contribu-
Statement of cash flows
tions of €6.9 million to plan assets (2015: €7.3 million) and
expected direct payments of pension benefits amounting to
In the case of obligations not covered by external assets,
€16.3 million (2015: €15.3 million) that are not covered by
payments to beneficiaries are made directly by the Company and
corresponding reimbursements from plan assets. According to
therefore have an impact on cash flow from operating activities.
local valuation rules, there continue to be gaps in the coverage of
If the benefit obligations are backed by external assets, the
two defined benefit pension plans in the United Kingdom, as a
payments are made from existing plan assets and have no effect
result of which the expected employer contributions for 2016
on the Company’s cash flow. Instead, any contributions made to
include one-off payments amounting to €2.5 million in line with
the external pension fund by the Company result in a cash outflow
the agreements reached with the trustees.
for operating activities.
The reconciliation of funded status and net defined benefit
obligation to the amounts reported in the consolidated statement
of financial position as at 31 December is shown in > TABLE 075.
KION GROUP AG | Annual Report 2015We keep the world moving.
162
Funded status and net defined benefit obligation
TABLE 075
Germany
UK
Other
Total
in € million
2015
2014
2015
2014
2015
2014
2015
2014
Present value of the partially or fully funded
defined benefit obligation
Fair value of plan assets
Surplus (+) / deficit (–)
– 487.0
– 475.2
– 440.5
– 438.4
– 90.5
– 87.2 – 1,018.1
– 1,000.7
79.8
73.6
467.2
455.5
79.4
73.8
626.4
603.0
– 407.2
– 401.6
26.7
17.2
– 11.2
– 13.3
– 391.7
– 397.8
Present value of the unfunded defined
benefit obligation
– 342.6
– 334.4
Net liability (–) / net asset (+) as at 31/12/
– 749.9
– 736.0
Reported as ‘retirement benefit obligation’
– 749.9
– 736.0
Reported as ‘Other non-current assets’
–
–
– 0.0
26.7
– 3.6
30.2
–
17.2
– 4.5
21.6
– 33.4
– 44.6
– 44.6
–
– 33.6
– 376.1
– 368.1
– 47.0
– 767.8
– 765.8
– 47.0
– 798.0
– 787.5
–
30.2
21.6
Changes in retirement benefit obligation
TABLE 076
Germany
UK
Other
Total
2014
2015
34.1
787.5
2014
560.1
0.4
24.7
20.4
1.1
29.4
17.1
– 15.6
– 14.4
– 3.7
– 0.1
– 17.6
798.0
– 3.4
– 0.4
200.0
787.5
0.2
2.2
1.1
– 1.6
– 2.2
– 0.0
13.2
47.0
in € million
Balance as at 01/01/
Exchange differences
Total service cost
Net interest expense
2015
736.0
–
29.0
16.0
2014
523.1
–
22.5
19.2
Pension benefits directly paid by company
– 14.0
– 12.9
2015
2014
4.5
0.3
0.0
0.2
–
2.9
0.3
–
0.1
–
Employer contributions to plan assets
Liability transfer out to third parties
Remeasurements
Balance as at 31/12/
– 1.1
– 0.1
– 16.0
749.9
– 1.0
– 0.3
185.4
736.0
– 0.3
– 0.2
–
– 1.0
3.6
–
1.4
4.5
2015
47.0
0.8
0.5
0.9
– 1.6
– 2.3
–
– 0.6
44.6
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
163
During the reporting year, pension benefits of €39.4 million (2014:
defined benefit obligation when the pension is paid attributable to
€35.8 million) were paid in connection with the main pension entitle-
the year under review on the basis of the maximum length of
ments in the KION Group, of which €15.6 million (2014: €14.4 mil-
service achievable by each employee.
lion) was paid directly by the Company and €23.8 million (2014:
Past service cost arises if there is a change to the pension
€21.4 million) was paid from plan assets. Cash contributions to
entitlement and it is recognised immediately in full.
plan assets in 2015 amounted to €8.5 million (2014: €5.6 million).
The net interest cost / income, which is calculated by multiply-
Furthermore, pension benefit payments totalling €0.1 million (2014:
ing the net liability (present value of the defined benefit obligation
€0.4 million) were transferred to external pension funds.
minus plan assets) or the net assets (if the plan assets exceed the
present value of the defined benefit obligation) by the discount
rate at the start of the year, is also recognised in the income
Income statement
statement.
The breakdown of the net cost of the defined benefit obliga-
In accordance with IAS 19, actuarial computations are performed
tion (expenses less income) recognised in the income statement
for benefit obligations in order to determine the amount to be
for 2015 is shown in > TABLE 077.
expensed in each period in accordance with fixed rules. The
The KION Group’s net financial income / expenses includes a
expenses recognised in the income statement for pensions and
net interest cost of €16.2 million (2014: €19.3 million). All other
similar obligations consist of a number of components that must
components of pension expenses are recognised under func-
be calculated and disclosed separately.
tional costs.
The service cost is the new pension entitlement arising in the
The actual total return on plan assets in 2015 was €6.1 million
financial year and is recognised in the income statement. It is
(2014: €70.3 million).
calculated as the present value of that proportion of the expected
Cost of defined benefit obligation
TABLE 077
Germany
UK
Other
Total
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
2015
29.0
2014
19.1
–
–
29.0
17.7
– 1.7
16.0
45.0
3.4
–
22.5
21.3
– 2.1
19.2
41.7
2015
1.1
–
–
1.1
16.3
2014
1.1
2015
4.7
2014
3.1
2015
34.7
2014
23.4
0.1
– 0.1
– 0.9
– 0.1
2.6
–
1.2
18.7
– 4.2
0.5
2.2
–
2.2
2.8
– 4.2
30.5
36.2
–
26.0
42.7
– 17.1
– 19.6
– 1.3
– 1.7
– 20.1
– 23.4
– 0.8
0.3
– 1.0
0.3
0.9
1.4
1.1
3.3
16.2
46.7
19.3
45.3
KION GROUP AG | Annual Report 2015We keep the world moving.
164
Other comprehensive income (loss)
The gains and losses on the remeasurement of plan assets are
attributable entirely to experience adjustments. The changes in
The breakdown of the remeasurement of the defined benefit
estimates relating to defined benefit pension entitlements
obligation recognised in the statement of comprehensive income
resulted in a €12.7 million increase in equity as at 31 Decem-
in 2015 is as follows: > TABLE 078
ber 2015 after deduction of deferred taxes (31 December 2014:
decrease of €138.3 million).
Accumulated other comprehensive income (loss)
TABLE 078
Germany
UK
Other
Total
in € million
2015
2014
2015
2014
2015
2014
2015
2014
Accumulated other comprehensive
income / loss as at 01/01/
Group changes
Exchange differences
Gains (+) and losses (–) arising from remeasure-
ments 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 remeasure-
ments of plan assets
Accumulated other comprehensive
income / loss as at 31/12/
– 300.1
– 114.8
– 44.4
– 44.1
– 27.8
– 14.4
– 372.3
– 173.3
–
–
–
–
–
– 2.4
5.3
– 3.1
–
–
–
– 0.9
– 0.1
– 3.3
5.3
– 3.2
14.9
– 188.0
19.9
– 38.0
– 0.2
– 22.0
34.6
– 247.9
–
–
–
– 0.2
0.0
– 0.2
0.0
– 0.4
25.3
– 194.4
– 10.5
6.4
14.4
5.5
– 37.8
0.1
– 1.6
1.4
– 21.8
– 0.0
38.1
– 3.6
– 254.0
6.4
1.1
2.6
– 15.9
35.5
0.8
8.8
– 14.0
46.9
– 284.2
– 300.1
– 42.8
– 44.4
– 28.0
– 27.8
– 355.0
– 372.3
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
165
Composition of plan assets
The plan assets of the main pension plans consist of the following
components: > TABLE 079
Fair value of plan assets
TABLE 079
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
2015
22.7
23.9
5.3
–
27.8
79.8
9.0
–
9.0
2014
25.7
28.4
4.8
–
14.6
73.6
9.0
–
9.0
2015
87.9
2014
83.8
376.8
368.3
–
–
–
–
2.5
3.4
467.2
455.5
–
–
–
–
–
–
2015
2014
8.7
15.6
4.4
44.0
6.6
79.4
47.9
44.0
3.8
10.1
12.0
4.3
43.9
3.6
73.8
44.7
43.9
0.9
2015
119.3
416.4
9.7
44.0
36.9
2014
119.7
408.7
9.1
43.9
21.6
626.4
603.0
56.9
44.0
12.8
53.7
43.9
9.9
The plan assets do not include any real estate or other assets
obligation recognised in the consolidated statement of financial
used by the KION Group itself.
position as at 31 December 2015.
Sensitivity analysis
Future pension benefit payments
The present value of the defined benefit obligation is based on
The pension benefit payments shown in > TABLE 081 are forecast
the significant assumptions detailed in > TABLE 071 above. If one
for the next ten years for the defined benefit pension entitle-
assumption were to vary and the other assumptions remained
ments in existence as at 31 December 2015. The expected pen-
unchanged, the impact on the present value of the defined ben-
sion benefits break down into future benefits to be paid directly
efit obligation would be as shown in > TABLE 080.
by the employer (for 2016: €16.3 million) and future benefits to be
The sensitivity analysis shown in > TABLE 080 is not representa-
paid from existing plan assets (for 2016: €23.0 million).
tive of an actual change in the present value of the defined benefit
As at the reporting date, the average duration of the defined
obligation because variations in the significant assumptions are
benefit obligation, weighted on the basis of the present value of
unlikely to occur in isolation as, to some extent, the assumptions
the defined benefit obligation, was 22.2 years in Germany (2014:
are interrelated. Sensitivity is determined using the same methods
21.7 years), 14.5 years in the United Kingdom (2014: 13.6 years)
(projected unit credit method) as for the measurement of the
and 16.8 years in the other countries (2014: 17.1 years).
KION GROUP AG | Annual Report 2015We keep the world moving.
166
Sensitivity defined benefit obligation
in € million
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
Expected payments for pension benefits
TABLE 080
2014
– 218.3
290.6
17.2
– 17.9
39.5
– 35.7
44.7
TABLE 081
Total
39.3
41.5
42.9
45.3
47.0
263.4
2015
– 220.8
294.6
16.2
– 17.4
38.7
– 37.1
47.8
Other
3.7
4.4
4.1
5.0
5.1
26.1
in € million
2016
2017
2018
2019
2020
2021 to 2025
Risks
Germany
15.8
16.6
17.6
18.8
20.4
UK
19.9
20.6
21.3
21.4
21.5
127.6
109.7
the United Kingdom. The market risk attaching to plan assets –
above all in the case of equities – is mitigated by defining an
The funding ratio, the defined benefit obligation and the associ-
investment strategy and investment guidelines and constantly
ated costs depend on the performance of financial markets. The
monitoring the assets’ performance. Moreover, a downward trend
return on plan assets is assumed to equal the discount rate,
on financial markets could have a significant effect on minimum
which is determined on the basis of the yield earned on AA-rated,
funding requirements, some of which apply outside Germany.
fixed-interest senior corporate bonds. If the actual return on plan
The KION Group also bears the full risk of possible future
assets falls below the discount rates applied, the net obligation
pension adjustments resulting from changes in longevity and
arising out of the pension plans increases. The amount of the net
inflation.
obligation is also particularly affected by the discount rates, and
Payroll-based contributions to the KION pension plan made
the current low level of interest rates – especially in the euro-
by employees in Germany are invested in fund units. If the actual
zone – is resulting in a comparatively large net obligation.
returns on these fund units fall below the interest rate of
The plan assets are predominantly invested in corporate
3.0 per cent that has been guaranteed to participating employ-
bonds and inflation-linked UK government bonds, particularly in
ees, the KION Group’s personnel expenses rise.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
167
[30] FINANCIAL LIABILITIES
The financial liabilities reported by the KION Group as at
31 December 2015 essentially comprised
interest-bearing
liabilities to banks and capital market liabilities in connection with
the corporate bond that was issued. The liabilities to banks
stemmed largely from the revolving credit facility.
> TABLE 082 shows the contractual maturity structure of the
financial liabilities.
Maturity structure of financial liabilities
TABLE 082
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 financial liabilities to non-banks
due within one year
due in one to five years
due in more than five years
Total current financial liabilities
Total non-current financial liabilities
2015
225.9
113.8
112.1
–
444.5
–
444.5
–
6.2
5.5
0.7
–
119.3
557.2
2014
459.9
257.7
202.2
–
443.1
–
–
443.1
6.6
5.1
1.2
0.2
262.9
646.8
KION GROUP AG | Annual Report 2015We keep the world moving.
168
Liabilities to banks
Capital market liabilities
In connection with its acquisition of Linde AG’s material handling
As at 31 December 2015, capital market liabilities consisted
business, the KION Group signed a loan agreement (a senior
entirely – as they had a year earlier – of the fixed-rate tranche of
facilities agreement and a subordinated facility agreement,
the bond issued in 2013, which has a volume of €450.0 million
referred to below as ‘SFA’) for a total original amount of
and a maturity date of 2020. The fixed-rate tranche of the
€3,300.0 million with the lead banks Barclays Bank PLC, Bayer-
corporate bond issued in 2011, which was due to mature in 2018
ische Hypo- und Vereinsbank AG, Credit Suisse (London branch),
and had a volume of €325.0 million, and the floating-rate tranche
Goldman Sachs International Bank, Lehman Commercial Paper
of the corporate bond issued in 2013, which was due to mature in
Inc. (UK branch) and Mizuho Corporate Bank Ltd. on 23 Decem-
2020 and had a volume of €200.0 million, had been repaid early
ber 2006. This loan agreement has been amended to reflect the
in full in 2014. Most (€523.0 million) of the funds used for the
KION Group’s changed financial circumstances on a number of
repayment were drawn down from the revolving credit facility.
occasions, particularly in connection with KION GROUP AG’s
This credit facility has far lower interest rates than the two corpo-
IPO in June 2013.
rate bonds. An amount of €8.4 million representing the proportion
The liabilities to banks stem largely from the revolving credit
of the related deferred borrowing costs relating to these bonds
facility agreed with a group of banks under the SFA. The revolving
and a payment of €14.8 million representing early repayment
credit facility, originally for €1,045.0 million, has a variable interest
charges had been recognised as financial expenses in 2014.
rate and will mature in mid-2018. In connection with the repay-
ment of two corporate bonds, the credit facility was increased by
€198.0 million to a total of €1,243.0 million in 2014. This was
Changes in net financial debt
achieved through bilateral lending agreements with a group of
banks. These additional loans mature in April 2019 and have a
The KION Group uses its net financial debt as a key internal figure
variable interest rate. The transaction costs directly attributable to
for analysing the changes in its financial liabilities. Net financial
the increase in the revolving credit facility, which were incurred in
debt is defined as the difference between financial liabilities
2014, came to €1.0 million. The transaction costs are recognised
(excluding lease liabilities) and cash and cash equivalents.
as prepaid expenses under current financial assets and expensed
over the term of the credit facility.
As at 31 December 2015, an amount of €152.2 million had
actually been drawn down from the revolving credit facility, which
includes other loan liabilities and contingent liabilities (31 Decem-
ber 2014: €402.0 million). Of this total, €62.2 million had been
drawn down on a short-term basis (31 December 2014:
€204.0 million). In 2014, drawdowns from the credit facility
amounting to €198.0 million had been used to repay the float-
ing-rate tranche of the corporate bond issued in 2013, which was
due to mature in 2020 and had a volume of €200.0 million, and
were classified as long term. These drawdowns were reduced to
€90.0 million in the reporting year.
There were also liabilities to banks of €83.2 million (31 Decem-
ber 2014: €63.9 million) that had been agreed with local banks for
Group companies and are therefore not part of the SFA.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
169
2015
450.0
225.9
6.2
– 5.5
676.5
103.1
573.5
TABLE 083
2014
450.0
459.9
6.6
– 6.9
909.6
98.9
810.7
TABLE 084
The table below gives a breakdown of the KION Group’s net
financial debt as at 31 December 2015: > TABLE 083
Net financial debt
in € million
Corporate bond – fixed rate (2013/2020) – gross
Liabilities to banks
Other financial liabilities to non-banks
./. Capitalised borrowing costs
Financial debt
./. Cash and cash equivalents
Net financial debt
The table below gives details of the changes in financial debt
and lists the applicable terms and conditions: > TABLE 084
Credit terms
in € million
Interest rate
Notional amount
Maturity
Term Loan Facility H2a (Corporate bond – fixed rate)
Fixed rate
Multicurrency Revolving Credit Facility 3
EURIBOR + Margin
Other liabilities to banks
Other financial liabilities to non-banks
./. Capitalised borrowing costs
Total financial debt
Various currencies and
interest terms
2020
2018
2015
450.0
142.7
83.2
6.2
– 5.5
676.5
2014
450.0
373.0
86.9
6.6
– 6.9
909.6
KION GROUP AG | Annual Report 2015We keep the world moving.
170
Financial covenants
The carrying amounts of the financial assets pledged as
collateral amounted to €279.7 million as at the reporting date
The SFA and the contractual terms and conditions governing the
(31 December 2014: €340.8 million).
issuance of the corporate bond require compliance with certain
As had been the case at the end of 2014, no material liabilities
undertakings and covenants. The SFA also requires compliance
to banks were secured by mortgage charges at the end of 2015.
with specific financial covenants during the term of the agree-
On 15 February 2016, the KION Group redeemed the corpo-
ment. The financial covenants specify required ratios for the
rate bond of €450.0 million that was still outstanding and all other
financial position and financial performance of the KION Group.
remaining liabilities under the existing syndicated loan of
Only the financial covenant for gearing (the ratio of net financial
23 December 2006. The restructuring of the KION Group’s fund-
debt to EBITDA) currently applies to the KION Group. If undertak-
ing was decided upon in a resolution of the Executive Board of
ings or financial covenants are breached, this may, for example,
KION GROUP AG on 25 January 2016. The repayment resulting
give lenders the right to terminate the SFA or permit bondholders
from this restructuring of the funding was made from funds drawn
to call the corporate bond prior to its maturity date.
down under a new senior facilities agreement concluded on
The financial covenants are reviewed every quarter. All the
28 October 2015 (see also note [50]).
undertakings and financial covenants were complied with in the
past financial year, as had been the case in 2014.
Loan collateral
Under the SFA, the KION Group is under an obligation to provide
collateral for its obligations and liabilities. This obligation also
extends to the corporate bond (tranche H2a). By the reporting
date, a total of 25 (31 December 2014: 25) KION Group companies
(guarantors) in five countries – Germany, the UK, France, Spain
and Italy – had provided the necessary collateral.
The collateral includes guarantees, the assignment of shares
in the guarantors (with the exception of shares in KION Material
Handling GmbH), the assignment of certain bank accounts and
certain guarantor receivables, the assignment of claims arising
from and in connection with the share purchase agreement
between Linde Material Handling GmbH and Linde AG dated
5 November 2006 relating to the shares in the former KION
GROUP GmbH, the assignment of shares in KION Information
Management Services GmbH and assignments and transfers of
title to intellectual property rights by guarantors in Germany. The
statutory provisions in the United Kingdom and the agreements
entered into mean that all the assets of the UK guarantors are
pledged as security.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
171
[31] LEASE LIABILITIES
Whereas lease liabilities stood at €855.6 million (31 Decem-
ber 2014: €707.7 million), lease receivables arising from sale and
leaseback transactions amounted to €592.0 million (31 Decem-
ber 2014: €490.6 million) and leased assets under sale and lease-
Lease liabilities relate solely to finance lease obligations arising
back transactions totalled €285.9 million (31 December 2014:
from sale and leaseback transactions for the funding of long-
€230.5 million).
term leases with end customers.
The amounts recognised as lease liabilities (the present
value of future minimum lease payments) are based on the
following data: > TABLE 085
Minimum lease payments
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
TABLE 085
2014
768.2
271.9
475.9
20.5
707.7
246.0
442.0
19.7
2015
922.1
266.0
625.6
30.5
855.6
237.9
587.9
29.7
Interest included in minimum lease payments
66.5
60.5
KION GROUP AG | Annual Report 2015We keep the world moving.
172
[32] OTHER PROVISIONS
Other provisions relate to the following items: > TABLE 086
Other provisions
TABLE 086
in € million
Balance as at 01/01/2015
thereof non-current
thereof current
Group changes
Additions
Utilisations
Reversals
Additions to accrued interest
Currency translation adjustments
Other adjustments
Balance as at 31/12/2015
thereof non-current
thereof current
Provisions
for product
warranties
Provisions for
personnel
Other
obligations
Total other
provisions
53.3
53.3
–
0.2
29.0
– 21.5
– 4.6
0.1
0.9
0.2
57.6
23.5
34.2
65.5
24.1
41.4
–
39.4
– 14.4
– 0.3
0.6
– 0.0
–
90.8
43.1
47.7
49.3
6.3
43.0
0.4
13.0
– 10.8
– 6.0
– 0.0
0.9
– 0.3
46.4
16.9
29.6
168.1
83.7
84.4
0.6
81.5
– 46.7
– 10.9
0.7
1.8
– 0.0
194.9
83.4
111.5
The provisions for product warranties include contractual and
Other obligations comprise, among others, provisions for
statutory obligations arising from the sale of industrial trucks and
restructuring, litigation and expected losses from onerous contracts.
spare parts. It is expected that the bulk of the costs will be
Total restructuring provisions (including obligations under social
incurred within the next two years after the reporting date.
plans and termination benefits) came to €33.2 million as at
The provisions for personnel comprise provisions for partial
31 December 2015 (31 December 2014: €26.7 million).
retirement obligations, long-service awards, annual bonuses, sever-
ance pay, obligations under social plans and obligations under the
employee equity programmes. The provisions for partial retirement
obligations are recognised on the basis of individual contractual
arrangements and agreements under collective bargaining law.
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
173
[33] TRADE PAYABLES
to make it more consistent with the presentation of other financial
instrument disclosures in accordance with IFRS 7. To comply with
IAS 1.55, the line items ‘Other assets’ and ‘Other liabilities’ were
added to the statement of financial position as at 31 December
As at 31 December 2015, trade payables of €574.6 million
2015. These line items contain other assets and liabilities that are
(31 December 2014: €564.6 million) included liabilities to non-
not covered by the scope of IFRS 7 and are thus shown sepa-
consolidated subsidiaries of €6.5 million (31 December 2014:
rately from other financial assets and other financial liabilities. The
€3.8 million) and liabilities to equity-accounted investments and
figures for 2014 have been restated to reflect these disclosure
other equity investments of €11.7 million (31 December 2014:
changes. An explanation of other assets can be found in note [24].
€4.4 million).
Other liabilities are explained in note [35].
Other financial liabilities comprise the following items:
> TABLE 087
[34] OTHER FINANCIAL LIABILITIES
With effect from 31 December 2015, the presentation of other
financial assets and other financial liabilities was changed in order
Other financial liabilities
TABLE 087
in € million
Liabilities from finance leases
Derivative financial instruments
Sundry other financial liabilities
Other non-current financial liabilities
Liabilities from finance leases
Derivative financial instruments
Liabilities from accrued interest
Sundry other financial liabilities
Other current financial liabilities
2015
311.6
–
4.0
315.6
127.4
12.4
19.8
34.7
194.4
2014
231.6
2.4
2.6
236.6
141.5
10.9
12.2
51.3
215.9
Total other financial liabilities
510.1
452.5
KION GROUP AG | Annual Report 2015We keep the world moving. 174
On 20 July 2015, the KION Group exercised the put option that it
The finance lease obligations comprise liabilities arising from
held via Linde Material Handling GmbH, Aschaffenburg, on
the financing of industrial trucks for short-term rental of €403.2 mil-
20.0 per cent of the shares in Linde Hydraulics. This eliminated
lion (2014: €339.1 million) and residual value obligations of €17.8 mil-
the corresponding call option 1 held by Weichai Power.
lion (2014: €18.5 million). The KION Group has also recognised
As at 31 December 2014, this call option had been recognised
other financial liabilities amounting to €18.1 million (31 December
under non-current derivative financial instruments in the amount of
2014: €15.6 million) arising from procurement leases, which are
€2.4 million. The current derivative financial instruments include a
classified as finance leases due to their terms and conditions.
further call option on the remaining 10.0 per cent of the shares in
The finance lease obligations are based on the following future
Linde Hydraulics amounting to €0.6 million (2014: €0.6 million).
minimum lease payments: > TABLE 088
Minimum lease payments
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
TABLE 088
2014
405.0
155.1
239.7
10.2
373.1
141.5
221.8
9.8
2015
473.2
141.8
318.8
12.6
439.0
127.4
299.4
12.2
Interest included in minimum lease payments
34.1
31.9
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
175
TABLE 089
2014
151.2
151.2
84.5
167.3
36.6
60.3
39.2
–
388.0
2015
185.4
185.4
77.4
186.5
36.3
64.7
39.2
9.9
414.0
599.4
539.2
[35] OTHER LIABILITIES
Other liabilities comprise the following items: > TABLE 089
Other liabilities
in € million
Deferred income
Other non-current liabilities
Deferred income
Personnel liabilities
Social security liabilities
Tax liabilities
Advances received
Construction contracts with a net debit balance towards customers
Other current liabilities
Total other liabilities
The contract costs incurred and the contract profit recognised in
respect of construction contracts that had not been completed
by the reporting date came to a total of €24.5 million (31 Decem-
ber 2014: €0.0 million).
KION GROUP AG | Annual Report 2015We keep the world moving. 176
[36] CONTINGENT LIABILITIES AND
OTHER FINANCIAL COMMITMENTS
Contingent liabilities
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 the existing risk provision in the form of insur-
ance or provisions will be sufficient in each individual case.
However, the KION Group believes it is unlikely that these on-
going lawsuits will require funds to be utilised that exceed the
Of the total guarantees, €2.5 million related to contingent liabilities
provisions recognised.
assumed jointly with another shareholder of a joint venture (2014:
€0.9 million). > TABLE 090
Litigation
Other financial commitments
Sundry other financial commitments included future payment
obligations to an associate amounting to €2.0 million (2014:
The legal risks arising from the KION Group’s business are
€21.0 million). > TABLE 091
typical of those faced by any company operating in this sector.
Contingent liabilities
in € million
Liabilities on bills of exchange
Liabilities on guarantees
Total contingent liabilities
Other financial commitments
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
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TABLE 090
2014
5.6
21.0
26.7
TABLE 091
2014
250.8
10.3
1.9
65.0
327.9
2015
6.8
23.5
30.3
2015
272.7
11.5
2.2
71.3
357.8
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
177
The maturity structure of the total future minimum lease payments
The future minimum lease payments for sale and leaseback
under non-cancellable operating leases is shown in > TABLE 092
transactions not recognised in the statement of financial position
below.
amounting to €63.4 million (2014: €45.3 million) are partially off-
The minimum lease payments relate to payments for leased
set by payments received under non-cancellable sub-leases
buildings, machinery, office furniture and equipment (procure-
amounting to €6.3 million (2014: €4.1 million). The future pay-
ment leases) as well as payments for industrial trucks refinanced
ments also include obligations arising from the refinancing of
with a sale and leaseback and sub-leased to end customers (sale
industrial trucks for which there are no offsetting receipts under
and leaseback sub-leases). > TABLE 093
short-term sub-leases.
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
TABLE 092
2014
250.8
61.4
114.8
74.5
2015
272.7
66.9
135.4
70.4
Minimum lease payments broken down into procurement leases & sale and leaseback sub-leases
TABLE 093
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
2015
209.3
43.3
95.8
70.2
–
–
–
–
2014
205.4
44.1
87.4
73.9
–
–
–
–
2015
63.4
23.7
39.6
0.2
6.3
2.0
4.3
0.0
2014
45.3
17.3
27.4
0.6
4.1
1.6
2.5
0.0
KION GROUP AG | Annual Report 2015We keep the world moving.
178
Other disclosures
[37] CONSOLIDATED STATEMENT OF
CASH FLOWS
At minus €329.1 million, cash flow from financing activi-
ties was down significantly on the prior-year figure (2014: minus
€428.1 million), which had been affected by the repayment of the
corporate bonds and other factors. The net repayment of finan-
cial debt in the year under review totalled €224.0 million (2014:
The consolidated statement of cash flows shows the changes in
€301.2 million). The financial debt taken up during the year, which
cash and cash equivalents in the KION Group resulting from cash
came to €911.0 million, was more than offset by repayments total-
inflows and outflows in the year under review, broken down into
ling €1,134.9 million. The repayments in 2014 had included
cash flow from operating, investing and financing activities. The
€525.0 million in respect of the early redemption of the bond
effects on cash from changes in exchange rates are shown sep-
tranches plus early repayment charges of €14.8 million. Net cash
arately. Cash flow from operating activities is presented using the
of €43.3 million was also used for regular interest payments
indirect method in which the profit or loss for the year is adjusted
(2014: €82.5 million). The distribution of a dividend of €0.55
for non-cash operating items.
per share (2014: €0.35 per share) resulted in an outflow of funds
The KION Group’s net cash provided by operating activities
of €54.3 million (2014: €34.5 million), while the acquisition of
totalled €677.9 million, which was significantly higher than the pri-
70,000 treasury shares generated an outflow of €2.7 million.
or-year figure (2014: €603.8 million). This increase was attribut-
Supported by favourable currency effects of €0.5 million
able to contributions from operating profit and other incoming
(2014: €1.8 million), this resulted overall in a small rise in cash and
payments. The higher working capital, the rise in the volume of
cash equivalents, which advanced from €98.9 million as at the
leasing and higher tax payments were fully offset as a result.
end of 2014 to €103.1 million as at 31 December 2015.
Net cash used for investing activities amounted to €345.2 mil-
lion (2014: net cash used of €297.8 million). Capital expenditure
on developments (R&D), property, plant and equipment, and the
rental fleet business (net) rose by €48.9 million year on year. Total
expenditure on the acquisition of equity investments amounted to
€84.9 million. The acquisition of Egemin Automation resulted in a
net outflow of funds of €68.6 million; the three other acquisitions
[38] INFORMATION ON FINANCIAL
INSTRUMENTS
led to cash payments of €16.3 million. The acquisitions of equity
The KION Group uses both primary and derivative financial instru-
investments were partly offset by the sale of the 20.0 per cent of
ments. The following section summarises the relevance of these
the shares in Linde Hydraulics to Weichai Power, which resulted
financial instruments for the KION Group.
in a relatively high inflow of funds of €77.4 million.
The following table shows the measurement categories
Free cash flow – the sum of cash flow from operating activities
defined by IAS 39. In line with IFRS 7, the table shows the carrying
and investing activities – increased by €26.8 million to €332.7 mil-
amounts and fair values of financial assets and liabilities:
lion in the reporting period (2014: €305.9 million). As in 2014, a
> TABLES 094 – 095
large part of this was used for repayments.
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
179
Other disclosures
Carrying amounts broken down by class and category 2015
TABLE 094
Classes
in € million
Financial assets
Investments in non-consolidated subsidiaries and
other investments
Loans receivable
Financial receivables
Non-current securities
Lease receivables ¹
Trade receivables
thereof construction contracts with a net credit balance
towards customers ²
Other financial receivables
thereof non-derivative receivables
thereof derivative financial instruments
Cash and cash equivalents
Financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Lease liabilities ¹
Trade payables
Other financial liabilities
thereof non-derivative liabilities
thereof liabilities from finance leases ¹
thereof derivative financial instruments
1 as defined by IAS 17
2 as defined by IAS 11
Carrying
amount
FAHfT
AfS
LaR
FLaC
FLHfT
Fair value
Categories
42.4
2.7
15.4
0.8
653.7
670.5
1.5
43.0
37.7
5.3
103.1
225.9
444.5
6.2
855.6
574.6
510.1
58.6
439.0
12.4
42.4
0.8
2.7
15.4
669.0
37.7
103.1
2.3
42.4
2.7
15.4
0.8
658.4
670.5
1.5
43.0
37.7
5.3
103.1
225.9
469.5
6.2
860.0
574.6
512.2
58.6
441.2
12.4
225.9
444.5
6.2
574.6
58.6
6.0
KION GROUP AG | Annual Report 2015We keep the world moving. 180
Carrying amounts broken down by class and category 2014
TABLE 095
Carrying
amount
FAHfT
AfS
LaR
FLaC
FLHfT
Fair value
Categories
11.4
0.6
12.4
0.8
547.8
598.2
106.0
62.3
43.7
98.9
459.9
443.1
6.6
707.7
564.6
452.5
66.1
373.1
13.3
11.4
0.8
0.6
12.4
598.2
62.3
98.9
42.8
11.4
0.6
12.4
0.8
549.2
598.2
106.0
62.3
43.7
98.9
460.0
490.0
6.6
711.2
564.6
454.3
66.1
374.9
13.3
459.9
443.1
6.6
564.6
66.1
5.4
Classes
in € million
Financial assets
Investments in non-consolidated subsidiaries and
other investments
Loans receivable
Financial receivables
Non-current securities
Lease receivables ¹
Trade receivables
Other financial receivables
thereof non-derivative receivables
thereof derivative financial instruments
Cash and cash equivalents
Financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Lease liabilities ¹
Trade payables
Other financial liabilities
thereof non-derivative liabilities
thereof liabilities from finance leases ¹
thereof derivative financial instruments
1 as defined by IAS 17
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
181
Other disclosures
The change in valuation allowances for trade receivables was
as follows: > TABLE 096
Change in valuation allowances
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/
The net gains and losses on financial instruments are broken
down by IAS 39 category as follows: > TABLE 097
Net gains and losses on financial instruments broken down by category
in € million
Loans and receivables (LaR)
Available-for-sale investments (AfS)
Financial instruments held for trading (FAHfT, FLHfT)
Financial liabilities carried at amortised cost (FLaC)
The above net gains and losses do not include losses arising on
hedging transactions, which amounted to €20.9 million (2014:
€7.5 million), because these losses form part of a documented
hedge. Gains / losses arising on hedging transactions forming part
of a documented hedge are predominantly included in other
income and other expenses.
TABLE 096
2014
42.4
–
7.1
– 4.6
– 5.1
0.3
40.2
TABLE 097
2014
– 4.8
1.4
54.6
– 103.5
2015
40.2
– 1.8
11.7
– 3.7
– 7.4
– 0.5
38.5
2015
– 9.1
9.7
18.2
– 89.6
KION GROUP AG | Annual Report 2015We keep the world moving.
182
Offsetting of financial instruments
cial collateral issued relates to collateral provided in the context of
the SFA serving as collateral in case of default for the creditors of
The potential offsetting volume essentially arises from netting
all SFA tranches (including H2a), subject to the usual limitations
arrangements in framework agreements governing derivatives
and agreed recovery principles. The following tables show actual
trading that the KION Group concludes with commercial banks.
offsetting and potential offsetting volumes for financial assets and
The potential offsetting volume reported in connection with finan-
financial liabilities. > TABLES 098 – 101
Financial assets subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 098
Potential offsetting
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
670.6
5.3
675.9
– 0.1
–
– 0.1
31/12/2015
670.5
5.3
675.8
– 0.0
– 2.7
– 2.7
–
–
–
670.5
2.6
673.1
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
183
Other disclosures
Financial assets subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 099
Potential offsetting
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
598.3
43.7
642.0
– 0.1
–
– 0.1
31/12/2014
598.2
43.7
641.9
– 0.0
– 5.8
– 5.8
–
–
–
598.2
37.9
636.2
Financial liabilities subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 100
Potential offsetting
amount
Gross
amounts of
recognised
financial
assets set
off in the
balance sheet
Net amounts
of financial
liabilities
presented in
the balance
sheet
Gross amounts
of recognised
financial
liabilities
owing to
netting
agreements
in connection
with financial
collaterals
pledged
Potential net
amount
in € million
Financial liabilities
Trade payables
Derivative financial liabilities
Total
676.5
574.7
12.4
1,263.7
–
– 0.1
–
– 0.1
31/12/2015
676.5
574.6
12.4
1,263.6
–
– 0.0
– 2.7
– 2.7
– 279.7
–
–
– 279.7
396.9
574.6
9.7
981.2
KION GROUP AG | Annual Report 2015We keep the world moving.
184
Financial liabilities subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 101
Potential offsetting
amount
Gross
amounts of
recognised
financial
assets set
off in the
balance sheet
Net amounts
of financial
liabilities
presented in
the balance
sheet
Gross amounts
of recognised
financial
liabilities
owing to
netting
agreements
in connection
with financial
collaterals
pledged
Potential net
amount
in € million
Financial liabilities
Trade payables
Derivative financial liabilities
Total
909.6
564.7
13.3
1,487.6
–
– 0.1
–
– 0.1
31/12/2014
909.6
564.6
13.3
1,487.5
–
– 0.0
– 5.8
– 5.8
– 340.8
–
–
568.8
564.6
7.5
– 340.8
1,140.9
Fair value measurement
The fair value of receivables and liabilities from finance leases
corresponds to the present value of the net lease payments, taking
The majority of the cash and cash equivalents, loans, financial
account of the current market interest rate for similar leases.
receivables, other non-derivative receivables and liabilities, trade
With the exception of derivative financial instruments, long-
receivables and trade payables held by the Group have short
term securities and shares in non-consolidated subsidiaries rec-
remaining terms to maturity. The carrying amounts of these finan-
ognised at fair value, all financial assets and liabilities are meas-
cial instruments are roughly equal to their fair values. The fair
ured at amortised cost.
value of liabilities to banks corresponds to the present value of the
The following tables show the assignment of fair values to the
outstanding payments, taking account of the current interest-rate
individual classification levels as defined by IFRS 7 for financial
curve and the Group’s own default risk. This fair value, calculated
instruments measured at fair value. > TABLES 102 – 103
for the purposes of disclosure in the notes to the financial state-
ments, is classified as Level 2 of the fair value hierarchy.
The fair value of the corporate bond issued, calculated for
disclosure in the notes to the financial statements, is determined
using 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 middle rate applicable on the reporting date.
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
185
Other disclosures
Financial instruments measured at fair value
TABLE 102
in € million
Financial assets
thereof investments in non-consolidated subsidiaries
and other investments
thereof non-current securities
thereof derivative instruments
Financial liabilities
thereof derivative instruments
Fair Value Hierarchy
Level 1
Level 2
Level 3
0.8
5.3
19.6
11.9
0.6
2015
25.7
19.6
0.8
5.3
12.4
12.4
Financial instruments measured at fair value
TABLE 103
in € million
Financial assets
thereof non-current securities
thereof derivative instruments
Financial liabilities
thereof derivative instruments
Fair Value Hierarchy
Level 1
Level 2
Level 3
0.8
9.0
34.7
10.3
3.0
2014
44.5
0.8
43.7
13.3
13.3
KION GROUP AG | Annual Report 2015We keep the world moving.
186
Level 1 comprises long-term securities for which the fair value is
The derivative financial liabilities allocated to Level 3 relate to
calculated using prices quoted in an active market.
a call option of Weichai Power on the 10.0 per cent of the shares
All currency forwards are classified as Level 2. In the previous
in Linde Hydraulics remaining as at 31 December 2015. The
year, Level 2 had also included interest-rate swaps on an insignif-
Black-Scholes model and probability-weighted scenario analysis
icant scale. The fair value of derivative financial instruments is
are used to calculate the fair value of the call option. The meas-
determined using appropriate valuation methods on the basis of
urement is based on the following significant, unobservable input
the observable market information at the reporting date. The
parameters as at 31 December 2015. An amount of €21.4 million
default risk for the Group and for the counterparty is taken into
has been recognised as the fair value of the underlying portion of
account on the basis of gross figures. The fair value of currency
the shares in Linde Hydraulics (31 December 2014: €21.4 million).
forwards is calculated by the system using the discounting
A base exercise price of €38.7 million (31 December 2014:
method based on forward rates on the reporting date. The fair
€38.7 million) and a term to maturity of 2.54 years (31 December
value of interest-rate swaps is calculated as the present value of
2014: 0.49–2.99 years) have been assumed for call option 2.
the estimated future cash flows. Both contractually agreed pay-
In the prior year, a put option held by Linde Material Handling
ments and forward interest rates are used to estimate the future
GmbH, Aschaffenburg, and Weichai Power’s call option 1 on
cash flows, which are then discounted on the basis of a yield
some of the shares in Linde Hydraulics had also been allocated to
curve that is observable in the market.
Level 3. On 20 July 2015, the KION Group exercised the put
The shares in non-consolidated subsidiaries allocated to
option that it held via Linde Material Handling GmbH, Aschaffen-
Level 3 relate to the shares in Moden Diesel S.p.A. (formerly
burg, on 20.0 per cent of the shares in Linde Hydraulics. This
MODEN DIESEL S.R.L.), which were acquired in October 2015,
eliminated the corresponding call option 1 held by Weichai Power.
and the shares in LR Intralogistik GmbH, which were acquired at
The following table shows the material changes in fair value and
the end of October 2015. Because the acquisitions took place
the impact on the income statement. > TABLE 104
shortly before the reporting date, the purchase consideration
reflects the fair value.
Development of financial assets / liabilities classified as level 3
TABLE 104
in € million
Value as at 01/01/
Gains recognised in net financial expenses
Disposals
Value as at 31/12/
Gains for the period relating to financial assets / liabilities classified as Level 3
Change in unrealised gains for the period relating to financial assets / liabilities held as at 31/12/
2015
31.7
2.4
– 34.7
– 0.6
2.4
0.1
2014
– 11.5
43.2
–
31.7
43.2
43.2
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
187
Other disclosures
As at 31 December 2015, the fair value calculated for call option
2 on the shares in Linde Hydraulics came to minus €0.6 million
(31 December 2014: net value arising from the options of
€31.7 million). If the fair value of the shares had been 10.0 per cent
[39] FINANCIAL RISK REPORTING
lower on the reporting date, the fair value of call option 2
Capital management
(31 December 2014: net value arising from the options) would
have increased by €0.2 million (31 December 2014: by €5.3 mil-
One of the prime objectives of capital management is to ensure
lion) to minus €0.3 million (31 December 2014: €37.1 million) and
liquidity at all times. Measures aimed at achieving these objec-
led to an additional gain of €0.2 million (31 December 2014: gain
tives include the optimisation of the capital structure, the reduc-
of €5.3 million). A 10.0 per cent rise in the fair value of the shares
tion of liabilities and ongoing Group cash flow planning and man-
in Linde Hydraulics would have reduced the fair value of call
agement. Close cooperation between local units and the Group
option 2 (31 December 2014: net value arising from the options)
head office ensures that the local legal and regulatory require-
by minus €0.3 million (31 December 2014: by €5.6 million) to
ments faced by foreign group companies are taken into account
minus €0.9 million (31 December 2014: €26.2 million) and led to
in capital management.
an expense of €0.3 million (31 December 2014: €5.6 million).
Net financial debt – defined as the difference between finan-
In order to eliminate default risk to the greatest possible
cial liabilities (excluding lease liabilities) and cash and cash equiv-
extent, the KION Group only enters into derivatives with invest-
alents – is the key performance measure used in liquidity planning
ment-grade counterparties.
at Group level (see note [30]) and amounted to €573.5 million at
If events or changes in circumstances make it necessary to
31 December 2015 (31 December 2014: €810.7 million).
reclassify financial instruments as a different level, they are reclas-
The KION Group had made further improvements to its fund-
sified at the end of a reporting period. As had been the case
ing structure and funding conditions in 2014 by repaying two cor-
in 2014, no financial instruments were transferred between Lev-
porate bonds ahead of schedule. The funds used for the repay-
els 1, 2 or 3 in 2015.
ment mainly originated from a revolving credit facility, which has
far lower interest rates than the two corporate bonds.
On 15 February 2016, the KION Group redeemed the cor-
porate bond of €450.0 million that was still outstanding and all
other remaining liabilities under the existing syndicated loan of
23 December 2006. The restructuring of the KION Group’s fund-
ing was decided upon in a resolution of the Executive Board of
KION GROUP AG on 25 January 2016. The repayment resulting
from this restructuring of the funding was made from funds drawn
down under a new senior facilities agreement concluded on
28 October 2015 (see note [50]).
KION GROUP AG | Annual Report 2015We keep the world moving. 188
Credit risk
The > TABLE 105 shows the age structure of receivables as at
the reporting date.
In certain finance and operating activities, the KION Group is sub-
Impairment losses are based on the credit risk associated
ject to credit risk, i.e. the risk that partners will fail to meet their
with the receivables, the risk being assessed mainly using factors
contractual obligations. This risk is limited by diversifying busi-
such as customer credit rating and failure to adhere to payment
ness partners based on certain credit ratings. The Group only
terms.
enters into transactions with business partners and banks hold-
Some of the receivables that were overdue as at the report-
ing a good credit rating and subject to fixed limits. Counterparty
ing date, but for which no impairment losses had been reported,
risks involving our customers are managed by the individual
were offset by corresponding trade payables. Apart from this
Group companies.
item, the Group did not hold any significant collateral.
Age structure analysis of receivables
TABLE 105
Thereof: Not impaired
at the reporting date
and overdue in the
following timebands
Thereof:
Neither
overdue nor
impaired at the
reporting date
Carrying
amount
Thereof:
Impaired at the
reporting date
up to and
including
90 days
overdue
more than
90 days
overdue
15.4
653.7
670.5
37.7
12.4
547.8
598.2
62.3
15.4
653.7
537.6
34.2
12.4
547.8
501.7
61.6
–
–
6.1
0.5
–
–
4.0
0.0
–
–
117.6
3.0
–
–
87.5
0.6
–
–
9.1
–
–
–
5.0
0.0
2015
2014
in € million
Financial receivables
Lease receivables
Trade receivables
Other non-derivative receivables / assets
in € million
Financial receivables
Lease receivables
Trade receivables
Other non-derivative receivables / assets
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
189
Other disclosures
Liquidity risk
April 2015, Moody’s upgraded its corporate family rating for the
KION Group from Ba2 with a stable outlook to Ba2 with a positive
Based on IFRS 7, a liquidity risk arises if an entity is unable to
outlook, while Standard & Poor’s also improved its rating, from
meet its financial liabilities. The KION Group maintains a liquidity
BB / positive to BB + / stable.
reserve in the form of lines of credit and cash in order to ensure
The following tables show all of the contractually agreed pay-
financial flexibility and solvency. The age structure of financial lia-
ments under recognised financial liabilities as at 31 Decem-
bilities is reviewed continually. The KION Group’s credit rating
ber 2015 and 2014, including derivative financial instruments with
maintained its positive trajectory in the year under review. In
negative fair values. > TABLES 106 – 107
Liquidity analysis of financial liabilities and derivatives 2015
TABLE 106
in € million
Primary financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Trade payables
Lease liabilities
Other financial liabilities
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2015
Cash flow
2016
Cash flow
2017 – 2020
Cash flow
from 2021
225.9
444.5
6.2
574.6
855.6
497.6
11.9
– 117.2
– 30.4
– 5.5
– 574.6
– 266.0
– 200.4
– 120.3
– 556.3
– 0.7
–
– 625.6
– 318.8
345.7
– 352.7
60.5
– 65.5
–
–
–
–
– 30.5
– 12.6
–
–
KION GROUP AG | Annual Report 2015We keep the world moving.
190
Liquidity analysis of financial liabilities and derivatives 2014
TABLE 107
in € million
Primary financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Trade payables
Lease liabilities
Other financial liabilities
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2014
Cash flow
2015
Cash flow
2016 – 2019
Cash flow
from 2020
459.9
443.1
6.6
564.6
707.7
439.2
10.3
– 262.4
– 30.5
– 5.1
– 564.6
– 271.9
– 221.2
– 214.1
– 121.3
– 1.3
–
– 475.9
– 239.7
–
– 465.2
– 0.2
–
– 20.5
– 10.2
270.2
– 280.0
4.2
– 4.2
–
–
The calculation of future cash flows for derivative financial liabili-
with fully derecognised financial assets, primarily the provision
ties includes all currency forwards that have negative fair values
of limited reserves for defaults. The recognised assets that serve
as at the reporting date.
as reserves for defaults and are reported under other current
Bank guarantee lines (e.g. sureties, performance bonds) had
financial assets, stood at €1.0 million as at 31 December 2015
been issued under the ancillary facility agreements for a total
(31 December 2014: €1.0 million). However, the short residual
amount in the single-digit millions as at 31 December 2015
maturity of these financial assets meant their carrying amount
(31 December 2014: single-digit millions). They included guaran-
was almost the same as their fair value. The maximum downside
tees payable ‘on first demand’. As was the case in the previous
risk arising on the transferred and fully derecognised financial
year, no guarantees were utilised in 2015. In some cases, the
assets amounted to €5.0 million as at 31 December 2015
KION Group retains insignificant rights and duties in connection
(31 December 2014: €5.0 million).
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
191
Other disclosures
Default risk
primarily based on fixed-interest agreements. The credit facilities
provided by various banks and an effective dunning process
For financial assets, default risk is defined as the risk that a coun-
ensure that the Group has sufficient liquidity.
terparty will default, and hence is limited to a maximum of the car-
In order to exclude currency risk, the KION Group generally
rying amount of the assets relating to the counterparty involved.
funds its leasing business in the local currency used in each market.
The potential default risk attaching to financial assets is mitigated
Because of low default rates, counterparty risk has not been
by secured forms of lending such as reservation of title, credit
significant to date in the Group. The KION Group has not identi-
insurance and guarantees, and potential netting agreements.
fied any material changes between 2014 and 2015. The Group
Specific valuation allowances for defaults are recognised to
also mitigates any losses from defaults by its receipt of the pro-
reflect the risk arising from primary financial instruments. Financial
ceeds from the sale of repossessed trucks. In addition, receiva-
transactions are only entered into with selected partners holding
bles management has been improved by enhancing the dunning
good credit ratings. Investments in interest-bearing securities are
process. The credit portfolio management system was updated
limited to securities with an investment-grade credit rating.
during 2015. Besides the design of the business processes, it
Risks arising from financial services
also encompassed the risk management and control processes.
Moreover, the KION Group offers the majority of financial ser-
vices indirectly via selected financing partners that bear the risks
of the finance transaction. As far as these financial services are
The KION Group’s leasing activities mean that it may be exposed
concerned, the KION Group bore the counterparty risk in under
to residual value risks from the marketing of trucks that are
3 per cent of cases (2014: 5 per cent).
returned by the lessee at the end of a long-term lease and subse-
quently sold or re-leased. Residual values in the markets for used
trucks are therefore constantly monitored and forecast. The KION
Currency risk
Group regularly assesses its overall risk position arising from
financial services.
In accordance with its treasury risk policy, the KION Group
The risks identified are immediately taken into account by the
hedges currency risks both locally at the level of the individual
Company in the costing of new leases by recognising writedowns
companies and centrally via KION Material Handling GmbH in
or valuation allowances and adjusting the residual values.
order to meet the prescribed minimum hedging ratios.
Risk-mitigating factors include the demand for used trucks, which
The main hedging instruments employed are foreign-cur-
stabilises the residual values of the KION Group’s industrial
rency forwards, provided that there are no country-specific
trucks. The majority of the residual values have underlying remar-
restrictions on their use.
keting agreements that transfer any residual-value risk to the
At company level, hedges are entered into for highly probable
leasing company. This had a positive impact on the financial
future transactions on the basis of rolling 15-month forecasts, as well
results in 2015. Groupwide standards to ensure that residual val-
as for firm obligations not reported in the statement of financial posi-
ues are calculated conservatively, combined with an IT system for
tion. In accordance with IAS 39, these hedges are generally classi-
residual-value risk management, reduce risk and provide the
fied as cash flow hedges for accounting purposes (see note [40]).
basis on which to create the transparency required.
The currency risk arising on translation of a foreign subsidiary’s
The KION Group mitigates its liquidity risk and interest-rate
financial statements into the Group’s reporting currency is also
risk attaching to financial services by ensuring that most of its
eliminated using a foreign-currency forward. In accordance with
transactions and funding loans have matching maturities and by
IAS 39, this hedge is classified as a net investment hedge for
constantly updating its liquidity planning. Long-term leases are
accounting purposes (see note [40]).
KION GROUP AG | Annual Report 2015We keep the world moving. 192
Foreign-currency forwards are also employed to hedge the cur-
the reporting entity concerned. This means that currency risks
rency risks arising in the course of internal financing.
resulting from the translation of the separate financial statements
The > TABLE 108 shows an overview of the foreign-currency
of subsidiaries into the Group reporting currency, i.e. currency
forwards entered into by the KION Group.
translation risks, are not included. > TABLE 109
Significant currency risks from financial instruments are
measured on the basis of value at risk (VaR). VaR figures are cal-
The value at risk in respect of currency risk as at 31 December
culated using a historical variance-covariance matrix. Currency
2015 was €28.8 million (31 December 2014: €19.7 million). Value
risks from financial instruments as defined by IFRS 7 are only
at risk is the loss that is not expected to be exceeded over a hold-
included in calculating value at risk if the financial instruments are
ing period of one year with a confidence level of 97.7 per cent
denominated in a currency other than the functional currency of
(2014: 97.7 per cent).
TABLE 108
2014
44.4
213.3
204.3
70.2
TABLE 109
2014
19.7
Foreign-currency forwards
Fair value
Notional amount
2015
142.5
153.3
181.1
269.7
2015
28.8
in € million
Foreign-currency forwards (assets)
Foreign-currency forwards (liabilities)
2015
2014
Hedge
Trading
Hedge
Trading
3.1
2.3
6.4
5.5
0.9
8.1
7.7
2.3
Value-at-Risk
in € million
Currency risk
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Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
193
Other disclosures
Interest-rate risk
In the previous year, interest-rate derivatives (mainly interest-rate
swaps) had been used on an insignificant scale to hedge the
Interest-rate risk within the KION Group is managed centrally. The
interest-rate risk. The interest-rate swaps expired in 2015, which
basis for decision-making includes sensitivity analyses of inter-
meant the KION Group no longer had any interest-rate hedging
est-rate risk positions in key currencies.
instruments as at 31 December 2015. At the end of 2014, the fair
The cumulative effect of a rise or fall of 100 basis points (bps)
value of the interest-rate swaps was €0.2 million, while their
in the relevant interest-rate curves results from floating-rate posi-
notional amount totalled €11.0 million.
tions and is shown in the following table: > TABLE 110
Interest-rate sensitivity
TABLE 110
in € million
Other comprehensive income (loss)
Net income (loss)
+ 100 bps
– 100 bps
+ 100 bps
– 100 bps
2015
–
– 0.9
2015
–
0.9
2014
–
– 3.3
2014
–
3.3
[40] HEDGE ACCOUNTING
Hedging currency risk
On account of the short-term nature of the Group’s payment
terms, reclassifications to the income statement and the recogni-
tion of the corresponding cash flows generally take place in the
same reporting period. A foreign-currency receivable or liability is
recognised when goods are despatched or received. Until the
corresponding payment is received, changes in the fair value of
In accordance with its treasury risk policy, the KION Group
the derivative are recognised in the income statement such that
applies cash flow hedge accounting in hedging the currency
they largely offset the effect of the measurement of the for-
risks arising from highly probable future transactions and firm
eign-currency receivable or liability at the reporting date.
obligations not reported in the statement of financial position in
The changes in fair value recognised and reclassified in
various currencies. Foreign-currency forwards with settlement
other comprehensive income in 2015 are shown in the consoli-
dates in the same month as the expected cash flows from the
dated statement of comprehensive income. There were no sig-
Group’s operating activities are used as hedges.
nificant ineffective portions in 2015, as had been the case in the
The effectiveness of the Group’s hedging transactions is
previous year.
assessed on the basis of forward rates using the hypothetical
In total, foreign-currency cash flows of €323.6 million (2014:
derivative approach under the cumulative dollar-offset method.
€248.7 million) were hedged and designated as hedged items, of
The effective portion of the changes in the fair value of foreign-
which €188.0 million is expected by 30 September 2016 (2014:
currency forwards is recognised in accumulated other compre-
€184.0 million by 30 September 2015). The remaining cash flows
hensive income (loss) and only reversed when the correspond-
designated as hedged items essentially fall due in the period up
ing hedged item is recognised in income.
to 31 December 2016.
KION GROUP AG | Annual Report 2015We keep the world moving.
194
In addition, the KION Group hedges currency risk arising on
has been included in the LMH brand segment. This change has
translation of a foreign subsidiary’s financial statements into the
not been reflected in the prior-year figures in the segment
Group’s reporting currency using a foreign-currency forward. For
reporting because it only had a minor effect on the key financials
this purpose, it applies net investment hedge accounting, in
for the LMH and Other segments. Egemin Automation became
which only the spot rate element of the foreign-currency forward
the seventh brand in the KION Group upon completion of the
is designated as the hedging instrument. The effectiveness of the
acquisition on 7 August 2015 and has been included in the
Group’s hedging transaction is determined on the basis of for-
Other segment since then.
ward rates using the hypothetical derivative approach under the
cumulative dollar-offset method. The effective portion of the
changes in the fair value of the foreign-currency forward is recog-
Description of the segments
nised in accumulated other comprehensive income (loss) and is
not reversed and recognised in the income statement until the
The Linde Material Handling (LMH) segment encompasses the
foreign operation is sold.
Linde, Fenwick, Baoli and Voltas brands. The 10.0 per cent stake
The spot rate element of the foreign-currency forward desig-
held in Linde Hydraulics is allocated to the LMH segment and
nated as the hedging instrument had a fair value of minus €4.5 mil-
accounted for using the equity method.
lion as at 31 December 2015 (31 December 2014: €0.0 million)
The STILL segment comprises the STILL and OM STILL
and, in the reporting year, resulted in an unrealised loss of €4.5 mil-
brands.
lion (2014: €0.0 million) that was recognised in other comprehen-
FS activities include the financing of long-term leasing busi-
sive income (loss). There were no ineffective portions of the net
ness with external customers of the KION Group and short-term
investment hedge in 2015. In 2015, an expense of €0.3 million
rental business of the LMH and STILL operating segments as well
(2014: €0.0 million) arising in connection with the interest element
as risk management. When long-term leasing business is being
of the foreign-currency forward was recognised under financial
conducted, FS operates as a contractual partner to external cus-
expenses.
Hedging of interest-rate risk
tomers and provides the necessary funding in conjunction with
external financial partners. Besides management of residual -
value risk, risk management also includes the management of
credit risk. In addition, FS provides the financing for short-term
rental fleets on behalf of the LMH and STILL brand segments,
The KION Group did not have any interest-rate derivatives as at
which operate and maintain such fleets as part of their opera-
31 December 2015. In the previous year, interest-rate swaps had
tional business.
been used on an insignificant scale to hedge the interest-rate risk.
The Other segment comprises the subsidiary Egemin NV and
its eight subsidiaries as well as holding companies and service
companies in the KION Group. Egemin Automation is a leading
logistics automation specialist. The service companies provide
services for all segments in the KION Group. The bulk of the total
revenue in this segment is generated by internal IT and logistics
services.
[41] SEGMENT REPORT
The Executive Board divides the KION Group into financial ser-
vices (FS) activities and the Linde Material Handling (LMH) and
STILL brands for management purposes. Segment reporting
follows the same breakdown, taking into account the relevant
organisational structures and corporate strategy of the KION
Group. Since the start of 2015, KION India Pvt. Ltd., Pune, India,
Moving Forward
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
195
Other disclosures
Segment management
Assets and liabilities associated with the long-term leasing
business, including related income and expenses, are assigned
The KPIs used to manage the brand segments are order intake,
to the FS segment.
revenue and adjusted EBIT. Segment reporting therefore includes
Whereas the main feature of long-term leasing business is
a reconciliation of externally reported consolidated earnings
the provision of a financial service for the external lessee, the
before interest and tax (EBIT) – including KION acquisition items
focus in short-term rental business is on the service function.
and non-recurring items – to the adjusted EBIT for the segments
External customers are offered rental trucks from a rental pool –
(‘adjusted EBIT’).
including associated services – for short-term use. Unlike the sit-
Earnings before tax (EBT) and return on equity (ROE) are the
uation in long-term leasing, financial performance in the short-
KPIs used to manage the Financial Services segment. ROE is cal-
term business is largely dependent on the achieved level of
culated on the basis of average equity employed excluding net
utilisation of the rental fleet, management of which lies entirely
income (loss) for the current period. As at 31 December 2015,
within the responsibility of the brand segments. Given this struc-
ROE – earnings before tax as a percentage of average equity –
ture, the assets associated with the short-term rental business
was 13.1 per cent (31 December 2014: 13.0 per cent).
remain on the brand segments’ statements of financial position
Intra-group transactions are generally conducted on an
and the related income and expenses remain on the brand seg-
arm’s-length basis. The regular (interest) margin income that FS
ments’ income statements.
generates from its business activities reflects prevailing market
In an indirect end customer finance arrangement, the other-
conditions. Surpluses from leasing that exceed this interest mar-
wise typical financing function of the FS segment as a lender for
gin are reflected in the producer margin within the operating profit
the leasing transaction no longer applies. As a result of the sale of
generated by the LMH and STILL brand segments.
the leased asset to the external finance provider in such transac-
Segment reports are prepared in accordance with the same
tions, the brand segments view the transactions in the same way
accounting policies as the consolidated financial statements, as
as a sale to an end-user. Consequently, these transactions and all
described in note [7]. Contrary to these policies, however, the
the revenue that they generate are recognised in the LMH and
LMH and STILL brands’ intersegment sales to FS are always
STILL brand segments.
treated as revenue for the brand segments, irrespective of which
entity might retain any opportunities and risks.
KION GROUP AG | Annual Report 2015We keep the world moving. 196
The following tables show information on the KION Group’s
operating segments for 2015 and 2014: > TABLES 111 – 112
Segment report 2015
TABLE 111
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before taxes
Financial income
Financial expenses
= Net financial expenses / income
EBIT
+ Non-recurring items
+ KION acquisition items
= Adjusted EBIT
Segment assets
Segment liabilities
Carrying amount of equity-
accounted investments
Profit from equity-accounted
investments
Capital expenditure ¹
Amortisation and depreciation ²
Order intake
Number of employees ³
LMH
3,058.1
371.7
3,429.8
345.7
12.7
– 30.4
– 17.8
363.4
– 0.3
20.8
383.9
5,120.9
1,819.7
49.9
5.9
73.6
92.8
STILL
1,569.0
381.2
1,950.2
83.7
2.0
– 35.8
– 33.8
117.5
20.3
6.2
144.0
2,296.9
1,435.4
4.2
1.8
52.4
46.2
3,516.3
14,486
1,980.0
8,103
Financial
Services
417.3
322.9
740.3
5.3
65.7
– 58.6
7.1
– 1.8
0.0
0.0
– 1.8
1,603.4
1,555.9
Other
53.5
199.3
252.8
77.1
19.8
– 70.0
– 50.2
127.3
27.9
0.1
155.3
722.1
3,103.2
19.5
0.0
2.9
0.0
0.0
740.4
59
0.0
16.6
18.4
268.6
858
Consolidation /
Reconciliation
–
– 1,275.2
– 1,275.2
– 181.5
– 48.8
50.8
2.0
– 183.5
– 15.0
–
– 198.5
– 3,303.1
– 3,322.6
–
–
–
–
– 1,289.7
–
Total
5,097.9
–
5,097.9
330.2
51.4
– 144.0
– 92.6
422.8
33.0
27.0
482.9
6,440.2
4,591.5
73.6
10.6
142.6
157.4
5,215.6
23,506
1 Capital expenditure including capitalised development costs, excluding leased and rental assets
2 On intangible assets and property, plant and equipment excluding leased and rental assets
3 Number of employees (full-time equivalents) as at balance sheet date 31/12/; allocation according to the contractual relationship
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
197
Other disclosures
Segment report 2014
TABLE 112
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before taxes
Financial income
Financial expenses
= Net financial expenses / income
EBIT
+ Non-recurring items
+ KION acquisition items
= Adjusted EBIT
Segment assets
Segment liabilities
Carrying amount of equity-
accounted investments
Profit / loss from equity-
accounted investments
Capital expenditure ¹
Amortisation and depreciation ²
Order intake ³
Number of employees 4
LMH
2,769.1
308.1
3,077.2
258.1
14.8
– 27.1
– 12.3
270.3
36.9
32.4
339.6
4,918.8
1,713.3
92.8
– 28.6
68.2
88.4
3,128.4
13,945
STILL
1,511.0
339.7
1,850.7
83.8
1.8
– 36.4
– 34.6
118.4
8.7
6.5
133.6
2,206.7
1,370.8
4.3
1.1
50.1
44.8
1,895.1
7,976
Financial
Services
350.1
270.7
620.9
5.2
58.8
– 55.6
3.1
2.1
0.0
0.0
2.1
1,361.3
1,314.8
Other
47.6
188.1
235.7
79.8
55.3
– 99.6
– 44.3
124.1
11.4
0.0
135.5
1,241.7
3,669.4
17.5
0.0
2.7
0.0
0.0
622.7
60
0.0
14.8
17.0
236.5
688
Consolidation /
Reconciliation
–
– 1,106.6
– 1,106.6
– 168.7
– 46.2
45.4
– 0.7
– 167.9
–
–
– 167.9
– 3,600.0
– 3,586.9
–
–
–
–
– 1,111.3
–
Total
4,677.9
–
4,677.9
258.3
84.4
– 173.2
– 88.8
347.0
57.0
38.9
442.9
6,128.5
4,481.4
114.6
– 24.8
133.1
150.3
4,771.2
22,669
1 Capital expenditure including capitalised development costs, excluding leased and rental assets
2 On intangible assets and property, plant and equipment excl. leased and rental assets
3 Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015
4 Number of employees (full-time equivalents) as at balance sheet date 31/12/; allocation according to the contractual relationship
KION GROUP AG | Annual Report 2015We keep the world moving. 198
The following table gives a breakdown of the revenue from
external customers by location: > TABLE 113
Segment revenue broken down by customer location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
TABLE 113
2014
3,411.0
403.3
245.3
470.7
147.5
2015
3,724.1
432.5
263.0
524.6
153.7
Total segment revenue
5,097.9
4,677.9
Revenue in Germany came to €1,276.3 million in 2015 (2014:
assets or lease receivables, depending on the type of lease. As
€1,221.8 million). There are no relationships with individual cus-
at the reporting date, lease receivables due from unrelated
tomers that generate revenue deemed to be significant as a pro-
third parties amounted to €627.6 million (31 December 2014:
portion of total consolidated revenue.
€521.9 million). There were also intra-group lease receivables of
Financial income and expenses including all interest income
€549.2 million (31 December 2014: €473.0 million), which primar-
and expenses are described in notes [12] and [13].
ily resulted from the funding of the short-term rental business of
The non-recurring items mainly comprise expenses for effi-
LMH and STILL. The leased assets of the Financial Services seg-
ciency measures initiated under the Strategy 2020, consultancy
ment amounted to €316.1 million at the reporting date (31 Decem-
costs and expenses in connection with severance payments.
ber 2014: €267.4 million).
They totalled €33.0 million in 2015 (2014: €57.0 million). In 2015,
The liabilities attributable to the Financial Services segment
these items also included components of the share of profit (loss)
largely comprised liabilities to leasing companies of €1,253.7 mil-
of the equity-accounted Linde Hydraulics amounting to an
lion (31 December 2014: €1,037.5 million) relating to sale-and-
expense of €2.8 million (2014: expense of €14.7 million) and
leaseback transactions that resulted from the funding of long-term
income from the deconsolidation of the 20.0 per cent of the
leases with external third parties and intra-group customers. In the
shares in Linde Hydraulics of €2.5 million. In 2014, non-recurring
reporting year, €853.1 million (2014: €702.9 million) of this amount
items had also included the impairment charge recognised on
was attributable to the funding of leases with external customers
the equity-accounted investment in Linde Hydraulics totalling
and €400.6 million (2014: €334.5 million) related to the funding of
€13.5 million, which related to the LMH segment.
intra-group leases with the subsidiaries in the LMH and STILL seg-
The KION acquisition items relate to the acquisition of the
ments as lessees that had, in turn, entered into short-term leases
KION Group, which was formed at the end of 2006 when it was
with external third parties. Moreover, the liabilities include net
spun off from Linde AG, Munich. These items comprise net write-
financial debt of €185.6 million (2014: €155.1 million) arising from
downs and other expenses in relation to the hidden reserves
general corporate finance for the FS segment.
identified as part of the purchase price allocation.
The assets attributable to the Financial Services segment
include long-term leases, which were reported as either leased
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
199
Other disclosures
Capital expenditure by the Financial Services segment includes
The regional breakdown of non-current assets excluding
additions to intangible assets and property, plant and equipment.
financial assets, financial instruments, deferred tax assets and
Leased assets are described in note [18]. > TABLE 114
post-employment benefits is shown in > TABLE 115 below.
Capital expenditure in Germany came to €88.2 million in 2015
Non-current assets attributable to Germany amounted to
(2014: €88.2 million).
€2,606.0 million as at 31 December 2015 (31 December 2014:
Depreciation/amortisation relates to intangible assets with
€2,618.7 million).
finite useful lives and property, plant and equipment.
Capital expenditures broken down by company location (excl. leased and rental assets)
TABLE 114
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total capital expenditures
Non-current assets broken down by company location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
2015
113.1
7.5
3.1
18.1
0.8
142.6
2015
3,432.7
129.4
48.2
178.5
50.7
2014
111.9
2.6
2.1
15.6
0.9
133.1
TABLE 115
2014
3,303.7
112.5
51.5
156.9
48.2
Total non-current assets (IFRS 8)
3,839.6
3,672.7
KION GROUP AG | Annual Report 2015We keep the world moving.
200
[42] EMPLOYEES
The KION Group employed an average of 23,129 full-time equiva-
lents (including trainees and apprentices) in the reporting year
(2014: 22,438). The number of employees (including part-time
employees expressed in terms of full-time equivalents) is broken
down by region as follows: > TABLE 116
Employees (average)
Germany
France
UK
Italy
Rest of Europe
Asia
Rest of world
Total employees
TABLE 116
2014
8,139
3,157
1,758
805
3,730
3,643
1,206
2015
8,395
3,181
1,782
811
3,939
3,796
1,225
23,129
22,438
The KION Group employed an average of 524 trainees and
(parent) if it holds more than 50 per cent of the shares in
apprentices in 2015 (2014: 536). The number of employees
another entity. Significant influence generally exists if an entity
increased by 323 following the acquisition of Egemin Automation.
holds between 20 per cent and 50 per cent of the shares in
[43] RELATED PARTY DISCLOSURES
another entity.
The related parties that are solely or jointly controlled by the
KION Group or over which significant influence can be exercised
are included in the list of shareholdings as at 31 December 2015
(see note [47]). Another related party is Weichai Power Co. Ltd.,
Weifang, China, which indirectly holds a 38.3 per cent stake in
In addition to the subsidiaries included in the consolidated
KION GROUP AG (31 December 2014: 33.3 per cent) and is thus
financial statements, the KION Group has direct or indirect
the largest single shareholder. Because Superlift Holding S.à r.l.,
business relationships with a number of non-consolidated
Luxembourg, sold its entire remaining stake of 13.9 per cent of
subsidiaries, joint ventures and associates in the course of its
KION shares in March 2015, Superlift Holding S.à r.l., Luxem-
ordinary business activities. According to IAS 24, related par-
bourg, Kohlberg Kravis Roberts & Co L.P., New York, USA, and
ties include entities that have control or significant influence over
Goldman, Sachs & Co., New York, USA, were no longer related
KION GROUP AG. An entity is usually assumed to have control
parties as at 31 December 2015.
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
201
Other disclosures
The revenue that the KION Group generated in 2015 and 2014
Group of €1.0 million as at 31 December 2015 (31 Decem-
from selling goods and services to related parties, and vice
ber 2014: €0.0 million); it has a variable interest rate. No valuation
versa, is shown in > TABLES 117 – 118 along with the outstanding
allowances for trade receivables had been recognised as at the
receivables and liabilities. The receivables include a loan that
reporting date, a situation that was unchanged on the end of 2014.
the KION Group has granted to Linde Hydraulics GmbH & Co.
The members of the Executive Board and Supervisory Board
KG, Aschaffenburg. The original commitment was €21.0 million,
of KION GROUP AG are also related parties. Details of the remu-
which was reduced to €7.0 million on a pro rata basis upon
neration of the Executive Board and Supervisory Board can be
transfer of the 20.0 per cent of the shares in Linde Hydraulics in
found in note [45].
December 2015. This resulted in a loan receivable for the KION
Related party disclosures 2015
in € million
Non-consolidated subsidiaries
Associates (equity-accounted)
Joint ventures (equity-accounted)
Other related parties *
Total
Receivables
Liabilities
Sales of goods
and services
24.9
19.3
1.3
4.3
49.8
13.6
8.2
53.7
0.2
75.7
19.4
152.8
48.1
12.7
232.9
* ‘Other related parties’ include, among others, transactions with Weichai Power and its affiliated companies
Related party disclosures 2014
in € million
Non-consolidated subsidiaries
Associates (equity-accounted)
Joint ventures (equity-accounted)
Other related parties *
Total
Receivables
Liabilities
Sales of goods
and services
8.3
8.9
1.1
4.4
22.7
4.9
2.2
45.1
0.9
53.1
9.4
115.8
63.9
15.3
204.5
* ‘Other related parties’ include, among others, transactions with Weichai Power and its affiliated companies
TABLE 117
Purchases of
goods and
services
34.0
126.4
57.2
12.5
230.1
TABLE 118
Purchases of
goods and
services
11.1
111.2
52.9
13.5
188.7
KION GROUP AG | Annual Report 2015We keep the world moving.
202
[44] VARIABLE REMUNERATION
poses. Each set of three KION shares represents a block of
shares. Once the three-year holding period has expired, employ-
ees are entitled to one free matching share (bonus share) for each
block. However, KION GROUP AG has the right to satisfy each
KEEP employee share option programme
programme participant’s entitlement by paying a cash settlement
instead of granting a bonus share. For employees taking part for
Following the introduction of the employee share option pro-
the first time, the KION Group offers a special incentive in the
gramme in Germany in 2014 (KEEP 2014), the Executive Board
form of starter blocks. Under KEEP 2015, the KION Group will
decided to launch a further share option programme for employ-
bear the cost of one KION share (free share) in each of the first
ees in Germany, China, the United Kingdom, France and Italy on
nine blocks of shares that an employee takes up.
1 October 2015 (KEEP 2015). The period during which eligible
The right to obtain a bonus share lapses if participants sell
employees could take up this offer by making a declaration of
their own investment in KION shares or cease to work for the
acceptance ran from 2 to 31 October 2015. To be eligible to par-
KION Group. The change in the number of bonus shares to be
ticipate in KEEP 2015, employees needed, at the start of the offer
granted is shown in > TABLE 119.
phase, to have had a permanent, uninterrupted employment con-
In 2015, 8,740 free shares were issued to employees as part of
tract with a participating KION Group company for at least one
their starter blocks (2014: 20,856 free shares).
year. Currently, KION GROUP AG plus twelve German and 34 for-
The free shares to be issued are measured at their fair value
eign subsidiaries are taking part in KEEP. The Company is con-
on the day on which employees obtain the right to acquire shares
sidering whether to extend the employee share option pro-
as their own investment. The fair value on the grant date is deter-
gramme to other countries over the coming years.
mined on the basis of Monte Carlo simulation. The measurement
The KEEP programme is a share matching plan. Participating
parameters used are shown in > TABLE 120.
employees acquire KION shares for their own investment pur-
Development of the granted bonus shares
in units
Balance as at 01/01/
Granted bonus shares
Forfeited bonus shares
Balance as at 31/12/
TABLE 119
2014
0
29,146
– 30
29,116
2015
29,116
24,504
– 400
53,220
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
203
Other disclosures
Significant measurement parameters for the KION GROUP AG employee share option programme
TABLE 120
Measurement parameters
Expected dividend yield
Price of the KION share as at grant date
KEEP 2015
KEEP 2014
€0.88
€41.01
€0.88
€29.02
For the 2015 programme, the fair value of a bonus share was
cated a total of 0.2 million virtual shares for this tranche (2014
€38.57 (2014 programme: €26.59).
tranche: 0.2 million virtual shares). The allocation was based on a
The fair value of the bonus shares to be granted is recognised
particular percentage of each manager’s individual gross annual
as an expense and paid into capital reserves over the three-year
remuneration at the time of grant. At the end of the performance
holding period.
period, the number of the virtual shares is amended depending
In 2015, an expense totalling €0.6 million was recognised
on the degree to which the relevant targets are achieved. The
under functional costs for free shares and bonus shares in con-
resulting final number of virtual shares multiplied by the smoothed
nection with the employee share option programme (2014:
price of KION GROUP AG shares at the end of the performance
€0.7 million). Of this amount, €0.2 million was attributable to
period determines the amount of cash actually paid. The KION
KEEP 2014.
Group has the right to adjust the amount payable at the end of the
Each year, the Executive Board of KION GROUP AG decides
performance period in the event of exceptional occurrences or
whether there will be an offer made under the share option pro-
developments. The maximum amount payable is limited to
gramme that year and which companies will participate.
200 per cent of the value of the shares allotted to an individual at
KION performance share plan (PSP)
for managers
the grant date.
The pro-rata expense calculation based on the fair value of
the virtual shares on each valuation date is carried out using
Monte Carlo simulation. The measurement parameters shown
in > TABLE 121 were used to value the virtual shares on the
In March 2015, the 2015 tranche of the long-term, variable remu-
reporting date.
neration component (the KION Long-Term Incentive Plan for Top
Taking account of the remaining term of two years (2015
Management 2015) with a defined period (three years) was intro-
tranche) and one year (2014 tranche), the historic volatility of KION
duced retrospectively from 1 January 2015 for the managers in
shares was used to determine the volatility on which the valuation
the KION Group. The remuneration component measured over
is based. As at 31 December 2015, the fair value of one virtual
the long term is based in equal parts on the total shareholder
share was €45.41 for the 2014 tranche (31 December 2014: €27.23)
return (TSR) of KION GROUP AG shares compared with the
and €39.80 for the 2015 tranche. On that date, the total fair value
STOXX® Europe TMI Industrial Engineering index as a measure of
based on 0.2 million virtual shares was €8.6 million (2014 tranche;
market performance, and with return on capital employed (ROCE)
31 December 2014: €4.9 million) and €8.2 million (2015 tranche).
as an internal measure. It also depends on the performance of
The total carrying amount for liabilities in connection with
KION GROUP AG shares during the relevant period.
share-based remuneration was €8.5 million as at 31 Decem-
The performance period for the 2015 tranche ends on
ber 2015 (31 December 2014: €1.6 million). Of this amount, €5.7 mil-
31 December 2017 (2014 tranche: 31 December 2016). At the
lion related to the 2014 tranche (31 December 2014: €1.6 million)
beginning of the performance period, the managers were allo-
and €2.7 million to the 2015 tranche. In 2015, a pro-rata expense
KION GROUP AG | Annual Report 2015We keep the world moving.
204
Significant measurement parameters of the PSP for Executive Employees
TABLE 121
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 at valuation date
Price of the STOXX® Europe TMI Industrial Engineering Index at valuation date
Initial value of the KION share (60 days average)
Initial value of the STOXX® Europe TMI Industrial Engineering Index (60 days average)
Valuation date 31/12/2015
Tranche 2015
Tranche 2014
30.0%
20.0%
– 0.36%
€0.88
€43.24
€208.65
€29.06
€200.94
30.0%
20.0%
– 0.39%
€0.88
€43.24
€208.65
€29.49
€208.87
of €4.1 million in respect of the 2014 tranche (2014: €1.6 million)
0.2 million virtual shares; 2013 tranche: 0.3 million virtual shares)
and a pro-rata expense of €2.7 million for the 2015 tranche were
with a specific fair value. The shares were allocated on the basis
recognised for twelve months under functional costs.
of an allocation value in euros specified in each Executive Board
KION performance share plan (PSP) for the
Executive Board
member’s service contract.
At the end of the performance period, the number of the vir-
tual shares is amended depending on the degree to which the
relevant targets are achieved. The resulting final number of virtual
shares multiplied by the smoothed price of KION GROUP AG
As part of the KION GROUP AG performance share plan, the
shares at the end of the performance period determines the
Executive Board members are allocated virtual shares over a fixed
amount of cash actually paid. The Supervisory Board can also
period (two-and-a-half years for the 2013 tranche and three years
use a discretionary personal performance factor to adjust the final
for all subsequent tranches). The remuneration component meas-
payment at the end of the performance period by + / – 20 per cent.
ured over the long term is based in equal parts on the total share-
The maximum amount payable is limited to 200 per cent of the
holder return (TSR) of KION GROUP AG shares compared with
value of the shares allotted to an individual at the grant date.
the STOXX® Europe TMI Industrial Engineering index as a meas-
The pro-rata expense calculation based on the fair value of
ure of market performance, and with return on capital employed
the virtual shares on each valuation date is carried out using
(ROCE) as an internal measure. It also depends on the perfor-
Monte Carlo simulation. The measurement parameters shown
mance of KION GROUP AG shares during the relevant period.
in > TABLE 122 were used to value the virtual shares on the
The performance period for the 2015 tranche ends on
reporting date.
31 December 2017 (2014 tranche: 31 December 2016). The 2013
tranche expired on 31 December 2015 and will be paid out in the
first quarter of 2016. At the beginning of the performance period
on 1 January 2015 (2014 tranche: 1 January 2014; 2013 tranche:
29 June 2013), the Executive Board members were allocated a
total of 0.2 million virtual shares for this tranche (2014 tranche:
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
205
Other disclosures
Significant measurement parameters for the KION GROUP AG performance share plan
TABLE 122
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 at valuation date
Price of the STOXX® Europe TMI Industrial Engineering Index at valuation date
Initial value of the KION share (60 days average)
Initial value of the STOXX® Europe TMI Industrial Engineering Index (60 days average)
Valuation date 31/12/2015
Tranche 2015
Tranche 2014
30.0%
20.0%
– 0.36%
€0.88
€43.24
€208.65
€29.06
€200.94
30.0%
20.0%
– 0.39%
€0.88
€43.24
€208.65
€29.49
€208.87
Taking account of the remaining term of two years (2015 tranche)
and one year (2014 tranche), the historic volatility of KION shares
was used to determine the volatility on which the valuation is
based. As at 31 December 2015, the fair value of one virtual share
was €43.58 for the 2014 tranche (31 December 2014: €26.79) and
€39.25 for the 2015 tranche. On that date, the total fair value
[45] REMUNERATION OF
THE EXECUTIVE BOARD
AND SUPERVISORY BOARD
based on 0.2 million virtual shares was €6.6 million (2014 tranche;
Executive Board
31 December 2014: €7.3 million) and €6.0 million (2015 tranche).
The amount that is expected to be paid of €10.3 million for the
Responsibilities
2013 tranche is calculated on the basis of a preliminary total tar-
Gordon Riske is Chief Executive Officer (CEO) and his responsibil-
get achievement rate and is subject to the performance-based
ities include strategy/business development, corporate communi-
adjustment (+ / – 20 per cent) made by the Supervisory Board for
cations, corporate office, internal audit, compliance, KION Ware-
individual Executive Board members.
house Systems, KION synergies/platforms (until 31 July 2015), the
The total carrying amount for liabilities in connection with
North America region and the South America region. On 15 Jan-
share-based remuneration was €17.8 million as at 31 December
uary 2015, he also became CEO of both the Linde Material Han-
2015 (31 December 2014: €6.1 million). Of this amount, €10.3 mil-
dling GmbH and the STILL GmbH brand companies. He also
lion related to the 2013 tranche (31 December 2014: €4.4 million),
assumed responsible for quality (until 31 July 2015).
€5.3 million to the 2014 tranche (31 December 2014: €1.7 million)
Dr Eike Böhm was appointed to the Executive Board in the
and €2.2 million to the 2015 tranche. In 2015, a pro-rata expense
newly created role of Chief Technology Officer (CTO) with effect
of €5.7 million in respect of the 2013 tranche (2014: €3.1 million),
from 1 August 2015. In this function, he holds groupwide respon-
a pro-rata expense of €3.4 million for the 2014 tranche (31 Decem-
sibility for research and development (R&D), product strategy,
ber 2014: €1.7 million) and a pro-rata expense of €2.0 million for
innovation, production system, assurance and procurement. By
the 2015 tranche were recognised for twelve months under func-
comprehensively restructuring R&D in this way, the KION Group
tional costs.
aims to harness the full potential of cross-brand synergies in
product development.
KION GROUP AG | Annual Report 2015We keep the world moving.
206
Bert-Jan Knoef stepped down from the Executive Board of KION
Remuneration
GROUP AG on 15 January 2015. He was CEO and Labour Rela-
The remuneration paid to the Executive Board comprises a fixed
tions Director of the brand company STILL GmbH. He oversaw all
salary and non-cash benefits, pension entitlements and perfor-
cross-brand logistics activities and managed the intra-group
mance-related components. The variable performance-related
logistics service provider, Urban.
components are paid each year on the basis of the Group’s per-
Theodor Maurer was CEO and Labour Relations Director of
formance. In addition, there are performance-related compo-
the brand company Linde Material Handling GmbH until his
nents in the form of the KION performance share plan for all Exec-
departure from the KION GROUP AG Executive Board on 15 Jan-
utive Board members. The pension entitlements consist of
uary 2015. He was also responsible for quality, facility manage-
retirement, invalidity and surviving dependants’ benefits.
ment and health, safety & environment (HSE).
An expense of €16.7 million was recognised for the total
Ching Pong Quek is Chief Asia Pacific Officer and heads up
remuneration for members of the Executive Board in 2015 (2014:
the KION Group’s entire Asia business.
€21.0 million). This consisted of short-term remuneration amount-
Dr Thomas Toepfer is Chief Financial Officer (CFO) and his
ing to €4.8 million (2014: €5.7 million), post-employment benefits
responsibilities include accounting, tax, financial services, corpo-
totalling €0.9 million (2014: €0.9 million), termination benefits of
rate finance, investor relations, M&A, controlling, HR/Labour
€1.5 million (2014: €8.8 million) and share-based payments of
Relations Director, legal affairs, IT, purchasing (until 31 July 2015)
€9.6 million (2014: €5.6 million). The short-term remuneration
and data protection. On 15 January 2015, he also assumed
comprised non-performance-related components amounting to
responsibility for facility management/HSE and logistics/Urban.
€2.3 million (2014: €3.0 million) and performance-related compo-
In November 2015, the Supervisory Board of KION GROUP AG
nents amounting to €2.5 million (2014: €2.7 million). The current
decided to redefine the organisational structure of the KION
service cost resulting from pension provisions for the Executive
Group. In future, the KION Group’s business with customers will
Board is reported under post-employment benefits. The long-
be organised into four operating units: Linde Material Handling
term incentive components take the form of a performance share
EMEA, STILL EMEA, KION APAC and KION Americas. EMEA
plan (see also note [44]). In addition, one Executive Board mem-
comprises the Europe, Middle East and Africa regions. APAC is
ber was promised a special bonus, to be paid in two tranches,
the Asia-Pacific region. The Americas region covers both North
that would be awarded in the event of a successful IPO; this
America and South America. The responsibilities of the members
bonus was also counted as a long-term incentive in 2014.
of the KION GROUP AG Executive Board changed accordingly
Under section 314 HGB, disclosure of the expense for share-
with effect from 1 January 2016 and are described below.
based payments is not required. Rather, the payments must be
Gordon Riske is responsible for the Linde Material Handling
included in the Executive Board members’ remuneration for the
EMEA, STILL EMEA and KION Americas operating units and for
year in which they are paid on the basis of the fair value at the indi-
the independent brand Egemin Automation. He also remains in
vidual grant dates. The fair value of the share-based payments at
charge of the following group functions: communications, the
their individual grant dates amounted to €4.6 million (2014:
corporate office and compliance, internal audit and strategy &
€5.6 million). Furthermore, disclosure of post-employment bene-
business development.
fits (expense of €0.9 million; 2014: expense of €0.9 million) and of
Product strategy, R&D, innovation, production system, quality
termination benefits (expense of €1.5 million; 2014: expense of
assurance and procurement have now been brought together in
€8.8 million) is not required. In 2014, differences between variable
the newly created CTO organisation headed by Chief Technology
remuneration calculated on the basis of preliminary total target
Officer Dr Eike Böhm.
achievement (benefits granted) and the one-year variable remu-
Ching Pong Quek is head of the KION APAC operating unit.
neration actually paid in the next year on the basis of the indi-
Dr Thomas Toepfer continues to be in charge of accounting,
vidual performance of each Executive Board member, which
financial services, corporate finance, investor relations, M&A,
amounted to an expense of €0.3 million (allocation), were also not
controlling, HR, IT and legal affairs.
disclosed. On this basis, the total remuneration of the members
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
207
Other disclosures
of the Executive Board pursuant to section 314 HGB came to
Supervisory Board
€9.4 million (2014: €10.9 million).
As in the previous year, no loans or advances were made to
The total remuneration paid to the members of the Supervisory
members of the Executive Board in 2015. The present value of the
Board for the performance of their tasks at the parent company
defined benefit obligation in respect of Executive Board members
and subsidiaries in 2015 amounted to €1.2 million (2014: €1.2 mil-
as at 31 December 2015 was €6.1 million (31 December 2014:
lion). There were no loans or advances to members of the Super-
€8.1 million).
visory Board in 2015. Furthermore, the members of the Supervi-
The total remuneration paid to former members of the Exec-
sory Board did not receive any remuneration or benefits for
utive Board in 2015 amounted to €0.2 million (2014: €0.2 million).
services provided as individuals, such as consulting or brokerage
Defined benefit obligations to former members of the Executive
activities.
Board or their surviving dependants amounting to €8.8 million
Members of the Supervisory Board also received short-term
(2014: €6.1 million) were recognised in accordance with IAS 19.
employee benefits of €0.8 million for employee services (2014:
Further details of Executive Board remuneration, including
€0.7 million).
the individual amounts for each member, can be found in the
remuneration report on pages 38 to 50 of this annual report.
KION GROUP AG | Annual Report 2015We keep the world moving. 208
[46] MEMBERS OF THE EXECUTIVE
BOARD AND SUPERVISORY
BOARD
Executive Board
Gordon Riske
Chief Executive Officer
Member of the Board of Directors of KION North America Corp.,
Summerville, USA (until 14 January 2015)
Member of the Board of Directors of Linde (China) Forklift
Truck Co. Ltd., Xiamen, People’s Republic of China
(until 14 January 2015)
Member of the Supervisory Board of Schöler Fördertechnik AG,
Rheinfelden (until 14 January 2015)
Ching Pong Quek
Member of the Executive Board / Chief Asia Pacific Officer
Chairman of the Supervisory Board of Linde Material
Member of the Board of KION South Asia Pte Ltd., Singapore,
Handling GmbH, Aschaffenburg (until 14 January 2015)
Singapore
Chairman of the Board of Directors of Linde (China)
President and CEO of KION Asia Ltd., Hong Kong,
Forklift Truck Co., Ltd., Xiamen, People’s Republic of China
People’s Republic of China
Chairman of the Supervisory Board of STILL GmbH, Hamburg
Chairman of KION Baoli Forklift Co., Ltd., Jiangsu,
(until 14 January 2015)
People’s Republic of China
Chairman of the Board of Directors of Egemin NV, Zwijndrecht,
Member of the Board of Directors of KION India Pvte. Ltd.,
Belgium (since 22 September 2015)
Pune, India
Non-Executive Director of Weichai Power Co., Ltd.,
Member of the Board of Directors of Linde Material
Weifang, People’s Republic of China
Handling Asia Pacific Pte., Ltd., Singapore, Singapore
Dr Eike Böhm
Chairman of the Board of Directors of Linde Material
Handling Hong Kong Ltd., Hong Kong,
Member of the Executive Board / CTO
People’s Republic of China
(since 1 August 2015)
Dr Thomas Toepfer
Member of the Supervisory Board of e.GO Mobile AG, Aachen
Member of the Executive Board / CFO
(since 3 December 2015)
Bert-Jan Knoef
Member of the Executive Board
(until 14 January 2015)
Theodor Maurer
Member of the Executive Board
(until 14 January 2015)
Member of the Supervisory Board of STILL GmbH, Hamburg
(until 14 January 2015)
Chairman of the Supervisory Board of STILL GmbH, Hamburg
(since 15 January 2015)
Member of the Supervisory Board of Linde Material Handling
GmbH, Aschaffenburg (until 14 January 2015)
Chairman of the Supervisory Board of Linde Material Handling
GmbH, Aschaffenburg (since 15 January 2015)
Chairman of the Board of Directors of KION North
Chairman of the Board of Directors of Linde Material
America Corp., Summerville, USA
Handling (UK) Ltd., Basingstoke, United Kingdom
Member of the Board of Directors of Superlift UK Ltd.,
(until 14 January 2015)
Basingstoke, United Kingdom
Chairman of the Board of Directors of Linde Heavy Truck Divi-
sion Ltd., Merthyr Tydfil, United Kingdom (until 14 January 2015)
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
209
Other disclosures
Supervisory Board
Dr Alexander Dibelius
Dr John Feldmann
Managing Partner at CVC Capital Partners (Deutschland)
Chairman of the Supervisory Board
GmbH, Frankfurt am Main (since 1 September 2015)
Member of the European Management Committee of Goldman
Former member of the Board of Executive Directors of BASF SE,
Sachs International, London, United Kingdom (until 30 June 2015)
Ludwigshafen
Member of the Board of Directors of OOO Goldman Sachs,
Member of the Supervisory Board of Bilfinger SE, Mannheim
Moscow, Russia (until 30 June 2015)
Member of the Supervisory Board of HORNBACH Baumarkt AG,
Member of the Board of Directors of OOO Goldman Sachs
Bornheim
Bank, Moscow, Russia (until 30 June 2015)
Member of the Supervisory Board of HORNBACH Holding AG &
Member of the Shareholder Committee of Xella
Co. KGaA, Neustadt (until 9 October 2015:
International S.à r.l., Luxembourg (until 30 June 2015)
HORNBACH HOLDING AG)
Chairman of the Supervisory Board of Wincor Nixdorf AG,
Member of the Supervisory Board of HORNBACH Management
Paderborn (until 30 June 2015)
AG, Annweiler am Trifels (since 9 October 2015)
Member of the Supervisory Board of Wincor Nixdorf Interna-
Özcan Pancarci 1
Deputy Chairman of the Supervisory Board (since 1 January 2016)
Wolfgang Faden (since 1 August 2015)
tional GmbH, Paderborn (until 30 June 2015)
Former Managing Director for Germany and Central Europe at
Chairman of the Plants I & II Works Council of Linde Material
Allianz Global Corporate & Specialty AG, Munich
Handling GmbH, Aschaffenburg
Member of the Supervisory Board of Albatros
Chairman of the Group Works Council of the KION Group
Versicherungsdienste GmbH, Cologne
Deputy Chairman of the Supervisory Board of Linde Material
Handling GmbH, Aschaffenburg (since 1 January 2016)
Denis Heljic 1
Joachim Hartig 1
Spokesperson for the STILL branches, Chairman of the European
Works Council and Deputy Chairman of the Works Council
Deputy Chairman of the Supervisory Board
of STILL GmbH, Dortmund plant
(until 31 December 2015)
Head of Learning and Development at Linde Material
Johannes P. Huth (until 31 July 2015)
Handling GmbH, Aschaffenburg
Partner at and member of the Executive Committee of Kohlberg
Deputy Chairman of the Supervisory Board of
Kravis Roberts & Co. Partners LLP, London, United Kingdom
Linde Material Handling GmbH, Aschaffenburg
Member of the Supervisory Board of Cognita Schools, Milton
(until 31 December 2015)
Keynes, United Kingdom
Member of the Supervisory Board of German Estate Group AG
Birgit A. Behrendt
(GEG), Frankfurt am Main
Vice President and Corporate Officer, Global Programs
Deputy Chairman of the Supervisory Board of NXP BV,
and Purchasing Operations at the Ford Motor Company,
Eindhoven, Netherlands
Dearborn, Michigan, USA
Member of the Board of Directors of SoftwareOne AG,
Holger Brandt 2
Chairman of the Supervisory Board of WMF AG,
Head of Sales Germany at STILL GmbH, Hamburg
Geislingen an der Steige
Member of the Supervisory Board of STILL GmbH, Hamburg
Wallisellen, Switzerland
KION GROUP AG | Annual Report 2015We keep the world moving. 210
Jiang Kui
Alexandra Schädler 1
President and Director of Shandong Heavy Industry
Trade Union Secretary on the National Executive of IG Metall,
Group Co., Ltd., Jinan, People’s Republic of China
Frankfurt am Main
Member of the Board of Directors of Ferretti International
Member of the Supervisory Board of Fujitsu Technology
Holding S.p.A., Milan, Italy
Solutions GmbH, Munich
Member of the Executive Board of Hydraulics Drive
Technology Beteiligungs GmbH, Aschaffenburg
Tan Xuguang
Member of the Supervisory Board of Linde Hydraulics
Chairman of the Board of Directors of Shandong Heavy Industry
Verwaltungs GmbH, Aschaffenburg
Group Co., Ltd., Jinan, People’s Republic of China
Director of Shandong Heavy Industry India
Chairman of the Board of Directors of Ferretti International
Private Ltd., Pune, India
Holding S.p.A., Milan, Italy
Olaf Kunz 1
Chairman of the Board of Directors of Ferretti S.p.A., Forli, Italy
Chairman of the Board of Directors of Weichai Group Holding Co.,
District Secretary / Lawyer at IG Metall, District Office
Ltd., Weifang, People’s Republic of China
for the Coast, Hamburg
Chairman of the Board of Directors and Chief Executive Officer
Member of the Supervisory Board of STILL GmbH, Hamburg
of Weichai Power Co. Ltd., Weifang,
Jörg Milla 1 (since 16 November 2015)
Chairman of the Works Council of STILL GmbH, Hamburg
Hans-Peter Weiß1 (until 15 November 2015)
People’s Republic of China
Kay Pietsch 1
Chairman of the Plant III Works Council of Linde
Material Handling GmbH, Kahl a. Main
Member of the Works Council of STILL GmbH, Hamburg
Deputy Chairman of the Supervisory Board of STILL GmbH,
Xu Ping
Hamburg
Hans Peter Ring
Management Consultant, Munich
Partner and Member of the Management Committee at
King & Wood Mallesons, Beijing, People’s Republic of China
Member of the Board of Directors of Ferretti S.p.A., Forli, Italy
Member of the Supervisory Board of Airbus Defense und Space
GmbH, Ottobrunn
Member of the Supervisory Board of Bilfinger SE, Mannheim
1 Employee representatives
2 Executive representatives
(since 7 May 2015)
Member of the Supervisory Board of Elbe
Flugzeugwerke GmbH, Dresden
Member of the Supervisory Board of Fokker
Technologies Holding B.V., Papendrecht, Netherlands
Member of the Supervisory Board of MAG IAS GmbH, Göppingen
(until 5 June 2015)
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
211
Other disclosures
[47] LIST OF THE SHAREHOLDINGS OF
KION GROUP AG, WIESBADEN
The shareholdings of the KION Group as at 31 December 2015 are
listed below. > TABLE 123
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
No.
Name
Registered
office
Country
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
1 KION GROUP AG
Wiesbaden
Germany
Consolidated subsidiaries
Domestic
2 BlackForxx GmbH
3 Egemin GmbH
4 Eisenwerk Weilbach GmbH
5 Fahrzeugbau GmbH Geisa
6 KION Financial Services GmbH
7 KION Holding 2 GmbH
Stuhr
Bremen
Wiesbaden
Geisa
Wiesbaden
Wiesbaden
8 KION Information Management Services GmbH Wiesbaden
9 KION Material Handling GmbH
10 KION Warehouse Systems GmbH
Wiesbaden
Reutlingen
11 Klaus Pahlke GmbH & Co. Fördertechnik KG
Haan
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
12 Linde Material Handling GmbH
Aschaffenburg
Germany
19 100.00% 100.00%
25 100.00%
–
[1]
12 100.00% 100.00%
19 100.00% 100.00%
12 100.00% 100.00%
1 100.00% 100.00%
9 100.00% 100.00%
7 100.00% 100.00%
19 100.00% 100.00%
12 100.00% 100.00%
9 100.00% 100.00%
13 LMH Immobilien GmbH & Co. KG
Aschaffenburg
Germany
12 & 14
99.64% 99.64%
14 LMH Immobilien Holding GmbH & Co. KG
Aschaffenburg
Germany
15 LMH Immobilien Holding Verwaltungs-GmbH
Aschaffenburg
Germany
16 LMH Immobilien Verwaltungs-GmbH
Aschaffenburg
Germany
17 Schrader Industriefahrzeuge GmbH & Co. KG
Essen
18 STILL Financial Services GmbH
Hamburg
19 STILL Gesellschaft mit beschränkter Haftung
Hamburg
Germany
Germany
Germany
12
94.00% 94.00%
12 100.00% 100.00%
12 100.00% 100.00%
12 100.00% 100.00%
6 100.00% 100.00%
12 100.00% 100.00%
20 Urban-Transporte Gesellschaft mit beschränkter
Unterschleißheim Germany
12 100.00% 100.00%
Haftung
21 Willenbrock Fördertechnik GmbH & Co. KG
Bremen
22 Willenbrock Fördertechnik GmbH & Co. KG
Hannover
23 Willenbrock Fördertechnik Holding GmbH
Bremen
Germany
Germany
Germany
23
23
12
74.00% 74.00%
74.00% 74.00%
74.00% 74.00%
KION GROUP AG | Annual Report 2015We keep the world moving. 212
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
No.
Name
Foreign
Registered
office
Country
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
24 Linde Material Handling Pty. Ltd.
Huntingwood
Australia
12 100.00% 100.00%
25 Egemin NV
26 STILL NV
27 KION South America Fabricação de
Equipamentos para Armazenagem Ltda.
28 STILL DANMARK A/S
29 BARTHELEMY MANUTENTION SAS
30 Bastide Manutention SAS
31 Bretagne Manutention S.A.
32 Egemin SAS
33 FENWICK FINANCIAL SERVICES SAS
34 FENWICK-LINDE S.A.R.L.
35 KION France SERVICES SAS
Zwijndrecht
Wijnegem
Indaiatuba /
São Paulo
Kolding
Vitrolles
Bruguières
Pacé
Heillecourt
Elancourt
Elancourt
Elancourt
Belgium
Belgium
Brazil
Denmark
France
France
France
France
France
France
France
36 LOIRE OCEAN MANUTENTION SAS
Saint-Herblain
France
39 Société Angoumoisine de Manutention (SAMA)
Champniers
37 Manuchar S.A.
38 MANUSOM SAS
SAS
40 SM Rental SAS
41 STILL Location Services SAS
42 STILL SAS
43 Egemin UK Ltd.
44 KION FINANCIAL SERVICES Ltd.
45 Linde Castle Ltd.
46 Linde Creighton 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.
Moving Forward
Innovation
Gond Pontouvre France
Rivery
France
France
France
Roissy Charles
de Gaulle
Marne-la-Vallée
France
Marne-la-Vallée
France
Huntingdon
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
9 100.00%
–
[1]
19 & 68 100.00% 100.00%
19 100.00% 100.00%
19 100.00% 100.00%
34
83.50% 87.00%
34 100.00% 100.00%
34 100.00% 100.00%
25 100.00%
–
[1]
35 100.00% 100.00%
35 & 12 100.00% 100.00%
12 100.00% 100.00%
34
79.99% 83.43%
34 100.00% 100.00%
42 100.00% 100.00%
42 100.00% 100.00%
34 100.00% 100.00%
35 100.00% 100.00%
35 100.00% 100.00%
25 100.00%
–
[1]
56 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
56 100.00% 100.00%
49 100.00% 100.00%
47 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
213
Other disclosures
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
No.
Name
55 STILL Materials Handling Ltd.
56 Superlift UK Ltd.
Registered
office
Exeter
Basingstoke
Country
U.K.
U.K.
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
56 100.00% 100.00%
12 100.00% 100.00%
57 Egemin Asia Pacific Automation Ltd.
Causeway Bay
Hong Kong
25 100.00%
–
[1]
58 KION ASIA (HONG KONG) Ltd.
Kwai Chung
Hong Kong
12 100.00% 100.00%
59 Linde Material Handling Hong Kong Ltd.
Kwai Chung
Hong Kong
12 100.00% 100.00%
60 KION India Pvt. Ltd.
Pune
India
61 Linde Material Handling (Ireland) Ltd.
Walkinstown
Ireland
62 KION Rental Services S.p.A.
63 Linde Material Handling Italia S.p.A.
64 OM Carrelli Elevatori S.p.A.
65 STILL ITALIA S.p.A.
66 KION Finance S.A.
Milan
Buguggiate
Lainate
Lainate
Italy
Italy
Italy
Italy
Luxembourg
Luxembourg
67 Egemin Handling Automation B.V.
Gorinchem
Netherlands
82 100.00% 100.00%
47 100.00% 100.00%
63 & 64 & 65 100.00% 100.00%
12 100.00% 100.00%
12 & 65 100.00% 100.00%
19 100.00% 100.00%
–
–
25 100.00%
–
–
[2]
[1]
68 STILL Intern Transport B.V.
69 AUSTRO OM PIMESPO Fördertechnik GmbH
70 Linde Fördertechnik GmbH
Hendrik Ido
Ambacht
Linz
Linz
Netherlands
19 100.00% 100.00%
Austria
Austria
64 100.00% 100.00%
12 & 69 100.00% 100.00%
71 STILL Gesellschaft m.b.H.
Wiener Neudorf
Austria
72 Linde Material Handling Polska Sp. z o.o.
73 STILL POLSKA Sp. z o.o.
74 OOO “Linde Material Handling Rus”
75 OOO “STILL Forklifttrucks”
76 STILL MOTOSTIVUITOARE S.R.L.
77 Linde Material Handling AB
78 STILL Sverige AB
79 Linde Material Handling Schweiz AG
80 STILL AG
81 KION South Asia Pte. Ltd.
Warsaw
Gadki
Moscow
Moscow
Giurgiu
Örebro
Malmö
Dietlikon
Otelfingen
Singapore
82 Linde Material Handling Asia Pacific Pte. Ltd.
Singapore
83 Linde Material Handling Slovenská republika s.r.o. Trenčin
84 STILL SR, spol. s r.o.
85 Linde Viličar d.o.o.
86 Islavista Spain S.A.U.
Nitra
Celje
L’Hospitalet de
Llobregat
Poland
Poland
Russia
Russia
Romania
Sweden
Sweden
Switzerland
Switzerland
Singapore
Singapore
Slovakia
Slovakia
Slovenia
Spain
19 100.00% 100.00%
12 100.00% 100.00%
19 100.00% 100.00%
12 & 4 100.00% 100.00%
12 & 19 100.00% 100.00%
12 & 19 100.00% 100.00%
12 100.00% 100.00%
19 100.00% 100.00%
12 100.00% 100.00%
19 100.00% 100.00%
12 100.00% 100.00%
12 100.00% 100.00%
12 & 92 100.00% 100.00%
19 & 94 100.00% 100.00%
12 100.00% 100.00%
12 100.00% 100.00%
87 KION Rental Services S.A.U.
Barcelona
Spain
86 100.00% 100.00%
KION GROUP AG | Annual Report 2015We keep the world moving. 214
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
No.
Name
88 Linde Holding de Inversiones, S.R.L.
89 Linde Material Handling Ibérica, S.A.U.
90 STILL, S.A.U.
Registered
office
Pallejá
Pallejá
L’Hospitalet de
Llobregat
Country
Spain
Spain
Spain
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
86 100.00% 100.00%
88 100.00% 100.00%
86 100.00% 100.00%
91 Linde Material Handling (Pty) Ltd.
Linbro Park
South Africa
12 100.00% 100.00%
92 Linde Material Handling Česká republika s r.o.
Prague
Czech Republic
12 & 19 100.00% 100.00%
93 Linde Pohony s r.o.
94 STILL ČR spol. s r.o.
Český Krumlov
Czech Republic
12 100.00% 100.00%
Prague
Czech Republic
12 & 19 100.00% 100.00%
95 STILL ARSER Iş Makineleri Servis ve Ticaret A.Ş.
Izmir
Turkey
19
51.00% 51.00%
96 Linde Magyarország Anyagmozgatási Kft.
Dunaharaszti
Hungary
12 100.00% 100.00%
97 STILL Kft.
98 Egemin Automation Inc.
99 Egemin Group, Inc.
Környe
Holland
Hungary
United States
Bingham Farms United States
19 100.00% 100.00%
99 100.00%
25 100.00%
–
–
100 KION North America Corp.
Summerville
United States
12 100.00% 100.00%
101 Egemin (Shanghai) Trading Company Ltd.
Shanghai
102 KION Baoli (Jiangsu) Forklift Co., Ltd.
Jiangjiang
103 Linde (China) Forklift Truck Corporation Ltd.
Xiamen
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
57 100.00%
–
58 100.00% 100.00%
12 100.00% 100.00%
Non-consolidated subsidiaries
Domestic
104 Klaus Pahlke Betriebsführungs-GmbH
Haan
Germany
12 100.00% 100.00%
Wörth a. d. Isar
Germany
19 100.00%
–
105 LR Intralogistik GmbH
106 OM Deutschland GmbH
Neuhausen a. d.
Fildern
Germany
[1]
[1]
[1]
[1]
[R]
107 proplan Transport- und Lagersysteme GmbH
Aschaffenburg
Germany
108 Schrader Industriefahrzeuge Verwaltung GmbH
Essen
109 Trainingscenter für Sicherheit und
Bremen
Transport GmbH
110 Willenbrock Fördertechnik Beteiligungs-GmbH
Bremen
111 Willenbrock Fördertechnik Beteiligungs-GmbH
Hannover
Germany
Germany
Germany
Germany
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64 100.00% 100.00%
1 100.00% 100.00%
12 100.00% 100.00%
23
74.00% 74.00%
23
23
74.00% 74.00%
74.00% 74.00%
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
215
Other disclosures
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
No.
Name
Foreign
Registered
office
Country
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
112 Lansing Bagnall (Aust.) Pty. Ltd.
Huntingwood
Australia
49 & 12 100.00% 100.00%
[R]
Elancourt
France
Marne-la-Vallée
France
35 100.00% 100.00%
64 100.00% 100.00%
[R]
113 Baoli France SAS
114 OM PIMESPO FRANCE SAS
115 SCI Champ Lagarde
116 URBAN LOGISTIQUE SAS
117 Castle Lift Trucks Ltd.
118 Creighton Materials Handling Ltd.
119 D.B.S. Brand Factors Ltd.
120 Fork Truck Rentals Ltd.
121 Fork Truck Training Ltd.
122 Lancashire (Fork Truck) Services Ltd.
123 Linde Heavy Truck Division Ltd.
124 McLEMAN FORK LIFT SERVICES LTD.
125 Stephensons Enterprise Fork Trucks Ltd.
126 Sterling Mechanical Handling Ltd.
127 Trifik Services Ltd.
128 Urban Logistics (UK) Ltd.
Elancourt
Elancourt
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
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.
129 Handling & Storage Equipment (Ireland) Ltd.
Walkinstown
Ireland
130 Carest SRL
131 COMMERCIALE CARRELLI S.r.l.
132 Moden Diesel S.p.A.
133 QUALIFT S.p.A.
134 URBAN LOGISTICA S.R.L.
135 WHO Real Estate UAB
136 TOO “Linde Material Handling Kazakhstan”
Lainate
Lainate
Modena
Verona
Lainate
Vilnius
Almaty
Italy
Italy
Italy
Italy
Italy
Lithuania
Kazakhstan
34 100.00% 100.00%
20 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
54 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
54 100.00% 100.00%
49 100.00% 100.00%
46 100.00% 100.00%
54 100.00% 100.00%
49 100.00% 100.00%
49 100.00% 100.00%
20 100.00% 100.00%
61 100.00% 100.00%
64 100.00% 100.00%
65 & 62 100.00% 100.00%
63 100.00%
–
63 100.00% 100.00%
20 100.00% 100.00%
23
74.00% 74.00%
12 & 4 100.00% 100.00%
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[1]
137 Linde Material Handling (Malaysia) Sdn. Bhd.
Petaling Jaya
Malaysia
82 100.00% 100.00%
138 IBER-MICAR S.L.
139 Linde Viljuškari d.o.o.
Gavà
Vrčin
Spain
Serbia
140 Linde Material Handling (Thailand) Co., Ltd.
Pathum Thani
Thailand
12 100.00% 100.00%
70 100.00% 100.00%
82 100.00% 100.00%
141 Baoli Material Handling Europe s.r.o.
Prague
Czech Republic
102 100.00% 100.00%
142 Linde Material Handling Parts Distribution CZ
Český Krumlov
Czech Republic
12 100.00%
–
[1]
s.r.o.
143 Použitý Vozík CZ, s.r.o.
Prague
Czech Republic
92 100.00% 100.00%
144 Urban Transporte spol. s.r.o.
Moravany u Brna Czech Republic
20 100.00% 100.00%
KION GROUP AG | Annual Report 2015We keep the world moving. 216
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
No.
Name
Registered
office
145 TOV “Linde Material Handling Ukraine”
Kiev
Country
Ukraine
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
12 & 4 100.00% 100.00%
Associates (equity-accounted investments)
Domestic
146 Carl Beutlhauser Kommunal- und Fördertechnik
Hagelstadt
Germany
12
25.00% 25.00%
GmbH & Co. KG (formerly: Beutlhauser-Basse-
witz GmbH & Co. KG)
147 Hans Joachim Jetschke Industriefahrzeuge
Hamburg
Germany
12
21.00% 21.00%
(GmbH & Co.) KG
148 Linde Hydraulics GmbH & Co. KG
Aschaffenburg
Germany
149 Pelzer Fördertechnik GmbH
Kerpen
Germany
Foreign
150 Linde High Lift Chile S.A.
151 Labrosse Equipement S.A.
152 Normandie Manutention S.A.
Santiago de Chile Chile
Saint-Péray
Saint-Etienne du
Rouvray
France
France
12
12
12
34
34
10.00% 30.00%
24.96% 24.96%
45.00% 45.00%
34.00% 34.00%
34.00% 34.00%
Joint ventures (equity-accounted investments)
Domestic
153 Linde Leasing GmbH
Wiesbaden
Germany
12
45.00% 45.00%
Foreign
154 JULI Motorenwerk s.r.o.
Moravany u Brna Czech Republic
12 & 19
50.00% 50.00%
Joint ventures (at cost)
Domestic
155 Eisengießerei Dinklage GmbH
Dinklage
Germany
19
50.00% 50.00%
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KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
217
Other disclosures
List of shareholdings as of 31 December 2015 (continued)
TABLE 123
Registered
office
Country
Parent
company
Share-
holding
2015
Share-
holding
2014
Note
No.
Name
Associates (at cost)
Domestic
156 JETSCHKE GmbH
Hamburg
Germany
157 Linde Hydraulics Verwaltungs GmbH
Aschaffenburg
Germany
158 MV Fördertechnik GmbH
Blankenhain
Germany
159 Supralift Beteiligungs- und Kommunikations-
gesellschaft mbH
160 Supralift GmbH & Co. KG
Hofheim am
Taunus
Hofheim am
Taunus
Germany
12
12
12
12
21.00% 21.00%
10.00% 30.00%
25.00% 25.00%
50.00% 50.00%
Germany
12
50.00% 50.00%
Foreign
161 Chadwick Materials Handling Ltd.
162 Bari Servizi Industriali S.C.A R.L.
163 Nordtruck AB
Corsham
Modugno
U.K.
Italy
Örnsköldsvik
Sweden
164 Carretillas Elevadoras Sudeste S.A.
Murcia
Spain
165 Motorové závody JULI CZ s r.o.
Moravany u Brna Czech Republic
Financial investments (at cost)
Foreign
166 TPZ Linde Viličari Hrvatska d.o.o.
Zagreb
Croatia
167 Balyo SA
Moissy-Cramayel France
[1] New during 2015
[2] Consolidated in accordance with IFRS 10 due to contractual rights that give the ability to direct the relevant activities
[3] No material influence
[R] Dormant company
49
64
77
89
12
12
12
48.00% 48.00%
25.00% 25.00%
25.00% 25.00%
38.54% 38.54%
50.00% 50.00%
20.00% 20.00%
[3]
10.00%
–
[1], [3]
KION GROUP AG | Annual Report 2015We keep the world moving. 218
[48] AUDITORS’ FEES
23 December 2006 comprising a revolving credit facility of
€1,243.0 million and the KION Group corporate bond of €450.0 mil-
lion that was issued in 2013 and was due to mature in 2020. The
associated repayment was made on 15 February 2016 using
The fees recognised as an expense and paid to the auditors of
funds drawn down under the new senior facilities agreement.
the consolidated financial statements in 2015 amounted to
An amount of €5.4 million representing the proportion of the
€1.1 million (2014: €1.0 million) for the audit of the financial state-
deferred borrowing costs relating to the corporate bond at the
ments, €0.6 million (2014: €0.4 million) for other attestation ser-
time of early repayment and a cash payment of €15.2 million repre-
vices, €0.0 million (2014: €0.1 million) for tax consultancy services
senting early repayment charges were recognised as financial
and €0.8 million (2014: €0.1 million) for other services.
expenses in February 2016 along with an amount of €5.1 million
[49] COMPLY-OR-EXPLAIN STATEMENT
REGARDING THE GERMAN COR-
PORATE GOVERNANCE CODE
(DCGK)
representing the proportion of the deferred borrowing costs relat-
ing to the previous syndicated loan at the time of early redemption
of that previous syndicated loan.
The new senior facilities agreement comprises a revolving
credit facility of €1,150.0 million maturing in February 2021 and a
fixed-term tranche B of €350.0 million maturing in February 2019.
KION GROUP AG has issued guarantees to the banks for all of
the payment obligations under the new senior facilities agreement.
Unlike the previous syndicated loan and the repaid corporate bond,
In December 2015, the Executive Board and Supervisory Board
the new syndicated loan agreement is not collateralised. Following
of KION GROUP AG submitted their comply-or-explain statement
repayment after the reporting date of the syndicated loan from
for 2015 relating to the recommendations of the German Corpo-
23 December 2006, all collateral furnished under the previous loan
rate Governance Code government commission pursuant to sec-
agreement has now been released.
tion 161 AktG. The comply-or-explain statement is permanently
Among other stipulations, the contractual terms of the senior
available for shareholders on the website of KION GROUP AG at
facilities agreement require compliance with certain covenants.
kiongroup.com/comply_statement.
They also contain a financial covenant that requires adherence
[50] EVENTS AFTER THE REPORTING
DATE
to a maximum level of gearing (the ratio of financial liabilities to
EBITDA). Non-compliance with the covenants may, for example,
give lenders the right to terminate the new syndicated loan
agreement.
The KION Group took over Retrotech Inc., a systems integra-
tor of automated warehouse and distribution solutions headquar-
tered in Rochester, New York State, with effect from 1 March 2016
Due to current market conditions and the KION Group’s significant
by acquiring 100.0 per cent of the capital and voting shares. The
repayment of debt as a result of and since its IPO, the KION Group
provisional purchase price for the net assets acquired is around
can currently obtain finance on far more favourable terms than has
€26.0 million. In 2015, Retrotech Inc. employed over 150 highly
been possible in the past. KION GROUP AG therefore signed a
specialised employees and generated revenue of roughly
new syndicated loan agreement (senior facilities agreement) totalling
€62.0 million.
€1,500.0 million with a syndicate of international banks on 28 Octo-
ber 2015. On 25 January 2016, the Executive Board of KION
GROUP AG decided to implement the new funding structure of
the KION Group by redeeming the existing syndicated loan dated
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
219
Other disclosures
[51] INFORMATION ON PREPARATION
AND APPROVAL
The Executive Board of KION GROUP AG prepared the consoli-
dated financial statements on 9 March 2016 and approved them
for forwarding to the Supervisory Board. The Supervisory Board
has the task of examining and deciding whether to approve the
consolidated financial statements.
Wiesbaden, 9 March 2016
The Executive Board
Gordon Riske
Dr Eike Böhm
Ching Pong Quek
Dr Thomas Toepfer
KION GROUP AG | Annual Report 2015We keep the world moving. 220
Auditors’ report
We have audited the consolidated financial statements prepared
Our audit has not led to any reservations.
by KION GROUP AG, Wiesbaden / Germany, – comprising the
consolidated income statement, consolidated statement of com-
In our opinion, based on the findings of our audit, the consoli-
prehensive income, consolidated statement of financial position,
dated financial statements of KION GROUP AG, Wiesbaden /
consolidated statement of cash flows, consolidated statement of
Germany, comply with IFRS, as adopted by the EU, as well as the
changes in equity and the notes to the consolidated financial
regulations under German commercial law complementarily
statements – and the group management report for the business
applicable under Sec. 315a (1) German Commercial Code (HGB)
year from 1 January to 31 December 2015. The preparation of the
and give a true and fair view of the net assets, financial position
consolidated financial statements and the group management
and results of operations of the Group in accordance with these
report in accordance with IFRS, as adopted by the EU, as well as
requirements. The group management report is consistent with
the regulations under German commercial law complementarily
the consolidated financial statements and as a whole provides a
applicable under Sec. 315a (1) German Commercial Code (HGB)
suitable view of the Group’s position and suitably presents the
are the responsibility of the parent company’s Executive Board.
opportunities and risks of future development.
Our responsibility is to express an opinion on the consolidated
financial statements and on the group management report based
Frankfurt am Main / Germany, 9 March 2016
on our audit.
We conducted our audit of the consolidated financial statements
Wirtschaftsprüfungsgesellschaft
Deloitte & Touche GmbH
in accordance with Sec. 317 German Commercial Code (HGB)
and German generally accepted standards for the audit of finan-
cial statements promulgated by the Institut der Wirtschaftsprüfer.
Those standards require that we plan and perform the audit such
(Crampton)
(Gräbner-Vogel)
that misstatements materially affecting the presentation of the net
Wirtschaftsprüfer
Wirtschaftsprüferin
assets, financial position and results of operations in the consoli-
(German Public Auditor)
(German Public Auditor)
dated financial 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 determination 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 state-
ments of those entities included in consolidation, the determina-
tion of entities to be included in consolidation, the accounting and
consolidation principles used and significant estimates made by
the Executive Board, as well as evaluating the overall presentation
of the consolidated financial statements and the group manage-
ment report. We believe that our audit provides a reasonable
basis for our opinion.
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KION GROUP AG | Annual Report 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
221
Auditors’ report
Responsibility statement
Responsibility statement
To the best of our knowledge, and in accordance with the appli-
cable reporting principles for consolidated financial reporting,
the consolidated financial statements give a true and fair view of
the financial performance and financial position of the Group,
and the management 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 develop-
ment of the Group.
Wiesbaden, 9 March 2016
The Executive Board
Gordon Riske
Dr Eike Böhm
Ching Pong Quek
Dr Thomas Toepfer
KION GROUP AG | Annual Report 2015We keep the world moving. ADDITIONAL INFORMATION
Contents
223
Additional Information
224
QUARTERLY INFORMATION
225
MULTI-YEAR OVERVIEW
226
DISCLAIMER
227
FINANCIAL CALENDAR
227
CONTACT
KION GROUP AG | Annual Report 2015
N
O
I
T
A
M
R
O
F
N
I
L
A
N
O
I
T
I
D
D
A
E
224
Quarterly information
KION Group overview
TABLE 124
in € million
Order intake *
Revenue
EBIT
Adjusted EBIT
Adjusted EBIT margin
Adjusted EBITDA
Adjusted EBITDA margin
Q4 2015
Q3 2015
Q2 2015
Q1 2015
Q4 2014
1,397.1
1,440.7
132.6
151.8
10.5%
250.0
17.4%
1,253.3
1,236.5
108.8
121.2
9.8%
212.0
17.1%
1,317.3
1,256.0
99.4
116.4
9.3%
206.6
16.4%
1,247.9
1,164.8
82.1
93.4
8.0%
181.4
15.6%
1,283.5
1,305.6
109.4
134.2
10.3%
219.6
16.8%
* Prior-year figure restated to reflect the change in the order intake calculation introduced in 2015
Moving Forward
Innovation
KION GROUP AG | Annual Report 2015 ADDITIONAL INFORMATION
Quarterly information
Multi-year overview
Multi-year overview
KION Group multi-year overview
in € million
Order intake 1
Revenue
Order book 1, 2
Financial performance
EBITDA
Adjusted EBITDA 3
Adjusted EBITDA margin 3
EBIT
Adjusted EBIT 3
Adjusted EBIT margin 3
2015
5,215.6
5,097.9
864.0
824.2
850.0
16.7%
422.8
482.9
9.5%
2014
4,771.2
4,677.9
764.1
714.2
780.4
16.7%
347.0
442.9
9.5%
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%
225
TABLE 125
2011
4,681.9
4,368.4
953.0
569.2
665.3
15.2%
213.2
364.6
8.3%
Net income (loss) 4
221.1
178.2
138.4
161.4
– 92.9
Financial position 2
Total assets
Equity
Net financial debt
ROCE 5
Cash flow
Free cash flow 6
Capital expenditure 7
6,440.2
1,848.7
573.5
11.9%
6,128.5
1,647.1
810.7
11.4%
6,026.4
1,610.0
979.3
–
6,213.2
660.7
1,790.1
–
6,066.3
– 487.6
2,631.3
–
332.7
142.6
305.9
133.1
195.6
125.8
513.6
155.1
230.8
133.0
Employees 8
23,506
22,669
22,273
21,215
21,862
* 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 Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015
2 Figures as at balance sheet date 31/12/
3 Adjusted for KION acquisition items and non-recurring items
4 Net income 2012 included a net gain from the Weichai transaction in the amount of € 154.8 million.
5 ROCE is defined as the proportion of EBIT adjusted to capital employed.
6 Free cash flow is defined as cash flow from operating activities plus cash flow from investing activities.
7 Capital expenditure including capitalised development costs, excluding leased and rental assets
8 Number of employees (full-time equivalents) as at balance sheet date 31/12/
KION GROUP AG | Annual Report 2015We keep the world moving.
226
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 statements
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 significantly 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 precisely 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 2015 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-looking statements or to change these to reflect events or developments that occur after the
publication 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 corresponding 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).
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Innovation
KION GROUP AG | Annual Report 2015 ADDITIONAL INFORMATION
Disclaimer
Financial calendar / Contact
227
FINANCIAL CALENDAR
CONTACT
17 March 2016
Contacts for the media
Contacts for investors
Publication of 2015 annual report /
Financial statements press conference
Michael Hauger
Frank W. Herzog
and analyst call
Head of Corporate Communications
Head of Corporate Finance
27 April 2016
michael.hauger@kiongroup.com
frank.herzog@kiongroup.com
Phone: +49 611 770 655
Phone: +49 611 770 303
Interim report for the period ended
31 March 2016 (Q1 2016) and analyst call
Frank Brandmaier
Dr Karoline Jung-Senssfelder
Head of Corporate Media Relations
Head of Investor Relations and M&A
12 May 2016
Phone: +49 611 770 752
Phone: +49 611 770 450
Annual General Meeting
frank.brandmaier@kiongroup.com
karoline.jung-senssfelder@kiongroup.com
27 July 2016
Interim report for the period ended
30 June 2016 and analyst call
27 October 2016
Interim report for the period ended
30 September 2016 and analyst call
Subject to change without notice
Securities identification numbers
KION GROUP AG
This annual report is available in German
ISIN: DE000KGX8881
Abraham-Lincoln-Strasse 21
and English at kiongroup.com under
WKN: KGX888
65189 Wiesbaden | Germany
Investor Relations / Financial Reports.
Phone: +49 611 770 0
Fax: +49 611 770 269
info@kiongroup.com
www.kiongroup.com
Only the content of the German version
is authoritative.
kiongroup.com/
ir
KION GROUP AG | Annual Report 2015We keep the world moving. KION GROUP AG
Corporate Communications
Abraham-Lincoln-Strasse 21
65189 Wiesbaden | Germany
Phone: +49 611 770 0
Fax: +49 611 770 269
info@kiongroup.com
www.kiongroup.com