A N N U A L R E P O R T
KION Group
Key figures for 2018
KION Group overview
in € million
Order intake
Revenue
Order book 1, 2
Financial performance
EBITDA
Adjusted EBITDA ³
Adjusted EBITDA margin ³
EBIT
Adjusted EBIT ³
Adjusted EBIT margin ³
2018
8,656.7
7,995.7
3,300.8
1,540.6
1,555.1
19.4%
642.8
789.9
9.9%
2017 *
7,979.1
7,598.1
2,614.6
1,457.6
1,495.8
19.7%
561.0
777.3
10.2%
2017
7,979.1
7,653.6
2,614.6
1,185.7
1,223.9
16.0%
549.4
765.6
10.0%
2016
5.833,1
5.587,2
2.396,6
889,5
931,6
16.7%
434,8
537,3
9.6%
Change
2018 / 2017 *
8.5%
5.2%
26.2%
5.7%
4.0%
–
14.6%
1.6%
–
Net income
401.6
422.5
426.4
246,1
– 4.9%
Financial position ¹
Total assets
Equity
Net financial debt
ROCE 4
Cash flow
Free cash flow 5
Capital expenditure 6
12,968.8
12,337.7
11,228.4
11.297,0
3,305.1
1,869.9
9.3%
519.9
258.5
2,992.3
2,095.5
9.3%
474.3
218.3
3,148.8
2,095.5
9.9%
2.495,7
2.903,4
6.9%
378.3
218.3
– 1,850.0
166.7
5.1%
10.5%
– 10.8%
–
9.6%
18.4%
Employees 7
33,128
31,608
31,608
30,544
4.8%
1 Figures as at balance sheet date 31/12/ (adjusted due to the final purchase price allocation Dematic)
2 Order backlog 2016 adjusted to reflect specific customer orders from long-term construction contracts in the segment SCS
3 Adjusted for PPA 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 right-of-use assets
7 Number of employees (full-time equivalents) as at balance sheet date 31/12/
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
All amounts in this annual report are disclosed in millions of euros (€ million) unless stated otherwise. Due to rounding effects, addition
of the individual amounts shown may result in minor rounding differences to the totals. The percentages shown are calculated on the
basis of the respective amounts, rounded to the nearest thousand euros (€ thousand).
DIGITAL
AND
BE YOND
Digitalisation is not simply a buzzword in
the KION Group. In fact, it has been a firm
part of our DNA for years. Our digital strategy
sets a course for the Group’s profitable
growth in the digital age. We are pressing
ahead with our digital transformation, and
digital innovation is opening up unimaginable
opportunities for our customers.
Contents
2
4
A
8
14
16
28
32
B
36
C
48
49
63
96
109
113
D
136
137
138
140
142
144
256
264
E
268
269
270
271
271
Company
Digital and beyond
TO OUR SHAREHOLDERS
Letter to shareholders
Executive Board
Report of the Supervisory Board
KION shares
Services for shareholders
CORPORATE GOVERNANCE
Corporate governance report
COMBINED MANAGEMENT REPORT
Preliminary remarks
Fundamentals of the KION Group
Report on the economic position
Outlook, risk report and opportunity report
Disclosures relevant to acquisitions
Remuneration 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
Independent auditors’ report
Responsibility statement
ADDITIONAL INFORMATION
Quarterly information
Multi-year overview
Disclaimer
Financial calendar
Contact
Company profile
The KION Group is a global leader in industrial trucks,
warehouse technology, related services and supply
chain solutions. Across more than 100 countries
worldwide, the KION Group’s logistics solutions opti-
mise the flow of material and information within facto-
ries, warehouses and distribution centres. The Group
is the largest manufacturer of industrial trucks in
Europe, the second-largest producer of forklifts globally
and a leading provider of automation technology
and software solutions.
The KION Group’s world-renowned brands are among
the best in the industry. Dematic is a global leader in
automated material handling, providing a comprehen-
sive range of intelligent supply chain and automation
solutions. The Linde and STILL brands serve the pre-
mium industrial truck segment. Baoli focuses on indus-
trial trucks in the economy segment. Among the regio-
nal KION brands, Fenwick is the largest supplier of
material handling products in France. OM Voltas is a
leading provider of industrial trucks in India.
More than 1.4 million industrial trucks and over 6,000
installed systems from the KION Group are deployed
by customers in all industries and of all sizes on six
continents.
We keep the world moving.
COMPANY
Industry 4.0
The KION Group
adds value
in production
and logistics
I N T E L L I G E N T
T R U C K S
Smart trucks with electronic
control units
Driver assistance systems for
greater efficiency
C L O U D - B A S E D D A T A
M A N A G E M E N T
Fleet data services for
centralised control and tracking
Fleet optimisation provides finan-
cial benefits and improved safety
A U T O M A T E D G U I D E D
V E H I C L E S ( A G V s )
Full range of
automated trucks
Enables automation of
material handling processes
A U T O M A T I O N
S Y S T E M S
Customised and integrated
hardware and software solutions
Robotics solutions for
order picking
Annual Report 2018
KION GROUP AG
COMPANY
Segments
I N D U S T R I A L T R U C K S
& S E R V I C E S
S U P P L Y C H A I N
S O L U T I O N S
The Industrial Trucks & Services segment encompasses forklift
The Supply Chain Solutions segment encompasses integrated
trucks, warehouse technology and related services, including
technology and software solutions that are used to optimise
complementary financial services. It pursues a multi-brand
supply chains. Manual and automated solutions are provided for
strategy involving the three international brands Linde, STILL
all functions along customers’ supply chains, from goods inward
and Baoli plus the regional brands Fenwick and OM Voltas.
and multishuttle warehouse systems to picking and value-added
packing. The Supply Chain Solutions segment comprises the
Industrial Trucks & Services is made up of four Operating
Dematic brand.
Units: Linde Material Handling EMEA and STILL EMEA, which
each concentrate on Europe, the Middle East and Africa,
plus KION APAC and KION Americas, which hold cross-brand
responsibility for the Asia-Pacific region and for North and
South America respectively.
G
N
I
T
A
R
E
P
O
S
T
I
N
U
S
D
N
A
R
B
S
T
C
U
D
O
R
P
L I N D E M H
E M E A
S T I L L
E M E A
K I O N
A M E R I C A S
K I O N
A P A C
Counterbalance trucks with electric drive
Counterbalance trucks with IC engine
Warehouse technology: ride-on industrial trucks
Warehouse technology: hand-operated industrial trucks
Towing vehicles
Automated trucks and autonomous trucks
G
N
I
T
A
R
E
P
O
S
T
I
N
U
S
D
N
A
R
B
S
T
C
U
D
O
R
P
D E M A T I C
Conveyors
Sorters
Storage and retrieval systems
Picking equipment
Palletisers
Robotics solutions
C O R P O R A T E S E R V I C E S
The Corporate Services segment comprises holding
companies and other service companies that provide
services such as IT and logistics across all segments.
I N T E R N A L
S E R V I C E S
H O L D I N G
C O M P A N Y
F U N C T I O N S
Annual Report 2018
KION GROUP AG
DIGITAL AND
BE YOND
Digitalisation is a key field of action of our
KION 2027 strategy, and we are transforming the
Company in order to remain the market leader in
a digital world. We are developing digital solutions
that improve the efficiency of our customers’
intralogistics and digitalising our internal pro-
cesses to increase our performance. The grow-
ing use of digital technologies is also the focus
of our research and development activities,
K I O N D I G I TA L CA M P U S
through which we are defining and shaping the
future of intralogistics – from conventional to
digital and beyond.
The innovation lab for
the digital revolution.
More information on these topics is available here:
kiongroup.com
Patrick
Tomczak and
his team are
working on the
future of intralo-
gistics
I N D U ST R I A L I N D O O R
LO CA L I S AT I O N
A M A P FO R TRUCKS .
Digital maps that
simplify processes and
allow trucks to
find their routes
KION GROUP AGAnnual Report 2018
5
R O B OT I C S
Software that
speeds up processes.
Machine learning that
enables sophisticated
product recognition
and high throughput of
goods
Data analysis,
cloud architecture
and networked
machines represent a
paradigm shift
I N T E R N E T O F T H I N G S
Progress through
networking.
V I R T UA L WA R E H O U S E
O P T I M I S AT I O N
Simulations provide
planning certainty.
Proactive warehouse
management using
innovative software
solutions
KION GROUP AGAnnual Report 2018 TO OUR SHAREHOLDERS
Contents
7
TO OUR
SHAREHOLDERS
8
14
16
28
32
LETTER TO SHAREHOLDERS
EXECUTIVE BOARD
REPORT OF THE SUPERVISORY BOARD
KION SHARES
SERVICES FOR SHAREHOLDERS
KION GROUP AGAnnual Report 2018 TO OUR SHAREHOLDERS
Letter to Shareholders
8
Letter to Shareholders
Dear shareholders, customers, partners, employees and
friends of the KION Group,
We all experience on a daily basis how rapidly the world around us is changing. The
rate of progress is accelerating; product and innovation cycles are getting shorter. In
the Information Age, connectivity and the sharing of data are the new success factors.
The Internet of Things, which links the physical with the virtual, is opening up unimagin
able opportunities. One megatrend in particular – digitalisation – has emerged as an
important driver that will also have a lasting influence on intralogistics. Digitalisation is
transforming our world, and the way in which we live and work. For us, this change is
an opportunity to help shape the future of Industry 4.0 on behalf of our customers
and to define the key intralogistics technologies of tomorrow. The challenge is great,
but it is one that we are fully motivated and fully committed to meeting.
Our mission is to remain the vanguard of our industry
Last year, we demonstrated yet again that we are the vanguard of our industry. Our
unique range of products and services enabled us to consolidate our position as the
global number two for forklift trucks and warehouse technology and a leading supplier
of supply chain solutions. Automation and digitalisation are part of our DNA. Our
automated systems serve as a benchmark in the intralogistics sector. But we are not
content to rest on our laurels and have created a dedicated Executive Board role for
digitalisation in order to maintain and build on our technological leadership. The
appointment of Susanna Schneeberger as Chief Digital Officer (CDO) highlights the
importance that we are attaching to digitalisation and automation under our KION 2027
strategy. Back in January, we launched the Digital Campus, an innovation laboratory
that gives strategists, user experience designers and developers a forum for collabo
rating on quickturnaround digital projects.
Annual Report 2018
KION GROUP AG
8
TO OUR SHAREHOLDERS
Letter to Shareholders
9
GORDON RISKE
CEO
Digital solutions
have been
an important part
of our product
range for a number
of years.
Beyond these recent initiatives, digital solutions have been an important and growing
part of our product range for a number of years and are strengthening our position as
an industry leader. Linde Safety Pilot and other intelligent assistance systems are
enhancing warehouse safety, dynamic mast control is counteracting mast oscillation
in reach trucks and autonomous picking trucks such as STILL’s iGo neo are easing
the workload of operatives. The collection, smoothing and analysis of data are presenting
opportunities for intralogistics that we are creating for our customers through the
medium of warehouse management software and digital fleet management. Solutions
such as Linde connect and STILL neXXt fleet can optimise capacity utilisation and
raise productivity. Many other applications, including special servicing apps and pre
dictive maintenance for industrial trucks, are facilitating the work of our customers
and their employees.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Letter to Shareholders
10
Many of our
solutions facilitate
the work of our
customers and their
employees.
Market leader in mobile automation
Automation is also a top priority for us. In the area of automated order pickers and
storage and retrieval systems, we are the global market leader. We can meet our
customers’ growing demand for speed and precision in logistics. Our automated guided
vehicles (AGVs) deliver huge benefits wherever applications require continuous
throughput or recurring processes can be automated. Guided by a laser scanner, for
example, they are able to move on their own and transport, store and retrieve goods.
We have established ourselves as a leading supplier of automated systems thanks to
Dematic’s broadranging portfolio. Every Dematic system uses the Dematic iQ software
platform, which consolidates all key data related to warehouse operations and delivers
significant efficiency gains. It allows us to greatly improve our customers’ warehouse
processes – whether the workflows are manual, semiautomated or fully automated.
Our robotic picking system is a softwarecontrolled robot arm that is equipped with
sensors and visual processing capabilities and has the ability to grip objects. Because
the system is more efficient at completing repetitive tasks, it can accelerate ware
house processes.
The next steps in our innovation drive
As proud as we are of these achievements, we are not content to let them be our
only successes as we continue on our path towards the future of intralogistics. With
every innovation, we create important new benefits that give our customers a com
petitive edge. This is what drives us.
Annual Report 2018
KION GROUP AG
10
TO OUR SHAREHOLDERS
Letter to Shareholders
11
Our developers and IT specialists are working on many other highpotential projects.
One of these is our virtual facility software, an online tool that will enable customers to
simulate their plans for warehouse expansion. It will make planning much easier and
dramatically reduce the number of problems that occur when the new facilities are
brought on stream. The KION cloud is the latest and perhaps most comprehensive pro
ject in our innovation drive. It is a virtual service centre that gives customers wanting
to record and analyse their intralogistics data unlimited capacity and flexibility. We can
use this data to develop solutions tailored to their specific challenges in fields ranging
from the Internet of Things to artificial intelligence. The KION cloud is the common link
between all our activities, which are not only supporting the transformation of intralo
gistics, but actively shaping it.
We are taking digitalisation and automation to their logical conclusion. Many of our
customers are waiting for the fully automated warehouse, which will no longer need
to be lit. It requires humans to only be available to monitor the systems. In many of the
world’s metropolitan regions, warehouse operatives are becoming as scarce a resource
as space to locate the warehouses. Thus our customers are sure to be pleased that our
automated solutions are helping them inch closer towards the goal of a ‘lightsout’
warehouse.
The forklift truck business and related services, including financial services, continue
to play a key role alongside the development of future technologies. Our Operating
Units again launched a variety of important product innovations last year. STILL brought
the awardwinning RX20 electric forklift truck to the market and reached a milestone
in the use of trucks powered by fuel cells. Linde Material Handling rounded out its
lithiumion product range and is now offering customers a choice between leadacid
and lithiumion batteries in nearly all its warehouse trucks. This has taken us beyond
intralogistics to become a leading innovator in drive systems.
Intralogistics has
become the
key competitive
factor in today´s
web economy.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Letter to Shareholders
12
With important
capital expenditure
we are laying
the foundations
for success in the
years ahead.
Upward trend despite unexpected challenges
In 2018, our marketleading products and solutions enabled us to build on the upward
trend of recent years. Order intake rose by 8.5 per cent yearonyear to reach a record
€8.7 billion, which gives us a healthy basis for 2019 and beyond. We also achieved
our outlook for all other key performance indicators, despite the major challenges that
faced us during the year related to currency effects, the higher cost of materials,
increased personnel expenses and inefficiencies in production caused by bottlenecks
at individual suppliers. Revenue increased by 5.2 per cent to almost €8 billion. At
€643 million, EBIT was 14.6 per cent higher than the figure for the previous year, while
net income amounted to €402 million.
Ecommerce, retail, wholesale and production supply chains, and a global economy
based on the division of labour – our products and solutions help all of them to function
smoothly. Our connected forklift trucks, our automated warehouse systems and, not
least, our software are making the logistics chains that form the backbone of the world’s
economy increasingly efficient. Intralogistics has become the key competitive factor in
today’s web economy. Our industry’s exceptional growth rates are a reflection of this.
The intralogistics market has consistently been expanding at a faster rate than the
global economy in recent decades. And the prospects for further growth in the
coming years look attractive as well. Worldwide demand for industrial trucks is pro
jected to increase by around four per cent a year and demand for supply chain
solutions is expected to see a high single digit percentage increase over the medium
term. We will be looking to benefit from these growth markets by offering many new
products, services and software solutions as well as a sales and service network
that is unparalleled in our industry.
Annual Report 2018
KION GROUP AG
12
TO OUR SHAREHOLDERS
Letter to Shareholders
13
Key investments in the future
In the year ahead, in order to fully exploit this growth potential, we will be continuing
to invest in innovative products and solutions and in expanding our capacities. To
help achieve the latter, we are building an additional plant in Poland that is scheduled
to come on stream in 2020.
In our longterm planning for production and plant structure, we specified which sites
will be manufacturing which products going forward. The main plants of Linde Material
Handling in Aschaffenburg and STILL in Hamburg will focus on highermargin, premium
products. At these locations too, we will continue investing in expanding capacities and
in new production technologies. This capital expenditure is important and essential
and with it we are laying the foundations for success and growth in the years ahead.
On behalf of my colleagues on the Executive Board, I would like to personally thank our
employees for the excellent results we achieved in 2018. It was a real team effort.
Your unfailing dedication to our customers, your creativity and your commitment to our
shared values make us the successful company that we are today. The KION Group
is entering 2019 in very good shape. The order books are well filled and, in the
coming year alone, we will bring around 50 new products and solutions to market. In
2019, as a leading innovator in our industry, we will be looking to again capitalise on
the huge opportunities presented to us by digitalisation, automation and the other
factors driving the growth of logistics.
With best wishes,
Gordon Riske
Chief Executive Officer
KION GROUP AG
Annual Report 2018
KION GROUP AG
14
TO OUR SHAREHOLDERS
Executive Board
Executive Board of
KION GROUP AG
GORDON RISKE
Chief Executive Officer (CEO)
born in 1957 in Detroit (USA)
DR EIKE BÖHM
ANKE GROTH
Chief Technology Officer (CTO)
born in 1962 in Pforzheim (Germany)
Chief Financial Officer (CFO)
and Labour Relations Director
born in 1970 in Gelsenkirchen (Germany)
CHING PONG QUEK
SUSANNA SCHNEEBERGER
Chief Asia Pacific Officer
born in 1967 in Batu Pahat /Johor
(Malaysia)
Chief Digital Officer (CDO)
born in 1973 in Uppsala (Sweden)
Annual Report 2018
KION GROUP AG
14
Susanna Schneeberger
Gordon Riske
Dr Eike Böhm
Ching Pong Quek
Anke Groth
TO OUR SHAREHOLDERS
Report of the Supervisory Board
16
Report of the Supervisory Board of
KION GROUP AG
Dear shareholders,
The developments of 2018 fully vindicated the basic assumptions and projected trends
that underpin the KION 2027 strategy. In all key regions of our global business, demand
for industrial trucks is expanding at around twice the rate of gross national product.
The growth in demand is even stronger for the kind of integrated, connected and
increasingly automated intralogistics systems that are being employed in the factories
and warehouses of industry, retail and wholesale.
The KION Group, as a leading global supplier of supply chain solutions and the world’s
second-largest manufacturer of industrial trucks, is playing an active role in shaping
this trend. 2018 was another highly successful year for the Company.
As part of their general dialogue on strategy during the reporting period, the Executive
Board and Supervisory Board endorsed the agreed KION 2027 strategy and discussed
its ongoing implementation. Following the acquisition of Dematic, the Company is
systematically building on the capabilities and solutions that will allow it to bring
digitalisation, connectivity and automation to bear in intralogistics.
Strengthening of the Executive Board: focus on digitalisation,
automation and innovation
The creation of the role of Chief Digital Officer (CDO) has combined responsibility for
digitalisation and mobile automation at the Executive Board level. Susanna Schneeberger,
KION Group’s first CDO, brings years of international leadership experience in intralo-
gistics with particular expertise in digitalisation, connectivity and automation.
We extended Dr Eike Böhm’s contract as Chief Technology Officer by three years.
We are thus ensuring continuity in the ongoing advancement of the Company’s core
technologies, in product development and in the production system. Reaping synergies,
continually improving efficiency and effectiveness in production and presenting truck
solutions that meet fast-changing customer requirements in the various markets will
remain the focus in the coming years. Our objective is clear: for KION to continue to
be a leading supplier, offering an extensive portfolio of industrial trucks that meet the
very wide-ranging needs of customers around the world.
Annual Report 2018
KION GROUP AG
16
TO OUR SHAREHOLDERS
Report of the Supervisory Board
17
DR JOHN FELDMANN
Chairman
In Anke Groth, we have recruited an excellent and experienced Chief Financial Officer.
She is sharpening the tools that KION uses for analysis and for managing the Company
with a view to increasing shareholder value. As Labour Relations Director, she influences
the corporate culture and the development of our employees in an increasingly digital
working world.
Ching Pong Quek is responsible for developing our strategy in the Asian markets,
which are exceptionally important to our industry and so also to KION. We will be
using a series of initiatives to build on our position in China in particular but also in the
region’s other fast-growing economies.
Under the experienced and proven leadership of our Chief Executive Officer, Gordon
Riske, the Executive Board team of KION GROUP AG is now in an excellent position
to meet its current and future challenges. Strategy and changes to the composition of
the Executive Board to bring it in line with future needs were key themes in our work
on the Supervisory Board last year. In a spirit of collaboration for the benefit of the
Company as well as its customers, employees and owners, the Executive Board team
will be focused on working with courage and integrity to ensure the long-term success
of the KION Group. It has at its disposal a broad range of expertise and experience in
engineering, truck manufacturing and intralogistics, in digitalisation, connectivity
and automation, and also in corporate management and the establishment of strong
corporate cultures.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Report of the Supervisory Board
18
As would be expected, implementation of the KION 2027 strategy in the reporting
year and the tasks and challenges facing the operational business were the subject of
discussion at every meeting of the Supervisory Board and its committees. Servicing
and aftersales will continue to play a key role in delivering consistent profitable growth
for the Company alongside the development and delivery of intralogistics solutions
and the manufacture of trucks and equipment.
Targets achieved despite difficult conditions
The KION Group proved to be a reliable performer yet again in 2018. Every aspect of
the outlook for the reporting year was borne out by the actual results. Achieving this
was not always easy in 2018. Like many other companies, the KION Group is reliant
on suppliers of key components. And it became clear that these suppliers were not
always able to cope with the increasing volumes that were required. Delivery delays,
rising inventories, costs and an impact on revenue were the result. Thanks to the hard
work of all employees, however, the Company was able to largely contain the effects.
The growing number of global trade disputes and their often severe after-effects
left their mark on the Company’s operating profit, as did exchange rate fluctuations
that were partly caused by the trade disputes. But because of the hard work of all
employees, the clear strategy and the systematic implementation of its measures,
the targets formulated in the outlook were achieved and the faith that our partners
put in us was repaid.
The Supervisory Board had, as in previous years, agreed very ambitious targets
with the members of the Executive Board which are aligned to the upper end of the
ranges in the outlook. These targets were exceeded with regard to order intake. How-
ever, they were not fully achieved when it comes to revenue, earnings and cash flow.
This will affect the Executive Board’s variable remuneration.
In addition, neither we nor the shareholders of KION GROUP AG were satisfied with
the share’s performance. Against the backdrop of trade disputes and concerns in
the markets about a slowdown in global economic growth, our share price fell signifi-
cantly – in line with the general trend. This and the question of what would constitute
an appropriate response were the subject of intense discussion by the Supervisory
Board. In the second and third quarter, the effects of the delivery delays raised con-
cerns and doubts in the capital markets; there was speculation about profit warnings.
However, the Company’s results were in line with its outlook and thus proved the
robustness of its forecasting, its strategy and its efficiency.
Annual Report 2018
KION GROUP AG
18
TO OUR SHAREHOLDERS
Report of the Supervisory Board
19
Collaboration between the Supervisory Board and Executive Board
Last year, the Supervisory Board continued to fulfil the tasks and responsibilities
imposed on it by the law, the Company’s articles of association and the German
Corporate Governance Code with dedication and diligence.
As in previous years, the Supervisory Board discussed numerous other issues and
transactions requiring consent, made necessary decisions, regularly advised the
Executive Board on all significant matters relating to managing the Company and
monitored the Executive Board’s running of the Company’s business. The Supervisory
Board was always fully involved in major decisions affecting the Company from an
early stage. The Executive Board always notified the Supervisory 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 its 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 Committee and both the
Chief Financial Officer and those responsible for internal audit and compliance in the
Company. 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 association or the rules of
procedure for the Executive Board of KION GROUP AG, require the Supervisory Board’s
consent so that it could adopt resolutions. The Supervisory Board examined closely
the resolutions proposed by the Executive Board and deliberated on them before
adopting them.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Report of the Supervisory Board
20
Sustainability report
The Supervisory Board discussed in detail the report on non-financial key performance
indicators for the financial year 2017 (sustainability report), which was produced for
the first time after having been piloted for the financial year 2016. In the opinion of the
Supervisory Board, business management focused on sustainability provides the
Company with a ‘licence to operate’, i.e. a basis for society’s acceptance of the Com-
pany and its business model. The report documents the Company’s existing sustaina-
bility management processes and those that are being implemented. Taking its cue
from the initial voluntary sustainability report presented in 2017, the Supervisory Board
discussed the topic with the Executive Board and the relevant managers in the
Company. The Supervisory Board engaged the auditors to review the content of the
non-financial Group report for 2018 pursuant to section 315b of the German Com-
mercial Code (HGB). It will take account of the auditors’ assessment in its own review of
the non-financial Group report and in the resolution to be adopted. The sustainability
report, including the non-financial Group report, will be published on the Company’s
website by 30 April 2019.
Corporate governance
Data protection and data security are integral elements of our business processes.
Greater digitalisation requires personal integrity, particularly when working with IT
systems. At the end of May 2018, the largely harmonised new regulations pertaining
to data protection at European Union level came into force. The Supervisory Board
discussed at great length the consequences of this and the Company’s preparations
to implement the new requirements and received reports on the matter from the
Executive Board.
In the second half of the year, another review was carried out of the efficiency of the
Supervisory Board’s work. External consultants were engaged, as they were for
the previous efficiency review, in 2015. The findings of the review were presented and
discussed at the December meeting of the Supervisory Board. As was the case in
2015, the reviewers gave a very good assessment of the work of the Company’s
Supervisory Board. The members of the Supervisory Board saw it as a particular
positive that suggestions for improvements to the Supervisory Board’s processes
resulting from the previous efficiency review had been taken up and implemented.
Annual Report 2018
KION GROUP AG
20
TO OUR SHAREHOLDERS
Report of the Supervisory Board
21
No amendments were made to the German Corporate Governance Code in 2018. At
its meeting on 12 December 2018, the Supervisory Board held its final discussion on
the KION Group’s compliance with the unchanged recommendations and suggestions
of the German Corporate Governance Code and issued an unchanged comply-or-
explain statement pursuant to section 161 of the German Stock Corporation Act (AktG).
This 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 7 February 2017) and intends
to continue to do so in future. As in previous years, the only recommendation of the
Code with which KION GROUP AG does not comply is the recommendation in sec-
tion 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 association do not provide
for this type of excess. The Company believes that such an excess is not typical at
international level and would therefore make it considerably more difficult to find inde-
pendent candidates, in particular candidates from outside Germany. The Supervisory
Board acknowledged the new version of the Code announced in October 2018. The
chairman of the Supervisory Board actively participated in the consultation process
for the new version of the Code. The Supervisory Board generally welcomes the attempts
made to focus and streamline the Code’s content. However, certain recommendations
that were still under discussion at the time this report was completed, are viewed
critically. Once the new version of the Code comes into force, the Company will complete
its review of the recommendations contained with the Code and how they compare
with the processes in place at the Company. The annual comply-or-explain statement
for 2019 is scheduled to be discussed at the December meeting, after which the
findings of this review will be published.
The Supervisory Board has decided to review the remuneration system and level of
remuneration for the members of the Executive Board of KION GROUP AG in 2019,
once ARUG (the German law implementing the European Shareholders’ Rights Direc-
tive) has come into force and the updated German Corporate Governance Code,
which we believe should make reference to ARUG, has taken effect. The Supervisory
Board has already entered into consultancy agreements concerning this matter with
an independent and specialized board compensation advisory firm.
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 at KION GROUP AG in the corporate governance report. This is combined
with the declaration on corporate governance pursuant to section 289f and 315d
HGB and can be found on pages 36 to 45 of this annual report and on the KION
GROUP AG website at kiongroup.com/GovernanceReport.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Report of the Supervisory Board
22
Work of the committees
KION GROUP AG’s Supervisory Board had four standing committees last year: the
Mediation Committee pursuant to section 27 (3) of the German Codetermination Act
(MitbestG), the Executive Committee, the Audit Committee and the Nomination
Committee. These committees, but primarily the Executive Committee, prepare the
matters to be discussed at the meetings of the full Supervisory Board. The chairman
of the Supervisory Board is also chairman of all committees except the Audit Com-
mittee. The chairmen of the committees each report regularly to the full Supervisory
Board on their committee’s deliberations. In addition, the minutes of the committee
meetings are distributed to the other members of the Supervisory Board for information
purposes once the committee members have approved them.
In 2018, the Supervisory Board and its committees dealt with the matters at hand
and made the necessary decisions at a total of 16 meetings. These consisted of six
meetings of the full Supervisory Board, four of the Executive Committee, five of the
Audit Committee and one of the Nomination Committee. The Mediation Committee
did not meet in the reporting period. There were also several conference calls for the
purpose of providing the members of the Supervisory Board or the relevant commit-
tees with advance information. In 2018, all members of the Supervisory Board
attended all Supervisory Board meetings and the meetings of the respective com-
mittees of which they were members apart from in the following cases:
There were four (of the six) Supervisory Board meetings at each of which one member
sent apologies and two committee meetings at each of which one member sent
apologies. Two Supervisory Board meetings took place in the period from 1 January
to 9 May 2018 when Denis Heljic was a member of the Supervisory Board. Denis Heljic
attended only one of these two meetings.
Annual Report 2018
KION GROUP AG
22
TO OUR SHAREHOLDERS
Report of the Supervisory Board
23
Engagement of the auditors; audit of the separate and
consolidated financial statements
The Company’s independent auditors, Deloitte GmbH Wirtschaftsprüfungsgesellschaft
(Deloitte), Munich, Frankfurt am Main branch office, audited the separate financial
statements, the consolidated financial statements and the combined management
report for KION GROUP AG and the Group for the year ended 31 December 2018
following their engagement by the Annual General Meeting on 9 May 2018. The
corres ponding proposal to the Annual General Meeting had been prepared in meetings
held between the chairman of the Audit Committee and the auditors. The proposal was
discussed at the Audit Committee’s meeting on 21 February 2018 and committee
members were given the opportunity to speak to the auditors in person.
The key audit matters were discussed and set out accordingly at the Audit Committee’s
meeting on 25 July 2018. The auditors were appointed by the chairman of the
Supervisory Board on 24 October 2018.
The auditors submitted their report and the documents relating to the 2018 financial
statements to the members of the Audit Committee on 12 February 2019 and to the
members of the Supervisory Board on 20 February 2019. The report was discussed
in depth at the Audit Committee meeting on 20 February 2019 and at the full Supervisory
Board meeting on 27 February 2019, 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 discussed these with the members of the Audit Committee and the full
Supervisory Board respectively.
The auditors issued an unqualified opinion for the separate financial statements for
the year ended 31 December 2018, the consolidated financial statements and the
group management report, which was combined with the Company’s management
report, for the year ended 31 December 2018 on 20 February 2019. Having itself
scrutinised the Company’s separate financial statements, consolidated financial
statements and combined management report for the year ended 31 December 2018,
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 Audit Committee’s review at its meeting on
27 February 2019.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Report of the Supervisory Board
24
Based on the final outcome of its own review, the Supervisory Board did not raise any
objections. The Supervisory Board approved the Company’s separate financial state-
ments and consolidated financial statements for the year ended 31 December 2018
prepared by the Executive Board, thereby adopting the annual financial statements.
At its meeting on 27 February 2019, 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 €1.20 per no-par-
value share. In doing so, the Supervisory Board took account of the Company’s finan-
cial situation and performance, its medium-term financial and capital-expenditure
planning and the interests of the shareholders. The Supervisory Board believes
the proposed dividend is appropriate.
Relationships with affiliated entities (dependency)
The Supervisory Board also examined the report concerning relationships with affiliated
entities (dependency report), which the Executive Board signed off on 20 February 2019.
The auditors reviewed this report and issued an auditors’ report. Based on their audit,
which they completed without identifying any deficiencies on 20 February 2019, the
auditors issued the following opinion:
Based on our audit and assessment in accordance with professional standards, we
confirm that
– 1. the facts in the report are stated accurately,
– 2. the consideration given by the entity for the transactions specified in the report
– 3. there are no circumstances in respect of the measures specified in the report that
was not unreasonably high,
would justify an opinion materially different from the opinion of the Executive Board.
The dependency report and the auditors’ report about it were submitted to all the
members of the Supervisory Board in good time. Both reports were discussed in
detail in the presence of the auditors at the Supervisory Board meeting on 27 Febru-
ary 2019 after the auditors had presented their report in person. 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.
Annual Report 2018
KION GROUP AG
24
TO OUR SHAREHOLDERS
Report of the Supervisory Board
25
Personnel changes on the Supervisory Board
There were several changes on the Supervisory Board in 2018:
By an order issued by the competent local court on 9 October 2018, Dr Michael Macht
was appointed to the Company’s Supervisory Board as a shareholder representative. He
succeeded Tan Xuguang, who had stepped down on 30 September. In Dr Michael
Macht, the Supervisory Board has found a proven production specialist who has a long
track record in management in the automotive industry. The experience and skills
that he possesses round off those that are already represented on the Supervisory
Board. His appointment is fully aligned with the objectives for the composition of the
Supervisory Board and the Supervisory Board’s profile of skills and expertise
adopted in 2017, with its 17 fields of competence. The Supervisory Board would like
to thank Mr Tan, who provided invaluable input for the strategic positioning of the Com-
pany and the development of its operations, particularly in the key markets in Asia.
Denis Heljic, who stepped down from the Supervisory Board after taking a new role
in the Company, was succeeded as an employee representative on the Supervisory
Board by Martin Fahrendorf with effect from 10 May 2018. The Supervisory Board
would like to thank Mr Heljic for the great dedication with which he always carried
out his work as an employee representative in the interests of the Company.
The following changes will be taking place in 2019:
On 5 February 2019, I informed the Company that, following consultation with repre-
sentatives of the main shareholder, Weichai Power, I will be stepping down as chairman
of the Supervisory Board and as a member of the Supervisory Board at the end of
the upcoming Annual General Meeting. The Nomination Committee proposed that
Dr Michael Macht and Mr Tan Xuguang be elected as new shareholder representa-
tives. Dr Michael Macht was appointed by the court to the Supervisory Board as a
shareholder representative for the period until the next Annual General Meeting.
The Supervisory Board plans to elect Dr Michael Macht as chairman of the Supervisory
Board in the constitutive meeting of the Supervisory Board that follows the Annual
General Meeting.
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Report of the Supervisory Board
26
I would like to thank you, our shareholders, for placing your trust in me since 2013
and electing me as a member of the Supervisory Board of KION GROUP AG. I would
also like to thank the members of the Supervisory Board for our constructive working
relationship, which has focused on building a successful and sustainable company.
And my special thanks go to the Executive Board members and the Company’s
employees. Under the strategically shrewd and far-sighted leadership of the Chief
Executive Officer Gordon Riske, who has been steering KION since 2007 with his
clear view of what is necessary and possible, KION has evolved into a global leader
within intralogistics. Today, KION GROUP AG is extremely well positioned within the
global market with expertise, efficiency and a successful business model, and has a
solid basis on which to not only meet the future challenges of the markets but also
proactively shape them. This will of course require the Company to review its position
in the market on an ongoing basis and to continually refine its business models,
expertise and processes. Going forward, the task of the Supervisory Board will be to
support this process, ensuring that it has the necessary capabilities to do so. I am
confident that the Company can continue to justify the faith placed in it by its share-
holders, and I wish the Supervisory Board, Executive Board and employees every
success in shaping a lasting and successful future based on the Company’s core
values: integrity, collaboration, courage and excellence.
Annual Report 2018
KION GROUP AG
26
TO OUR SHAREHOLDERS
Report of the Supervisory Board
27
The details of this report were discussed thoroughly at the Supervisory Board meeting
on 27 February 2019 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 2018.
Dr John Feldmann
Chairman
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
KION shares
KION shares
28
Growing uncertainty impacts on equity markets
KION shares affected by price losses
The trends in the global equity markets were primarily negative in
KION shares started 2018 with gains and achieved their highest
2018. After the markets were volatile in the first few months of the
price of the year of €78.88 on 20 April 2018. The volatile environment
year, growing economic uncertainty took its toll on the stock
in the equity markets meant that it was not possible to maintain
exchanges mainly in the second half of the year, which resulted in
this upward trend in the subsequent months, and the price of the
a significant correction in global growth forecasts. Geopolitical
shares ended the year at €44.33, which was 38.4 per cent lower
tensions also had an impact. The ongoing trade dispute between
than their price at the close of 2017. At the end of 2018, market
the US and China and the prospect of the US government imposing
capitalisation stood at €5.2 billion, of which €2.9 billion was
further protectionist measures must also be mentioned in this
attributable to shares in free float. The average daily Xetra trading
context, as must the potential consequences of a hard Brexit,
volume in 2018 was 295.7 thousand shares or €18.7 million, and
which became much more likely as the year progressed. Investor
thus below the prior year level (332.0 thousand shares or
caution also rose on the back of growing concerns about the
€22.0 million). > DIAGRAM 001
stability of the euro in the context of Italy’s expansionary fiscal
policy. Further downward pressure resulted from the anticipated
inversion of the yield curve in the bond markets, triggered by the
US central bank’s interest-rate hikes. Over the year as a whole,
the DAX fell by 18.3 per cent and the MDAX was down by
17.6 per cent.
Share price performance between 29 December 2017 and 28 December 2018
DIAGRAM 001
€80
71.98€ *
KION GROUP AG
DAX
MDAX
€70
€60
€50
€40
€30
€20
€10
€0
44.33€ *
44,33 € *
* Closing price
01 / 2018
02 / 2018
03 / 2018
04 / 2018
05 / 2018
06 / 2018
07 / 2018
08 / 2018
09 / 2018
10 / 2018
11 / 2018
12 / 2018
Annual Report 2018
KION GROUP AG
28
TO OUR SHAREHOLDERS
KION shares
29
Record dividend agreed at the
Annual General Meeting
Reliable anchor shareholder, high free float
At the beginning of July 2018, Weichai Power Co., Ltd. announced
The Annual General Meeting on 9 May 2018, at which around
that it was increasing its shareholding in KION GROUP AG from
80 per cent of the share capital was represented, approved the
43.3 per cent to 45.0 per cent. As at 31 December 2018, the free
Supervisory Board and Executive Board’s proposals with a large
float accounted for around 54.9 per cent of the shares, while
majority. This included a 23.8 per cent increase in the dividend to
0.1 per cent were treasury shares. Between 10 and 27 Septem-
€0.99 per share (2017: €0.80 per share). The total dividend payout
ber 2018, KION GROUP AG repurchased a total of 66,000 shares
was therefore up by more than a third at €116.8 million compared
(around 0.06 per cent of the share capital) for use in the KION
to the previous year (2017: €86.9 million). This equated to around
Employee Equity Programme (KEEP). By 31 December 2018, a
35 per cent of the net income for 2017 adjusted for the non-cash
total of 38,691 shares had been purchased by staff (31 Decem-
remeasurement of (net) deferred tax liabilities in connection
ber 2017: 36,294 shares). The number of shares held in treasury
with the lowering of the corporate income tax rate in the US.
stood at 165,558 as at the reporting date. > DIAGRAM 002
> TABLE 001
Basic information on KION shares
TABLE 001
Shareholder structure as at 31 December 2018
DIAGRAM 002
ISIN
WKN
DE000KGX8881
KGX888
Bloomberg KGX:GR
Reuters
KGX.DE
Share type No-par-value shares
Index
MDAX, MSCI World, STOXX Europe 600,
FTSE EuroMid
0.1%
KION GROUP AG
45.0%
WEICHAI POWER
54.9%
FREE FLOAT
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
KION shares
30
KION shares mainly recommended as a buy
Stable credit ratings
As at 31 December 2018, 21 brokerage houses were following
The KION Group is assigned credit ratings by two of the world’s
and reporting on the KION Group (31 December 2017: 21). Fifteen
leading independent rating agencies. Since January 2017, the
analysts recommended KION shares as a buy and six rated them
Group has had an investment-grade long-term issuer rating from
as neutral. The median target price specified for the shares was
Fitch Ratings of BBB– with a stable outlook, while Standard &
€64.00 (31 December 2017: €75.00).
Poor’s has classified the Group as BB+ with a positive outlook
since September 2017.
Dividend of €1.20 per share planned
The Executive Board and Supervisory Board of KION GROUP AG
will propose a dividend of €1.20 per share (2017: €0.99) to the
Annual General Meeting on 9 May 2019. Thus the total dividend
payout amounts to €141.5 million, up by 21.3 per cent on the prior
year. With earnings per share for 2018 of €3.39, this equates to
a dividend payout rate of around 35 per cent. The prior year’s
earnings per share, which is based on net income, was adjusted
for the non-cash remeasurement of (net) deferred tax liabilities in
connection with the lowering of the corporate income tax rate in
the US. > TABLE 002
Annual Report 2018
KION GROUP AG
30
TO OUR SHAREHOLDERS
KION shares
31
Share data
TABLE 002
Closing price at the end of 2017
High for 2017
Low for 2017
Closing price at the end of 2018
Market capitalisation at the end of 2018
Performance in 2018
€71.98
€78.88
€41.03
€44.33
€5,234.9 million
– 38.4%
Average daily XETRA-trading volume in 2018 (no. of shares)
295.7 thousand
Average daily XETRA-trading volume in 2018 (€)
Share capital
Number of shares
Earnings per share for 2018
Dividend per share for 2018 *
Dividend payout rate *
Total dividend payout *
Equity ratio as at 31/12/2018
* Proposed dividend for the fiscal year 2018
€18.7 million
€118,090,000
118,090,000
€3.39
€1.20
35%
€141.5 million
25.5%
Annual Report 2018
KION GROUP AG
TO OUR SHAREHOLDERS
Services for shareholders
32
Services for shareholders
Active investor relations work
results. Recordings from the financial statements press conference
and the transcripts from the annual and quarterly conference
The objective of investor relations is to ensure, through continuous
calls, along with the associated presentations, form part of
dialogue, that the capital markets value the Company appropriately.
the extensive information for investors that is available on the
The Executive Board and the KION Group’s investor relations
Company’s website.
team continued their active dialogue with investors and analysts
last year. The KION Group participated in many investor confer-
ences in Germany and abroad and held numerous roadshows
Information on the website
and one-on-one meetings.
The Annual General Meeting of KION GROUP AG on 9 May
Detailed information on KION shares as well as press releases,
2018, at which around 80 per cent of the share capital was repre-
reports, presentations and information about the Annual General
sented, approved the Supervisory Board and Executive Board’s
Meeting and corporate governance in the Group can be found at
proposals with a large majority.
kiongroup.com/ir. The KION Group’s annual report is also available
The speeches of the Chief Executive Officer and the chairman
here, both as a PDF file and as an interactive online version. The
of the Supervisory Board were broadcast live at kiongroup.com/
contact details of the investor relations team can be found under
agm. A webcast of the Chief Executive Officer’s speech is also
IR Contact & Services.
available on the Company’s website.
When the 2017 annual report was published on 1 March 2018,
the Executive Board of KION GROUP AG held a financial
statements press conference and conference call. It also held a
Capital Markets Day at which it presented the updated KION
2027 strategy. At the heart of the strategy are innovation, digi-
talisation, automation, efficient energy use, and even better
products and processes – everything the KION Group needs to
continue delivering profitable growth. In addition, the Executive
Board held conference calls to report on each set of quarterly
kiongroup.com/
ir
Annual Report 2018
KION GROUP AG
32
CORPORATE GOVERNANCE
Contents
35
CORPORATE
GOVERNANCE
36
36
36
39
43
CORPORATE GOVERNANCE REPORT
Comply-or-explain statement pursuant to section 161 (1) AktG
Corporate governance practices
Working methods of the Executive Board and Supervisory Board
and composition of the committees of the Supervisory Board
Diversity
KION GROUP AGAnnual Report 2018 CORPORATE GOVERNANCE
Corporate governance report
36
Corporate governance report
Also constitutes the declaration on corporate
governance pursuant to section 289f and
section 315d HGB
The Executive Board and Supervisory Board submitted the
Company’s previous comply-or-explain statement on 13 / 18
December 2017.
Both decision-making bodies again considered the recom-
Corporate governance covers the whole system of managing and
mendations of the amended Code in detail and, on 3 / 12 Decem-
monitoring an enterprise, the principles and guidelines that shape
ber 2018, issued the following comply-or-explain statement of
its business policy and the system of internal and external control
KION GROUP AG as required by section 161 (1) AktG:
and monitoring mechanisms. The Executive Board and Supervisory
Since issuing the last declaration of conformity in December
Board of KION GROUP AG believe that a commitment, born from
2017, KION GROUP AG has complied with all but one of the
responsibility for the Company, to rigorous corporate governance
recommendations of the German Corporate Governance Code
in accordance with the accepted standards is essential to the
(the ‘Code’) as amended on 7 February 2017 and intends to do so
Company’s long-term success. Compliance with these principles
in the future.
also promotes the trust that our investors, employees, business
In derogation of section 3.8 (3) of the Code, the articles of
partners and the public have in the management and monitoring
association of KION GROUP AG do not provide for a deductible
of the Company.
for members of the Supervisory Board under D&O insurance. The
There is a close correlation between the corporate governance
Company believes that such a deductible is not customary on an
report required by the German Corporate Governance Code (the
international level and would therefore make it considerably more
‘Code’) as amended on 7 February 2017 and the content of the
difficult to find independent candidates for the Supervisory
declaration on corporate governance required by section 289f
Board, in particular candidates from outside Germany.
and section 315d of the German Commercial Code (HGB). For
this reason, the Executive Board and the Supervisory Board of
Frankfurt am Main, 3 / 12 December 2018
KION GROUP AG have combined the two statements below in
accordance with section 3.10 of the Code. The declaration on
For the Executive Board:
corporate governance pursuant to section 289f and section 315d
HGB is part of the combined management report. According to
Gordon Riske
Anke Groth
section 317 (2) sentence 6 HGB, the information provided in
accordance with section 289f and section 315d HGB does not
have to be reviewed by the auditor.
For the Supervisory Board:
1. Comply-or-explain statement
pursuant to section 161 (1) AktG
Dr John Feldmann
The comply-or-explain statement is permanently available to the
public on the website of KION GROUP AG at kiongroup.com/
Section 161 (1) of the German Stock Corporation Act (AktG)
comply_statement.
requires the management board and supervisory board of a
publicly listed company to issue an annual declaration stating that
the company has complied with, and intends to comply with, the
2. Corporate governance practices
recommendations of the Code or stating the recommendations
with which it has not complied or does not intend to comply, and
The corporate governance of KION GROUP AG is essentially, but
the reasons why.
not exclusively, determined by the provisions of the German
Stock Corporation Act and the German Codetermination Act
(MitbestG) and also follows the recommendations of the German
KION GROUP AGAnnual Report 2018
36
CORPORATE GOVERNANCE
Corporate governance report
37
Corporate Governance Code. KION GROUP AG complies with all
report to be fully compliant with the relevant statutory and
the Code’s recommendations, with one exception. These fun-
regulatory requirements and, in particular, the applicable financial
damental principles are combined with a commitment to sustain-
reporting standards. Changes to these requirements and
able business, taking account of society’s expectations in the
standards are analysed on an ongoing basis and taken into
markets in which the Company operates.
account as appropriate. Details can be found in the risk report,
In 2018, the Executive Board and the Supervisory Board (or
which is part of the combined management report.
its committees) regularly discussed corporate governance issues
in accordance with a rolling schedule of topics. This ensured that
2.3 Risk management system
the key elements of corporate governance within the KION Group
were always on the agenda at meetings of the Company’s main
For the Company to be managed professionally and responsibly,
decision-making bodies. The Supervisory Board in particular
the Executive Board must use the risk management system
complied with the supervisory duties incumbent upon it under the
established in the Company to regularly gather information about
German Stock Corporation Act. The Supervisory Board’s Audit
current risks and how they are evolving, and then report on this to
Committee, which was set up to support this task, received
the Supervisory Board’s Audit Committee. The KION Group’s risk
regular reports on the standard accounting processes, on
management system is documented in a Group risk policy that
changes to the regulatory environment and the internal control
defines tasks, processes and responsibilities and sets out the
and risk management systems, and on the audit of financial
rules for identifying, assessing, reporting and managing risk.
statements and the effectiveness of this, and then reported back
Specific individual risks are then reported by each Group entity
to the full Supervisory Board on these matters.
using an online reporting tool. Reporting on cross-segment risks
2.1 Internal control system
and groupwide risks is carried out by Controlling and the relevant
departments. The risks that have been reported are reviewed on
a quarterly basis and re-assessed until the reason for reporting a
KION GROUP AG has an internal control system designed to
risk no longer exists.
meet the specific needs of the Company. Its processes are
intended to ensure the correctness of the internal and external
2.4 Compliance management system
accounting processes, the efficiency of the Company’s business
operations and compliance with key legal provisions and internal
The Executive Board and Supervisory Board of KION GROUP AG
policies. These control processes also include the Company’s
consider that adhering rigorously to broad-ranging compliance
strategic planning, where the underlying assumptions and plans
standards is essential to sustained financial success. That is why
are reviewed on an ongoing basis and refined as necessary.
a detailed compliance programme, centring around the KION
Group Code of Compliance, has been set up for KION GROUP AG
2.2 Accounting-related internal control system
and its Group companies worldwide.
The KION Group Code of Compliance, which is available in all
For its accounting process, the KION Group has defined suitable
of the main languages relevant to the Group companies of KION
structures and processes as part of its internal control and risk
GROUP AG, provides all employees with clear guidance on how
management system and implemented them throughout the
to conduct their business in accordance with sound values and
Group. Besides defined control mechanisms, it includes, for
ethics and in compliance with the law. The aim is that all employees
example, system-based and manual reconciliation processes,
should receive regular training on the most important compliance
clear separation of
functions, strict compliance with the
subjects, in particular anti-corruption, liability of senior manage-
double-checking principle and written policies and procedures.
ment / directors’ and officers’ liability, data protection and IT secu-
The overarching aim is for the separate financial statements,
rity, communications, competition law, and foreign trade / export
consolidated financial statements and combined management
controls. Compliance activities are also focused on these areas.
KION GROUP AGAnnual Report 2018 CORPORATE GOVERNANCE
Corporate governance report
38
The Executive Board of KION GROUP AG bears collective
management report are discussed by the Audit Committee and
responsibility for the functioning of compliance management
then reviewed and approved by the Supervisory Board.
within the Group; the compliance department reports to the Chief
The independent auditors review the condensed consoli-
Executive Officer of KION GROUP AG. He has delegated the
dated interim financial statements, the condensed interim group
performance of compliance duties to the Chief Compliance
management report for the first half of the year and the
Officer. The presidents of the Operating Units are responsible for
non- financial report. The Executive Board discusses the two
compliance within the operating business, while the functional
quarterly statements and the half-year interim report with the
managers are responsible for core administrative processes in
Audit Committee before they are published.
the departments at the Group’s headquarters. Ultimate responsi-
bility for the compliance management system of course remains
2.6 Avoiding conflicts of interest
with the Chief Executive Officer of the Group. The KION com-
pliance department, the KION compliance team and the KION
Conflicts of interest between the governing bodies and other
compliance committee provide operational support to the
decision-makers in the Company or significant shareholders go
aforementioned functions. The KION compliance department
against the principles of good corporate governance and may be
focuses mainly on preventing compliance violations by providing
harmful to the Company. KION GROUP AG and its governing
guidance, information, advice and training. It manages the
bodies therefore adhere strictly to the recommendations of the
KION compliance team, in which local and regional compliance
German Corporate Governance Code on this subject. The
officers of the Group are represented.
employees of KION GROUP AG and its investees are made aware
Actual or suspected incidents of non-compliance can be
of the problem of conflicts of interest as part of compliance
reported anonymously or otherwise by calling a 24-hour compli-
training and are bound by rules on how to behave in the event of
ance hotline or by email, post or fax.
actual or potential conflicts of interest. Every Executive Board
As part of its work, the compliance department at KION
member must disclose potential conflicts of interest to the
GROUP AG cooperates closely with the legal, internal audit and
Supervisory Board immediately and must also inform the other
human resources departments. The KION compliance commit-
Executive Board members. All transactions between KION
tee, which is staffed by the heads of these departments and
GROUP AG and Executive Board members or related parties
chaired by the Chief Compliance Officer, operates as a cross-
must be concluded on an arm’s-length basis.
functional committee that primarily advises on, examines and, if
The Company attaches high priority to preventing possible
appropriate, punishes incidents of non-compliance that are
conflicts of interest from occurring in the first place. This is
reported.
especially important given the involvement of Weichai Power,
whose stake has risen to 45 per cent. The Company achieves
2.5 Audit of the financial statements
these aims by avoiding business scenarios or personnel struc-
tures that could give the impression of a conflict of interest and by
The Company’s independent auditors, which are appointed by
taking transparent steps and issuing clear communications.
means of a resolution of the Annual General Meeting, audit the
The Company’s Chief Executive Officer, Mr Gordon Riske,
separate financial statements prepared by the Executive Board of
was appointed a non-executive director of Weichai Power Co.,
KION GROUP AG, the consolidated financial statements and the
Ltd., with effect from 24 June 2013. On 14 June 2018, the term of
combined management report. Since the audit of the 2014
his appointment was extended to 31 December 2020, for which
separate and consolidated financial statements, Ms Kirsten
the Supervisory Board had previously given its consent. Appro-
Gräbner-Vogel has been the global lead service partner at the
priate precautions have been taken to ensure that this role at a
appointed independent auditors, Deloitte GmbH Wirtschafts-
parent company of the Company does not create a conflict of
prüfungsgesellschaft (Deloitte). The separate financial state-
interest relating personally to Mr Riske. Formal processes
ments, the consolidated financial statements and the combined
have been put in place to ensure that Mr Riske, in his role as a
KION GROUP AGAnnual Report 2018 38
CORPORATE GOVERNANCE
Corporate governance report
39
non- executive director of Weichai Power Co., Ltd., is not involved
in transactions that could give rise to a conflict with the interests
of the KION Group. Nor is Mr Riske involved in transactions relat-
ing to the exercise of voting rights by Weichai Power or its subsid-
iaries at the Annual General Meeting of KION GROUP AG. It has
been ensured that Mr Riske maintains a strict separation between
his duties as a non-executive director of Weichai Power Co., Ltd.,
and his duties as Chief Executive Officer of KION GROUP AG
and that he fulfils all of his legal obligations in the interests of
the Company.
Responsibilities of Executive Board members
as at 31 December 2018
TABLE 003
Member
Responsibilities
Gordon Riske
CEO of KION GROUP AG
LMH EMEA
STILL EMEA
KION Americas
Corporate Office
Corporate Communications
Corporate Strategy
Internal Audit
Corporate Compliance
KION Invest
CTO of KION GROUP AG
Product & Technology Strategy
Product Development Industrial Trucks
Product Development Supply Chain Solutions
Module & Component Development
Procurement
Quality
Production System
KPDO Initiative
CFO of KION GROUP AG
Corporate Accounting / Tax
Corporate Controlling
Corporate Finance / M&A
Investor Relations
Financial Services
Corporate HR / Labour Relations Director
Legal
Health, Safety & Environment
Logistics / Urban
Chief Asia Pacific Officer of KION
GROUP AG
KION APAC
3. Working methods of the Executive Board
and Supervisory Board and composition of
the committees of the Supervisory Board
Dr Eike Böhm
The Executive Board and Supervisory Board of KION GROUP AG
have a close and trusting working relationship focused on
ensuring the sustained success of the Company. The members
of the Executive Board regularly attend Supervisory Board
meetings, unless the Supervisory Board decides to meet without
the Executive Board.
The Executive Board promptly, comprehensively and
regularly reports to the Supervisory Board on the performance of
the KION Group. Besides the reporting obligations defined by
law, the rules of procedure for the Executive Board of KION
GROUP AG set out further reporting requirements and reser-
vations of approval in favour of the Supervisory Board.
Anke Groth
3.1 Working methods of the Executive Board
Ching Pong Quek
The Executive Board of KION GROUP AG now comprises five
members, having been extended from four members with effect
from 1 October 2018. It is responsible for managing the Company
in the Company’s interest, i.e. taking account of shareholders,
customers, employees and other stakeholders with the aim of
creating sustainable added value. The Executive Board develops
the Company’s strategy, discusses it with the Supervisory Board
and ensures that it is implemented. Every Executive Board
member is responsible for his or her own area of responsibility
and keeps the other board members informed of developments
on an ongoing basis. > TABLE 003
Susanna
Schneeberger
CDO of KION GROUP AG
Dematic
Software Development
KION Group IT
Data Protection
Digital Campus
Mobile Automation
KION GROUP AGAnnual Report 2018 CORPORATE GOVERNANCE
Corporate governance report
40
Rules of procedure laid down by the Supervisory Board define
The Supervisory Board has drawn up rules of procedure for
the areas of responsibility of the Executive Board members and
its work. These apply in addition to the requirements of the
the way in which they work together. The full Executive Board
articles of association and also define the Supervisory Board
normally meets every 14 days and meetings are chaired by the
committees. According to these rules, the chairman of the Super-
Chief Executive Officer. Individual Executive Board members
visory Board coordinates its work and the cooperation with the
sometimes take part via video conference. At the meetings, the
Executive Board, chairs the meetings of the Supervisory Board
board members discuss measures and business that, under the
and represents it externally. The Supervisory Board meets in
Executive Board’s rules of procedure, require the approval of the
person at least twice in each half of a calendar year, and adopts
full Executive Board. Resolutions of the full Executive Board are
its resolutions at these meetings. In 2018, there were six Supervi-
passed by simple majority unless a greater majority is required by
sory Board meetings in total. The focus of the Supervisory
law. The Chief Executive Officer has a casting vote in the event of
Board’s advisory activities is detailed in the Supervisory Board’s
a tied vote. Resolutions of the Executive Board may also be
report to the Annual General Meeting. Between these meetings,
adopted between meetings. Taking account of the requirements
resolutions may also be adopted in writing, by telephone or by
of section 90 AktG, the Executive Board provides the Supervisory
other similar forms of voting, provided that the chairman of the
Board with regular, timely and comprehensive information on all
Supervisory Board or, in his absence, his deputy, decides on this
matters of relevance to the business as a whole relating to the
procedure for the individual case concerned. The Supervisory
intended operating policy, strategic planning, business perfor-
Board adopts resolutions by a simple majority of the votes cast
mance, financial position, financial performance and business
unless a different procedure is prescribed by law. If a vote is tied,
risks. The Chief Executive Officer discusses these matters regu-
the matter will only be renegotiated if the majority of the Supervi-
larly with the chairman of the Supervisory Board.
sory Board vote in favour of this option. Otherwise the Board
The Executive Board’s rules of procedure specify that impor-
must vote again without delay. If this new vote on the same matter
tant transactions are subject to approval by the Supervisory
also results in an equal number of votes for and against, the chair-
Board. Budget planning, major acquisitions or capital expenditure,
man of the Supervisory Board has a casting vote. The Supervisory
for example, require the consent of the Supervisory Board.
Board has the efficiency of its work and processes reviewed by
In accordance with its articles of association, the Company is
an external party at regular intervals.
represented by two members of the Executive Board or by one
member of the Executive Board acting conjointly with a Prokurist
(person with full commercial power of representation).
3.2 Working methods of the Supervisory Board
The Supervisory Board of KION GROUP AG appoints the
members of the Executive Board and advises and monitors the
Executive Board in its management of the Company. The
Supervisory Board is fully involved from an early stage in all
decisions that are fundamental to KION GROUP AG.
The Supervisory Board of KION GROUP AG consists of
16 members, eight of whom are employee representatives and
eight are shareholder representatives. The shareholder repre-
sentatives are elected by the Annual General Meeting by
simple majority.
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41
3.3 Working methods and composition of the committees of
Board – regularly deliberate on long-term succession planning for
the Supervisory Board
the Executive Board.
The Executive Committee met four times in 2018. The main
KION GROUP AG’s Supervisory Board had four standing
topics discussed and deliberated upon by the Executive Commit-
committees in the year under review. Their tasks, responsibilities
tee in 2018 concerned the creation of a new, fifth Executive Board
and work processes comply with the provisions of the German
role and the associated appointment of Ms Susanna Schnee-
Stock Corporation Act and the German Corporate Governance
berger as Chief Digital Officer and the extension of the term of
Code. The chairman of each committee reports regularly to the
Dr Eike Böhm as Chief Technology Officer of KION GROUP AG.
full Supervisory Board on the committee’s work. The minutes of
Topics related to the Annual General Meeting, governance and
the committee meetings are made available to all Supervisory
the review of the efficiency of the Supervisory Board were also
Board members. The standing committees have each drawn up
addressed.
rules of procedure that define their tasks and working methods.
Members of the Executive Committee as at 31 December 2018:
Executive Committee
Dr John Feldmann (chairman)
The Executive Committee consists of four shareholder represent-
Özcan Pancarci (deputy chairman)
atives and four employee representatives. Its chairman is always
Dr Alexander Dibelius
the chairman of the Supervisory Board. It prepares the meetings
Jiang Kui
of the Supervisory Board and is responsible for ongoing matters
Olaf Kunz
between Supervisory Board meetings. The Executive Committee
Jörg Milla
also prepares the Supervisory Board’s decisions relating to
Hans Peter Ring
corporate governance, particularly amendments to the comply-
Claudia Wenzel
or-explain statement pursuant to section 161 AktG reflecting
changed circumstances and the checking of adherence to the
Mediation Committee
comply-or-explain statement. It also prepares documents for the
The Mediation Committee comprises the chairman of the Super-
Supervisory Board when Executive Board members are to be
visory Board, his deputy, an employee representative and a
appointed or removed and, if applicable, when a new Chief
shareholder representative. It only convenes in exceptional cases.
Executive Officer is to be appointed. Documents relating to any
If the two-thirds-of-votes majority required by section 27 (3) and
matters in connection with Executive Board remuneration are
section 31 (3) MitbestG is not reached in a vote by the Super-
also compiled by the Executive Committee. In addition, the
visory Board on the appointment of an Executive Board member,
Executive Committee is responsible for resolutions concerning
the Mediation Committee must propose candidates for the post
the conclusion, amendment and termination of Executive Board
to the Supervisory Board within one month. The chairman of the
employment contracts and agreements with Executive Board
Supervisory Board does not have a casting vote on the candidates
members governing pensions, severance packages, consultancy
proposed. The Mediation Committee did not need to be convened
and other matters and for resolutions on any matters arising as a
in 2018.
result of such contracts and agreements, unless they relate to
remuneration. The responsibilities of the Executive Committee
also include resolutions about the extension of loans to Executive
Board members, Supervisory Board members and parties
related to them within the meaning of sections 89 and 115 AktG,
as well as resolutions to approve contracts with Supervisory
Board members outside their Supervisory Board remit. The
Executive Committee should – in consultation with the Executive
KION GROUP AGAnnual Report 2018 CORPORATE GOVERNANCE
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42
Members of the Mediation Committee as at 31 December 2018:
Members of the Audit Committee as at 31 December 2018:
Dr John Feldmann (chairman)
Özcan Pancarci (deputy chairman)
Jörg Milla
Hans Peter Ring
Audit Committee
Hans Peter Ring (chairman)
Alexandra Schädler (deputy chairwoman)
Dr John Feldmann
Jörg Milla
The chairman of the Audit Committee, Hans Peter Ring, is an
The Audit Committee comprises four members. Its primary
independent member of the Supervisory Board and has the
purpose is to monitor financial reporting (including non-financial
required expertise in the areas of accountancy and auditing
reporting), the accounting process, the effectiveness of the
specified in sections 100 (5) and 107 (4) AktG.
internal control system, the risk management system, the internal
audit system, the auditing of the financial statements and
Nomination Committee
compliance, thereby supporting the Supervisory Board in its task
The Nomination Committee has four members, all of whom are
of monitoring the Company’s management. The Audit Committee
shareholder representatives and are elected by the shareholder
also reviews the work carried out by the independent auditors
representatives on the Supervisory Board. The Nomination
and checks that the independent auditors are qualified and
Committee’s only task is to propose new candidates for the
independent. It is also responsible for engaging the independent
Supervisory Board to the Company’s Annual General Meeting.
auditors, determining the focus of the audit and agreeing the fee.
The Nomination Committee met once in 2018 to discuss the
In addition, the Audit Committee exercises the rights in investee
appointment of Dr Michael Macht to the Supervisory Board.
companies set forth in section 32 (1) MitbestG.
The Audit Committee met five times in 2018. The main topics
Members of the Nomination Committee
discussed by the Audit Committee in 2018 were the 2017 annual
as at 31 December 2018:
financial statements, the quarterly statements, the interim report,
Dr John Feldmann (chairman)
the budget, the Company’s sustainability report and the regular
Dr Alexander Dibelius (deputy chairman)
subject of the key elements of corporate governance and risk
Birgit A. Behrendt
control systems within the Company.
Jiang Kui
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43
4. Diversity
sory Board believes their role as representatives of the employees
does not, per se, compromise their independence.
One of the main concerns of good corporate governance is to
The Supervisory Board is of the opinion that the priority in
ensure that appointments to the Executive Board and Supervi-
aiming for a board composition based on diversity is the expertise
sory Board are appropriate to the specific needs of the business.
of the individual members and a balanced mix of personal
Key criteria in this regard include the professional and personal
qualities, experience, skills, qualifications and knowledge in line
skills and qualifications of the members of the Executive Board
with the requirements of the business. This is the basis on which
and Supervisory Board as well as diversity in the composition of
the Supervisory Board has drawn up its profile of skills and
both boards, an appropriate degree of female representation and
expertise. The following profile of skills and expertise defines the
the independence of the Supervisory Board.
knowledge acquired through professional practice (experience)
and theoretical / academic knowledge (expertise) that should be
Composition of the Supervisory Board
represented on the Supervisory Board:
The Supervisory Board has laid down specific requirements and
objectives for its composition in recognition of its responsibilities
and obligations and taking into account the business needs of
– Experience
– Automotive industry, components and drive technologies
KION GROUP AG. Besides having the minimum professional
– Intralogistics
skills required to be a Supervisory Board member, as specified by
– Automation, particularly automation in intralogistics
law and the highest courts, all members of the Supervisory Board
– Service / aftersales business, particularly in intralogistics
of KION GROUP AG should meet the following criteria:
– Development of international marketing strategies and
GROUP AG
– Identification with the fundamental values and beliefs of KION
– Positive attitude towards the basic principles of responsible
– Personal integrity and a responsible approach to dealing with
– Ability to devote the expected amount of time required and
potential conflicts of interest
corporate governance
compliance with the limit on the number of mandates that
may be held at any one time
product portfolio strategies
– Expertise
– Development and assessment of technology
– Service / aftersales business models and technological
developments in this area
– Digitalisation and automation
– In-depth understanding of the markets in EMEA, the Americas
– Experience
and Asia
– Management of companies with an international presence,
Other targets set by the Supervisory Board with regard to its
organisational structures
composition are a standard age limit of no more than 70 at the
– Supervisory board membership in companies with an
time of appointment/election and a maximum limit for length of
international presence
membership of four terms of office. All of the current Supervisory
– Acquisitions and strategic alliances
including the development of corporate cultures and
Board members meet these requirements.
In addition, the Supervisory Board has defined what it
considers to be an adequate number of independent Supervisory
Board members. Accordingly, five shareholder representatives
on the Supervisory Board should be independent within the
meaning of section 5.4.2 of the Code. These five members are
currently Ms Behrendt, Dr Reuter, Dr Dibelius, Dr Feldmann and
Mr Ring. As regards the employee representatives, the Supervi-
KION GROUP AGAnnual Report 2018 CORPORATE GOVERNANCE
Corporate governance report
44
– Experience and expertise
– Corporate governance and compliance principles as well
Composition of the Executive Board
Against the background of the aforementioned diversity consid-
as their implementation in at least two of the regions
erations as well as demographic requirements and strategic
relevant to the Company
– Accounting and auditing
operating challenges, the Supervisory Board strives for diversity
at Executive Board level, not only in terms of appropriate female
– Capital markets and international finance.
representation but also in respect of experience, skills, expertise,
cultural background and personality. Ultimately, however, the
Each of these fields of competence is currently covered by at
Supervisory Board is guided exclusively by the skills and qualifi-
least six members of the Supervisory Board.
cations of the persons concerned when making appointments to
As 31.25 per cent of its members are female (five of 16), the
the Executive Board.
Supervisory Board meets the statutory requirements regarding
When implementing these objectives during the process of
gender representation on supervisory boards pursuant to section
appointing successors or recruiting for a new position, the Super-
96 (2) AktG. The shareholder representatives and the employee
visory Board draws up a shortlist of candidates who appear to be
representatives are agreed that attaining the objectives in relation
suitable for the Company as a result of their strategic manage-
to diversity, in particular the objectives relating to the involvement
ment experience, expertise, skills and qualifications. Demo-
of women and people from different cultural backgrounds, is con-
graphic criteria (including the standard retirement age of 65 for
sidered to be in the interests of KION GROUP AG and a task that
Executive Board members) and diversity criteria are then also
forms part of the collective responsibility of the entire Supervisory
taken into account, depending on the existing composition of the
Board. The Supervisory Board therefore supports the inclusion of
Executive Board. However, these criteria are of a subordinate
additional female members and members from different cultural
nature when making a final decision on the person to appoint.
backgrounds who meet the above criteria insofar as the skills
The Supervisory Board therefore set the target for the minimum
requirements are met.
proportion of women on the Executive Board of KION GROUP
When proposing candidates to the Annual General Meeting
AG at 0 per cent, to be achieved by 31 December 2021. The
in future, the Nomination Committee and Supervisory Board will
specification of this type of target is required by Germany’s ‘Act
take all of the aforementioned targets into account and strive to
for the equal participation of women and men in managerial
ensure that the profile of skills and expertise is still achieved. The
positions in the private and public sectors’.
Nomination Committee and Supervisory Board have no influence
Following the departure of Dr Thomas Toepfer, the Super-
on the composition of the group of employee representatives on
visory Board applied these principles when it appointed Ms Anke
the Supervisory Board because the employees in Germany are
Groth as a member of the Executive Board with effect from
free to choose whom they elect.
1 June 2018. Furthermore, it created a new, fifth Executive Board
role, reassigning responsibilities in the process, and appointed
Ms Susanna Schneeberger as a member of the Executive Board
with effect from 1 October 2018. The proportion of women on the
Executive Board of KION GROUP AG was therefore 40 per cent
as at 31 December 2018.
KION GROUP AGAnnual Report 2018 44
CORPORATE GOVERNANCE
Corporate governance report
45
Appointments to management positions below the level of the
Executive Board of KION GROUP AG
When selecting candidates for senior management levels, the
Executive Board generally considers that it is under an obligation
to make such selections on the basis of diversity, capability,
character and experience. As regards the number of women
appointed to senior management positions in the Company, the
Executive Board is striving in its implementation of the new KION
2027 strategy to increase the current proportion of women in
management positions. In this context, the Executive Board set
the target at 10 per cent for the first management level below the
Executive Board of KION GROUP AG and at 30 per cent for the
second management level, to be achieved by 31 December 2021.
The specification of this type of target is required by Germany’s
‘Act for the equal participation of women and men in managerial
positions in the private and public sectors’.
In 2018, as part of the HR initiative under the KION 2027
strategy, a dedicated diversity programme was launched whose
initial areas of activity were defined in workshops involving
participants drawn from various Operating Units and sites. The
end of 2018, for example, saw the start of the Female Mentoring
Programme, in which the Company’s high-potential female
employees are systematically coached by managers from the
highest management level in the Company.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Contents
47
COMBINED
MANAGEMENT REPORT
48
49
49
58
60
63
63
66
82
88
96
96
98
PRELIMINARY REMARKS
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 of the KION Group
KION GROUP AG
Non-financial performance indicators
OUTLOOK, RISK REPORT AND OPPORTUNITY REPORT
Outlook
Risk report
106
Opportunity report
109
DISCLOSURES RELEVANT TO ACQUISITIONS
113
REMUNERATION REPORT
113
132
Executive Board remuneration
Supervisory Board remuneration
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Preliminary remarks
48
Preliminary remarks
COMBINED MANAGEMENT REPORT
The combined management report published in the 2018 annual
report combines the group management report and the manage-
ment report of KION GROUP AG. Unless stated otherwise, the
description of the course of business (including business
performance), position and expected development refers both to
the Group and to KION GROUP AG. Sections that only contain
information on KION GROUP AG are indicated as such. The
report on the economic position includes a separate section
containing disclosures for KION GROUP AG in accordance with
the German Commercial Code (HGB).
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
49
Fundamentals of the KION Group
PROFILE OF THE
KION GROUP
Organisational structure
Management and control
Corporate governance
The KION Group follows generally accepted standards of sound,
responsible corporate governance. The German Corporate
Governance Code (DCGK) provides the framework for manage-
The KION Group is one of the world’s leading suppliers of
ment and control. As required by section 289f and section 315d
integrated supply chain solutions. Its portfolio encompasses
of the German Commercial Code (HGB), the corporate governance
forklift trucks, warehouse technology and supply chain solutions,
standards that the Group applies are set out in the declaration
including the related services. Across more than 100 countries
on corporate governance. This declaration also contains the
worldwide, the KION Group designs, builds and supports
comply-or-explain statement pursuant to section 161 AktG,
logistics solutions that optimise material and information flow
which was issued by the Executive Board and Supervisory Board
within factories, warehouses and distribution centres. The Group
of KION GROUP AG on 3 / 12 December 2018, and the corporate
is the largest manufacturer of industrial trucks in Europe, the
governance report pursuant to section 3.10 of the German
second-largest producer of industrial trucks globally and based
Corporate Governance Code, which also provides information
on revenue the leading provider of automation technology.
about the compliance standards in the Group. The declaration on
The Linde and STILL brands serve the premium industrial
corporate governance can be viewed and downloaded on the
truck segment. Baoli focuses on industrial trucks at the lower end
Company’s website. It also forms part of this annual report and is
of the volume segment and in the economy segment. Among
a component of the combined management report.
KION’s regional industrial truck brand companies, Fenwick is the
The essential features of the remuneration system are
biggest material-handling provider in France and OM Voltas is a
described in the ‘Remuneration report’ section. The total amounts
leading provider of industrial trucks in India. Dematic is a leading
for Executive Board remuneration and Supervisory Board
global supplier of integrated automation technology, software and
remuneration are also reported in the notes to the consolidated
services for optimising supply chains. Around 1.4 million industrial
financial statements (note [46]).
trucks and over 6,000 installed intralogistics systems are deployed
by customers in all industries and of all sizes on six continents.
Non-financial declaration
The KION Group comprises the parent company KION
GROUP AG, which is a public limited company under German
A separately published sustainability report provides detailed
law, and its subsidiaries. The KION Group’s strategic manage-
information on the sustainable management of the KION Group. It
ment holding company, KION GROUP AG, is listed on the Frank-
contains the KION Group’s non-financial declaration as required
furt Stock Exchange and is part of the MDAX, the STOXX Europe
under the German law to implement the corporate social respon-
600 and the FTSE Euro Mid Cap. Details of treasury shares
sibility (CSR) directive. The declaration focuses on targets, action
(pursuant to section 160 (1) no. 2 of the German Stock Corporation
steps and due diligence processes relating to the key environmental,
Act (AktG)) are provided in note [27] ‘Equity’ in the notes to the
social and employee-related aspects of the KION Group’s
consolidated financial statements.
business model, the observation of human rights and the fight
The parent company of KION GROUP AG is Weichai Power
against corruption and bribery.
(Luxembourg) Holding S.à r.l., Luxembourg (‘Weichai Power’), a
In accordance with the statutory disclosure deadlines defined
subsidiary of Weichai Power Co., Ltd., Weifang, China, which held
in section 325 HGB, the KION Group publishes its annual sustain-
45.0 per cent of the shares at the end of 2018 as far as the
ability report (including the non-financial report) by no later than
Company is aware. The free float accounted for 54.9 per cent of
the end of April each year on its website (www.kiongroup.com),
the shares, while the remaining 0.1 per cent were treasury shares.
where it will remain available for at least ten years.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
50
Executive Board
– Anke Groth, in her role as Chief Financial Officer (CFO), is in
charge of corporate accounting & tax, corporate controlling,
The Executive Board of KION GROUP AG is responsible for the
corporate finance / M&A, investor relations, financial services,
operational management of the KION Group. In the year under
legal affairs and logistics / Urban. As Labour Relations
review, the Executive Board was extended from four to five
Director, she is further responsible for corporate HR and
members and the following personnel changes were made:
– Anke Groth was appointed as a member of the Group’s
Executive Board and as Chief Financial Officer (CFO) for a
term of five years beginning 1 June 2018. Ms Groth also
assumed the role of Labour Relations Director. She replaced
health, safety & environment.
– Ching Pong Quek, Chief Asia Pacific Officer, heads up the
KION APAC Operating Unit and thus the entire Asia business
within the Industrial Trucks & Services segment.
– Susanna Schneeberger is responsible for the Dematic
Operating Unit in the Supply Chain Solutions segment and –
Dr Thomas Toepfer, who had left the Company at his own
in the role of Chief Digital Officer (CDO) – for the groupwide
request on 31 March 2018.
– Susanna Schneeberger was appointed as a member of the
Group’s Executive Board for a term of five years beginning
areas of software development, KION Group IT, data
protection, mobile automation and the Digital Campus.
1 October 2018. She took on the newly created role of Chief
The Group Executive Committee (GEC) advises the Executive
Digital Officer (CDO), assuming strategic responsibility for
Board of KION GROUP AG and provides input from the Operating
groupwide activities aimed at digitalisation and networking
Units. The committee comprises the Executive Board members
products and processes as well as operational responsibility
as well as the presidents of the five Operating Units.
for the Supply Chains Solutions segment.
– Dr Eike Böhm was reappointed for a further three years as
an Executive Board member and Chief Technology Officer
The Executive Board maintains a relationship of trust with,
and is monitored by, the Company’s Supervisory Board.
(CTO) of KION GROUP AG. His second term of appointment
Supervisory Board
will commence on 1 August 2019.
The Supervisory Board, which was formed in accordance with the
As at 31 December 2018, the responsibilities of the Executive
German Codetermination Act (MitbestG), comprises 16 people. It
Board members were as follows:
advises the Executive Board in its handling of significant matters
– Gordon Riske, Chief Executive Officer (CEO), is responsible
for the LMH EMEA, STILL EMEA and KION Americas
and business transactions. To increase the efficiency of its work,
the Supervisory Board is supported by four standing committees:
the Nomination Committee, the Executive Committee, the Audit
Operating Units in the Industrial Trucks & Services segment.
Committee and the Mediation Committee.
He also remains in charge of the following group functions:
The shareholder representatives’ term of office ends at the
corporate office, corporate communications, corporate strat-
Annual General Meeting in 2022. Dr Michael Macht was appointed
egy, internal audit, corporate compliance and KION Invest.
– Dr Eike Böhm, in his role as Chief Technology Officer (CTO),
has groupwide responsibility for research and development
to the Supervisory Board with effect from 9 October 2018. He
succeeds Mr Tan Xuguang, Chairman of the Board of Directors of
Weichai Power Co., Ltd., who stepped down on 30 September
in both the Industrial Trucks & Services and the Supply
2018. Mr Martin Fahrendorf succeeded Mr Denis Heljic as an
Chain Solutions segments, including modules & components,
employee representative with effect from 10 May 2018.
and for procurement, quality, the production system and the
KION Product Development Optimisation (KPDO) initiative.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
51
Business model and organisational structure
technology, efficiency, functionality and design. In France, Linde
products are sold under the Fenwick brand.
The KION Group’s business model is designed so that cus-
STILL is predominantly an international premium provider of
tomers of all sizes and from all kinds of industries can obtain
trucks with electric and diesel-electric drives. It mainly focuses on
the full spectrum of material handling products and services
the European and Latin American markets.
from a single source. Thanks to its broad technology base,
Baoli is the international brand for the lower end of the volume
diversified product portfolio and worldwide service network,
segment and the economy segment.
the KION Group has a comprehensive portfolio of such prod-
OM Voltas is the local brand company for the Indian market,
ucts and services in the market.
through which the KION India Pvt. Ltd. subsidiary manufactures
The KION Group’s market activities are divided into five
and sells electric and IC forklift trucks and warehouse trucks.
Operating Units: LMH EMEA, STILL EMEA, KION APAC, KION
KION Financial Services (FS) is an internal funding partner for
Americas and Dematic. LMH EMEA and STILL EMEA each
the Industrial Trucks & Services segment, providing finance
concentrate on Europe, the Middle East and Africa. KION APAC
solutions to support sales. Its activities comprise the financing of
and KION Americas hold cross-brand responsibility for industrial
long-term leasing business for external customers, the internal
truck business in the Asia-Pacific region and the Americas
financing of the short-term rental business and the related risk
respectively. Dematic is the global supply chain solutions
management. In the large sales markets with a high volume of
business. While the Operating Units have full operational and
financing and leasing, legally independent FS companies handle
commercial responsibility within their markets, KION GROUP AG
this business.
is the strategic management holding company and is responsible
So that it can fully cater to the needs of material handling cus-
for the groupwide strategy and groupwide business standards.
tomers worldwide, the business model of the Industrial Trucks &
For internal management purposes, the KION Group has
Services segment covers the key steps of the value chain: prod-
divided its operating business into two segments that correspond
uct development, manufacturing, sales and service, truck rental
to the segments as required by international financial reporting
and used trucks, fleet management and financial services that
standards (IFRS 8). The industrial truck business, including the
support the core industrial truck business.
supporting financial services, is shown in the Industrial Trucks &
The segment earns just over half of its revenue by selling
Services segment, while activities focusing on end-to-end
industrial trucks. The product portfolio includes counterbalance
solutions make up the Supply Chain Solutions segment. The two
trucks powered by an electric drive or internal combustion engine,
operating segments complement each other because they both
warehouse trucks (ride-on and hand-operated) and towing
have a strong market position and regional presence. The Corpo-
vehicles for industrial applications covering all load ranges.
rate Services segment comprises the other activities and holding
Worldwide research and development activities enable the
functions of the KION Group. These include service companies
Industrial Trucks & Services segment to consolidate its technology
that provide services such as IT and logistics across all segments.
leadership, which it is extending in the areas of energy-efficient
and low-emission drive technologies and automation solutions. In
Industrial Trucks & Services segment
this field, the KION Group operates 16 production facilities for
industrial trucks and components in eight countries. So that it can
The Industrial Trucks & Services segment encompasses the
ensure security of supply and the availability of spare parts for
activities of the international brand companies Linde, STILL and
important components in order to meet customers’ specific
Baoli, the local brand companies Fenwick and OM Voltas plus the
requirements, the segment manufactures major components
financial services business.
itself – notably lift masts, axles, counterweights and safety
Linde is an international premium brand and technology leader
equipment. Other components – such as hydraulic components,
that meets customers’ most sophisticated requirements regarding
electronic components, rechargeable batteries, engine components
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
52
and industrial tyres – are purchased through the global procure-
Supply Chain Solutions segment
ment organisation.
As a rule, industrial trucks are built according to the customer’s
Through the Dematic brand, the Supply Chain Solutions segment is
individual specifications. Networked fleet management solutions
a leading global supplier of integrated automation technology,
and the advantages for customers in terms of total cost of owner-
software and services for optimising supply chains.
ship (TCO) support the international Linde and STILL brands’
Manual and automated solutions are provided for all func-
premium positioning. The segment is underpinned by an exten-
tions along customers’ supply chains, from goods inward and
sive sales and service network comprising more than 1,600 outlets
multishuttle warehouse systems to picking, automated palletising
in over 100 countries and staffed by more than 18,000 service
and automated guided vehicle systems. Picking equipment
employees. Almost half of them are employed by the KION Group.
controlled by radio, voice or light is available for nearly all goods
The worldwide vehicle fleet, which consisted of around
and packaging types, whether it is used for case, individual item,
1.4 million industrial trucks at the end of 2018, provides a stable
split-case or pallet picking. Automated storage and retrieval
base for the service business. This business helps to smooth out
systems (ASRS) and compact, powerful split-case and pallet
fluctuations in the segment’s revenue, reduces dependency on
picking stations can be used to achieve very fast throughput
market cycles and supports new truck sales by maintaining
times and picking rates. At the same time, cross-docking
lasting customer relationships. The proportion of service business
solutions increase the efficiency of the system as a whole by
is continually increasing across all price segments. Extensive
eliminating the unnecessary handling and storage of goods.
services such as software-based fleet management are offered,
Real-time management of the supply chain solutions is
mainly for premium products. There are also individual orders
based on the proprietary software platform Dematic iQ, which
for repairs and maintenance work as well as for spare parts. The
can be easily integrated into the customer’s existing application
Operating Units also have extensive used truck and rental truck
landscape. By providing real-time material flow data analyses,
businesses, allowing peaks in capacity requirements to be met
among other things, Dematic iQ can help with the data-based
and customers to be supported after their leases have expired.
optimisation of all processes to ensure seamless order processing.
Financial services support new truck business in many
It also supports performance management functions for measuring
markets, forming another pillar of the service business. About
and controlling performance.
half of all new trucks are financed via the KION Group itself or
The segment is primarily involved in customer-specific,
via external banks and financing partners. Offering financial
longer-term project business. With global resources, eleven
services is therefore part of the truck sales process. A lease
production facilities worldwide and regional teams of experts,
contract is generally linked to a service contract throughout
Dematic is able to plan and deliver logistics solutions with
the term of the finance agreement.
varying degrees of complexity anywhere in the world.
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Fundamentals of the KION Group
53
The (new) project business (business solutions) covers every
phase of a new installation: analysis of the customer’s needs
and the general parameters, provision of appropriate advice,
computer simulation of bespoke intralogistics solutions in the
customer’s individual environment, technical planning and design
of the system, implementation of the control technology and its
integration into the customer’s existing IT infrastructure, site and
project management, plant monitoring and support for the
customer during implementation of the system, including training
for the workforce.
The system components, which are specified in detail for
each customer project, such as automatic guided vehicles,
palletisers, storage and picking equipment including automated
storage and retrieval systems, sorters and conveyors, are
manufactured inhouse or, in some cases, by quality-assured
third parties.
Modernisation work and services (customer services), which
usually cover the entire lifetime of an installation, are provided to
local customers by approximately 1,400 employees in over
20 countries. The service business benefits from a sizeable
installed base of more than 6,000 systems. > DIAGRAM 003
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
54
Production sites of the KION Group
Production sites of the KION Group
DIAGRAM 003
Dinklage
Zwijndrecht
Châtellerault
Offenbach
Reutlingen
Milan
Hamburg
Bielefeld
Geisa
Kahl
Aschaffenburg
Luzzara
Stříbro
Český Krumlov
Weilbach
Industrial Trucks & Services
Brazil
Indaiatuba / São Paulo: Counterbalance trucks with electric drive
or IC engine, warehouse technology
People’s Republic of China
Jingjiang: Counterbalance trucks with electric drive or IC engine,
warehouse technology
Xiamen: Counterbalance trucks with electric drive or IC engine,
heavy trucks, warehouse technology
France
Châtellerault: Warehouse technology
India
Germany
Aschaffenburg: Counterbalance trucks with electric drive or
IC engine
Dinklage: Component production
Geisa: Component production
Pune: Counterbalance trucks with electric drive or IC engine,
warehouse technology
Italy
Luzzara: Warehouse technology
Czech Republic
Hamburg: Counterbalance trucks with electric drive or IC engine,
warehouse technology, components
Český Krumlov: Component production
Stříbro: Warehouse technology
Kahl: Spare parts center, component production
Reutlingen: Very narrow aisle trucks
Weilbach: Component production
United States
Summerville: Counterbalance trucks with electric drive or
IC engine, warehouse technology
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
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Supply Chain Solutions
Australia
Sydney: Conveyor and sortation systems, automated guided
vehicle systems, system components, and racking
Belgium
Zwijndrecht: Automated guided vehicle systems
People’s Republic of China
Suzhou: Conveyor, sortation, storage and retrieval systems
Germany
Bielefeld: Sortation systems
Offenbach: Conveyor, sortation, storage and retrieval systems
Italy
Milan: Sortation systems
Czech Republic
Stříbro: Conveyor systems
Mexico
Monterrey: Conveyor, sortation, storage and retrieval systems,
system components
United States
Grand Rapids: Conveyor, sortation, storage and retrieval systems,
system components
Holland: Automated guided vehicle systems
Salt Lake City: Conveyor, sortation, storage and retrieval systems,
automated guided vehicle systems, system components
Pune
Holland
Grand Rapids
Salt Lake City
Summerville
Monterrey
Indaiatuba
Jingjiang
Suzhou
Xiamen
Sydney
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Fundamentals of the KION Group
56
Market and influencing factors
the Supply Chain Solutions segment. The products and services
of companies in the KION Group have to comply with the specific
According to the KION Group’s estimates, the material handling
legal requirements in their respective markets. Compliance with
market – comprising forklift trucks, warehouse technology and
the different requirements has to be verified or certified. Many of
supply chain solutions – has expanded at a faster rate than global
the legal requirements are enshrined in product-specific standards
economic growth over the past five years. The value of the market
and other norms (e.g. EN, ISO and DIN).
has increased at an average annual rate of around 6 per cent.
Legal requirements also apply to the construction and
Of the relevant market volume, almost 60 per cent is esti-
operation of production facilities, including in relation to air pollu-
mated to be attributable to industrial trucks and related services,
tion avoidance, noise reduction, waste production & disposal and
which are essential elements in the production and logistics
health & safety. The KION Group fulfils all of these requirements
processes of many manufacturers as well as in the wholesale
as well as all the legal provisions pertaining to exports and
and retail sectors. The remaining market volume is accounted for
financing business.
by supply chain solutions, the growth of which is fuelled in no
small part by the increasing automation and digitalisation of
Influencing factors in the Industrial
production and logistics processes in various industries. The
Trucks & Services segment
main overarching growth drivers are the advancing intercon-
nectivity of the global economy and additional transport services
In recent years, the value of the global market for industrial trucks
between ever-more fragmented value chains and supply chains,
has increased by an average of 5 per cent per year. This is due in
which necessitate decentralised warehouse and logistics capacity.
equal measure to the growth in the volume of new truck business
The strong growth of e-commerce and the increasing prevalence
and the rise in the contribution from the service business com-
of multichannel approaches in all kinds of industries are boosting
pared to the past. Measured in terms of units ordered, 37 per cent
capital expenditure on the reconfiguration of supply chains.
of the global market was attributable to IC counterbalance trucks
Economic conditions in the different regions and the rates of
in 2018, while electric forklift trucks accounted for 17 per cent and
growth in global trade have a major influence on customers’
warehouse technology for 46 per cent. It should be noted that the
willingness to invest. Historically, new business in the Industrial
per-unit price for warehouse technology is considerably lower
Trucks & Services segment has shown a very strong correlation
than for forklift trucks, which is why the breakdown by value
with the performance of broad economic indicators, such as
shows that trucks clearly dominate. IC trucks continue to make
industrial output. By contrast, the Supply Chain Solutions seg-
up a comparatively high proportion of the total unit volume in
ment tends to be less cyclical owing to longer projects that often
growth regions. However, the strongest growth in the new truck
last several years and due to the stable growth of e-commerce. In
business in recent years has been for forklift trucks and
both segments, the service business is generally more stable
warehouse trucks powered by an electric motor. Much of the
than the product or project business as it is linked to the installed
additional volume is attributable to the electrification of manual
base of trucks and systems over their entire lifetime. The eco-
hand pallet trucks, which have been replaced by entry-level
nomic situation is also affected by competition levels, exchange
trucks in the lower weight categories. Better drive technologies,
rates and changes in commodity prices. Economic trends within
in particular lithium-ion drives, are also contributing to the
individual customer sectors are another important factor.
above-average growth in electric trucks and equipment. Moreover,
The most significant of these are manufacturing, the food
driverless transport solutions developed by automating
industry, general merchandise and grocery wholesale and retail,
standard warehouse trucks are becoming more and more
logistics services and pure e-commerce, which has the highest
appealing to customers.
growth rates.
The upper price segment continues to benefit from customers’
Regulatory frameworks have a major impact on the business
growing requirements regarding the quality, efficiency and eco-
model, both in the Industrial Trucks & Services segment and in
friendliness of industrial trucks and from higher expectations in
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
57
terms of service, availability of spare parts and flexible rental solu-
Market position
tions. In this segment, customers are much more focused than
before on optimising total cost of ownership and, increasingly, on
In 2018, the Industrial Trucks & Services segment achieved a
the ability to integrate the trucks into fully automated intralogistics
14.1 per cent share of the global market based on unit sales (2017:
solutions. At the same time, there is mounting competitive pres-
14.4 per cent) and is thus still the second-largest manufacturer of
sure worldwide as some manufacturers in the economy segment
industrial trucks. It remained the market leader in Europe. At the
based in emerging markets are pursuing an international expan-
same time, the KION Group is a leading global producer of elec-
sion strategy. In mature markets and, increasingly, in growth
tric forklift and warehouse trucks. In China, it is still the leading
regions, the large number of trucks in use also provides a strong
foreign manufacturer and number three overall. The KION Group
base for replacement business and rising demand for services.
is also among the leading providers in Brazil and India.
Influencing factors in the Supply Chain Solutions segment
manufacturer in the relevant market segment. This is also the
case in the fast-growing AGV and AMR segment, where Dematic
According to the KION Group’s estimates, the market for supply
is the leading vendor, according to Interact Analysis (2017).
The Supply Chain Solutions segment (Dematic) is the largest
chain solutions has expanded much faster than the market for
industrial trucks and services over the past five years owing to
growing demand in the main customer industries. Both the
project business (business solutions) and downstream services
(customer services) contributed to this expansion. The service
business benefits from the ever-larger installed base and the
trend towards the outsourcing of logistics processes.
The growth of e-commerce has a major influence on demand
for supply chain solutions, including warehouse automation and
solutions for sorting and for automated goods transport. According
to market analysis by the Ecommerce Foundation, global online
trading (B2C) expanded at an average rate of around 15 per cent
between 2013 and 2017. Increasing complexity, cost pressures
and shifting demand patterns require shorter lead times, a more
efficient flow of goods, a wider product range and process relia-
bility. This is pushing up demand for decentralised warehouse
and logistics capacity that enables faster deliveries and, due to
automated processes, keeps down personnel expenses and
floor space requirements. The digitalisation and automation of
industrial production and supply chains and the multichannel
strategies being adopted in traditional industries – e.g. supermarket
chains, grocery wholesale and retail, fashion, food and beverage
manufacturing, and parcel and courier services – are also
contributing to this. At the same time, the focus of technological
progress is increasingly shifting towards software and robotics
solutions. Interact Analysis forecasts strong growth in the market
for automated guided vehicles (AGVs) and autonomous mobile
robots (AMRs) over the next five years.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
58
STRATEGY OF THE KION GROUP
Strategic fields of action and
measures in 2018
Objectives of the KION 2027 strategy
Five fields of action have been defined for the KION 2027
strategy – energy, digital, automation, innovation and perfor-
mance – for which a wide range of strategic measures were
In 2018, the KION Group began implementing its updated strat-
implemented in 2018:
egy, KION 2027. It provides guidance on the strategic direction to
be taken over the next decade and is aligned with the KION
Energy
Group’s vision: “We are the best company in the world at
understanding our customers’ material handling needs and
In the material handling market, the KION Group wants to lead
providing the right solutions.”
the way in terms of efficient energy use by its products and
Following the integration of Dematic, the KION 2027 strategy’s
solutions. Thanks in no small part to the high energy-efficiency of
aim is to unlock the potential of the entire Group and place an
its premium brands’ products, the KION Group has become a
even greater focus on a shared, customer-centric innovation,
global market leader for electric forklift trucks and warehouse
sales and brand strategy. The emphasis is on developing and
trucks. A focus of the strategy is to develop and commercialise
marketing integrated, automated supply chain solutions and
new energy sources for industrial trucks and related services,
mobile automation solutions for customers around the world. In
such as the provision of advice on energy matters.
the Industrial Trucks & Services segment, consultancy and pro-
Several measures enabled the KION Group to move a step
ject work are increasingly being added to the traditional portfolio
closer to its objective in 2018. Energy-efficient lithium-ion batteries,
of products and services. And in the Supply Chain Solutions seg-
which offer a number of benefits including shorter charging times,
ment, the range of solutions for customers is being expanded
lower operating costs and greater range and availability, are now
through partnerships, among other things. The KION 2027
an option for the entire Linde and STILL fleet. The RX 20 electric
strategy provides the framework for profitable growth in the
forklift truck made by STILL won the International Intralogistics
Group and sets groupwide targets:
and Forklift Truck of the Year award in the Counter Balanced
– Growth: The KION Group aims to grow at a faster rate
than the global material handling market by evolving into a
solutions provider in both segments.
– Profitability: The KION Group wants to retain its position as the
most profitable supplier in the industry and improve its EBIT
margin so that it is permanently in the double-digit range.
– Efficient use of capital: The KION Group is working stead-
fastly to optimise the return on capital employed (ROCE).
Truck category (see ‘Research and development’). Furthermore,
Linde’s new rental concept is encouraging the use of energy-saving
drive technology in intralogistics. The benefits for customers are
flexibility and financial security over the entire usage period.
Through its strategic partnership with EP Equipment, Co., Ltd.,
Hangzhou, a leading Chinese manufacturer of warehouse trucks,
the KION Group improved its market position in the entry-level
segment for lightweight warehouse trucks. It will also drive for-
ward electrification based on lithium-ion technology in this seg-
Besides increasing earnings, the focus here is on asset
ment. The KION Group is also a leader in fuel-cell technology,
management and efficient use of capital.
– Resilience: Profitability throughout the various market cycles
is to be guaranteed by a robust business model. This will
involve greater diversification in terms of regions and cus-
tomer sectors alongside efforts to expand the service
business and further optimise the production network.
as evidenced by a rising number of customer orders.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
59
Digital
Building on its leading position in the AGV and AMR segment,
Dematic improved its range of automated guided vehicle systems
The KION Group is aligning its business with an increasingly
significantly last year. Dematic’s new robotics centre of excellence,
digital world. The digitalisation of customer solutions, which will
which focuses on developing and implementing robot-based
even include fully automated warehouses incorporating robotics
automation, delivered the first market-ready product in July. The
solutions, will be accompanied by the digitalisation of internal
new robotic piece picking module completes the automation of
processes. Digital solutions will be developed for customers to
order processing and increases throughput.
improve the efficiency of their intralogistics. The KION Group will
The Dematic iQ software, which enables real-time manage-
digitalise its inhouse processes so that they are more effective. It
ment of material flow solutions, was expanded with the cloud-based
will not only integrate software into solutions but also increasingly
asset performance management system Dematic iQ InSights. This
market it to customers as a separate product. New internal
new module increases warehouse efficiency through end-to-end
organisational structures will enable the KION Group to cater to
facilities management. Linde and STILL have also extended their
the high expectations regarding the speed at which solutions are
digital offerings, in particular for fleet management.
created and adapted. This will pave the way for agile development
and embed it across the KION Group.
Innovation
The important role that digitalisation plays was recognised
with the creation of a fifth Executive Board role in 2018. Susanna
The KION Group is driving innovation in the material handling
Schneeberger has operational responsibility for the Supply Chain
market with an effective innovation ecosystem and cutting-edge,
Solutions segment (Dematic) and, as Chief Digital Officer (CDO),
rapid development processes. It is developing new technologies
coordinates the further development of the IT systems and
into innovative products for use in both segments. To this end, it
manages the groupwide activities aimed at digitalisation and
enters into strategic partnerships with research institutes, univer-
networking products and processes. The new KION Digital
sities and innovative companies so that it can go to market quickly
Campus, established in early 2018 as an agile innovation labo-
with new products and solutions.
ratory for new digital solutions and business models, is an
In addition to the investment in the KION Digital Campus, a
example of the speed of digital change within the KION Group.
further example in 2018 was the integration and refinement of the
The laboratory instructs teams in agile work methods and soft-
offering of Comnovo, a start-up acquired in 2017. Comnovo has
ware developers help them to rapidly create minimum viable
developed Safety Guard, an assistance system that uses
products for initial use in test phases. The first solutions devel-
ultra-wideband technology to increase safety in Logistics 4.0. The
oped in the Campus include a chatbot app for service technicians
assistance system now plays an important role in delivering
and an application for data-based fleet optimisation.
Linde’s VISION ZERO, an advisory and training package designed
Automation
to increase productivity and prevent accidents at work. The KION
Group also expanded its collaboration with external research
institutes and scientists, for example as part of QBIIK, a joint
The KION Group’s solutions will enable customers to use auto-
research and development project between STILL and the
mated technologies effectively and will help them to achieve a
Federal Ministry for Economic Affairs and Energy aimed at
‘lights-out’ warehouse. Today, the KION Group and its two
improving self-learning autonomous truck technology. KION
segments cover the complete spectrum, from customers with
Invest is a newly established unit that works with start-ups to
just one forklift truck to those with fully automated large-scale
drive forward new technologies and innovative business models
warehouses. It will continue to develop different solutions so that
that will benefit KION Group customers in the future.
it can offer all customers a scalable automation solution that is
suited to their particular requirements and to which extra compo-
nents can be added.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
60
Performance
MANAGEMENT SYSTEM
The KION Group is continually improving internal efficiency,
optimising the performance of its products from a customer per-
spective and fully leveraging synergies.
Core key performance indicators
In 2018, the KION Group continued its efficiency drive at
European production sites in the Industrial Trucks & Services
The KION Group’s strategy, which centres on value and growth,
segment. The new and largely automated powder painting plant
is reflected in how the Company is managed. It uses five core key
came online at the Linde site in Aschaffenburg during the first
performance indicators (KPIs), which remained unchanged in the
quarter of 2018. A new logistics centre at the STILL site in
reporting year, to continuously monitor market success, profita-
Hamburg serves as the hub for internal logistics, including the
bility, financial strength and liquidity. The performance targets of
storage and dispatch of large truck parts. Dematic is now able to
the Group and the segments are based on selected financial
serve customers in the European market even better thanks to its
KPIs, as is the performance-based remuneration paid to manag-
new factory in Stříbro in the Czech Republic, which commenced
ers. The KPIs used to manage the segments are order intake,
operations in the first quarter of 2018. It produces modules for
revenue and adjusted EBIT. As a rule, the KPIs are measured and
multishuttles and modular conveyor systems.
made available to the Executive Board in a comprehensive report
Efforts were also focused on even more efficient product
each month. This enables the management team to take prompt
development based on a global, modular platform strategy
corrective action in the event of variances compared with target
that allows for localisation with minimal effort. The diesel trucks
figures. > TABLE 004
developed in the Chinese research and development centre, for
example, are also available on the North American market through
local supply chains. The offering for the US market comprises
three warehouse trucks and a new diesel truck with a load capacity
of four to five tonnes.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
Key performance indicators
in € million
Order intake
Revenue
Adjusted EBIT **
Free cash flow
ROCE
61
TABLE 004
2017 *
7,979.1
7,598.1
777.3
474.3
9.3%
2018
8,656.7
7,995.7
789.9
519.9
9.3%
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
** Adjusted for PPA items and non-recurring items
KPIs related to business volume
Liquidity-related KPI
Order intake and revenue
Free cash flow
Order intake and revenue are broken down by segment, region
Free cash flow is the main KPI for managing liquidity and financ-
and product category in the KION Group’s management reporting
ing activities. It is determined by the KION Group’s operating
so that growth drivers and pertinent trends can be identified and
activities and investing activities. Carefully targeted manage-
analysed at an early stage. Order intake is a leading indicator for
ment of working capital and the controlling of capital expenditure
revenue. The length of time between receipt and invoicing of an
are important tools in generating free cash flow. Free cash flow
order varies between business units and product categories.
does not include interest arising from financing activities.
Earnings-related KPI
Profitability-related KPI
Adjusted EBIT
ROCE
The key figure used for operational management and analysis of
Return on capital employed (ROCE) is another core KPI. It is the
the KION Group’s financial performance is adjusted earnings
ratio of adjusted EBIT to capital employed. ROCE is measured
before interest and tax (EBIT). It is calculated in the same way as
annually. > TABLE 005
EBIT, except that it does not take account of purchase price
allocation effects or any non-recurring items.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
Return on capital employed (ROCE)
in € million
Total assets
- less selected assets ¹
- less selected liabilities ²
Capital employed
Adjusted EBIT
ROCE
62
TABLE 005
2017 *
12,337.7
– 1,547.9
– 2,413.3
8,376.5
777.3
9.3%
2018
12,968.8
– 1,730.4
– 2,708.0
8,530.3
789.9
9.3%
1 Lease receivables, income tax receivables, cash and cash equivalents, PPA items 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
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
Other key performance indicators
Besides the aforementioned core KPIs, the KION Group uses
a wealth of additional financial KPIs. The main one is the
adjusted EBIT margin, which is besides ROCE a relevant com-
ponent of remuneration and is also a target in the KION 2027
strategy. There are also non-financial KPIs, which primarily
relate to customers, employees, sustainability and technology.
Some of them are used operationally as leading indicators for
the financial KPIs.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
63
Report on the economic position
MACROECONOMIC AND SECTOR-
SPECIFIC CONDITIONS
Macroeconomic conditions
The pace of growth tailed off over the course of the year. One
of the main reasons was an increasing reluctance to invest in
view of growing geopolitical and trade-policy uncertainties. The
escalating trade dispute between the US and China led to greater
doubt about the stability of the upturn, as did the difficult
negotiations on the United Kingdom’s departure from the EU and
the diminishing budgetary discipline in Italy. Deteriorating financial
Global economic growth continued at a robust pace in 2018. The
conditions in the emerging markets against a backdrop of
upturns in the United States and India made up for the moderate
higher inflation (predominantly driven by the oil price), interest-
decline in growth rates in the European Union, China and various
rate hikes and the negative balances of payments resulting from
emerging markets. Growth rates for global industrial output and
the resurgent US dollar also played their part in the slowdown.
the worldwide volume of trade were both down compared
> DIAGRAM 004
with 2017, although they remained high thanks to capital expend-
iture and strong domestic demand in many economies.
Gross domestic product in 2018 – real year-on-year change
DIAGRAM 004
INDIA
CHINA
WORLD
USA
EU
RUSSIA
GERMANY
BRAZIL
JAPAN
3.0%
2.9%
1.9%
1.6%
1.5%
1.2%
0.8%
7.4%
6.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Source: Oxford Economics (as at 16/01/2019)
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
64
Sectoral conditions
In the EMEA region (western Europe, eastern Europe, Middle
East and Africa), which is still the KION Group’s most important
The global material handling market, which comprises industrial
region, order numbers were up by 10.8 per cent. This was on a
trucks and supply chain solutions, again grew at a much faster
par with the growth rate in 2017, thanks to contributions from both
rate than the global economy in 2018. Despite the spiralling trade
western and eastern Europe. At 4.1 per cent, the rate of increase
disputes, the high volume of goods traded worldwide led once
in the Americas region (North, Central and South America)
again to growing demand for industrial trucks in all of the KION
was lower than in 2017. While the rate of growth was down
Group’s sales regions. At the same time, demand rose sharply for
significantly in Central and South America, the US also registered
warehouse automation and for sorting and picking solutions,
markedly slower growth. Despite a noticeable flattening, the
partly in connection with the creation of extra warehouse capacity
APAC region (Asia-Pacific) again generated the strongest
for the expanding e-commerce market.
rise, driven to a large extent by demand for electric-powered
Industrial Trucks & Services
trucks. > TABLE 006
Supply Chain Solutions
Measured in terms of the number of trucks ordered, the global
market for industrial trucks registered strong growth of
The market for supply chain solutions again expanded rapidly in
10.3 per cent in 2018. Around 1.5 million industrial trucks
2018. Burgeoning e-commerce is continuing to have a significant
were ordered in total worldwide, with significant increases in all
impact, as is the related refocusing of supply chains on multi-
product categories. Orders for new IC trucks were up by
channel approaches. A steadily growing number of companies
6.4 per cent, although the rate of growth in China, the biggest
are investing in the expansion and optimisation of their warehous-
individual IC market, was a lot slower than in 2017. Unit sales of
ing and logistics capacity in order to shorten lead times, improve
electric forklift trucks rose by 9.3 per cent. For warehouse trucks,
the efficiency of the flow of goods and widen their product range.
the increase was 14.0 per cent. One of the main reasons for this
Automated warehouse systems include not only solutions for
growth was that manual equipment was replaced by entry-level
individual processes, such as picking and packing, but also fully
trucks in the lower price segment, particularly electric hand pallet
integrated end-to-end solutions.
trucks in the lower weight categories.
Global industrial truck market (order intake)
in thousand units
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
World
Source: WITS/FEM
2018
435.0
94.1
36.2
288.8
39.5
647.3
2017
395.5
78.4
36.4
277.7
37.7
571.4
1,540.9
1,397.2
TABLE 006
Change
10.0%
20.0%
– 0.6%
4.0%
5.0%
13.3%
10.3%
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
65
In the US market, the volume of e-commerce sales again rose
it subsequently fell sharply. By contrast, rubber became cheaper
sharply year on year and the proportion of retail business
due to declining demand from the middle of the year onward, and
transacted online increased from 8.7 per cent to 9.6 per cent.
the average price in 2018 was lower than the average in 2017.
This meant a greater flow of goods in warehousing and logistics,
as shown by the Prologis Industrial Business Indicator. The
resulting increase in logistics capacity utilisation is leading to
Financial markets
investment in distribution centres located close to consumers,
and the trend for large building units accelerated sharply. At the
In the reporting year, the KION Group billed 48.1 per cent of
same time, there is growing demand for more efficient ware-
revenue in foreign currencies, the most important of which were
houses, especially as the majority are still managed manually.
the US dollar, China’s renminbi and pound sterling.
Capital expenditure on warehouse equipment and technology,
Overall, currency effects had a slight negative impact on the
including rising investment in warehouse management systems,
KION Group’s business situation in 2018. Relative to the dollar,
was therefore again at a high level in 2018.
the euro was worth approximately 5 per cent less on average
Procurement markets
in 2018 compared with the average for 2017, as the US dollar
appreciated significantly in the second half of the year. Against
pound sterling and the Chinese renminbi, the euro made only
On the whole, prices for the commodities used by the KION
moderate gains. > TABLE 007
Group rose sharply over the course of 2018. Steel, the most
important commodity, became more expensive during the year
and was up by more than 5 per cent on the average price for
2017. The average price of copper (LME) also increased year on
year, reaching its highest level since 2014. The average price of oil
in 2018 was also well above the previous year’s average. The
price of Brent crude maintained a clear uptrend until October
and, for a time, exceeded the threshold of US$ 75 per barrel, but
Currencies
Average rate per Euro
Australia (AUD)
Brazil (BRL)
China (CNY)
United Kingdom (GBP)
USA (USD)
Source: Bloomberg
TABLE 007
2017
1.4734
3.6090
7.6292
0.8764
1.1300
2018
1.5801
4.3073
7.8066
0.8848
1.1809
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
66
Business performance in the Group
In 2018, the KION Group focused on strengthening its position
in emerging markets in line with its KION 2027 strategy. Back in
January 2018, the KION Group entered into an exclusive and
FINANCIAL POSITION AND FINANCIAL
PERFORMANCE OF THE KION GROUP
global strategic partnership with EP Equipment, Co., Ltd.,
Overall assessment of the economic situation
Hangzhou, People’s Republic of China, a leading Chinese manu-
facturer of warehouse trucks. In this context, the KION Group
2018 was another successful year for the KION Group. The
also plans to acquire a non-controlling interest in EP Equipment,
targets set for its monetary KPIs for 2018 were achieved both at
Co., Ltd., thereby expanding its product offering in the entry-level
Group level and in the two segments, despite a negative overall
segment for lightweight warehouse trucks in the Chinese market
currency effect over the course of the year. It should be empha-
and improving on its worldwide position as the leading supplier of
sised that the brief dip in EBIT and free cash flow in the first half
electric-powered material handling equipment.
of the year was largely reversed again as a result of the faster
In the first quarter of 2018, the KION Group’s production
revenue growth in the second half of the year. The corrective
network was enlarged when the factory in Stříbro, Czech
measures taken in the Industrial Trucks & Services segment
Republic, commenced operations and began manufacturing
had the desired effect on the temporary bottlenecks at individual
multishuttles and modular conveyor systems. The factory
suppliers. The Supply Chain Solutions segment’s strong finish to
supports Dematic’s growth in the European market.
2018 more than made up for the shortfalls in project revenue
Further steps were taken as part of ongoing improvements
recognised in the first few months of the year. The KION Group
to the KION Group’s funding. In January 2018, the KION Group
was thus able to take full advantage of the generally favourable
agreed an extension, until February 2023, to the term of the
market conditions in both segments.
revolving credit facility of €1,150.0 million arranged under the
The KION Group’s total order intake rose by 8.5 per cent to
senior facilities agreement (SFA), giving it another year of flexibility
€8,656.7 million (2017: €7,979.1 million). The contribution from
in its funding. The KION Group issued a further promissory note
the Supply Chain Solutions segment, where order intake
in June 2018. It has a volume of €200.0 million and will mature
increased by 15.5 per cent, was exceptionally strong, but the
in June 2025. In addition, the long-term tranche of the acqui-
Industrial Trucks & Services segment also saw year-on-year
sition facilities agreement (AFA) was reduced to €600.0 million
order growth of 6.0 per cent. Consolidated revenue improved by
(31 December 2017: €1,000.0 million).
5.2 per cent to €7,995.7 million (2017: €7,598.1 million). The
At the start of the 2018 financial year, the KION Group
Industrial Trucks & Services segments played a particularly
adopted the new standards IFRS 9, IFRS 15 and IFRS 16 retro-
strong part in this revenue growth, whereas revenue in the
spectively. As a result, some of the prior-year figures, Group
Supply Chain Solutions segment was only slightly higher than in
KPIs and line items have been adjusted, particularly those
2017 due to the overall poor start to 2018.
relating to the leasing business.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
67
The KION Group’s EBIT adjusted for non-recurring items and
purchase price allocation effects came to €789.9 million (2017:
€777.3 million). This year-on-year increase of €12.6 million was
Comparison between actual and
forecast growth
achieved despite higher material prices, wage cost rises, negative
The KION Group’s order intake of €8,656.7 million was above the
currency effects and temporary bottlenecks at individual suppliers
upper end of the target range (€8,050 million to €8,550 million),
in the Industrial Trucks & Services segment. There was a moderate
while the revenue of €7,995.7 million was in the middle (target
reduction in the adjusted EBIT margin to 9.9 per cent (2017:
range: €7,700 million to €8,200 million). The adjusted EBIT of
10.2 per cent). After taking into account diminishing purchase
€789.9 million was also within the specified bounds (target range:
price allocation (PPA) effects and non-recurring items, EBIT rose
€770 million to €835 million). Higher advance payments from
sharply to €642.8 million (2017: €561.0 million). As a result of
customers in the project business meant that the free cash flow
higher tax expenses, there was a moderate decrease in net
of €519.9 million was significantly higher than anticipated (target
income to €401.6 million (2017: €422.5 million). Non-recurring
range: €410 million to €475 million). At 9.3 per cent, ROCE
items in both 2018 (positive item of €29.4 million) and 2017 (posi-
was as predicted (target range: 8.7 per cent to 9.7 per cent). In
tive item of €92.2 million) had a positive impact on tax expenses
the Industrial Trucks & Services segment, order intake and
and thus on net income. Basic earnings per share attributable to
revenue exceeded expectations, while adjusted EBIT was at
the shareholders of the KION Group came to €3.39 in 2018 (2017:
the lower end of the target range due to the temporary supply
€3.68) based on a weighted average of 117.9 million no-par-
bottlenecks during the year. The results achieved in the Supply
value shares outstanding during the reporting year (2017:
Chain Solutions segment for revenue and adjusted EBIT were
114.3 million). KION GROUP AG will propose a dividend of €1.20
also around the lower end of their respective target range. Order
per share to the Annual General Meeting (2017: €0.99 per share).
intake exceeded the top end of the target range because the
Free cash flow increased to €519.9 million (2017: €474.3 mil-
strong level of incoming orders for customer projects in recent
lion), above all thanks to improved earnings and the lower
quarters continued into the fourth quarter. > TABLES 008 – 009
growth in net working capital.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
68
Comparison between actual and forecast growth – KION Group
TABLE 008
in € million
Order intake
Revenue
Adjusted EBIT
Free cash flow
ROCE
KION Group
2018
Outlook
8,050 – 8,550
7,700 – 8,200
770 – 835
410 – 475
8.7% – 9.7%
2018
Actual
8,656.7
7,995.7
789.9
519.9
9.3%
Comparison between actual and forecast growth – segments
TABLE 009
in € million
Order intake *
Revenue *
Adjusted EBIT *
Industrial Trucks & Services
Supply Chain Solutions
2018
Outlook
5,950 – 6,150
5,700 – 5,900
2018
Actual
2018
Outlook
6,210.6
2,100 – 2,400
5,922.0
2,000 – 2,300
650 – 685
655.4
180 – 215
2018
Actual
2,425.2
2,055.2
180.2
* Disclosures for the Industrial Trucks & Services and Supply Chain Solutions segments also include intra-group cross-segment order intake, revenue and effects on EBIT
Business situation and financial performance
of the KION Group
compared with the end of 2017 (31 December 2017: €2,614.6 mil-
lion) and provides an excellent basis for the future.
Level of orders
Revenue
Order intake in the KION Group rose by 8.5 per cent year on
The negative currency effects on revenue were comfortably
year to €8,656.7 million (2017: €7,979.1 million). This substantial
outweighed by the growth in the volume of business. The consol-
increase is attributable to new truck business in the Industrial
idated revenue of the KION Group increased by 5.2 per cent to
Trucks & Services segment, project business in the Supply Chain
€7,995.7 million (2017: €7,598.1 million); if exchange rates had
Solutions segment and growing service activities in both
been the same as in 2017, the rise would have been 7.5 per cent.
segments. Although negative currency effects dissipated slightly
The rate of revenue growth picked up sharply in the second half
in the fourth quarter owing to the weakness of the euro, their
of the year, predominantly due to the increase in production
overall impact in 2018 as a whole still reduced the value of order
volume in the Industrial Trucks & Services segment once the
intake by €186.5 million. Thanks to strong order intake, the KION
bottlenecks at individual suppliers had largely been resolved.
Group’s order book of €3,300.8 million was up by 26.2 per cent
Overall, the Industrial Trucks & Services segment generated
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
69
total revenue of €5,922.0 million, which equated to an increase of
primarily attributable to the increase in revenue from the service
6.3 per cent compared with 2017. In the Supply Chain Solutions
business. Across the Group as a whole, the share of revenue
segment, revenue amounted to €2,055.2 million following a
attributable to the service business grew from 42.5 per cent to
strong fourth quarter. This year-on-year rise of 2.3 per cent was
43.1 per cent. > TABLE 010
Revenue with third parties by product category
in € million
Industrial Trucks & Services
New business
Service business
– Aftersales
– Rental business
– Used trucks
– Other
Supply Chain Solutions
Business solutions
Service business
Corporate Services
Total revenue
* Revenue for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
2018
5,916.3
3,009.1
2,907.2
1,513.9
900.1
327.8
165.4
2,052.1
1,514.0
538.1
27.3
7,995.7
2017 *
5,568.2
2,828.8
2,739.5
1,429.5
855.2
306.6
148.3
2,005.1
1,512.4
492.7
24.8
7,598.1
TABLE 010
Change
6.3%
6.4%
6.1%
5.9%
5.3%
6.9%
11.6%
2.3%
0.1%
9.2%
10.0%
5.2%
Revenue by sales region
decline in revenue in Australia, resulting in an overall decrease of
2.2 per cent in spite of the ongoing momentum in the region.
In the EMEA sales region (western Europe, eastern Europe,
Emerging markets accounted for 20.3 per cent of the KION
Middle East and Africa), revenue rose by 3.6 per cent year on
Group’s revenue in the reporting year (2017: 20.9 per cent), while
year. Revenue was up by 4.4 per cent in western Europe, thanks
80.8 per cent of consolidated revenue (2017: 81.6 per cent) was
in no small part to the Industrial Trucks & Services segment’s
generated outside Germany. > TABLE 011
higher unit sales in the German, Italian and French markets. In
eastern Europe, revenue increased by 8.0 per cent compared
with the previous year. This growth was mainly driven by brisk
new truck business in Poland and Russia. In the Americas region
(North, Central and South America), the KION Group posted a
substantial rise in revenue of 16.1 per cent – despite significant
negative currency effects – and thus boosted its strong market
position in North America, especially in the Supply Chain Solu-
tions segment. The APAC region (Asia-Pacific) was affected by a
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Revenue with third parties by customer location
in € million
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total revenue
* Revenue for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
2018
4,769.9
592.3
94.5
1,486.3
173.5
879.3
7,995.7
2017 *
4,567.1
548.2
153.6
1,266.7
163.1
899.3
7,598.1
70
TABLE 011
Change
4.4%
8.0%
– 38.5%
17.3%
6.4%
– 2.2%
5.2%
Earnings and profitability
EBIT, EBITDA and ROCE
Services segment, to the redirection of sales activities in South
Africa. In 2017, non-recurring items (€40.1 million) had been
incurred in connection with the fundamental integration of
Despite negative currency effects, earnings before interest and
Dematic and with the start-up costs for the new plant in Mon-
tax (EBIT) went up by 14.6 per cent to €642.8 million in 2018
terrey, Mexico.
(2017: €561.0 million). The main reason was the sharp reduction,
EBIT adjusted for non-recurring items and purchase price
from €176.2 million in 2017 to €126.2 million in the reporting year,
allocation effects (adjusted EBIT) was above the figure for the
in the negative purchase price allocation effects included in EBIT.
previous year at €789.9 million (2017: €777.3 million). The adjusted
The non-recurring items also decreased, to €21.0 million, and
EBIT margin declined from 10.2 per cent to 9.9 per cent.
mainly related to ongoing process standardisation in connection
> TABLE 012
with the integration of Dematic and, in the Industrial Trucks &
EBIT
in € million
EBIT
+ Non-recurring items
+ PPA items
Adjusted EBIT
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
2018
642.8
21.0
126.2
789.9
2017 *
561.0
40.1
176.2
777.3
TABLE 012
Change
14.6%
– 47.7%
– 28.4%
1.6%
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
71
Earnings before interest, tax, depreciation and amortisation
EBITDA for the long-term leasing business, which is derived
(EBITDA) increased to €1,540.6 million (2017: €1,457.6 million).
from internal reporting and assumes a minimum rate of return
Adjusted EBITDA came to €1,555.1 million (2017: €1,495.8 mil-
on the capital employed, amounted to €321.1 million (2017:
lion). The adjusted EBITDA margin decreased from 19.7 per cent
€320.9 million). > TABLE 013
in 2017 to 19.4 per cent in 2018.
EBITDA
in € million
EBITDA
+ Non-recurring items
+ PPA items
Adjusted EBITDA
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
2018
1,540.6
14.6
– 0.0
2017 *
1,457.6
36.4
1.8
1,555.1
1,495.8
TABLE 013
Change
5.7%
– 59.9%
<– 100%
4.0%
Return on capital employed (ROCE) was at the same level as in
Selling expenses and administrative expenses increased by
2017 at 9.3 per cent.
6.1 per cent – virtually the same rate as for revenue growth – to
reach €1,352.6 million (2017: €1,275.1 million). This rise was due
Key influencing factors for earnings
to higher wage costs and, above all, the expansion of mar-
Whereas revenue increased by 5.2 per cent, the cost of sales was
ket-specific and customer-specific sales activities. The level of
up by 4.5 per cent. Consequently, the gross margin improved
groupwide research and development costs held steady at
slightly to reach 26.2 per cent, compared with 25.7 per cent in
€137.7 million (2017: €137.0 million), reflecting the ongoing
2017. Higher material prices and wage cost rises in the reporting
innovation initiatives taking place in the KION Group in connection
year partly negated the positive impact of reduced purchase
with its growth strategy. The ‘other’ item included, among other
price allocation effects. In addition, the bottlenecks at individual
effects, the share of profit (loss) of equity-accounted invest-
suppliers in the Industrial Trucks & Services segment resulted in
ments, which amounted to a profit of €12.2 million (2017: profit
production inefficiencies and thus an increase in the cost of sales.
of €13.6 million). It also included impairment losses on non-
Furthermore, delays in the awarding of projects by customers
current assets of €6.4 million (2017: €14.8 million); the prior-year
in previous quarters led to temporary underutilisation of project-
figure had included impairment losses of €8.6 million relating
related personnel capacity and, overall, squeezed earnings in the
to the Egemin brand name, which has been integrated into
Supply Chain Solutions segment. Despite a recovery in the fourth
the Dematic brand presentation. > TABLE 014
quarter, currency effects, primarily from the US dollar, also had a
negative impact on the key financials and therefore on the
KION Group’s EBIT.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
(Condensed) income statement
in € million
Revenue
Cost of sales
Gross profit
Selling expenses and administrative expenses
Research and development costs
Other
Earnings before interest and taxes (EBIT)
Net financial expenses
Earnings before taxes
Income taxes
Net income
72
TABLE 014
Change
5.2%
– 4.5%
7.3%
– 6.1%
– 0.5%
93.6%
14.6%
– 1.2%
17.3%
<– 100%
– 4.9%
2018
7,995.7
– 5,898.1
2,097.6
– 1,352.6
– 137.7
35.4
642.8
– 97.4
545.3
– 143.7
401.6
2017 *
7,598.1
– 5,643.3
1,954.8
– 1,275.1
– 137.0
18.3
561.0
– 96.3
464.7
– 42.2
422.5
* (Condensed) income statement for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
Net financial expenses
expenses of €42.2 million in 2017 had primarily been attributable
The net financial expenses, representing the balance of financial
to the remeasurement of deferred tax liabilities in light of the US
income and financial expenses, were virtually unchanged year on
tax reforms; the associated positive non-recurring tax effect had
year at €97.4 million (2017: net financial expenses of €96.3 mil-
amounted to €92.2 million in 2017.
lion). Current interest expense on financial liabilities decreased in
2018 due to the corporate actions carried out in 2017, whereas
Net income and appropriation of profit
currency effects had improved the level of net financial expenses
Net income amounted to €401.6 million (2017: €422.5 million). On
in the previous year. The deferred borrowing costs of €4.5 million
a like-for-like basis, i.e. excluding the non-recurring impact of the
reported within financial expenses included, among other items,
tax effects in both years, net income was significantly higher than
expenses resulting from the early repayment of €400.0 million
in the previous year. The net income attributable to the sharehold-
under the acquisition facilities agreement (AFA); previously
ers of KION GROUP AG was €399.9 million (2017: €420.9 million).
deferred borrowing costs of €1.9 million were expensed. In
Basic earnings per share came to €3.39 (2017: €3.68) based on
2017, borrowing costs totalling €8.8 million had been recognised
117.9 million (2017: 114.3 million) no-par-value shares; this was
as an expense.
Income taxes
the weighted average number of shares outstanding during the
reporting year. Diluted earnings per share, which is calculated by
adding the potential dilutive no-par-value shares under the
Income tax expenses amounted to €143.7 million, which equates
employee share option programme, amounted to €3.39 (2017:
to a tax rate of 26.3 per cent. This included a positive tax effect
€3.68) based on a weighted average number of shares of
stemming from the offsetting of losses of corporations in an
117.9 million (2017: 114.4 million). These calculations did not
amount of €29.4 million in connection with an amendment to tax
include 165.6 thousand (2017: 160.8 thousand) no-par-value
law (section 8c of the German Corporation Tax Act (KStG)) at
treasury shares that were repurchased by KION GROUP AG as
the end of the financial year 2018. The far lower level of tax
part of the employee equity programme.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
73
KION GROUP AG’s net profit for 2018 was €236.3 million, of
Revenue
which €94.8 million will be transferred to other revenue reserves.
Total segment revenue went up by 6.3 per cent to €5,922.0 mil-
The Executive Board and the Supervisory Board will propose to
lion (2017: €5,572.2 million). Although deliveries were delayed
the Annual General Meeting to be held on 9 May 2019 that an
during the course of 2018 due to temporary bottlenecks at
amount of €141.5 million be appropriated from the distributable
individual suppliers, which adversely affected revenue, the level
profit of €141.7 million for the payment of a dividend of €1.20 per
of output improved markedly in the second half of the year.
dividend-bearing share. It is also proposed that the remaining
Excluding negative currency effects of €97.6 million, the increase
sum of €0.2 million be carried forward to the next accounting
in revenue was 8.0 per cent for 2018 as a whole. The growth of
period. This equates to a dividend payout rate of 35 per cent of
6.4 per cent in the new truck business is due to scheduled price
net income.
Business situation and financial performance
of the segments
adjustments and, above all, increasing unit sales of electric forklift
trucks and warehouse trucks. Unit sales of diesel trucks were
lower than in 2017. Revenue from the service business was up by
6.1 per cent year on year, which was almost the same as the rate
of revenue growth in the new truck business. Aftersales busi-
ness accounted for the largest share, contributing 52.1 per cent
Industrial Trucks & Services segment
of service revenue. The rental and used truck business was also
very encouraging, with revenue going up by 5.7 per cent. The
Business performance and order intake
proportion of the segment’s external revenue accounted for by
The Industrial Trucks & Services segment registered a year-on-
the service business was 49.1 per cent (2017: 49.2 per cent).
year increase in orders for new trucks across all sales regions of
7.6 per cent to 216.7 thousand units. The Linde brand (including
Earnings
Fenwick) achieved strong growth and accounted for 62.1 per cent
The segment’s adjusted EBIT increased at a slightly slower rate
of new truck business. STILL generated 31.8 per cent of new
than revenue to reach €655.4 million (2017: €642.7 million). The
orders; the remaining 6.1 per cent was attributable to the Baoli
related contraction of the adjusted EBIT margin to 11.1 per cent
and OM Voltas brands.
(2017: 11.5 per cent) essentially reflects the impact of the bottle-
In line with the objectives of the KION 2027 strategy, there
necks at suppliers, the effects of which included temporary
was a particularly sharp increase in unit sales of electric-pow-
inefficiencies in production. The adjusted EBIT margin continued
ered trucks, which accounted for over 80 per cent of orders.
to be squeezed by higher material prices and wage costs. After
The total value of order intake rose by 6.0 per cent to
taking into account non-recurring items and purchase price alloca-
€6,210.6 million (2017: €5,859.5 million), despite negative cur-
tion effects, EBIT amounted to €625.2 million (2017: €640.2 million).
rency effects of €98.5 million. In addition to new truck orders,
Adjusted EBITDA improved to €1,340.2 million (2017:
the expanding service business also contributed to this increase.
€1,288.7 million). This equated to an adjusted EBITDA margin of
22.6 per cent (2017: 23.1 per cent). > TABLE 015
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Key figures – Industrial Trucks & Services
in € million
Order intake
Total revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
2018
6,210.6
5,922.0
1,332.3
1,340.2
625.2
655.4
22.6%
11.1%
2017 *
5,859.5
5,572.2
1,287.0
1,288.7
640.2
642.7
23.1%
11.5%
74
TABLE 015
Change
6.0%
6.3%
3.5%
4.0%
– 2.3%
2.0%
–
–
Supply Chain Solutions segment
back to 2017 – took their toll on revenue in the first nine months of
2018. The fourth quarter rally was unable to fully make up for this,
Business performance and order intake
which meant that revenue was at the lower end of the target
The Supply Chain Solutions segment saw a significant year-
range. Excluding negative currency effects of €76.5 million,
on-year improvement of 15.5 per cent in its order intake to
the year-on-year increase was 6.1 per cent. Project business
€2,425.2 million (2017: €2,099.2 million). Negative currency
accounted for 73.8 per cent of external revenue and the service
effects of €88.0 million, which were mainly due to the US dollar
business for 26.2 per cent. The segment generated 65.7 per cent
being weaker on average during the year, were easily offset.
of its revenue in North America (2017: 56.8 per cent).
Adjusted for currency effects, order intake was up by 19.7 per cent.
Following a muted start to 2018, project business (business
Earnings
solutions) received major orders – especially in the second and
The segment’s adjusted EBIT came to €180.2 million, which was
third quarters – and thus registered strong year-on-year growth.
below the figure for the previous year of €188.7 million. The
Overall, project business generated 76.5 per cent of the seg-
continued delays in the awarding of projects by customers led to
ment’s order intake (2017: 75.4 per cent). The growing trend
temporary underutilisation of project-related personnel capacity
for the outsourcing of logistics processes and the related
in 2018. Currency effects also had an adverse impact on EBIT. The
downstream services provides good foundations for the rapidly
adjusted EBIT margin fell to 8.8 per cent (2017: 9.4 per cent).
expanding service business (customer services) in the Supply
After taking into account non-recurring items and purchase
Chain Solutions segment.
Revenue
price allocation effects, which were down year on year, EBIT
improved significantly to €64.4 million (2017: minus 16.6 million).
Adjusted EBITDA came to €231.5 million (2017: €235.7 million),
The segment’s total revenue increased by a moderate 2.3 per cent
with an adjusted EBITDA margin of 11.3 per cent (2017:
to €2,055.2 million (2017: €2,009.5 million), following a strong
11.7 per cent). > TABLE 016
finish to the year in the fourth quarter. However, delays in the
awarding of projects by customers – some of which stretched
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Key figures – Supply Chain Solutions
in € million
Order intake
Total revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
75
TABLE 016
Change
15.5%
2.3%
8.9%
– 1.8%
> 100%
– 4.5%
–
–
2018
2,425.2
2,055.2
226.1
231.5
64.4
180.2
11.3%
8.8%
2017 *
2,099.2
2,009.5
207.7
235.7
– 16.6
188.7
11.7%
9.4%
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
Corporate Services segment
The segment reported adjusted EBIT of €369.6 million,
Business performance
compared with €532.4 million in the previous year. This sharp
fall was attributable to higher intra-group dividend income in
The Corporate Services segment comprises holding companies
2017. Adjusted EBIT excluding intra-group dividend income
and other service companies that provide services such as IT and
amounted to minus €45.8 million (2017: minus €54.1 million).
logistics across all segments.
Adjusted EBITDA came to €398.8 million, or minus €16.6 million
if intra-group dividend income is excluded. > TABLE 017
Revenue and earnings
Total segment revenue, which came to €299.2 million (2017:
€266.6 million), mainly resulted from internal IT and logistics
services.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Key figures – Corporate Services
in € million
Order intake
Total revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
76
TABLE 017
Change
12.2%
12.2%
– 27.6%
– 28.5%
– 29.7%
– 30.6%
2018
299.2
299.2
397.6
398.8
368.5
369.6
2017 *
266.6
266.6
549.4
557.9
523.9
532.4
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
Net assets
Non-current assets
lion (31 December 2017: €608.4 million). At €826.2 million,
long-term lease receivables arising from leases with end custom-
ers that are classified as finance leases were considerably higher
than at the end of 2017 (31 December 2017: €647.8 million). The
Non-current assets rose by €300.0 million from their level at the
amount of deferred tax assets recognised in the statement of
end of 2017 to €10,150.6 million as at 31 December 2018.
financial position was €421.7 million as at the reporting date
Intangible assets accounted for €5,721.6 million of total non-
(31 December 2017: €475.2 million).
current assets (31 December 2017: €5,716.5 million). The goodwill
included in this total was up slightly at €3,424.8 million (31 Decem-
Current assets
ber 2017: €3,382.5 million), mainly as a result of currency
effects. However, these were partly offset by the effect of the
Current assets rose by €331.1 million to €2,818.2 million (31 Decem-
ongoing writedowns on the customer relationships acquired from
ber 2017: €2,487.1 million). The temporary bottlenecks at individual
Dematic as part of the purchase price allocation (PPA). The rise
suppliers resulted in significant inventory growth in the Industrial
in other property, plant and equipment to €1,077.8 million
Trucks & Services segment that had not been completely elimi-
(31 December 2017: €994.9 million) was largely attributable to
nated by 31 December 2018. The increased volume of business
higher capital expenditure on new production facilities and to
also resulted in higher inventories in the KION Group, which stood
additional right-of-use assets relating to new and extended
at €994.8 million as at the reporting date (31 December 2017:
procurement leases. Right-of-use assets increased to €390.7 mil-
€768.6 million). > TABLE 018
lion (31 December 2017: €347.4 million). Within this total, the
right-of-use assets for land and buildings stood at €276.4 million
Trade receivables amounted to €1,036.4 million (31 December
(31 December 2017: €247.6 million) and the right-of-use assets for
2017: €999.4 million).
plant, machinery, and office furniture and equipment stood at
The KION Group’s net working capital, which comprises
€114.3 million (31 December 2017: €99.8 million). Leased assets
inventories, trade receivables and contract assets
less
for direct and indirect leases with end customers that are classified
trade payables and contract liabilities, rose to €676.1 million
as operating leases increased slightly to reach €1,261.8 million
(31 December 2017: €619.9 million).
(31 December 2017: €1,246.3 million). Further expansion of the
short-term rental fleet caused rental assets to rise to €670.5 mil-
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
77
TABLE 018
Change
53.5%
21.3%
19.9%
80.5%
29.4%
2018
284.2
132.3
550.6
27.8
994.8
2017
185.2
109.0
459.0
15.4
768.6
Cash and cash equivalents stood at €175.3 million on the
Financial position
reporting date, which was virtually unchanged on the previous
year (31 December 2017: €173.2 million) and, in line with groupwide
Principles and objectives of financial management
liquidity management (cash pooling), was at the level required
for operating activities.
The KION Group pursues a conservative financial policy of
Current lease receivables from end customers increased to
maintaining a strong credit profile with reliable access to debt
€271.2 million (31 December 2017: €228.0 million).
capital markets. By pursuing an appropriate financial manage-
The condensed consolidated statement of financial position
ment strategy, the KION Group makes sufficient cash and cash
as at 31 December 2018 showing current and non-current
equivalents available at all times to meet the Group companies’
assets and liabilities together with equity is presented in
operational and strategic funding requirements. In addition, the
> TABLE 019.
KION Group optimises its financial relationships with customers
(Condensed) statement of financial position
in € million
Non-current assets
Current assets
Total assets
Equity
Non-current liabilities
Current liabilities
Total equity and liabilities
2018
10,150.6
2,818.2
12,968.8
3,305.1
5,999.1
3,664.6
12,968.8
in %
78.3%
21.7%
–
25.5%
46.3%
28.3%
–
2017 *
9,850.6
2,487.1
12,337.7
2,992.3
6,133.7
3,211.7
12,337.7
in %
79.8%
20.2%
–
24.3%
49.7%
26.0%
–
* (Condensed) statement of financial position for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
TABLE 019
Change
3.0%
13.3%
5.1%
10.5%
– 2.2%
14.1%
5.1%
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
78
and suppliers and mitigates the financial risk to its enterprise
interest-rate swaps in order to hedge risks attaching to financial
value and profitability, notably currency risk, interest-rate risk,
liabilities.
price risk, counterparty risk and country risk. In this way, the
Among other stipulations, the contractual terms of the senior
KION Group creates a stable funding position from which to
facilities agreement (SFA), the acquisition facilities agreement
maintain profitable growth.
(AFA) and the promissory notes set out certain covenants. In
The financial resources within the KION Group are provided
addition, there is a financial covenant that involves ongoing
on the basis of an internal funding approach. The KION Group
testing of adherence to a defined maximum level of leverage.
collects liquidity surpluses of the Group companies in central or
Non-compliance with the covenants or with the defined maxi-
regional cash pools and, where possible, covers subsidiaries’
mum level of leverage as at a particular reporting date may
funding requirements with intercompany loans. This funding
potentially give lenders a right of termination or lead to an
enables the KION Group to present a united front in the capital
increase in interest payments.
markets and strengthens its hand in negotiations with banks
All covenants were complied with in the past financial year,
and other market participants. The Group occasionally arranges
as had been the case in 2017.
additional credit lines for KION Group companies with local
banks or leasing companies in order to comply with legal, tax
Main corporate actions in the reporting period
and other regulations.
The KION Group is a publicly listed corporate group and
In January 2018, the term of the revolving credit facility of
therefore ensures that its financial management takes into
€1,150.0 million agreed under the SFA was extended by a year,
account the interests of shareholders, promissory note inves-
which means the KION Group can now utilise this credit facility
tors and the banks providing its funding. For the sake of all
until February 2023. The KION Group issued a further promissory
stakeholders, the KION Group makes sure that it maintains an
note in June 2018. Split into fixed-rate and variable-rate tranches,
appropriate ratio of
internal
funding to borrowing. The
it has a volume of €200.0 million and will mature in June 2025.
KION Group’s borrowing is based on a long-term approach. The
The risk of a change in fair value has been hedged using an inter-
individual tranches of this borrowing will become due for repay-
est-rate swap with matching maturity. The hedging transaction is
ment in the years 2021 to 2027.
recognised as a fair value hedge. The funds generated by this
Depending on requirements and the market situation, the
promissory note were used to repay part of the long-term tranche
KION Group will also avail itself of the funding facilities offered by
under the AFA. Following further repayments using funds from
the public capital markets in future. The KION Group therefore
operating activities, the only outstanding liability in connection
seeks to implement proactive risk management by rigorously pur-
with the AFA entered into in order to fund the acquisition of
suing its corporate strategy and to maintain an investment-grade
Dematic is the floating-rate long-term tranche in a residual amount
credit rating in the capital and funding markets by ensuring a solid
of €600.0 million (31 December 2017: €1,000.0 million), which is
funding structure. Since September 2017, rating agency Stand-
due to mature in October 2021. As a result of the early repayment,
ard & Poor’s has classified the KION Group as BB+ with a positive
deferred borrowing costs of €1.9 million had to be recognised
outlook, while the rating from Fitch Ratings has been BBB– with
under financial expenses. The KION Group has issued guaran-
a stable outlook since January 2017. The KION Group thus has an
tees to the banks for all of the payment obligations under the SFA
investment-grade credit rating, helping it to secure more advanta-
and AFA and it is the borrower in respect of all the payment obli-
geous funding conditions in the capital markets.
gations resulting from the promissory notes.
The KION Group maintains a liquidity reserve in the form of
In October 2018, the KION Group employees entitled to
unrestricted, agreed and confirmed credit lines and cash in
participate in KEEP were given the opportunity to buy more
order to ensure long-term financial flexibility and solvency. In
KION shares. By 31 December 2018, a total of 38,691 shares
addition, it uses derivatives to hedge currency risk. It enters into
had been purchased by staff (31 December 2017: 36,294 shares).
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
79
The number of shares held in treasury therefore stood at
Over the course of 2018, current financial liabilities fell by
165,558 as at the reporting date (31 December 2017: 160,829).
€17.4 million to €226.5 million (31 December 2017: €243.9 mil-
lion). In the first six months of the year, higher drawdowns from
Analysis of capital structure
the revolving credit facility were needed to fund net working
capital as a result of the temporary bottlenecks at individual
At €9,663.7 million, current and non-current liabilities had risen by
suppliers. These were repaid in the second half of 2018, taking
€318.4 million as at the reporting date (31 December 2017:
current financial liabilities to below the level as at 31 December
€9,345.4 million). An increase in current financial liabilities during
2017.
the year was more than offset by repayments in the second half
Net financial debt (non-current and current financial liabilities
of the year. Non-current liabilities included deferred tax liabilities
less cash and cash equivalents) was therefore reduced to
of €626.7 million (31 December 2017: €702.4 million).
€1,869.9 million (31 December 2017: €2,095.5 million). This
Financial debt
equated to 1.2 times the adjusted EBITDA in the year under review.
The unused, unrestricted loan facility under the SFA stood
Non-current financial liabilities (net of borrowing costs) decreased
at €1,048.2 million as at the reporting date (31 December 2017:
to €1,818.7 million (31 December 2017: €2,024.8 million). This
€965.3 million). > TABLE 020
figure can essentially be broken down into promissory notes with
a total volume of €1,210.0 million and the remaining floating-rate
long-term tranche of €600.0 million drawn down under the AFA.
Industrial net operating debt
in € million
Liabilities to banks
Promissory notes
Other financial liabilities to non-banks
Financial liabilities
Less cash and cash equivalents
Net financial debt
Liabilities from financial services (short-term rental fleet)
Other financial liabilities (short-term rental fleet)
Liabilities from short-term rental fleet financing
Liabilities from procurement leases
Industrial net operating debt
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
TABLE 020
2017 *
1,253.7
1,007.3
7.7
2,268.7
– 173.2
2,095.5
–
515.7
515.7
369.1
2018
826.4
1,214.3
4.6
2,045.2
– 175.3
1,869.9
307.1
289.9
597.0
421.2
2,888.1
2,980.4
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
80
Retirement benefit obligation
Overall, liabilities from financial services increased to
The KION Group supports pension plans in many countries.
€1,472.4 million as at 31 December 2018 (31 December 2017:
These plans comply with legal requirements, standard local
€437.4 million). Of this total, €1,165.3 million was attributable to
practice and thus the situation in the country in question. They
financing of the direct and indirect long-term leasing business
are either defined benefit pension plans, defined contribution
(31 December 2017: €437.4 million). The total also includes
pension plans or multi-employer benefit plans. As at 31 Decem-
residual value obligations of €319.5 million (31 December 2017:
ber 2018, the retirement benefit obligation under defined benefit
€340.7 million) resulting from the indirect leasing business.
pension plans amounted to a total of €1,043.0 million, which
A sum of €307.1 million, representing some of the financing
was only slightly higher than the figure at the end of 2017 of
of the short-term rental fleet, is recognised under liabilities from
€1,002.7 million. The net obligation under defined benefit
financial services (31 December 2017: €0.0 million); the remain-
pension plans increased year on year to reach €1,009.7 million
ing financing of the short-term rental fleet, which amounts to
(31 December 2017: €978.5 million). Changes in estimates
€289.9 million (31 December 2017: €515.7 million), is recognised
relating to defined benefit pension entitlements resulted in a
under other financial liabilities.
marginal decrease in equity.
Contributions to pension plans that are entirely or partly
Lease liabilities
funded via funds are paid in as necessary to ensure sufficient
Lease liabilities fell by €390.5 million to €740.6 million as at the
assets are available and to be able to make future pension
reporting date (31 December 2017: €1,131.1 million) because new
payments to pension plan participants. These contributions are
business has been included in liabilities from financial services
determined by factors such as the funded status, legal and tax
since 1 January 2018.
considerations, and local practice. The payments made by the
Overall, liabilities from financial services and lease liabilities
KION Group in 2018 in connection with the main pension plans
together totalling €1,906.0 million were attributable to financing
totalled €37.3 million, comprising €17.5 million for direct pension
of the direct and indirect long-term leasing business (31 Decem-
payments and €19.7 million for employer contributions to plan
ber 2017: €1,568.5 million).
assets. The latter predominantly comprised a one-off payment
of €17.8 million that was made in the United States in order to
Other financial liabilities
better meet statutory minimum funding provisions.
As at the reporting date, other financial liabilities included liabili-
ties of €289.9 million (31 December 2017: €515.7 million) arising
Liabilities from financial services
from sale and leaseback sub-lease transactions used to finance
Further expansion of the long-term leasing business with end
the short-term rental fleet.
customers in 2018 again led to a higher total funding requirement
This item also included liabilities from procurement leases
in the form of liabilities from financial services and lease liabilities.
amounting to €421.2 million (31 December 2017: €369.1 million),
Liabilities from financial services comprise all liabilities from
for which right-of-use assets were recorded. Overall, current
financing the leasing business and the short-term rental fleet on
and non-current other financial liabilities came to €813.2 million
the basis of sale and leaseback sub-leases from 1 January 2018
(31 December 2017: €962.2 million).
onwards, as well as the liabilities that arise from financing the
leasing business by means of lease facilities and the use of
securitisations. Furthermore, liabilities from financial services
arising from the leasing business include residual value obliga-
tions resulting from the indirect leasing business.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
81
Contract liabilities
ber 2017: €173.2 million). Taking into account the credit facility
Contract liabilities, of which a large proportion related to the
that was still freely available, the unrestricted cash and cash
long-term project business, increased to €570.1 million (31 Decem-
equivalents available to the KION Group as at the reporting date
ber 2017: €324.4 million) due to higher advance payments from
amounted to €1,219.8 million (31 December 2017: €1,138.0 million).
customers in connection with new orders.
Net cash provided by operating activities totalled €765.5 mil-
Equity
lion, which was higher than the prior-year figure of €711.9 mil-
lion. The year-on-year improvement in earnings played a signifi-
Equity increased substantially to €3,305.1 million (31 Decem-
cant part in this increase. The temporary rise in liquidity tied up
ber 2017: €2,992.3 million). Net income of €401.6 million was
in inventories was partly reversed in the fourth quarter once
partly offset by the dividend of €116.8 million paid by KION
most of the bottlenecks at individual suppliers had been
GROUP AG in May 2018. Given the stable level of interest rates,
resolved. Higher advance payments from customers in the
actuarial effects on pensions had a negligible impact on equity.
project business of the Supply Chain Solutions segment made
Exchange differences at the reporting date boosted equity by
up for the increase in inventories in the Industrial Trucks &
€35.5 million. The total effects recognised directly in equity
Services segment. Overall, the smaller increase in net working
amounted to €16.8 million. The equity ratio increased to
capital compared to the previous year made a positive contribu-
25.5 per cent (31 December 2017: 24.3 per cent).
tion of €58.9 million to cash flow from operating activities. By con-
trast, further expansion of the leasing and rental business and,
Analysis of capital expenditure
as budgeted, higher tax payments of €193.2 million (2017:
€136.3 million) resulting from the positive earnings performance
The KION Group’s total capital expenditure on property, plant
of KION Group companies reduced the level of cash flow from
and equipment and on intangible assets (excluding right-of-use
operating activities.
assets from procurement leases) totalled €258.5 million in the
Net cash used for investing activities amounted to
reporting year (2017: €218.3 million). This increase is primarily
€245.6 million and was therefore higher than in the previous
attributable to the rise in capitalised development costs (see
year (2017: €237.6 million). Within this figure, cash payments for
‘Research and development’), which came to €84.0 million and
capital expenditure on product development and on property,
were thus up by 11.5 per cent on 2017.
plant and equipment (excluding right-of-use assets related to
Spending in the Industrial Trucks & Services segment con-
procurement leases) rose to €258.5 million (2017: €218.3 million).
tinued to be focused on capital expenditure on product develop-
Free cash flow – the sum of cash flow from operating
ment and on the expansion and modernisation of the Operating
activities and investing activities – increased to €519.9 million
Units’ production and technology facilities. Capital expenditure in
(2017: €474.3 million).
the Supply Chain Solutions segment mainly related to develop-
Net cash used for financing activities came to €514.5 million
ment costs as well as software and licences.
(2017: €568.5 million). The net repayment of financial debt in
Analysis of liquidity
the period under review totalled €230.9 million. The gross
repayment amount of €2,042.6 million consisted of the repay-
ment of a further tranche of the long-term AFA in an amount of
Liquidity management is an important aspect of central financial
€400.0 million as well as the repayment of loan facilities drawn
management in the KION Group. The sources of liquidity are cash
down in order to fund the temporary increase in inventories.
and cash equivalents, cash flow from operating activities and
There was also new borrowing of €1,811.7 million that was
amounts available under credit facilities. Using cash pools, liquidity
largely attributable to utilisation of the revolving credit facilities
is managed in such a way that the Group companies can always
and to the issuance of a promissory note with a volume of
access the cash that they need. At €175.3 million, cash and cash
€200.0 million. Payments made for interest portions and
equivalents were virtually unchanged year on year (31 Decem-
principal portions under procurement leases amounted to
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
82
€114.0 million in the reporting year (2017: €109.0 million). The
AG in the second quarter of €0.99 per share resulted in an
net cash used for current interest payments decreased from
outflow of funds of €116.8 million (2017: €86.9 million). The
€58.1 million in 2017 to €42.9 million in 2018 due to lower aver-
acquisition of employee shares caused a cash outflow of
age net debt during the year. The dividend paid by KION GROUP
€3.6 million (2017: €4.3 million). > TABLE 021
(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 exchange rate changes on cash
Change in cash and cash equivalents
2018
642.8
765.5
– 245.6
519.9
– 514.5
– 3.2
2.2
2017 *
561.0
711.9
– 237.6
474.3
– 568.5
– 12.2
– 106.4
TABLE 021
Change
14.6%
7.5%
– 3.4%
9.6%
9.5%
73.4%
> 100%
* (Condensed) statement of cash flows for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AG
Business activities
ments have been prepared in accordance with International
Financial Reporting Standards (IFRSs) and the additional provi-
sions in section 315e (1) HGB. Differences between the accounting
policies in accordance with HGB and those in accordance with
IFRSs arise primarily in connection with the accounting treatment
of financial instruments, provisions and deferred taxes.
KION GROUP AG is the strategic management holding company
in the KION Group. KION GROUP AG holds all the shares in
Dematic Holdings GmbH, Frankfurt am Main (formerly DH
Services Luxembourg Holding S.à r.l., Luxembourg) and thus all
Management system, future development
and risk position
the shares in the subsidiaries in the Supply Chain Solutions
segment. Furthermore, KION GROUP AG is the sole shareholder
As a holding company without any operating activities of its own,
of Linde Material Handling GmbH, Aschaffenburg, which holds
KION GROUP AG is indirectly dependent on the earnings and
almost all the shares of the companies in the Industrial Trucks &
economic performance of its subsidiaries. The management
Services segment.
system, expected development and the opportunities and risks of
The annual financial statements of KION GROUP AG have
the KION Group are described in detail in the ‘Management
been prepared in accordance with the provisions in the German
system’ and ‘Outlook, risk report and opportunity report’ sections
Commercial Code (HGB) and the German Stock Corporation Act
of this combined management report.
(AktG). The management report has been combined with the
group management report. The consolidated financial state-
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
83
Business performance in 2018
The main changes in net financial income/expenses were
as follows:
The business performance and position of KION GROUP AG
are largely determined by the business performance and success
of the Group. Detailed reports in this regard are set out in the
‘Business performance’ and ‘Financial position and financial
performance of the KION Group’ sections.
Financial performance
KION GROUP AG does not have any operating activities itself.
The reported revenue of €30.5 million (2017: €24.3 million) largely
arose from the performance of services for affiliated companies.
– Of
the
total
income
from profit-transfer agreements,
€343.4 million related to Linde Material Handling GmbH
(2017: €500.6 million).
– Interest expense and similar charges, which amounted to
€54.9 million (2017: €48.8 million), arose mainly from the
external financing of the KION Group via the promissory
notes and loan agreements as well as, to a smaller extent,
from interest charged on intercompany liabilities and the
unwinding of the discount on pension provisions.
– Other interest and similar income in the amount of €61.6 mil-
lion (2017: €28.6 million) for the most part consisted of interest
Other operating income went up by €11.1 million to €33.5 mil-
income on intercompany receivables. This rise is attributable
lion and includes, in particular, gains on the measurement of bank
to KION GROUP AG having taken over the management of
accounts and cash pools in foreign currencies.
the cash pool in 2017, resulting in a gradual increase in
The cost of materials is related to the revenue from the
intercompany receivables.
provision of services and mostly consists of expenses for consul-
tancy services.
KION GROUP AG incurred tax expenses of €55.5 million as a
Personnel expenses fell by €4.9 million to €37.5 million. This
result of its role as the parent company of the tax group in 2018
year-on-year decrease was due to the smaller addition to provi-
(2017: €79.4 million). This included a positive tax effect stemming
sions for share-based remuneration. There was a countervailing
largely from the offsetting of losses of corporations in an amount
effect on personnel expenses from the increase in the number of
of €29.4 million in connection with an amendment to tax law
employees and from annual salary rises.
(section 8c of the German Corporation Tax Act (KStG)).
Other operating expenses rose by €11.9 million to €80.2 mil-
A total net profit of €236.3 million was generated in the year
lion owing to losses on the measurement of bank accounts and
under review (2017: €335.5 million). > TABLE 022
cash pools in foreign currencies. Costs for external services
and consultancy are another substantial component of other
operating expenses.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Financial performance
in € million
Revenue
Other operating income
Material expenses
Personnel expenses
Other operating expenses
Depreciation expense
Operating loss
Net financial income
Income taxes
Net income
Net assets
84
TABLE 022
Change
25.4%
49.6%
– 40.5%
11.6%
– 17.4%
– 84.3%
15.3%
– 27.7%
30.1%
– 29.6%
2018
30.5
33.5
– 0.7
– 37.5
– 80.2
– 0.4
– 54.9
346.7
– 55.5
236.3
2017
24.3
22.4
– 0.5
– 42.4
– 68.3
– 0.2
– 64.8
479.7
– 79.4
335.5
Provisions contracted by €10.0 million to €85.4 million; this
was mainly attributable to the reversal of the provisions for
At the end of 2018, the total assets of KION GROUP AG had
share-based remuneration and to the recognition of tax assets
reduced, albeit insignificantly, by approximately 0.9 per cent year
following the retrospective abolition of German tax rules on the
on year to €7,574.5 million.
lapse of some losses following a harmful share acquisition. There
The financial assets largely comprise the carrying amounts of
was a countervailing effect from the increase in pension pro-
the equity investments in Dematic Holdings GmbH (formerly DH
visions. Pension provisions include provisions of €5.5 million
Services Luxembourg Holding S.à r.l.) (€2,862.2 million) and Linde
(31 December 2017: €3.9 million) for former members of the
Material Handling GmbH (€1,368.4 million).
Executive Board. KION GROUP AG recognised tax provisions of
The receivables mainly consist of loans and cash pool receiv-
€22.0 million (31 December 2017: €27.6 million) including those in
ables due from other Group companies and the Company’s
connection with its role as the parent company of the tax group.
entitlement to the transfer of profits from Linde Material Handling
Liabilities mainly consist of liabilities to banks of €1,978.7 mil-
GmbH of €343.4 million (2017: €500.6 million). There are
lion (31 December 2017: €2,214.8 million) as well as loan liabilities
long-term loans to Group companies of €216.0 million.
and cash pool liabilities to other Group companies. The liabilities
After taking into account the dividend payment of €116.8 mil-
to banks comprise the financing via the promissory notes, the
lion and the €0.9 million increase in the volume of treasury shares,
bridge loan (AFA) and the syndicated loan agreement (SFA).
the net profit of €236.3 million meant that equity rose to
> TABLE 023
€3,811.6 million (31 December 2017: €3,692.9 million). Further
disclosures on treasury shares can be found in the notes to the
financial statements of KION GROUP AG. The equity ratio was
50.3 per cent as at the reporting date (31 December 2017:
48.3 per cent).
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
85
Net assets
in € million
Assets
Property, plant and equipment
Financial assets
Receivables and other assets
Cash and cash equivalents
Total assets
Equity and liabilities
Equity
Retirement benefit obligation
Tax provisions
Other provisions
Liabilities
Total equity and liabilities
Financial position
TABLE 023
2018
2017
Change
3.3
4,231.2
3,321.6
18.3
7,574.5
2.9
4,231.2
3,389.3
20.5
7,643.9
3,811.6
3,692.9
39.3
23.2
22.9
3,677.5
7,574.5
32.1
27.6
35.7
3,855.6
7,643.9
15.1%
–
– 2.0%
– 10.7%
– 0.9%
3.2%
22.4%
– 15.8%
– 35.9%
– 4.6%
– 0.9%
On 4 July 2016, KION GROUP AG reached agreement on a
bridge loan to finance the acquisition of Dematic, originally in an
By pursuing an appropriate financial management strategy, the
amount of €3.0 billion. As at 31 December 2018, it consisted
KION Group – through KION GROUP AG – makes sufficient cash
solely of a floating-rate loan in a nominal amount of €600.0 million
and cash equivalents available at all times to meet the Group
that is due to mature in October 2021. At the end of 2017, this loan
companies’ operational and strategic funding requirements.
had a nominal amount of €1,000.0 million. It was partly repaid in
KION GROUP AG is a publicly listed company and therefore
2018 using the funds from the issuance of a further promissory
ensures that its financial management takes into account
note and using cash received from operating activities.
the interests of shareholders and banks. For the sake of these
In 2018, a promissory note was issued in a nominal amount
stakeholders, KION GROUP AG makes sure that it maintains an
of €200.0 million. It will mature in June 2025 and has both
appropriate ratio of internal funding to borrowing.
floating-rate and fixed coupons. The resulting funds were used to
KION GROUP AG signed a syndicated loan agreement (SFA),
repay part of the floating-rate loan under the AFA. KION GROUP
originally for €1.5 billion, with a syndicate of international banks on
AG has entered into an interest-rate derivative to hedge the risk of
28 October 2015. As at 31 December 2018, the SFA consisted
a change in the fair value of the tranche with a fixed coupon.
solely of a revolving credit facility of €1.2 billion. This has a variable
The promissory note issued in 2017 in a nominal amount
interest rate and, following the agreement in 2018 of an extension
totalling €1,010.0 million is divided into several tranches that
to its term, it can be drawn down until February 2023. As at
mature between 2022 and 2027 and have floating-rate or fixed
31 December 2018, the amount drawn down was €101.8 million
coupons. KION GROUP AG has entered into a number of
(31 December 2017: €184.7 million). The drawdowns under the
interest-rate derivatives in order to hedge the interest-rate risk
revolving credit facility are classified as short term.
resulting from the floating-rate tranches.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
86
The SFA, AFA and promissory notes are not collateralised.
KION GROUP AG has issued guarantees to the banks for all of
the payment obligations under the SFA and AFA and it is the
borrower in respect of all the payment obligations resulting from
the promissory notes.
As at 31 December 2018, liabilities to banks amounted to
€1,978.7 million (31 December 2017: €2,214.8 million). After
deduction of cash and cash equivalents, net debt amounted to
€1,960.4 million (31 December 2017: €2,194.3 million).
Employees
The average number of employees at KION GROUP AG was 217
in 2018 (2017: 190). KION GROUP AG employed 230 people as
at 31 December 2018 (31 December 2017: 195).
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
87
Concluding declaration on the report on rela-
tionships with affiliated entities (dependency
report), section 312 (3) sentence 3 AktG
With respect to the legal transactions and other measures
mentioned in the report on relationships with affiliated entities,
we hereby declare that in each case the Company received
appropriate consideration in accordance with the circumstances
of which we were aware at the time when the legal transactions
were concluded or the measures were taken or omitted and that
it did not suffer any disadvantages as a result of such measures
having been taken or omitted.
Frankfurt am Main, 20 February 2019
The Executive Board
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
88
NON-FINANCIAL PERFORMANCE
INDICATORS
The KION Group has maintained and continued to strengthen
the high value of its employer brands, particularly those of Linde
Material Handling, STILL and Dematic. In 2018, STILL was
recognised as a top employer for the seventh year in succession
by the Top Employers Institute, a certification organisation.
The KION Group’s enterprise value is determined not only by
financial KPIs but also by non-financial factors. They are based on
Our shared KION Group values
the Company’s relations with its customers and employees, on its
technological position and on environmental considerations. The
In 2017, we defined and introduced our shared corporate val-
KION Group can only achieve the targets that it has formulated for
ues as part of an international multi-stage process involving
itself in the KION 2027 strategy if it is an attractive and responsible
employees from across all units, countries and hierarchy levels.
employer that can retain competent and committed employees at
Eleven global workshops with a total of around 1,000 participants
all sites, if it develops products and solutions that are closely
were held on all continents, ensuring that the entire workforce
tailored to customers’ needs and environmental requirements
was represented. The values – integrity, collaboration, courage
now and in future, if it continually increases the customer benefits
and excellence – provide a common basis for our work together.
provided by its products and services and if it designs production
In order to further entrench the values in the Company, we
processes in such a way that resources are conserved and
implemented a number of measures in 2017 and 2018. Among
emissions are avoided as far as possible.
other things, we ran team workshops to ensure that all employees
The KION Group firmly believes that these aspects are
are aware of them, and provided regular updates on the intranet,
important to its positioning as a pioneering company in a highly
including features on employees who embody the values
competitive environment.
Employees
HR strategy
particularly well.
Headcount
The average number of employees (full-time equivalents (FTEs),
including trainees and apprentices) in the KION Group was
32,524 in 2018 (2017: 31,064 FTEs).
The KION Group’s success is founded on the capabilities and
As at 31 December 2018, the KION Group companies
commitment of its employees. The ultimate objective of the KION
employed 33,128 FTEs, 1,520 more than a year earlier. > TABLE 024
Group’s HR strategy is to provide the best possible support for
the targeted implementation of the KION 2027 strategy. To this
end, the KION Group draws on a wide range of measures to
ensure that there is always a sufficient number of highly qualified,
hard-working employees at all levels of its operations. Attractive
working conditions and the opportunities for career progression
afforded by working for an international group of companies play
an important role in this and provide a solid basis for meeting the
manifold challenges presented by demographic change.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
Employees (full-time equivalents) *
31/12/2018
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total
31/12/2017
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total
89
TABLE 024
Total
20,647
2,773
210
2,977
1,225
5,296
Corporate
Services
796
0
0
0
0
0
796
33,128
698
19,430
0
0
0
0
0
2,433
248
3,027
1,298
5,172
698
31,608
Industrial
Trucks & Services
Supply Chain
Solutions
17,641
2,642
206
232
486
4,326
25,533
16,634
2,349
237
219
459
4,192
24,090
2,210
131
4
2,745
739
970
6,799
2,098
84
11
2,808
839
980
6,820
* Number of employees (full-time equivalents) as at balance sheet date; allocation according to the contractual relationship
Personnel expenses amounted to €2,100.2 million. The main
reason for this increase of 5.6 per cent compared with 2017 was
the rise in average headcount for 2018 and changes to collective
bargaining agreements. > TABLE 025
Personnel expenses
in € million
Wages and salaries
Social security contributions
Post-employment benefit costs and other benefits
Total
2018
1,653.4
364.2
82.6
2,100.2
2017
1,567.8
343.5
78.5
1,989.7
TABLE 025
Change
5.5%
6.0%
5.3%
5.6%
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
90
Diversity
positions is critically important to the KION Group. As a result,
one of the focuses of HR work across the Group in 2018 was, as
The KION Group sees itself as a global manufacturer with
in the previous years, the recruitment and development of
strong intercultural awareness: as at 31 December 2018, people
suitable young talent.
from around 90 different countries were employed across the
The KION Group endeavours to offer its employees interesting
KION Group.
career opportunities and flexible, family-friendly working-time
One of the ways in which the Company promotes interna-
models. The Group companies also collaborate closely on areas
tional collaboration between employees is the KION expat
such as talent management and training & development pro-
programme, which gives employees the opportunity to transfer to
grammes. This helps to systematically identify and support
different countries where the KION Group is represented.
staff with potential, high performers and experts in key functions.
The KION Group is tackling the challenges of demographic
The STILL, Linde Material Handling and Dematic academies
change in a variety of ways, for example by providing working
offer subject-specific and interdisciplinary training courses that
conditions that are suited to employees’ age-related requirements
develop employees’ skills, particularly in sales and service.
and organising healthy-living programmes so that it can continue
to benefit from older employees’ experience. As at 31 Decem-
Training and professional development
ber 2018, 26.6 per cent of employees were over the age of 50
(31 December 2017: 27.0 per cent).
The companies in the KION Group currently offer training for
Compared with the previous year, the proportion of the
22 professions in Germany. Besides providing dual vocational
KION Group’s total workforce made up of women was virtually
training schemes, KION Group companies offer work placements
unchanged in 2018, at 16.2 per cent (2017: 16.0 per cent). To help
for students combining vocational training with a degree course
increase the proportion of management positions occupied
in cooperation with various universities.
by women, the Executive Board set targets that are published in
The total number of trainees and apprentices was 601 as at
the corporate governance report. Going forward, the KION Group
31 December 2018 (31 December 2017: 579).
intends to fill more management positions internationally in
order to better fulfil the continually growing requirements placed
Sharing in the Company’s success
on the Company.
The KION Group offers flexible working-time models that pro-
The KION Group launched the KION Employee Equity Programme
mote a good work-life balance.
(KEEP) in 2014. Initially limited to Germany, the programme was
In addition, various initiatives were launched in 2018 aimed at
then rolled out to more countries. Around 1,450 employees
increasing diversity in the Company. For our female managers, for
participated in this share matching programme in 2018, roughly
example, we launched the Female Mentoring Programme.
6 per cent of the total number who are eligible to do so.
The programme was extended to the USA in 2018.
Development of specialist workers and executives
Since 2014, the remuneration of the approximately 460 top
executives has included a remuneration component running
The longer-term HR strategy focuses on an even better and
over several years that is based on the long-term success of the
more targeted development for employees with high potential.
Company and is granted annually.
In addition to the development activities geared specifically
to high-potential employees, greater priority will be given to
succession planning for key positions in the KION Group in future.
To this end, we introduced a performance management process
for succession planning in 2017/2018 that applies globally.
Finding highly qualified people to fill specialist and executive
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
91
Employee commitment
The KION Safety Championship provides additional motivation
for employees to continually engage with HSE matters. Based on
The KION Group’s products and services destined for its cus-
regular reporting from the individual units and a set of four defined
tomers are produced by committed employees. That is why all KION
evaluation criteria, a panel of judges awards prizes to those units
companies aim to ensure a high level of employee commitment.
that have shown special dedication or have suggested the most
Based on the manager survey conducted in 2015 and the
improvements in an area of HSE.
action plan derived from it, a package of measures was defined
HSE managers at the KION Group’s production facilities
and implemented in 2016 as part of the new ‘Lift up’ transforma-
and in its sales and service units have the opportunity to meet
tion initiative, in particular to ensure the new organisational
and talk with one another at annual conferences.
structure is firmly embedded and to communicate the KION
Numerous activities aimed at improving health, such as
Group’s strategy more widely.
fitness programmes and advice on nutrition and healthcare – also
A new manager survey was carried out in 2017 which
have a positive effect on health and safety in the Group. The vast
revealed that the action plan derived from the earlier survey had
majority of employees have access to voluntary health-related
been successfully implemented and we were therefore able to
activities at their site.
improve on the results of the 2015 survey.
At 2.8 per cent on average, the illness rate for 2018 remained
We continued to work on the action plan in team workshops
at a satisfactory level (2017: 2.8 per cent). The illness rate is
over the course of 2018. Another survey is planned for 2019.
the figure for illness-related or accident-related absences from
the workplace. The targets relating to HSE were examined in
Health and safety in the workplace
2018 as part of a regular review. Further information, along
with details of the other HSE key performance indicators and
As an employer, the KION Group is responsible for the health
of the measures initiated and implemented in 2018, will be
and safety of its employees. The focus is always on avoiding all
included in the KION Group’s separate sustainability report,
accidents and work-related illness wherever possible, as well as
which will be published in April 2019 on the following website:
on maintaining each employee’s work capacity in the long term.
https://reports.kiongroup.com/2018/sr.
In 2017, the KION Group updated its corporate policy setting out
its obligations in respect of health, safety and the environment
(HSE). These include taking comprehensive precautions to create
a safe working environment and ensuring employees know how
to avoid risks and accidents.
HSE activities centre on an internal audit programme, which
covers all of the KION Group’s production facilities as well as
sales and service. It systematically documents HSE measures
and processes and provides specific ideas for how they can be
developed further. In 2018, nine central HSE audits were carried
out within the KION Group, including at the new plant in the
Czech Republic and at other Dematic sites. Furthermore,
comprehensive minimum HSE standards were implemented that
are binding for all plants and the sales and service organisation.
Every employee can access them via the intranet. To ensure rapid
implementation, the main focus is on the 20 standards that are
particularly relevant.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
92
Research and development
develop customer-specific solutions. As a result, a consortium
led by the Fraunhofer Institute for Production Technology IPT
Strategic focus of research and development
and RWTH Aachen ranked the KION Group among the top five
‘successful practice’ companies in a benchmark study on agile
Under the KION 2027 strategy, research and development is
invention. A total of 159 German and European companies took
set up so as to provide the best possible support for the
part in the benchmark study.
KION Group’s objective of becoming the world’s leading supplier
of integrated, automated supply chain solutions and mobile
Key R&D figures
automation solutions. The innovativeness of the portfolio is being
significantly increased by concentrating heavily on automation
Total spending on research and development came to €221.7 mil-
and robotics solutions that are based on an overarching software
lion in 2018 (2017: €212.4 million), which equates to 2.8 per cent
platform. In 2018, the KION Group forged ahead with incor-
of revenue (2017: 2.8 per cent). Total R&D expenditure included
porating autonomous trucks and automated guided vehicle
€84.0 million in capitalised development costs (2017: €75.4 mil-
systems into end-to-end solutions for warehouses, among other
lion). Alongside this addition to capitalised development costs,
things. Another area of focus was the ongoing development of
there were amortisation and impairment charges of €76.6 million
the warehouse management system. Moreover, the KION Group
(2017: €69.0 million) (see note [16] in the notes to the consolidated
has driven forward the integration of research and development
financial statements). A total of €137.7 million (2017: €137.0 million)
into a groupwide digitalisation strategy. The Digital Campus, for
was expensed.
example, is helping to significantly accelerate projects to digitalise
The number of full-time jobs in R&D teams remained more or
the existing core business and ensure that they are fully aligned
less constant compared to 31 December 2017. > TABLE 026
with the requirements of the Operating Units and their customers.
At the same time, R&D will continue to be structured
The KION Group takes comprehensive measures to protect the
cost-effectively, including through the use of agile processes.
products it develops against imitations and pursues a dedicated
This will further reduce the complexity and diversity of products
patent strategy. In 2018, the KION companies applied for a total
and shorten development times for new products. R&D essentially
of 105 new patents (2017: 101). As at 31 December 2018, the
works on a cross-brand and cross-region basis, which ensures
companies of the KION Group held a total of 2,923 patent
that research findings and technological know-how are shared
applications and issued patents (31 December 2017: 2,808 patent
across the Group. Building on this, local product development
applications and issued patents).
teams working for the individual brand companies and regions
Research and development (R&D)
in € million
Research and development costs (P&L)
Capitalised development costs
Total R&D spending
R&D spending as percentage of revenue
2018
137.7
84.0
221.7
2.8%
2017
137.0
75.4
212.4
2.8%
TABLE 026
Change
0.5%
11.5%
4.4%
–
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Report on the economic position
93
Focus of R&D in 2018
Energy
uses acoustic and visual signals as well as vibrations to alert
pedestrians and drivers in good time if they are approaching one
another within warning zones that can be individually configured.
Since 2018, lithium-ion technology has been available for virtually
Zone Intelligence uses sensors to identify and avoid situations
every intralogistics and warehouse management application. The
that may cause an accident and therefore costs. The new
advantages of energy-saving electric drives include faster charg-
assistance systems use ultra-wideband technology to enable
ing times, lower operating costs, higher safety standards and the
communi cation between the truck’s sensors, static sensors
ability to store considerably more energy. Linde extended the
and sensors worn on the person. The highly responsive Active
availability of lithium-ion batteries to the six to eight tonne load
Stability Control (ASC) assistance system from Linde and the
capacity range, closing the final gap in the electric forklift truck
Active Floor Compensation (AFC) safety and assistance system
segment in the process. A new rental concept is also encourag-
from STILL make it possible to drive faster yet more safely in
ing the use of energy-saving drive technology. The benefits for
high-rack warehouses, even where the floor is uneven. Further-
customers are flexibility and financial security over the entire
more, the innovative Truck Mapping app improves communication
usage period.
between the fleet manager and drivers, thereby enabling orders
A new battery concept was introduced for the new RX 20
to be managed even more efficiently.
electric forklift truck from STILL in 2018. The truck was a winner
Another new solution is the STILL neXXt fleet online portal,
at this year’s International Intralogistics and Forklift Truck of the
via which numerous processes involving inhouse material and
Year (IFOY) awards, where it triumphed in the Counter Balanced
data flows can be managed digitally – including from mobile
Truck category thanks to its compactness, ergonomics, perfor-
devices – in order to optimise industrial truck fleets. The user
mance, precision and innovative assistance systems.
is given a clear overview of all relevant fleet data and KPIs via a
Through its strategic partnership with EP Equipment, the
single application that can be accessed online from any device.
KION Group is expanding its portfolio for the electrification of
intralogistics to include entry-level warehouse technology.
Automation
Digitalisation
Dematic’s robotics centre of excellence, established in 2018,
brought the first robotic piece picking module to market that is
Software-based supply chain solutions that use robotics applica-
capable of independently selecting individual items and placing
tions are at the heart of digitalisation. The Dematic iQ software,
them in the right container at very high throughput rates. The
which enables real-time management of material flow solutions,
module has already proven itself in the field, and now all stages of
was expanded with the cloud-based asset performance man-
the order fulfilment process can be fully automated. Further
agement system Dematic iQ InSights. This new module increases
developments include a very narrow aisle AGV and robotics
warehouse efficiency through end-to-end facilities management.
solutions for use in cold stores.
Using real-time data, Dematic iQ InSights helps to optimise
Dematic also presented the second generation of its pouch
capacity utilisation, reduce lead times and increase operational
sorting system, which is particularly suitable for the handling of
performance.
returns and for picking, e.g. in e-commerce. Hanging and flat
Supported by the Digital Campus, Linde and STILL have also
goods as well as flat-packed items and boxes can be stored,
extended their digital offerings, in particular for data-based fleet
sorted and staged. An improved goods-to-person picking
management. Linde’s ‘connect’ fleet management solution is
solution was also launched. Combining the advantages of the
now available for all industrial trucks – including those built by
Dematic Multishuttle with patented inter-aisle transfer technology,
other companies – and therefore provides a comprehensive
the solution enables more intelligent, faster and ergonomic order
system for capturing and evaluating data that is also suitable for
processing for high volumes of goods.
mixed fleets. Two new assistance systems have also been added
The Industrial Trucks & Services and Supply Chain Solutions
to ‘connect’. Linde Safety Guard is a new assistance system that
segments particularly focused on product development aimed at
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
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94
improving the automation and connectivity of warehouse
At the World of Material Handling event in June, Linde and
and logistics solutions. Linde entered the automated guided
its partners – including Dematic for the first time – presented
cart (AGC) segment with the new Linde C-MATIC, which
solutions for efficient, affordable and safe intralogistics to more
autonomously manoeuvres through the warehouse and plays a
than 5,000 visitors. The topics in the spotlight were loading and
key part in standardising production logistics processes. Another
unloading, goods handling in high-rack warehouses and fully
addition to the robotics portfolio was the R-MATIC autonomous
and semi-automated solutions for picking and transport
reach truck, which operates fully automatically to store and
between individual production steps. There was a particular
retrieve palletised goods weighing up to 1.6 tonnes on high-bay
focus on specific sectors, for example through special formats
racks. New rider trucks in the 1.2 to 2.5 tonne load capacity range
for grocery wholesale and retail, transport logistics and the
ensure even more comfortable and productive goods transport
construction industry.
and link to the ‘connect’ modular data system. For light transport
STILL presented mainly compact trucks at the 2018 Logistics
tasks, Linde also launched three new pallet stackers and a hand
& Distribution fair in Brussels, where the new RX 20 electric forklift
pallet truck on the market.
Customers
truck won the Best of Handling award. STILL also showcased its
platform concept for digitalised intralogistics of the future at
the Zukunftskongress Logistik trade show in Dortmund. Among
the products unveiled at CeMAT 2018 were innovative fleet
management solutions from STILL. Baoli participated in various
The KION Group’s industrial trucks and supply chain solutions
trade fairs, including an event in Dubai.
are deployed in all kinds of industries.
At LogiMAT in Stuttgart, Dematic presented industry-specific
The Industrial Trucks & Services segment has a very broadly
automation solutions and hosted a Logistics Supply Chain Day at
diversified customer base, ranging from large key accounts with
its site in Heusenstamm. Dematic also launched European Cus-
global operations to small and medium-sized enterprises that
tomer Days 2018, a series of events for customers from the textile
typically order just a few trucks each year.
and fashion wholesale/retail industries that was supported through
The Supply Chain Solutions segment benefits
from
participation in the Fashion Supply Chain Summit. The autumn
long-standing customer relationships with major players in the
saw the launch of European Service Days, a platform where
e-commerce and logistics sectors. They influence the success of
service teams from across Europe can find out more about
the segment’s new business and service business. Specific
preventative measures for automation solutions. At MODEX 2018
product solutions and customer retention formats help Dematic
in Atlanta, Dematic showcased its comprehensive range of prod-
to further consolidate its position in major customer sectors,
ucts and solutions, while at EXCHAINGE it presented sector-
including general merchandise, grocery wholesale and retail,
specific automation solutions and highlighted the digital trans-
fashion, food and beverages, and parcel and courier services.
formation’s potential benefits for the supply chain. Dematic also
The KION Group already ranks among the global market leaders
supported the Material Handling & Logistics Conference in
in most of these sectors and enjoys excellent relationships with its
Utah, where customers and industry experts engaged in dia-
customers. It has been able to extend these relationships through
logue in a wide range of workshops and lectures on new trends
joint development projects and other initiatives.
and applications.
The KION brand companies again exhibited at the sector’s
leading trade fairs in various regions in 2018 in order to intensify
their collaboration with customers and partners.
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95
Sustainability
Acting sustainably and responsibly is one of the key principles
by which the KION Group operates. The Group’s focus on
sustainability is reflected in its safe and clean products, in its
environmentally friendly manufacturing processes and in the
safe and non-discriminatory working environment it provides.
The KION Group and its Operating Units strive for a balance
between environmental, economic and social considerations in
their activities. This is the basis upon which sustainability is
enshrined in the KION 2027 strategy. The KION Group’s values
also have a clear link to sustainability.
In 2018, the KION Group took part in CDP’s climate change
survey for the first time. Once a year, the Company will voluntarily
provide information regarding its climate protection activities to
CDP. The KION Group was also awarded a sector-specific ‘prime
status’ in a ranking by ISS-oekom, which specialises in identifying
sustainability-related investment opportunities and risks. The
objective is to be categorised as a sustainable investment for
environmentally conscious investors.
As well as comprehensive information on strategy, the man-
agement approach and structures for sustainability, the groupwide
2018 sustainability report which will be published in April of
2019, contains data on relevant key performance indicators
(see https://reports.kiongroup.com/2018/sr). It also contains the
KION Group’s non-financial declaration as required under German
law. For this reason, the KION Group has not provided detailed
information in the 2018 combined management report.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
96
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
from customers and movements in exchange rates.
as well as the earnings of KION GROUP AG. Any unexpected
developments in the global economy would result in the
Expected macroeconomic conditions
KION Group’s and KION GROUP AG’s performance and profits
differing significantly from those forecast below.
In its outlook for 2019 published in January 2019, the International
The KION Group does not undertake to update forward-looking
Monetary Fund (IMF) predicts continued global economic growth,
statements to reflect subsequently occurring events or circum-
which is slightly lower than the rate for 2018. Although growth is
stances. Furthermore, the KION Group cannot guarantee that
expected to weaken in the developed economies, partly as a
future performance and actual profits generated will be consistent
result of the positive impact of the US tax reforms coming to an
with the stated assumptions and estimates and can accept no
end, expansion in the emerging markets is forecast to continue
liability in this regard.
almost unchanged. The IMF anticipates a slight dip in the euro-
Actual business performance may deviate from our forecasts
zone’s moderate growth that will be attributable, in particular, to
due, among other factors, to the opportunities and risks described
Germany, Italy and France.
here. Performance particularly depends on macroeconomic
According to the IMF’s prediction, the worldwide volume of
and industry-specific conditions and may be negatively affected
trade will continue to grow at a constant rate.
by increasing uncertainty or a worsening of the economic and
This outlook from the IMF is lower than its previous expec-
political situation.
Outlook for 2018
tations, which it primarily attributes to geopolitical risks. The
IMF makes specific mention of the risks, for example in connec-
tion with the US/Chinese trade dispute, the consequences of
the Brexit outcome, diminishing budgetary discipline in some
eurozone countries and the high level of government debt in
The overall assessment of the financial situation of the KION
emerging markets.
Group compares the outlook included in the 2017 combined
management report with actual performance in 2018.
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Expected sectoral conditions
Expected business situation and financial
performance of the KION Group
The overall market for industrial trucks and warehouse systems
will continue to expand in 2019. Going forward, growth at regional
In 2019, the KION Group aims to build on its successful perfor-
level will again depend heavily on the strength of the economy in
mance in 2018 and, based on the forecasts for market growth,
the main sales markets. In past years, the market’s growth –
achieve further increases in revenue and adjusted EBIT.
measured by the number of new trucks sold and the revenue of
The order intake of the KION Group is expected to be
the largest system manufacturers – has consistently exceeded
between €8,250 million and €8,950 million. The target figure for
the growth rates for global gross domestic product (GDP). The
consolidated revenue is in the range of €8,150 million to
KION Group believes that the fundamental drivers of growth are
€8,650 million. The target range for adjusted EBIT is €805 million
intact, particularly the global fragmentation of value chains and
to €875 million. Free cash flow is expected to be in a range
consumers’ increasing preference for e-commerce. In view of
between €380 million and €480 million. The target figure for
the largely stable macroeconomic prospects, the KION Group
ROCE is in the range of 9.0 per cent to 10.0 per cent.
anticipates that the worldwide market for industrial trucks and
Order intake in the Industrial Trucks & Services segment is
warehouse systems will continue to expand at an above-average
expected to be between €6.250 million and €6,450 million. The
rate in 2019.
target figure for revenue is in the range of €6,050 million to
However, the growth of new industrial truck business is likely
€6,250 million. The target range for adjusted EBIT is €685 million
to normalise compared with the exceptional rates of expansion
to €720 million.
seen in 2017 and 2018, returning closer to the long-term trend of
Order intake in the Supply Chain Solutions segment is
around 4 per cent. The EMEA and Americas regions are expected
expected to be between €2,000 million and €2,500 million. The
to register further moderate increases in orders. Sharper rises are
target figure for revenue is in the range of €2,100 million to
anticipated in the APAC region, although it remains to be seen
€2,400 million. The target range for adjusted EBIT is €190 million
what impact the trade disputes will have. The KION Group is in an
to €225 million. > TABLE 027
excellent position from which to take advantage of the expected
progress in the electrification of warehouses. The constantly
increasing number of trucks in operation worldwide provides a
sustainable customer base for the service business.
Demand for supply chain solutions is likely to be underpinned
by the strong inclination to invest seen in the main customer
industries in connection with multichannel and e-commerce
strategies. In the medium-term, market growth is expected to be
in the high single digits.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
Outlook
in € million
Order intake *
Revenue *
Adjusted EBIT *
Free cash flow
ROCE
98
TABLE 027
KION Group
Industrial Trucks & Services
Supply Chain Solutions
2018
Actual
2019
Outlook
2018
Actual
2019
Outlook
2018
Actual
2019
Outlook
8,656.7
8,250 – 8,950
6,210.6
6,250 – 6,450
2,425.2
2,000 – 2,500
7,995.7
8,150 – 8,650
5,922.0
6,050 – 6,250
2,055.2
2,100 – 2,400
789.9
519.9
805 – 875
380 – 480
9.3%
9.0% – 10.0%
655.4
685 – 720
180.2
190 – 225
–
–
–
–
–
–
–
–
* Disclosures for the Industrial Trucks & Services and Supply Chain Solutions segments also include intra-group cross-segment order intake, revenue and effects on EBIT
Expected financial position of the KION Group
all identified risks by implementing suitable measures and takes
appropriate precautions.
Having significantly reduced its financial liabilities in the reporting
This ensures that the losses expected if these risks arise will
year, the KION Group intends to use free cash flow to achieve a
be largely covered and therefore will not jeopardise the Company’s
further moderate decrease in net debt.
continuation as a going concern. Risk management is embedded
Overall statement on expected performance
controlling. The Operating Units’ business models, strategic
perspectives and specific plans of action are examined system-
The KION Group believes it will continue along its path of profit-
atically. This ensures that risk management is fully integrated into
able growth and aims to further improve its market position
the KION Group’s overall planning and reporting process.
in the corporate controlling function and plays an active and
wide-ranging role due to the strategic focus of corporate
worldwide in 2019.
RISK REPORT
Risk strategy
Principles of risk management
The procedures governing the KION Group’s risk management
activities are laid down in internal risk guidelines. For certain types
of risk, such as financial risk or risks arising from financial services,
the relevant departments also have guidelines that are specifically
geared to these matters and describe how to deal with inherent
The business activities of the KION Group necessarily involve risk.
risks. Risk management is organised in such a way that it directly
Dealing responsibly with risk and managing it in a comprehensive
reflects the structure of the Group itself. Consequently, risk
manner is an important element of corporate management. The
officers supported by risk managers have been appointed for
overarching aim is to fully harness business opportunities while
each company and each division. A central Group risk manager
ensuring that risk always remains under control. Using its
is responsible for the implementation of risk management pro-
groupwide risk management system, the KION Group contains
cesses in line with procedures throughout the Group. His or her
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
99
remit includes the definition and implementation of standards to
reporting, to identify material mismeasurement and to ensure
ensure that risks are captured and evaluated.
compliance with the applicable regulations and internal instruc-
The risk management process is organised on a decentral-
tions. This includes verifying that the consolidated financial
ised basis. Firstly, a groupwide risk catalogue is used to capture
statements and combined management report comply with the
the risks attaching to each company. Each risk must be captured
relevant accounting standards.
individually. If the losses caused by a specific risk or the likelihood
of this risk occurring exceed a defined limit, the KION Group’s
Material processes and controls in the
Executive Board and its corporate controlling function are notified
(Group) accounting process
immediately. Each risk is documented in an internet-based
reporting system designed specifically for the requirements
For its (Group) accounting process, the KION Group has defined
of risk management. Risks affecting more than one Group
suitable structures and processes within its internal control
company, such as market risks, competition risks, financial risks
and risk management system and implemented them in the
and risks arising from financial services, are not recorded
organisation.
individually but are instead evaluated at Group level. Conse-
Changes to the law, accounting standards and other pro-
quently, such risks are not quantified.
nouncements are continually analysed with regard to their
The scope of consolidation for risk management purposes is
relevance and effect on the consolidated financial statements
the same as the scope of consolidation for the consolidated
and group management report; the relevant changes are then
financial statements. The risks reported by the individual
incorporated into the Group’s internal policies and systems.
companies are combined to form divisional risk reports as part
All consolidated entities must follow the KION GROUP IFRS
of a rigorous reporting process. To this end, minuted risk
Accounting Manual when preparing their IFRS reporting
management meetings are held once a quarter. Moreover,
packages. This manual contains the recognition, measurement
material risks are discussed with the segments at the business
and disclosure rules to be applied in the KION Group’s account-
review meetings. The divisional risk reports are then used to
ing in accordance with IFRS. The accounting guidelines primarily
compile an aggregate risk portfolio for the KION Group as a
explain the financial reporting principles specific to the KION
whole. To support this, the relevant departments of the holding
Group’s business. In addition, all companies must adhere to the
company are consulted each quarter in order to identify and
schedule defined by head office for preparing the consolidated
assess risk – particularly Company- wide, cross-brand risk affect-
financial statements and group management report.
ing areas such as treasury, purchasing, tax, human resources
The accounting-based internal control and risk management
and financial services. The Executive Board of KION GROUP AG
system encompasses defined control mechanisms, automated
and the Supervisory Board’s Audit Committee are informed of the
and manual reconciliation processes, separation of functions,
Group’s risk position once a quarter. The Internal Audit department
the double-checking principle and adherence to policies and
audits the risk management system at regular intervals.
instructions.
Material features of the internal control and
risk management system pertaining to the
(Group) accounting process
Principles
The employees involved in the (Group) accounting process
receive regular training in this field. Throughout the accounting
process, the local companies are supported by central points of
contact. The consolidated accounts are drawn up centrally using
data from the consolidated subsidiaries. Specially trained
KION Group employees carry 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.
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100
A team is responsible for monitoring the system-based controls,
things stand at present, there are no indications of any risks
which it supplements with manual checks. The entire accounting
that could jeopardise the Company’s continuation as a going
process contains a number of specific approval stages, for which
concern. > DIAGRAM 005
extensive plausibility checks have been set up. Employees with
the relevant expertise provide support on specialist questions
Risk matrix
DIAGRAM 005
and complex issues.
Internal control mechanisms and ongoing analysis of the
regulatory framework enable any risks that might jeopardise the
compliance of the consolidated financial statements and group
management report with accounting standards to be identified as
H
G
H
I
soon as possible so that appropriate countermeasures can be
taken. Such risks form part of the KION Group’s aggregate risk
profile and are classified as operational risk.
The Internal Audit department evaluates governance, risk
management and the control processes by following a systematic
and structured process, thus helping to bring about improve-
L
E
V
E
L
K
S
I
R
I
M
U
D
E
M
ments. It focuses primarily on the following aspects:
• Market risk
• Production risk
• Procurement risk
systems for avoiding financial losses
– appropriateness and effectiveness of the internal control
– compliance with legal requirements, directives from the
– correct performance of tasks and compliance with business
Executive Board, other policies and internal instructions
principles
Risk
Aggregate risk
• Risks arising from
customer project
business
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
The aggregate risk position was largely unchanged compared
The market risks and competition risks described, the risks along
with the end of 2017. With regard to 2019, the risks in the risk
the value chain, the human resources risks and the legal risks
matrix below will be continually observed and evaluated in terms
largely relate to the Industrial Trucks & Services and Supply Chain
of their extent and probability of occurrence. For example,
Solutions segments. Risks arising from financial services mainly
the KION Group considers there to be a low probability of the
affect the Industrial Trucks & Services segment, while financial
materialisation of market risks that would lead to a negative
risks would predominantly impact on the Corporate Services
deviation from the assumptions underlying the forecast. How-
segment.
ever, 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 performance. As
KION GROUP AGAnnual Report 2018
COMBINED MANAGEMENT REPORT
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101
Market risks and competition risks
market. The market risks referred to could be heightened by
Market risks
geopolitical risk, including the heightened protectionist tenden-
cies seen last year, and possible currency crises.
Market risk can arise when the economy as a whole or a par-
However, it is not currently foreseeable whether these risks
ticular sector does not perform as well as had been anticipated
will become relevant and then have a material effect on the busi-
in the outlook. Following two years of exceptionally strong growth
ness situation and financial performance.
in the Industrial Trucks & Services segment, the KION Group
The geopolitical situation is monitored closely. Various meas-
expects market growth to normalise at the multiple-year average.
ures aimed at making cost structures more flexible – such as the
This expectation has been factored into the outlook.
consolidation of production facilities, leveraging of cost synergies
Cyclical fluctuations in macroeconomic activity affect both
and the platform strategy – help to contain the earnings risk arising
the market for industrial trucks and the market for automated
from reductions in revenue caused by economic conditions.
supply chain solutions, although the latter has greater immunity
Diversification of the customer base in terms of industry and
to economic cycles.
region as well as expansion of service activities also play a role
Customers’ decisions on whether to invest depend to a large
in mitigating risk. Moreover, the KION Group closely monitors the
degree on the macroeconomic situation and conditions in their
market and its competitors so that it can identify market risks at
particular sector. During an economic downturn, or even just
an early stage and adjust its production capacities in good time.
periods of heightened economic uncertainty, customers tend to
Besides global economic growth and other data, the KION
postpone their capital expenditure plans. Although demand for
Group also analyses exchange rates, price stability, the con-
services is less cyclical, it correlates with the degree of utilisation
sumer and investment climate, foreign trade activity and politi-
of the trucks and systems – which usually declines during difficult
cal stability in its key sales markets, constantly monitoring the
economic periods.
possible impact on its financial performance and financial posi-
As the KION Group can only adjust its fixed costs to fluctua-
tion. Other risks arise as a result of constant changes in the
tions in demand to a limited extent, reductions in revenue impact
Company’s political, legal and social environment. Because it
on earnings. Despite the significant proportion of revenue
operates in countries in which the political or legal situation is
generated outside the eurozone (due in part to the strong North
uncertain, the KION Group is exposed to the consequent risk of
American business of the Supply Chain Solutions segment and
government regulation, changes to customs rules, capital con-
the expansion of business in China), the bulk of revenue contin-
trols and expropriations. The KION Group mitigates such stra-
ues to be billed in euros. As a result, the market conditions that
tegic risks by, for example, carrying out in-depth market
prevail in the eurozone impact significantly on the KION Group’s
research, conducting thorough evaluation procedures to
financial performance. Although the eurozone’s economic growth
assess political and economic conditions and drafting contracts
continued to stabilise in the year under review, there are still risks
appropriately.
resulting from Brexit-related uncertainties and diminishing
budgetary discipline in Italy. Moreover, any weakening of
Competition risks
economic growth affecting major trading partners – e.g. China,
Competition risk describes the risk that growing competitive
where the punitive tariffs imposed by the US are taking their
pressure will prevent the KION Group from achieving its predicted
toll on the economy – might reduce eurozone customers’
margins and market share. The markets in which the KION Group
willingness to invest and consequently the demand for the
operates are characterised by strong competition, often
KION Group’s products.
price-driven. Price competition is compounded by some
Any loss of momentum in the emerging markets, for example
manufacturers having cost advantages in production, sometimes
due to the adverse impact of changes in the interest-rate and
due to the currency situation and sometimes because local
currency environment – could also have a negative effect on
labour costs are lower. This mainly affects the Industrial Trucks &
global trade volumes and thus on growth in the material handling
Services segment, where competition is fierce, particularly in
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102
the economy and volume price segments, and the impact is
changing regulatory and technological requirements. To this end,
especially strong in emerging markets. Building on their local
the KION Group must anticipate customers’ needs and changing
competitive strength, manufacturers in emerging markets are
market conditions – including the growing use of digital technolo-
also looking for opportunities to expand. Although the high quality
gies in value chains – and has to quickly bring new products
expectations and service needs of customers in developed mar-
to market. If the Company does not succeed in doing this, its
kets present a barrier to growth for many of these manufacturers,
technological and competitive position could be compromised in
this situation is likely to intensify competitive pressures in future.
the long term.
It is also conceivable that competitors will join forces and
The innovations developed by the KION Group are compre-
their resulting stronger position will be detrimental to the KION
hensively protected by intellectual property rights, in particular
Group’s sales opportunities. Moreover, predictions of higher
patents. Nevertheless, there is always the possibility that
volumes and margins may lead to overcapacity, which would put
products or product components will be imitated. There is also a
increased pressure on prices. Although the excellent customer
risk that patent applications will not be successful. The KION
benefits provided by its products have enabled the KION Group
Group mitigates research and development risk by focusing firmly
to charge appropriate prices until now, it is taking a variety of
on customer benefit in its development of products and solutions.
steps to contain competition risk. Alliances, partnerships,
Customer needs are incorporated into the development process
acquisitions and other measures are increasingly playing a role
on an ongoing basis by ensuring close collaboration between
in improving the KION Group’s competitiveness in terms of
sales and development units and taking account of all
resources, market access, product range and digitalisation
region-specific requirements.
expertise. The steps that the KION Group is taking to mitigate its
competition risk also include making its plants more efficient and
Procurement risks
securing low-cost sources of supply.
Procurement activities constitute a potential risk for the KION
The KION Group also continually evaluates its options for
Group in terms of the general availability of parts and compo-
strengthening and consolidating its position in emerging markets,
nents and the rising cost of raw materials, energy, inputs and
in particular through proactive cross-selling by the two operating
intermediate products. In particular, restricted capacity in a tight
segments, strategic partnerships, the creation of joint ventures
supplier market could result in the KION Group facing backlogs
or acquisition of local manufacturers. One of the risks of such
in the supply of individual raw materials and components. As
alliances and acquisitions is that the expected benefits will
seen in 2018, these backlogs can lead to temporary decreases in
materialise only partly or not at all. For example, the organisa-
revenue and cash flow as well as to inefficiencies in production.
tional integration of new units can harm financial performance for
The KION Group obtains some of its key components from a lim-
a variety of reasons. It is also possible that a partner will collabo-
ited number of core suppliers. Key components in the Industrial
rate with competitors if exclusivity agreements are not in place.
Trucks & Services segment include internal combustion engines,
Risks along the value chain
tyres and high-performance forged and electronic parts.
The risk of supply bottlenecks – for example in the event of
a shortage of raw materials or financial difficulties at core
Research and development risks
suppliers – cannot be ruled out in future. The KION Group
The KION Group’s market position and business performance
mitigates this risk by further diversifying its supplier structure in
depend to a large extent on its ability to build on its leading
the context of a global procurement organisation.
technological position in respect of individual products and
In addition, the supplier development department, which
system solutions in order to become the leading supplier of
focuses on improving suppliers’ production processes, helps
automated supply chain solutions and mobile automation
suppliers to ensure that their processes are cost-efficient and
solutions. This requires the Group to continually develop
offer excellent quality.
products that meet customer expectations and comply with
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
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Price changes present another procurement-related risk. In 2018,
increases over the term of the project that were not anticipated in
around 25.5 per cent (2017: around 25 per cent) of the cost
the project costing and cannot be passed onto the customer.
of materials for new trucks was directly influenced by changes
To mitigate these risks in the Supply Chain Solutions segment,
in commodity prices. Moreover, conditions in the commodity
project management includes a comprehensive process of risk
markets typically affect component prices after a delay of three to
management. This involves detailed evaluation of the risks when
six months. The KION Group endeavours to pass on price
defining the technical aspects of quotations plus financial risk
increases to customers but cannot always do so entirely due to
provisioning based on the individual project specifications when
market pressures.
Production risks
preparing quotations. A multistage approval process based on an
extensive list of criteria ensures that financial, country-specific,
currency-specific and contractual risks are largely avoided.
Production risks are largely caused by quality problems, possible
The potential risks that may arise in the project realisation
disruptions to operational procedures or production downtime at
phase are analysed in every individual project using detailed con-
individual sites. They can also materialise as secondary risks
tinuous reviews based on the individual items of work that make
resulting from the aforementioned procurement risks. In such
up the project. This keeps potential risks to a minimum.
cases, the KION Group’s closely integrated manufacturing
network presents a heightened risk to its ability to deliver goods
Sales risks
on time. There is also a risk that structural measures and reorgan-
The main sales risks – besides a drop in revenue caused by market
isation projects will not be implemented owing to disruption of
conditions – result from dependence on individual customers and
production or strikes. Delays in delivery or a rise in the number of
sectors. For example, it is possible that customers would post-
complaints could harm the KION Group’s positioning in the price
pone or cancel orders during a period of economic difficulty.
segments and sales markets that it serves and, as a result, could
There have not been any significant cancellations in previous
harm its financial situation.
years, however. It is also conceivable that customers would face
To mitigate these risks, the KION Group carries out preven-
a liquidity shortfall and therefore be unable to fulfil their payment
tive maintenance, implements fire protection measures, trains its
obligations immediately or even at all. Because of its customer
staff and builds a pool of external suppliers. The Company has
project business, the Supply Chain Solutions segment generally
taken out a commercially appropriate level of insurance cover
has a greater dependence on individual sectors and individual
against loss. Quality assurance is a high priority throughout the
customers than the Industrial Trucks & Services segment. Never-
value chain and reduces possible quality-related risks arising
theless, the concentration risk for the KION Group overall is still
from the products and services provided. The KION Group
considered to be low. The business is highly diversified from a
mitigates its quality-related risks significantly by applying rigorous
regional perspective. In addition, the KION Group supplies com-
quality standards to its development activities, conducting
panies of all sizes. Experience has shown that the KION Group’s
stringent controls throughout the process chain and maintaining
exposure to the risk of possible payment defaults is low, but this
close contact with customers and suppliers.
risk can be further mitigated by recovering any collateral.
Risks arising from customer project business
IT risks
In the customer project business, risks can arise from deviations
A high degree of interconnectedness between sites and with
from the schedule originally agreed with the customer, potentially
customers and other companies means that the KION Group
leading to revenue and profit being recognised in subsequent
also relies on its IT systems working flawlessly. The KION Group
years or, in isolated cases, contractual penalties having to be paid.
undertakes ongoing further development of a reliable, extendable
Another possible risk is that the technology deviates from the
and flexible IT system environment with the aim of countering
promised specifications, which may result in additional completion
any IT-related risks that may arise from the failure of IT systems
costs. The long-term nature of individual projects can lead to cost
and IT infrastructure. Internal IT resources are pooled in the
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
104
cross-segment KION Group IT function, which has well-estab-
Risk arising out of the lending and promissory note condi-
lished processes for portfolio management and project planning
tions that have been agreed was not regarded as material as at
and control. Independent external audits are conducted to
31 December 2018. It relates in particular to the restrictions in
provide additional quality assurance. Various technical and
respect of compliance with financial covenants and upper limits
organisational measures protect the data of the KION Group and
for certain transactions and in respect of the obligation to submit
the Group companies against unauthorised access, misuse and
special regular reports. The KION Group complied with all the
loss. These measures include procedures to validate and log
obligations in this regard in the reporting year.
access to the Group’s infrastructure.
Some of the Group’s financing takes the form of floating-rate
There are further IT risks in connection with the European
or fixed-rate financial liabilities. Interest-rate swaps are used to
General Data Protection Regulation (GDPR), which came into
hedge the resultant interest-rate risk and the risk of a change in
effect on 25 May 2018. It contains a host of new data protection
the liabilities’ fair value.
provisions that were not included in the previous legislation, for
The Company generally refers to credit ratings to manage
example rules on the processing of personal data and require-
counterparty risk when depositing funds with a financial insti-
ments relating to full documentation of such processing. Major
tution. The KION Group only uses derivatives to hedge under-
breaches of the GDPR can lead to fines of up to 4 per cent of the
lying operational and financial transactions; they are not used
previous year’s revenue. In 2018, the KION Group launched a
for speculative purposes. It is exposed to currency risk
groupwide project in order to fully implement the data protection
because of the high proportion of its business conducted in
and documentation requirements. Furthermore, employees are
currencies other than the euro. In the Industrial Trucks & Ser-
being reminded that all of the Group’s stakeholders have privacy
vices segment, at least 75 per cent of the currency risk related
rights that must be upheld. Given that the KION Group maintains
to the planned operating cash flows based on liquidity plan-
very high compliance standards, the probability of the GDPR
ning is normally hedged by currency forwards in accordance
being breached is regarded as very low.
with the relevant guideline. The Supply Chain Solutions seg-
Financial risks
ment hedges itself against currency risk on a project-related
basis. Corporate Treasury rigorously complies with and moni-
tors the strict separation of functions between the front, middle
Corporate Treasury is responsible for ensuring that sufficient
and back offices.
financial resources are always available for the KION Group’s
Each Group company’s liquidity planning is broken down by
international growth. The main types of financial risk managed by
currency and incorporated into the KION Group’s financial
Corporate Treasury, including risks arising from funding instru-
planning and reporting process. Corporate Treasury checks the
ments, are liquidity risk, currency risk, interest-rate risk and coun-
liquidity planning and uses it to determine the funding require-
terparty risk. Counterparty risk consists solely of credit risks
ments of each company. The funding terms and conditions faced
attaching to financial institutions.
by the lenders themselves (manifested, for example, in the pay-
Risk management procedures issued by Corporate Treasury
ment of liquidity premiums on interbank lending) may result in a
stipulate how to deal with the aforementioned risks. Non-current
future shortage of lines of credit and / or increased financing costs
financial liabilities fell by €206.1 million from their level at
for companies. However, the Group currently does not expect
31 December 2017 to reach €1,818.7 million at the end of 2018.
any further changes in its lines of credit or any excessive increases
As at 31 December 2018, the main financial liabilities classified
in margins.
as non-current were a promissory note with a nominal amount
Goodwill and brand names represented 33.7 per cent of total
totalling €1,210.0 million plus the nominal amount of €600.0 mil-
assets as at 31 December 2018 (31 December 2017: 35.1 per cent).
lion still outstanding under the bridge loan (AFA) following sub-
Pursuant to IFRS, these assets are not amortised and their meas-
stantial repayments. The unused, unrestricted SFA loan facility
urement depends, above all, on future expectations. If these future
stood at €1,048.2 million as at 31 December 2018.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
105
expectations are not fulfilled, there is a risk that impairment losses
The counterparty risk inherent in the leasing business contin-
will have to be recognised on these assets.
ues to be insignificant. The Group also mitigates any losses from
The individual Group companies directly manage counter-
defaults by its receipt of the proceeds from the sale of repos-
party risks involving customers. These counterparty risks did not
sessed trucks. Furthermore, receivables management and credit
change significantly in 2018. Each individual Group company has
risk management are refined on an ongoing basis. Besides the
established a credit management system for identifying customer-
design of the business processes, it also encompasses the risk
related counterparty risks at an early stage and initiating the
management and control processes.
necessary countermeasures. Analysis of the maturity structure of
receivables is an integral element of monthly reporting.
Risks arising from financial services
Human resources risks and legal risks
The KION Group relies on having highly qualified managers and
The leasing activities of the Industrial Trucks & Services segment
experts in key roles. If they left, it could have a long-term adverse
mean that the KION Group may be exposed to residual value
impact on the Group’s prospects. That is why the KION Group
risks from the marketing of trucks that are returned by the lessee
actively engages in HR work aimed at identifying and developing
at the end of a long-term lease and subsequently sold or
young professionals with high potential who already work for the
re-rented. Residual values in the markets for used trucks are
Company and retaining them over the long term, thereby enabling
therefore constantly monitored and forecast. The KION Group
succession planning for key roles across the Group. The KION
regularly assesses its aggregate risk position arising from
Group also positions itself in the external market as an employer
financial services.
of choice. This will enable it to make strategic additions to its
The risks identified are immediately taken into account by the
portfolio of existing staff and, in this way, avert the risk of possibly
Company by recognising write-downs or provisions and in the
losing expertise and thereby becoming less competitive.
costing of new lease contracts by adjusting the residual values.
Any restructuring measures may result in a risk of strikes and
Risk-mitigating factors include the demand for used trucks, which
reactions of other kinds by the workforce. As demonstrated
stabilises the residual values of the KION Group’s industrial
several times in the past, this risk is contained by collaborating
trucks. In many cases, the residual values have underlying remar-
closely with employee representatives and, if job losses are
keting agreements that transfer any residual-value risk to the leas-
necessary, taking comprehensive steps to ensure they are
ing company. This had a positive impact on the financial results in
achieved with the minimum possible social impact.
2018. Groupwide standards to ensure that residual values
The legal risks arising from the KION Group’s business are
are calculated conservatively, combined with an IT system for
typical of those faced by any company operating in this sector.
residual- value risk management, reduce risk and provide the
The Group companies are a party in a number of pending
basis on which to create the transparency required.
lawsuits in various countries. The individual companies cannot
The KION Group mitigates its liquidity risk and interest-rate
assume with any degree of certainty that they will win any of the
risk attaching to financial services by ensuring that most of its
lawsuits or that the existing risk provision in the form of insurance
transactions and funding loans have matching maturities and by
or provisions will be sufficient in each individual case. However,
constantly updating its liquidity planning. Long-term leases are
the KION Group is not expecting any of these existing legal
primarily based on fixed-interest agreements. The credit facilities
proceedings to have a material impact on its financial position or
provided by various banks and an effective dunning process
financial performance. These lawsuits relate, among other things,
ensure that the Group has sufficient liquidity.
to liability risks, especially as a result of legal action brought by
In order to exclude currency risks, the KION Group generally
third parties because, for example, the Company’s products were
finances its leasing business in the local currency used in each
allegedly faulty or the Company allegedly failed to comply with
market.
contractual obligations. Further legal risk may arise as a result of
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
106
the environmental restoration of sites that have been shut down in
require individual areas of opportunity to be re-evaluated. This
recent years, for example work required due to contamination.
may lead to reallocation of the budgets earmarked for the realisation
Any damage to the environment may lead to legal disputes and
of opportunities. Such decisions are made on the basis of the
give rise to reputational risk.
potential of the opportunity, drawing on empirical values. There is
The Company has taken measures to prevent it from
no management system for the evaluation of opportunities com-
incurring financial losses as a result of these risks. Although legal
parable to the system for risk management.
disputes with third parties have been insignificant both currently
and in the past, the Company has a centralised reporting system
to record and assist pending lawsuits. In addition to the high
Categorisation of opportunities
quality and safety standards applicable to all users of the
Company’s products, with which it complies when it develops
‘Opportunities’ are understood as positive deviations from the
and manufactures the products, it has also taken out the usual
expectations set out in the outlook relating to the economic
types of insurance to cover any third-party claims. In addition,
situation and the KION Group’s position. Opportunities are
interdisciplinary teams work on the avoidance of risks arising from
divided into three categories:
inadequate contractual arrangements. A further objective of this
cooperation across functions is to ensure compliance with man-
datory laws, regulations and contractual arrangements at all times.
Owing to the KION Group’s export focus, legal risk and
reputational risk arise due to the numerous international and local
export controls 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
– Market opportunities describe the potential resulting from
trends in the market and competitive environment and from
the regulatory situation.
– 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
2019. In addition, circumstances may occur in the wider market
part of the Company’s day-to-day management. In 2018, the
at any time – such as quality problems at competitors or the
aggregate opportunity position was largely unchanged com-
effects of consolidation – that increase demand for products from
pared with the previous year. Individual areas of opportunity
the KION Group brands. New, unforeseen regulatory initiatives
are identified within the framework of the strategy process.
could be launched, for example the tightening of health and safety
Opportunities are determined and managed on a decentralised
regulations or emissions standards, that would push up demand
basis in line with the Group strategy.
for products offered by the KION Group brands. Average
There are monthly reports on the opportunity situation as
prices for procuring commodities over the year may be cheaper
part of the regular Group reporting process. As a result, the
than anticipated. Moreover, a weakening of the euro could
KION Group is in a position to ascertain at an early stage whether
bring positive currency effects that have not been factored
market trends, competitive trends or events within the Group
into the planning.
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Outlook, risk report and opportunity report
107
Medium- to long-term market opportunities are presented, in
particular, by:
– a greater presence in the economy and volume price
segments, particularly as a result of the systematic imple-
– growing demand for intralogistics products, solutions and
services as a consequence of globalisation, industrialisation
mentation of the segment-wide platform strategy
– stronger involvement in the electrification of warehousing and
logistics processes, including by ensuring availability of
and fragmentation of supply chains as well as efficiency
lithium-ion technology across the entire product range
increases that are needed due to limited warehouse space
and expanding market share in the lightweight warehouse
and changing consumer requirements
– high demand for replacement investments, especially in
– the trend towards outsourcing of service functions for indus-
developed markets
trial trucks, outsourcing of entire logistics processes in the
supply chain solutions business and growth in demand for
finance solutions
– increased use of industrial and warehouse trucks powered
by electric motors – one of the KION Group’s particular
strengths
– growing demand for automation solutions and fleet manage-
ment solutions in connection with the rapidly expanding
truck sector
– further strengthening of its market-leading position in the
EMEA region and achievement of a significant position in the
Americas region, in particular by boosting its technological
expertise, making greater use of shared modules and
harnessing potential for cross-selling
– expansion of the service portfolio, including financial
services, at every stage of the product lifecycle, taking
advantage of the high number of trucks in use and the
installed base of supply chain solutions
The KION Group’s medium- to long-term strategic opportunities
e-commerce sector and the implementation of Industry
in the Supply Chain Solutions segment arise, in particular, from:
4.0 projects
Strategic opportunities
– further expansion of its position in the market for intralogistics
solutions based on the growing acceptance of automation
The positive impact of the strategic activities under the KION
2027 strategy is already appropriately reflected in the expecta-
tions regarding the KION Group’s financial performance in 2019.
Nevertheless, the individual activities could create positive effects
that exceed expectations. There is also a possibility that new
strategic opportunities that were not part of the planning may
arise over the course of the year, for example in the form of
concepts
– the advancing digitalisation and automation of production
– the growing trend in numerous sectors for the integration of
and supply chains through the use of robotics solutions
supply chain solutions into the respective software applica-
tion environment
– strengthening of the market position in the EMEA region –
above all, central and eastern Europe – by using the sales
acquisitions and strategic partnerships.
structures of Industrial Trucks & Services
The KION Group’s medium- to long-term strategic oppor-
tunities in the Industrial Trucks & Services segment arise, in
particular, from:
– achievement of a leading global market and technology
position with regard to truck automation and innovative drive
technologies as an integral element of automated warehouse
solutions
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
108
Business-performance opportunities
Business-performance opportunities arise firstly from ongoing
activities to modernise and streamline the KION Group’s production
facilities and from the worldwide integration of the production
network. By investing in new locations and expanding existing
ones, products can be assembled nearer to the markets in which
they are to be sold, economies of scale can be achieved across
the Group and synergies can be leveraged. Secondly, activities
are carried out under the KION strategy aimed at improving
operational excellence in logistics, technology & product devel-
opment and production and at lowering material and quality costs,
for example by reducing the complexity of the product range.
The following may lead to an increase in profitability in the
medium term:
sales and improve the gross margin.
– Ongoing efficiency increases at production sites may boost
– Effective use of global development capacities may create
– Activities to improve operational excellence and lower costs
synergies and economies of scale.
may help the KION Group to achieve future growth with a
disproportionately small rise in costs.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
109
Disclosures relevant to acquisitions,
section 315a and 289a HGB
1. Composition of subscribed capital
– According to the disclosures pursuant to the German Secu-
rities Trading Act (WpHG), the shareholding held by Weichai
The subscribed capital (share capital) of KION GROUP AG
Power is deemed to belong to the following other companies:
amounted to €118.09 million as at 31 December 2018. It is divided
> TABLE 028
into 118.09 million no-par-value bearer shares. The share capital
is fully paid up. All of the shares in the Company give rise to the
same rights and obligations. Each share confers one vote and
Companies and countries to which
Weichai Power is deemed to belong
TABLE 028
entitlement to an equal share of the profits. The rights and obliga-
tions arising out of the shares are defined by legal provisions. As
Company
at 31 December 2018, the Company held 165,558 shares in
treasury. The primary intention is to offer these treasury shares to
Shandong Heavy Industry
Group Co., Ltd.
staff as part of the KION Employee Equity Programme (KEEP).
Weichai Group Holdings Limited
Weichai Power Co., Ltd.
Registered office
Jinan,
People’s Republic of China
Weifang,
People’s Republic of China
Weifang,
People’s Republic of China
2. Restrictions on voting rights or the
transfer of shares
Weichai Power Hong Kong Inter-
national Development Co., Ltd.
Hong Kong,
People’s Republic of China
The Company is not aware of any agreements entered into by
shareholders of KION GROUP AG that restrict voting rights or the
Other
transfer of shares.
People’s Republic of China
KION GROUP AG has no rights arising from the treasury
shares that it holds (section 71b AktG).
Registered office
Beijing,
People’s Republic of China
3. Direct or indirect shareholdings in the
Company that represent more than
10 per cent of the voting rights
Since the reporting date, there may have been further changes
to the aforementioned shareholdings of which the Company is
unaware. As the shares in the Company are bearer shares, the
Company only learns about changes to the size of shareholdings
if these changes are notifiable pursuant to the WpHG or other
As far as the Company is aware, only Weichai Power (Luxem-
regulations.
bourg) Holding S.à r.l., Luxembourg (‘Weichai Power’) directly or
indirectly held more than 10 per cent of the voting rights in
KION GROUP AG as at 31 December 2018 and its shareholding
4. Shares with special rights that confer
was 45 per cent.
authority to exert control over the Company
There are no shares with special rights that confer the authority to
exert control over the Company.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
110
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
7. Authority of the Executive Board to issue or
buy back shares
The Annual General Meeting on 12 May 2016 authorised the
Company, in the period up to 11 May 2021, to acquire for treasury
There are no cases where employees hold some of the Company’s
up to 10 per cent of all the shares in issue at the time of the
capital and do not exercise their control rights directly themselves.
resolution or in issue on the date the authorisation is exercised,
6. Appointment and removal of members of
the Executive Board; amendments to the
articles of association
whichever is the lower. Together with other treasury shares in
possession of the Company or deemed to be in its possession
pursuant to section 71a et seq. AktG, the treasury shares bought
as a result of this authorisation must not exceed 10 per cent of the
Company’s share capital at any time. The Company may sell the
purchased treasury shares through a stock exchange or by
Members of the Company’s Executive Board are appointed and
means of an offer to all shareholders. It may also sell the shares in
removed in accordance with the provisions of sections 84 and
return for a non-cash consideration, in particular in connection
85 AktG and section 31 MitbestG. Pursuant to article 6 (1) of the
with the acquisition of a business, parts of a business or equity
articles of association of the Company, the Executive Board
investments. In addition, the treasury shares may be offered to
must have a minimum of two members. The Supervisory Board
employees of the Company or of an affiliated company as part of
determines the number of Executive Board members. Pursuant
an employee share ownership programme. The treasury shares
to section 84 AktG and section 6 (3) of the Company’s articles of
can also be retired. Share buyback for trading purposes is
association, the Supervisory Board may appoint a Chief Executive
prohibited. The authorisation may be exercised on one or more
Officer and a deputy.
occasions, for the entire amount or for partial amounts, in pursuit
Section 179 (1) sentence 1 AktG requires that amendments
of one or more aims, by the Company, by a Group company or by
to the articles of association be passed by resolution of the
third parties for the account of the Company or the account of a
Annual General Meeting. In accordance with article 23 of the
Group company. At the discretion of the Executive Board, the
articles of association in conjunction with section 179 (2) sentence
shares may be purchased through the stock exchange, by way of
2 AktG, resolutions at the Annual General Meeting on amend-
a public purchase offer made to all shareholders or by way of a
ments to the articles of association are passed by simple majority
public invitation to shareholders to tender their shares.
of the votes cast and by simple majority of the share capital
In 2018, the Company again made use of this authorisation,
represented in the voting unless a greater majority is specified as
purchasing 66,000 shares in the period 10 to 27 September
a mandatory requirement under statutory provisions. The option
2018. During the reporting year, 61,271 of the shares acquired
to stipulate a larger majority than a simple majority in any other
that were still in treasury were used as part of the KEEP Employee
cases has not been exercised in the articles of association.
Equity Programme for the employees of the Company and certain
The Supervisory Board is authorised in article 10 (3) of the
Group companies. In addition, 13,674 of the shares in treasury
articles of association to amend the articles of association
will be used in February of 2019 for the participants’ own invest-
provided that such amendments relate solely to the wording.
ments under the KEEP 2018 programme.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
111
– On the basis of a resolution of the Company’s Annual Gen-
eral Meeting on 11 May 2017, the Executive Board was
to €10.88 million (‘2017 Authorisation’). The 2017 Conditional
Capital of €10.88 million was created to service the debt instru-
authorised, subject to the consent of the Supervisory Board,
ments. The 2017 Authorisation has not been used so far.
to increase the Company’s share capital by up to €10.88 mil-
lion by issuing up to 10.88 million new no-par-value ordinary
The 2017 Conditional Capital will be reduced by, among other
bearer shares for cash and / or non-cash contributions up to
things, the portion of the share capital attributable to shares
and including 10 May 2022 (2017 Authorised Capital). The
issued on the basis of the 2017 Authorised Capital. As part of the
2017 Authorised Capital became effective when the corre-
capital increase in May 2017, 9.3 million new shares were issued
sponding change to the articles of association was
on the basis of the 2017 Authorised Capital. Consequently, con-
entered in the commercial register at the Wiesbaden local
ditional capital of up to €1.579 million is available on the basis of
court (HRB 27060) on 12 May 2017.
which the Executive Board would be able to issue shares.
With the consent of the Supervisory Board’s ad-hoc transaction
committee set up for this purpose, the Executive Board resolved
on 22 May 2017 to use part of the 2017 Authorised Capital
and, disapplying shareholders’ pre-emption rights, to increase
the Company’s share capital by a nominal €9.3 million to
€118.090 million by issuing 9.3 million new no-par-value bearer
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
shares in the Company. This equates to an 8.55 per cent rise in
In the event of a change of control resulting from a takeover bid,
the Company’s share capital in existence on the effective date
certain consequences are set out in the following significant
and at the time of use of the 2017 Authorised Capital. The capital
contracts (still in force on 31 December 2018) concluded between
increase took effect when its implementation was entered in the
Group companies of KION GROUP AG and third parties:
commercial register at the Wiesbaden local court under HRB
27060 on 23 May 2017. Consequently, the Executive Board is
currently authorised by the Annual General Meeting to increase
– Senior facilities agreement dated 28 October 2015, con-
cluded between KION GROUP AG and, among others, the
the Company’s share capital by up to €1.579 million by issuing up
London branch of UniCredit Bank AG
to 1.579 million new no-par-value bearer shares for cash and / or
non-cash contributions.
– On the basis of a resolution of the Annual General Meeting on
11 May 2017, the Executive Board was also authorised, in the
In the event that a person, companies affiliated with this person,
or persons acting in concert within the meaning of section 2 (5) of
the German Securities Acquisition and Takeover Act (WpÜG)
acquire(s) control over more than 50 per cent of the Company’s
period up to and including 10 May 2022, to issue convertible
voting shares, the lenders may demand that the loans drawn
bonds, warrant-linked bonds, profit-sharing rights and / or
down be repaid and may cancel the loan facilities under the senior
income bonds with or without conversion rights, warrants,
facilities agreement.
mandatory conversion requirements or option obligations, or
any combinations of these instruments (referred to jointly as
‘debt instruments’) for a total par value of up to €1 billion, and
– Acquisition facilities agreement dated 4 July 2016, concluded
between KION GROUP AG and, among others, the London
to grant conversion rights and / or warrants to – and / or to
branch of UniCredit Bank AG
impose mandatory conversion requirements or option obli-
gations on – the holders / beneficial owners of debt instru-
The provisions in this agreement that apply in the event of a
ments to acquire up to 10.88 million new shares of KION
change of control are identical to those in the senior facilities
GROUP AG with a pro-rata amount of the share capital of up
agreement dated 28 October 2015.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
112
– Promissory note agreements (seven tranches with different
coupons and different maturities) dated 13 February 2017 / 29
March 2017, concluded between KION GROUP AG and
Landesbank Baden-Württemberg; the latter subsequently
9. Compensation agreements that the
Company has signed with the Executive
Board members or employees and that
will be triggered in the event of a takeover bid
passed them on to its investors
The provisions in these agreements that apply in the event of a
and its current Executive Board members or employees.
No such agreements have been concluded between the Company
change of control are largely identical to those in the senior
facilities agreement dated 28 October 2015.
– Promissory note agreements (two tranches with different
coupons) dated 26 June 2018, concluded between KION
GROUP AG and Landesbank Hessen-Thüringen; the latter
subsequently passed them on to its investors
The provisions in these agreements that apply in the event of a
change of control are largely identical to those in the senior
facilities agreement dated 28 October 2015.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Remuneration report
113
Remuneration report
In accordance with statutory requirements and the recommenda-
The European Shareholder Rights’ Directive is to be imple-
tions of the German Corporate Governance Code (DCGK) as
mented into German law in 2019, and we believe it will affect the
amended on 7 February 2017, this remuneration report explains
changes being made to the German Corporate Governance
the main features and structure of the remuneration system used
Code. The Supervisory Board has therefore decided to review the
for the Executive Board and Supervisory Board of KION GROUP
remuneration system and level of remuneration for the members
AG and also discloses the remuneration of the individual
of the Executive Board of KION GROUP AG in 2019. To help with
members of the Executive Board and Supervisory Board for the
this review, KION will draw on the services of a remuneration con-
work that they carried out on behalf of the Company and its
sultancy that is independent of KION.
subsidiaries in 2018. The report also reflects the requirements of
German accounting standard (GAS) 17 and the HGB.
1) Essential features of the Executive Board
KION GROUP AG considers that transparency and clarity
remuneration system
surrounding both the remuneration system itself and the
remuneration of the individual members of the Executive Board
The Supervisory Board based the level of remuneration for the
and Supervisory Board are fundamental to good corporate
members of our Executive Board on benchmark analyses of
governance.
EXECUTIVE BOARD REMUNERATION
I. Remuneration system
executive board pay in the MDAX. These analyses were
conducted on behalf of the Supervisory Board by a consultancy
that is independent of KION.
The Supervisory Board’s decision on changing the remuner-
ation system was guided by KION GROUP AG’s positioning in
the top quartile of the MDAX on the basis of its size, market
position and total assets.
The remuneration of the Executive Board of KION GROUP
AG is determined in accordance with the requirements of the
The Supervisory Board of KION GROUP AG is responsible for
German Stock Corporation Act and the DCGK and is focused on
setting and regularly reviewing the total pay of the individual
the Company’s long-term growth. It is determined so as to reflect
members of the Executive Board. According to the rules of
the size and complexity of the KION Group, its business and
procedure for the Supervisory Board, the Executive Committee
financial situation, its performance and future prospects, the
prepares all Supervisory Board resolutions pertaining to
normal amount and structure of executive board remuneration in
remuneration.
comparable companies and the internal salary structure. The
As recommended by the Executive Committee, the Supervi-
Supervisory Board also takes into account the relationship
sory Board approved the remuneration system by adopting
between the Executive Board remuneration and the remuneration
resolutions at its meetings on 29 June 2016 and 28 Septem-
paid to senior managers and the German workforce of the
ber 2016, taking account of the requirements of stock company
Company as a whole, including changes over the course of time.
law and the DCGK.
To this end, the Supervisory Board has decided how the relevant
The remuneration system described below for the members
benchmarks are to be defined. Other criteria used to determine
of the Executive Board of KION GROUP AG has applied since
remuneration are the individual responsibilities and personal
1 January 2017 and was approved by the Annual General
performance of each member of the Executive Board. The
Meeting of KION GROUP AG on 11 May 2017 with a majority of
financial and individual targets used in the Executive Board
71.68 per cent. The Supervisory Board acknowledged these
remuneration system are in line with the business strategy. The
voting results from the 2017 Annual General Meeting and
Supervisory Board regularly reviews the structure and appro-
believes that it therefore has an ongoing duty to review the
priateness of Executive Board remuneration.
remuneration system.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
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114
In doing so, the Supervisory Board focuses on the sustainability
2) Upper limits on total remuneration
of the Company’s long-term performance and has therefore given
a high weighting to the multiple-year variable remuneration com-
In accordance with the DCGK, remuneration is subject to upper
ponents. The granting of a long-term incentive in the form of
limits on the amounts payable, both overall and also in terms of
performance shares with a three-year term means that this com-
the variable components. The upper limit on the total cash
ponent is linked to the share price and incentivises Executive
remuneration to be paid, consisting of the fixed annual salary plus
Board members to ensure the Company performs well over
the one-year and multiple-year variable remuneration, equals
the long term.
roughly 1.7 times the target remuneration (2017: 1.7 times) –
The total remuneration of the Executive Board comprises a
excluding the non-performance-related non-cash remuneration
non-performance-related salary, non-performance-related non-
and other benefits paid in that financial year. Both the one-year
cash benefits, non-performance-related pension entitlements
and the multiple-year variable remuneration are capped at
and performance-related (variable) remuneration. The system
200 per cent of the target value. The specific figures are shown in
specifically allows for both positive and negative developments.
> TABLE 033.
3) Overview of the structure and parameters of
Executive Board remuneration
Structure and parameters of Executive Board remuneration
TABLE 029
Component
Proportion of
target value
Measurement basis
Basic remuneration
32% – 37%
One-year variable
remuneration (STI)
20% – 22%
Multiple-year variable
remuneration (LTI)
42% – 49%
Pension plan
Non-cash remuneration
and additional benefits
Range
Fixed
Basis and
criteria
Specified in
service contract
Payment
Monthly instalments
Function,
remit,
responsibility
KION Group’s overall
success/results, Group
targets, individual targets,
overall performance
0% – 200%
(full achievement
= 100%)
KION Group’s overall
success/results, Group
targets, individual targets,
overall performance
0% – 200%
(full achievement
= 100%)
+ share price per-
formance
Achievement of financial
targets for year (adjusted
EBIT and free cash flow)
and assessment of
individual performance
Achievement of ROCE
target and relative total
shareholder return com-
pared with the MDAX and
assessment of individual
performance
After adoption
of annual financial
statements
After expiry of
three-year period and
adoption of annual
financial statements
Defined contribution
pension entitlements
and defined benefit
entitlement
Annual pension
contribution /
annual
service cost
Pension entitlement for
retirement,
insured event,
early termination
Capital /
annuity
Specified in
service contract
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The regular cash remuneration for a particular year, consisting of
Both the one-year and the multiple-year components are
a non-performance-related fixed annual salary and perfor-
linked to key performance indicators used by the KION Group to
mance-related (variable) remuneration, has a heavy emphasis on
measure its success. The KPIs relevant to one-year variable
performance. If the targets set by the Supervisory Board are
remuneration are adjusted earnings before interest and tax (EBIT)
completely missed, only the fixed salary is paid. The cash
and free cash flow. The relevant KPIs for multiple-year variable
remuneration is structured as follows in the event that the target
remuneration are return on capital employed (ROCE) and relative
value / maximum value is reached:
total shareholder return (TSR).
Target value:
The remuneration system is thus closely tied to the success
of the Company and, with a high proportion of multiple-year
32 to 37 per cent fixed annual salary
variable remuneration, has a long-term focus aimed at promoting
20 to 22 per cent one-year variable remuneration
the KION Group’s growth.
42 to 49 per cent multiple-year variable remuneration
Maximum value:
19 to 23 per cent fixed annual salary
23 to 26 per cent one-year variable remuneration
II. The components of Executive Board
remuneration in detail
52 to 58 per cent multiple-year variable remuneration
A. Non-performance-related remuneration
The variable components of the cash remuneration make up
1) Fixed salary and additional benefits
between 63 and 68 per cent of the target value and between
The Executive Board members of KION GROUP AG receive
77 and 81 per cent of the maximum remuneration. In each case,
non-performance-related remuneration in the form of a fixed
multiple-year components account for two-thirds of the total.
annual salary (basic remuneration) and additional benefits. The
Ratio of fixed to variable pay on average
DIAGRAM 006
equal instalments, the last payment being made for the full
fixed annual salary is paid at the end of each month in twelve
month in which the Executive Board service contract ends. The
Supervisory Board reviews the basic remuneration at regular
intervals and makes adjustments if appropriate.
The additional benefits essentially comprise use of a com-
pany car and the payment of premiums for accident insurance
80%
with benefits at a typical market level.
2) Additional special benefits
Additional special benefits have been agreed for Mr Quek
because he has been sent from Singapore to China on foreign
20%
assignment.
66%
34%
TARGET REMUNERATION
MAXIMUM REMUNERATION
FIXED SALARY
VARIABLE (STI + LTI)
Under this arrangement, Mr Quek’s remuneration is
structured as if he were liable for taxes and social security
contributions in Singapore. KION GROUP AG pays the taxes and
social security contributions that Mr Quek incurs in China and
Germany over and above the taxes that would theoretically apply
in Singapore. In 2018, this additional amount totalled €615 thou-
sand (2017: €1,253 thousand). The additional benefits also agreed
KION GROUP AGAnnual Report 2018
COMBINED MANAGEMENT REPORT
Remuneration report
116
with Mr Quek include the cost of trips home to Singapore for him
The present value of the previous defined benefit plan for the
and his family, a company car, rental payments in Xiamen, China,
ordinary members of the Executive Board was transferred as a
and private health insurance. In 2018, the additional benefits for
starting contribution for a new defined contribution pension plan
Mr Quek amounted to a total of €136 thousand (2017: €118 thou-
when the Company changed its legal form. The new plan is
sand). These additional benefits will be granted for as long as
structured as a cash balance plan and is also applied to new
Mr Quek’s designated place of work is Xiamen or until his service
Executive Board members.
contract with KION GROUP AG ends.
Fixed annual contributions of €250 thousand for Dr Toepfer
When Ms Groth entered into her KION Executive Board
(pro rata for 2018: €62.5 thousand) and Ms Groth (pro rata for
service contract, her existing employment contract with her
2018: €145.8 thousand), €150 thousand for Ms Schneeberger
previous employer ended and her entitlement to payment of
(pro rata for 2018: €37.5 thousand) and Dr Böhm and €124.5 thou-
long-term variable remuneration from her previous employer
sand for Mr Quek are paid into their pension accounts for the
therefore expired without compensation. To compensate for the
duration of the member’s period of service on the Executive
loss of this entitlement when she left her previous employer,
Board. Interest is paid on the pension account at the prevailing
Ms Groth was paid a sum of €314 thousand after suitable docu-
statutory guaranteed return rate for the life insurance industry
mentary evidence had been provided.
(applicable maximum interest rate for the calculation of the
When Ms Schneeberger’s contract was being drawn up, a
actuarial reserves of life insurers pursuant to section 2 (1) of the
commitment was made to pay her compensation to the extent
German Regulation on the Principles Underlying the Calculation
that her entitlement to shares that she had been allocated by her
of the Premium Reserve (DeckRV)) until an insured event occurs.
previous employer expired without compensation owing to her
If higher interest is generated by investing the pension account, it
departure. Ms Schneeberger was paid a sum of €328 thousand
will be credited to the pension account when an insured event
in October after suitable documentary evidence had been pro-
occurs (surplus). The standard retirement age for the statutory
vided. This sum was calculated on the basis of the average price
pension applies. Executive Board members are entitled to early
of those shares in June 2018.
payment of the pension no earlier than their 62nd birthday. In the
3) Pension entitlements
event of invalidity or death while the Executive Board member has
an active service contract, the contributions that would have been
KION GROUP AG grants its Executive Board members direct
made until the age of 60 are added to the pension account,
entitlement to a company pension plan consisting of retirement,
although only a maximum of ten annual contributions will be added.
invalidity and surviving dependants’ benefits.
When an insured event occurs, the pension is paid as a lump
The Chief Executive Officer has a defined benefit entitlement
sum or, following a written request, in ten annual instalments.
that was granted in his original service contract and was trans-
ferred to his Executive Board service contract when the Company
B. Performance-related remuneration
changed its legal form. The amount of the entitlement is
dependent on the number of years of service and amounts to a
1) One-year variable remuneration (short-term incentive)
maximum of 50 per cent of the most recent fixed annual salary
The one-year variable remuneration is a remuneration compo-
awarded in the original service contract after the end of the
nent linked to the profitability and productivity of the KION Group
tenth year of service.
in the relevant financial year. This is the same as the arrangement
in our remuneration system for senior managers. Its amount is
determined by the achievement of the following targets:
– Adjusted earnings before interest and taxes (EBIT), weighting
– Free cash flow, weighting of 50 per cent
of 50 per cent
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117
The target values for the financial components are derived from
1 a) Bonus curve for the short-term incentive
the annual budget and specified in target agreements between
the Supervisory Board and Executive Board.
STI bonus entitlement
DIAGRAM 007
Upper target limit
Target value
Lower target limit
0
20
30
40
50
60
70
80
90
100 110 120 130 140
KPI results
No bonus is paid if target achievement is 70 per cent or less
(lower target limit). In cases where the targets are significantly
exceeded (upper target limit of 130 per cent), the bonus can be
doubled at most (payment cap of 200 per cent). > DIAGRAM 007
If the targets derived from the annual budget are achieved in full,
target achievement is 100 per cent. The target achievement levels
for the weighted targets (adjusted EBIT and free cash flow) are
added together to give the total target achievement.
The individual performance of the Executive Board members
is assessed by the Supervisory Board, which applies a discre-
tionary performance multiple with a factor of between 0.7 and 1.3.
The main criteria used for this performance-based adjustment
are growth of market share, successful innovations and the
Organizational Health Index (OHI), which measures the improve-
t
n
e
m
e
l
t
i
t
n
e
s
u
n
o
B
0
2
2
0
0
2
0
8
1
0
6
1
0
4
1
0
2
1
0
0
1
0
8
0
6
0
4
0
2
0
ment in the Company’s management culture. There are also
agreements relating to special operational and, in particular, stra-
tegic projects that are very important to the Company’s long-term
development. The discretionary performance multiple enables
%
the Supervisory Board to increase or reduce the bonus, calcu-
lated on the basis of the total target achievement for the financial
targets derived from the budget, by a maximum of 30 per cent
depending on the assessment of individual performance. The
one-year variable remuneration is capped at 200 per cent of
the contractual target bonus and is paid after the annual
financial statements for the year in question have been adopted.
> DIAGRAM 008
In the event that an Executive Board member is not entitled to
remuneration for the entire year on which the calculation is based,
the remuneration is reduced pro rata.
KION GROUP AGAnnual Report 2018
118
DIAGRAM 008
COMBINED MANAGEMENT REPORT
Remuneration report
1 b) Diagram showing the calculation of one-year variable
remuneration (short-term incentive)
STI
Target
achievement for
adjusted EBIT
(weighting of 50%)
+
Target
achievement for
free cash flow
(weighting of 50%)
=
Averaged target
achievement
for adjusted
EBIT and FCF
x
Target value
(€) according
to service
contract
Preliminary
payout
=
Individual
performance
multiple
x
=
Final payout
(gross)
Target range =
plus or minus
30% of target
value (= 100%)
Between
0% and 200%
target
achievement rate
Between 0.7 and 1.3
Criteria: market share,
successful innovations,
OHI and special projects
Cap of 200%
of target value
2) Multiple-year variable remuneration (long-term incentive)
Xetra closing price of KION shares (closing auction prices) on
For the members of the Executive Board, multiple-year variable
the Frankfurt Stock Exchange (or a successor system that
remuneration has been agreed in the form of a performance
replaces it) over the last 60 trading days prior to the start of the
share plan. A very similar plan is in place for the Group’s senior
performance period.
managers. The basis of measurement has been defined as the
At the end of the performance period, the preliminary number
total shareholder return (TSR) for KION shares compared with the
of performance shares is adjusted depending on achievement of
MDAX and return on capital employed (ROCE). Each has a
the two targets (relative TSR and ROCE) to give the final number
weighting of 50 per cent. The annual tranches promised under
of performance shares.
the plan have a term (performance period) of three years and are
In respect of the ROCE target, there is no entitlement if target
paid at the end of the term, provided the defined targets have
achievement is 70 per cent or less. If the target is significantly
been achieved.
exceeded (target achievement of 130 per cent or more), the
At the start of a performance period, a conditional entitlement
entitlement is capped at 200 per cent. Regarding the relative TSR
to a certain target number of performance shares is granted.
target, there is no entitlement if KION shares underperform the
This preliminary number is calculated by dividing the allocation
MDAX. If the KION shares outperform this index by 20 per cent or
value set out (in euros) in the service contract for the particular
more, the entitlement is capped at 200 per cent. If KION shares
Executive Board member by the share price on the relevant date
outperform the MDAX by 6.67 per cent and the ROCE targets
at the start of the performance period. This share price, which is
defined each year on the basis of the budget are achieved, total
calculated to two decimal places, is determined from the average
target achievement will be 100 per cent.
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119
The amount paid for each tranche is determined by the final
Health Index (OHI), which measures the improvement in the
number of performance shares multiplied by the price of KION
Company’s management culture. For the LTI too, there are also
shares (average price over the preceding 60 trading days) at the
agreements relating to special operational and, in particular,
end of the performance period.
strategic projects that are very important to the Company’s
Executive Board members’ individual performance is also
long-term development. Depending on achievement of these
taken into account in the multiple-year variable remuneration. At
targets, the Supervisory Board can apply a discretionary factor to
the start of the performance period, the Supervisory Board
make a final adjustment to the calculation of the amount to be
defines targets for the three-year period. For the performance
paid out at the end of the performance period by plus or minus
share plan, the criteria used to assess individual performance
30 per cent, although the maximum payment may not exceed
are – as for the one-year variable remuneration – growth of
200 per cent of the allocation value. > DIAGRAMS 009 – 010
market share, successful innovations and the Organizational
2 a) Diagram showing the calculation of multiple-year variable
remuneration (long-term incentive)
LTI
DIAGRAM 009
Averaged target
achievement of:
Number of
performance
shares at
allocation
date
x
ROCE
Relative TSR
(weighting
of 50% each)
=
Final
number of
performance
shares
x
Average
share price at
end of
performance
period
=
Preliminary
payout
Individual
performance
multiple
x
=
Final payout
(gross)
Between
0% and 200%
target
achievement
rate
Contractual
allocation value
divided by
average share
price for the
60 trading days
before start of
performance
period
Average
share price
for the
60 trading
days before
end of
performance
period
Cap of
200% of
target value
Between 0.7
and 1.3
Criteria:
market share,
successful
innovations,
OHI and
special
projects
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2 b) Target ranges for relative TSR and ROCE
The plan is a cash-settled long-term incentive plan that does
LTI
not include the right to receive any actual shares. Under the
DIAGRAM 010
requirements of GAS 17, IFRS 2 and the HGB, the total expense
Target
achievement
External measurement
basis: relative TSR
(weighting of 50%)
Internal measurement
basis: ROCE
(weighting of 50%)
arising from share-based payments and the fair value of the per-
formance share plan on the date of granting must be disclosed.
> TABLES 030 – 032
0%
Underperformance
70% of budgeted figure
The income in 2018 amounted to €1,763 thousand (total expense
2017: €7,476 thousand).
50%
Outperformance of 0% 85% of budgeted figure
100%
Outperformance of
6.67%
Budgeted figure
200%
Outperformance of 20% 130% of budgeted figure
2016 performance share plan
Fair value of the
performance
share plan on the
date of grant
€1,500 thousand
€1,000 thousand
Gordon Riske
Dr Eike Böhm
Ching Pong Quek
€830 thousand
Dr Thomas Toepfer 4
€1,000 thousand
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant 2
Expense for
share-based
remuneration
in 2017 3
TABLE 030
Expense for
share-based
remuneration
in 2018 3
36,179
24,120
20,019
24,120
€41.46
€41.46
€41.46
€41.46
€1,062 thousand
– €736 thousand
€708 thousand
– €491 thousand
€905 thousand
– €641 thousand
– €339 thousand
€0 thousand
Total
€4,330 thousand
104,438
€2,336 thousand
– 1,867 thousand
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 fair value was calculated using the Monte Carlo method
3 The amount shown for Mr Quek includes a flat-rate allowance of 53 per cent in 2018 (2017: 55 per cent) as part of a tax equalisation agreement
4 All of Dr Toepfer’s entitlements under the performance share plan have expired because he left the Company on 31 March 2018
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Remuneration report
2017 performance share plan
Fair value of the
performance
share plan on the
date of grant
€1,600 thousand
€1,000 thousand
Gordon Riske
Dr Eike Böhm
Ching Pong Quek
€830 thousand
Dr Thomas Toepfer 3
€1,000 thousand
Total
€4,430 thousand
121
TABLE 031
Expense for
share-based
remuneration
in 2018 2
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
Expense for
share-based
remuneration
in 2017 2
29,712
18,570
15,413
18,570
82,265
€53.85
€53.85
€53.85
€53.85
€650 thousand
– €179 thousand
€406 thousand
– €112 thousand
€522 thousand
– €149 thousand
€0 thousand
€0 thousand
€1,578 thousand
– €440 thousand
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 53 per cent in 2018 (2017: 55 per cent) as part of a tax equalisation agreement
3 All of Dr Toepfer’s entitlements under the performance share plan have expired because he left the Company on 31 March 2018
2018 performance share plan
Gordon Riske
Dr Eike Böhm
Anke Groth 3
Ching Pong Quek
Susanna Schneeberger 4
Total
Fair value of the
performance
share plan on the
date of grant
€1,600 thousand
€1,000 thousand
€861 thousand
€830 thousand
€750 thousand
€5,041 thousand
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
22,906
14,316
12,328
11,883
10,737
72,170
€69.85
€69.85
€69.85
€69.85
€69.85
TABLE 032
Expense for
share-based
remuneration
in 2018 2
€185 thousand
€116 thousand
€68 thousand
€147 thousand
€29 thousand
€544 thousand
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 53 per cent as part of a tax equalisation agreement
3 The fair value of the performance share plan on the date of grant was recognised pro rata from the date of appointment to the Executive Board (1 June 2018)
4 The fair value of the performance share plan on the date of grant was recognised pro rata from the date of appointment to the Executive Board (1 October 2018)
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3) Termination benefits
temporary incapacity for a further six months, the Executive
In line with the DCGK, all Executive Board service contracts
Board member will receive 80 per cent of his fixed salary, but only
provide for a severance payment equivalent to no more than
up to a point at which the service contract is terminated.
two years’ annual remuneration payable in the event of the
If an Executive Board member ceases to be employed by the
contract being terminated prematurely without good cause. The
Company as a result of death, the Executive Board member’s
amount of annual remuneration is defined as fixed salary plus the
family will be entitled to the fixed monthly remuneration for the
variable remuneration elements, assuming 100 per cent target
month in which the service contract ends and for the three
achievement and excluding non-cash benefits and other
subsequent months, but only up to the point at which the service
additional benefits, for the last full financial year before the end of
contract would otherwise have come to an end.
the Executive Board service contract. If the Executive Board
service contract was due to end within two years, the severance
4) Share ownership guidelines
payment is calculated pro rata. If a service contract is terminated
In connection with the updated remuneration system for Executive
for good cause for which the Executive Board member con-
Board members that has been in force since 1 January 2017, the
cerned is responsible, no payments are made to the Executive
Supervisory Board decided to introduce share ownership guide-
Board member in question. The Company does not have any
lines, under which all Executive Board members are required to
commitments for the payment of benefits in the event of a prema-
hold shares worth 100 per cent of their basic remuneration. They
ture termination of Executive Board contracts following a change
have to build up their shareholding to this percentage and hold the
of control.
shares for as long as they remain on the Executive Board. The
Executive Board members are subject to a post-contractual
obligation to hold the full number of shares begins no later than
non-compete agreement of one year. In return, the Company
four years after the start of the obligation to hold shares. In the first
pays the Executive Board member compensation for the duration
four years, they are permitted to increase their shareholding incre-
of the non-compete agreement amounting to 100 per cent of his
mentally: they must hold 25 per cent of the full number of shares
final fixed salary. Other income of the Executive Board member is
no later than twelve months after the start of the obligation,
offset against the compensation.
50 per cent by the end of the second year and 75 per cent by the
In the event that Mr Riske’s appointment is not extended for
end of the third year. The Executive Board members to whom
a reason for which he is not responsible and he has not reached
these guidelines apply held the required number of shares as at
the standard retirement age for the statutory pension or in the
31 December 2018 and thus fulfilled this obligation.
event that Mr Riske resigns for good cause before the end of his
The relevant number of shares is determined on the basis of
appointment or suffers permanent incapacity after his period of
the arithmetic mean (rounded to two decimal places) of the Xetra
service as a result of sickness, he will receive transitional benefits
closing prices (closing auction prices) of the Company’s shares
of €300 thousand per annum on the basis of previous contracts.
on the Frankfurt Stock Exchange (or a successor system that
Severance payments in the event of early termination of his
replaces it) over the last 60 trading days prior to the start of the
appointment without good cause, compensation for the
obligation to hold the shares and then rounded to the nearest
post-contractual non-compete agreement, pension benefits that
whole number.
Mr Riske receives due to his previous work for other employers
It is not necessary to acquire further shares once the full
and income from other use of his working capacity (with the
number of shares has been reached, nor will there be an obliga-
exception of remuneration for work as a member of a supervisory
tion to purchase additional shares if the share price falls. There is
or advisory board or a board of directors) will be offset against
only an obligation to purchase additional shares if there is a
these transitional benefits.
change to the fixed annual remuneration in the member’s Executive
If an Executive Board member suffers temporary incapacity,
Board service contract or if a capital reduction, capital increase or
he will receive his full fixed salary for a maximum period of six
stock split takes place.
months plus the one-year variable remuneration. In the event of
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Remuneration report
123
III. Remuneration for members of the
Executive Board in 2018
In accordance with the recommendations of the DCGK, as
amended on 7 February 2017, the remuneration of Executive
Board members is presented in two separate tables. Firstly,
the benefits granted for the year under review, including the
additional benefits and – in the case of variable remuneration
components – the maximum and minimum remuneration
achievable are shown. > TABLE 033
Secondly, > TABLE 034 shows the total remuneration allocated /
earned, comprising fixed remuneration, short-term variable
remuneration and long-term variable remuneration, broken down
by reference year.
1) Benefits granted pursuant to the DCGK
The total remuneration granted to Executive Board members
for 2018 was €13,148 thousand (minimum: €5,426 thousand,
maximum: €20,871 thousand) (2017: €10,279 thousand). Of
this amount, €3,628 thousand (2017: €2,958 thousand) was
attributable to fixed non-performance-related remuneration
components, €7,722 thousand (minimum: €0 thousand, maxi-
mum: €15,444 thousand) (2017: €6,051 thousand) to variable
one-year and multiple-year performance-related remuneration
components, €841
thousand
(2017: €186
thousand)
to
non-performance-related non-cash remuneration and other
non-performance-related benefits and €957 thousand (2017:
€1,084 thousand) to the pension expense in accordance with
IFRS. 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 70 per cent or less, maxi-
mum: 200 per cent for target achievement of 130 per cent or
more). The figure shown for multiple-year variable remuneration is
the fair value of the performance share plan at the date of grant,
representing full target achievement (minimum: zero payment,
maximum: 200 per cent of the contractual allocation value).
The additional benefits were measured at the value calcu-
lated for tax purposes. > TABLE 033
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Remuneration report
124
Benefits granted in 2018
TABLE 033
Gordon Riske
Dr Eike Böhm
CEO of KION GROUP AG
CTO of KION GROUP AG
2017
2018
2018
(min.)
2018
(max.)
2017
2018
2018
(min.)
2018
(max.)
Fixed remuneration
1,100
1,400
1,400
1,400
575
650
650
650
€ thousand
Non-perfor-
mance-
related
components
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 4, 5, 6
Performance share plan
(1 Jan 2017 – 31 Dec 2019)
Performance share plan
(1 Jan 2018 – 31 Dec 2020)
21
34
34
34
1,121
1,434
1,434
1,434
20
595
15
665
15
665
800
800
1,600
1,600
0
0
1,600
400
400
3,200
1,000
1,000
0
0
15
665
800
2,000
1,600
1,000
1,600
0
3,200
1,000
0
2,000
Total
3,521
3,834
1,434
6,234
1,995
2,065
Pension expense 7
664
631
631
631
152
147
Total remuneration
4,185
4,464
2,064
6,864
2,147
2,212
665
147
812
3,465
147
3,612
Reconciliation to total remuneration as defined by
section 285 no. 9a, section 314 (1) no. 6a HGB in conjunction with GAS 17
Minus the one-year variable
remuneration granted
– 800
– 800
– 400
– 400
Plus the expected one-year
variable remuneration (allocation)
664
663
Minus the pension expense
– 664
– 631
332
331
– 152
– 147
Plus the adjustment of the
one-year variable remuneration
for the previous year
Total remuneration as defined
by section 285 no. 9a,
section 314 (1) no. 6a HGB in
conjunction with GAS 17
77
170
1
1
3,462
3,866
1,928
1,997
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. The
amounts for Ms Groth and Ms Schneeberger also contain a one-off compensation payment in 2018 (€314 thousand for Ms Groth, €328 thousand for Ms Schneeberger)
2 The amount shown for Mr Quek includes a flat-rate allowance of 58 per cent (2017: 55 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 70 per cent or less, maximum:
200 per cent for target achievement of 130 per cent or more)
4 Fair value on the date of grant
5 The amount shown for Mr Quek includes a flat-rate allowance of 53 per cent (2017: 55 per cent) as part of a tax equalisation agreement
6 All of Dr Toepfer’s entitlements under the performance share plan have expired because he left the Company on 31 March 2018
7 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 036)
KION GROUP AGAnnual Report 2018
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125
Benefits granted in 2018
TABLE 033
€ 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 4, 5, 6
Performance share plan
(1 Jan 2017 – 31 Dec 2019)
Performance share plan
(1 Jan 2018 – 31 Dec 2020)
Total
Pension expense 7
Total remuneration
Anke Groth
Ching Pong Quek
CFO of KION GROUP AG
from 1 June 2018
Chief Asia Pacific Officer
of KION GROUP AG
2017
2018
2018
(min.)
2018
(max.)
2017
2018
2018
(min.)
2018
(max.)
–
–
–
–
–
–
–
–
–
–
467
467
467
633
749
749
749
320
787
292
861
320
787
320
787
118
751
136
885
136
885
136
885
0
0
583
515
525
1,722
1,287
1,270
0
0
1,049
2,540
1,287
861
0
1,722
1,270
0
2,540
1,939
787
3,092
2,552
2,679
124
120
885
120
4,474
120
1,939
787
3,092
2,675
2,800
1,005
4,594
Reconciliation to total remuneration as defined by
section 285 no. 9a, 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 remuneration
for the previous year
Total remuneration as defined
by section 285 no. 9a,
section 314 (1) no. 6a HGB in
conjunction with GAS 17
– 292
242
–
–
–
–
– 515
– 525
427
435
– 124
– 120
– 9
40
–
1,889
2,456
2,630
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. The
amounts for Ms Groth and Ms Schneeberger also contain a one-off compensation payment in 2018 (€314 thousand for Ms Groth, €328 thousand for Ms Schneeberger)
2 The amount shown for Mr Quek includes a flat-rate allowance of 58 per cent (2017: 55 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 70 per cent or less, maximum:
200 per cent for target achievement of 130 per cent or more)
4 Fair value on the date of grant
5 The amount shown for Mr Quek includes a flat-rate allowance of 53 per cent (2017: 55 per cent) as part of a tax equalisation agreement
6 All of Dr Toepfer’s entitlements under the performance share plan have expired because he left the Company on 31 March 2018
7 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 036)
KION GROUP AGAnnual Report 2018
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126
Benefits granted in 2018
TABLE 033
€ 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 4, 5, 6
Performance share plan
(1 Jan 2017 – 31 Dec 2019)
Performance share plan
(1 Jan 2018 – 31 Dec 2020)
Total
Pension expense 7
Total remuneration
Susanna Schneeberger
Dr Thomas Toepfer
CDO of KION GROUP AG
from 1 October 2018
CFO of KION GROUP AG
until 31 March 2018
2017
2018
2018
(min.)
2018
(max.)
2017
2018
2018
(min.)
2018
(max.)
–
–
–
–
–
–
–
–
–
–
163
163
163
650
200
200
200
332
494
100
750
332
494
332
494
27
677
5
5
205
205
0
0
200
450
125
1,500
0
0
0
0
5
205
250
0
750
0
1,500
1,344
494
2,194
1,127
145
1,344
494
2,194
1,272
330
59
389
205
59
264
455
59
514
Reconciliation to total remuneration as defined by
section 285 no. 9a, 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 remuneration
for the previous year
Total remuneration as defined
by section 285 no. 9a,
section 314 (1) no. 6a HGB in
conjunction with GAS 17
– 100
83
–
–
–
–
– 450
– 125
374
– 145
104
– 59
44
2
–
1,327
1,095
311
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. The
amounts for Ms Groth and Ms Schneeberger also contain a one-off compensation payment in 2018 (€314 thousand for Ms Groth, €328 thousand for Ms Schneeberger)
2 The amount shown for Mr Quek includes a flat-rate allowance of 58 per cent (2017: 55 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 70 per cent or less, maximum:
200 per cent for target achievement of 130 per cent or more)
4 Fair value on the date of grant
5 The amount shown for Mr Quek includes a flat-rate allowance of 53 per cent (2017: 55 per cent) as part of a tax equalisation agreement
6 All of Dr Toepfer’s entitlements under the performance share plan have expired because he left the Company on 31 March 2018
7 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 036)
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127
2) Allocation pursuant to the DCGK
minus 30 per cent of the variable remuneration. Because
The total remuneration allocated to / earned by Executive Board
Ms Groth and Ms Schneeberger were appointed to the Executive
members for 2018 was €9,381 thousand (2017: €15,426 thou-
Board part way through the year, their performance multiples
sand). Of this amount, €3,628 thousand (2017: €2,958 thousand)
were set at 1.0 for 2018, i.e. there was no individual adjustment.
was attributable to fixed non-performance-related remuneration
The same applies to Dr Toepfer’s pro-rata entitlement for 2018; a
components, €3,955 thousand (2017: €11,197 thousand) to var-
performance multiple of 1.0 was also set for him because he left
iable one-year and multiple-year performance-related remu-
the Company during the year.
neration components, €841 thousand (2017: €186 thousand) to
For the multiple-year variable remuneration, a payment from
non-performance-related non-cash remuneration and other
the 2016 tranche of the performance share plan will be made in
non-performance-related benefits and €957 thousand (2017:
spring 2019 on the basis of the achievement of the long-term
€1,084 thousand) to the pension expense in accordance with
targets that were defined in 2016 at the start of the performance
IFRS. The figure shown for one-year variable remuneration is
period. The value shown for 2018 is also calculated on the basis
derived from a preliminary total target achievement rate of
of a preliminary total target achievement rate of about 47 per cent
about 95 per cent based on the budgeted figure. This target
and is subject to the performance-based adjustment made
achievement rate was calculated using preliminary earnings
by the Supervisory Board (using a discretionary performance
figures at the beginning of 2019 and equates to a payout of
multiple) for individual Executive Board members. Under the
around 83 per cent of the target value for one-year variable
terms of the plan at the grant date, this performance-based
remuneration. This preliminary variable remuneration for each
adjustment may vary by plus or minus 20 per cent.
Executive Board member is also subject to adjustment by the
The additional benefits were measured at the value calcu-
Supervisory Board in line with the individual performance of the
lated for tax purposes. > TABLE 034
Executive Board member. This adjustment may vary by plus or
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
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128
Allocation in 2018
TABLE 034
€ thousand
Non-perfor-
mance-
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 3
(1 Jan 2015 – 31 Dec 2017)
Performance share plan
(1 Jan 2016 – 31 Dec 2018)
Total
Pension expense 4
Total remuneration
Gordon Riske
Dr Eike Böhm
CEO of KION GROUP AG
CTO of KION GROUP AG
2017
1,100
21
1,121
834
3,000
3,000
4,955
664
5,618
2018
1,400
34
1,434
663
835
835
2,931
631
3,562
2017
575
20
595
333
1,611
1,611
2,539
152
2,692
2018
650
15
665
331
557
557
1,553
147
1,700
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.
The amounts for Ms Groth and Ms Schneeberger also contain a one-off compensation payment in 2018 (€314 thousand for Ms Groth, €328 thousand for Ms Schneeberger)
2 The figure shown for one-year variable remuneration for 2017 is the actual amount paid out, which differs from the estimated value listed in the 2017 consolidated financial statements.
The discretionary performance multiple for Ms Groth, Ms Schneeberger and Dr Toepfer has already been set at 1.0 for 2018
3 The figure shown for multiple-year variable remuneration is the actual amount paid out, which, in Mr Quek’s case, differs from the estimated value listed in the 2017 consolidated financial
statements
4 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 036)
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129
Allocation in 2018
TABLE 034
€ thousand
Non-perfor-
mance-
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 3
(1 Jan 2015 – 31 Dec 2017)
Performance share plan
(1 Jan 2016 – 31 Dec 2018)
Total
Pension expense 4
Total remuneration
Anke Groth
Ching Pong Quek
CFO of KION GROUP AG
from 1 June 2018
Chief Asia Pacific Officer
of KION GROUP AG
2017
–
–
–
–
–
–
–
–
–
–
2018
467
320
787
242
0
1,028
1,028
2017
633
118
751
467
2,577
2,577
3,795
124
3,918
2018
749
136
885
435
707
707
2,026
120
2,147
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.
The amounts for Ms Groth and Ms Schneeberger also contain a one-off compensation payment in 2018 (€314 thousand for Ms Groth, €328 thousand for Ms Schneeberger)
2 The figure shown for one-year variable remuneration for 2017 is the actual amount paid out, which differs from the estimated value listed in the 2017 consolidated financial statements.
The discretionary performance multiple for Ms Groth, Ms Schneeberger and Dr Toepfer has already been set at 1.0 for 2018
3 The figure shown for multiple-year variable remuneration is the actual amount paid out, which, in Mr Quek’s case, differs from the estimated value listed in the 2017 consolidated financial
statements
4 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 036)
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130
Allocation in 2018
TABLE 034
€ thousand
Non-perfor-
mance-
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 3
(1 Jan 2015 – 31 Dec 2017)
Performance share plan
(1 Jan 2016 – 31 Dec 2018)
Total
Pension expense 4
Total remuneration
Susanna Schneeberger
Dr Thomas Toepfer
CDO of KION GROUP AG
from 1 October 2018
CFO of KION GROUP AG
until 31 March 2018
2017
–
–
–
–
–
–
–
–
–
–
2018
163
332
494
83
0
577
577
2017
650
27
677
375
2,000
2,000
3,053
145
3,197
2018
200
5
205
104
0
309
59
368
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.
The amounts for Ms Groth and Ms Schneeberger also contain a one-off compensation payment in 2018 (€314 thousand for Ms Groth, €328 thousand for Ms Schneeberger)
2 The figure shown for one-year variable remuneration for 2017 is the actual amount paid out, which differs from the estimated value listed in the 2017 consolidated financial statements.
The discretionary performance multiple for Ms Groth, Ms Schneeberger and Dr Toepfer has already been set at 1.0 for 2018
3 The figure shown for multiple-year variable remuneration is the actual amount paid out, which, in Mr Quek’s case, differs from the estimated value listed in the 2017 consolidated financial
statements
4 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 036)
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131
The table below shows the pension contributions (additions to the
plan) attributable to each individual Executive Board member and
their separate present values in accordance with IFRS and HGB
> TABLES 035 – 036.
Pension entitlements under IFRS
TABLE 035
€ thousand
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
Dr Thomas Toepfer 1
Service cost
2018
Service cost
2017
Present value (DBO)
31 Dec 2018
Present value (DBO)
31 Dec 2017
631
147
120
59
664
152
124
145
6,897
502
148
670
38
6,491
364
557
864
1 Left the Company on 31 March 2018; the present value (DBO) as at 31 December 2018 was recognised under provisions for defined benefit obligations to former members of the
Executive Board or their surviving dependants in accordance with IAS 19
Pension entitlements under HGB
TABLE 036
€ thousand
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
Dr Thomas Toepfer 1
Service cost
2018
Service cost
2017
Present value (DBO)
31 Dec 2018
Present value (DBO)
31 Dec 2017
482
134
129
65
460
133
98
156
5,714
469
129
615
32
4,872
326
505
738
1 Left the Company on 31 March 2018; the present value (DBO) as at 31 December 2018 was recognised under provisions for defined benefit obligations to former members of the
Executive Board or their surviving dependants in accordance with IAS 19
The total remuneration paid to former members of the Executive
In the year under review, no advances were made to mem-
Board in 2018 amounted to €258 thousand (2017: €254 thou-
bers of the Executive Board, and there were no loans.
sand). Provisions for defined benefit obligations to former mem-
bers of the Executive Board or their surviving dependants
amounting to €10,463 thousand (2017: €9,765 thousand) were
recognised in accordance with IAS 19.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
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132
SUPERVISORY BOARD
REMUNERATION
Remuneration system
The members of the Supervisory Board receive an attend-
ance fee of €1,500 per day for meetings of the Supervisory Board
and its committees, although they only receive this amount once
if they attend more than one meeting on the same day.
The Company reimburses each member for any VAT incurred
in connection with his or her remuneration.
A D&O insurance policy without an excess has been taken
The Supervisory Board’s remuneration is defined in article 18 of
out for the members of the Supervisory Board.
KION GROUP AG’s articles of association. Members of the
Supervisory Board receive fixed remuneration plus reimburse-
ment of out-of-pocket expenses. The fixed annual remuneration
of an ordinary member amounts to €55,000. The chairman of the
Remuneration paid to members of the
Supervisory Board in 2018
Supervisory Board receives three times the amount of an ordi-
nary member, i.e. €165,000, and his deputy receives two times
The total remuneration paid to the Supervisory Board in 2018
the amount of an ordinary member, i.e. €110,000.
was €1,455 thousand (2017: €1,386 thousand). Of this amount,
Additional remuneration is paid for being a member or chair-
€1,050 thousand (2017: €955 thousand) was attributable to
man of a committee, although this does not apply in the case of
remuneration for activities carried out by the Supervisory Board.
the Nomination Committee or the Mediation Committee pursuant
The remuneration paid for committee work (including attendance
to section 27 (3) of the German Codetermination Act (MitbestG).
fees) totalled €406 thousand (2017: €432 thousand). The follow-
The annual remuneration for members of a committee is usually
ing table shows the breakdown of remuneration paid to each
€8,000, while the chairman of a committee receives double this
Supervisory Board member for 2018: > TABLE 037
amount. However, ordinary members of the Audit Committee
receive €15,000, the chairman of the Audit Committee €45,000
and his deputy €30,000 in view of their greater responsibilities
and thus the greater amount of their time taken up.
If a member of the Supervisory Board or one of its commit-
tees does not hold their position for a full financial year, remuner-
ation is reduced pro rata.
KION GROUP AGAnnual Report 2018 COMBINED MANAGEMENT REPORT
Remuneration report
133
Remuneration of the Supervisory Board of KION GROUP AG in 2018 (net)
TABLE 037
Dr Feldmann, John
Behrendt, Birgit
Dr Dibelius, Alexander
Jiang, Kui *
Dr Reuter, Christina
Ring, Hans Peter
Tan, Xuguang * (until 30 Sep 2018)
Dr Macht, Michael (from 9 Oct 2018)
Xu, Ping *
Pancarci, Özcan
Casper, Stefan
Kunz, Olaf
Heljic, Denis (until 9 May 2018)
Fahrendorf, Martin (from 10 May 2018)
Schädler, Alexandra
Wenzel, Claudia
Dr Schepp, Frank
Milla, Jörg
Total
Fixed
remuneration
Committee remu-
neration (fixed)
Attendance fee
Total
€165,000.00
€31,000.00
€21,000.00
€217,000.00
€55,000.00
€55,000.00
€55,000.00
€55,000.00
€9,000.00
€64,000.00
€8,000.00
€8,000.00
€13,500.00
€76,500.00
€13,500.00
€76,500.00
€7,500.00
€62,500.00
€55,000.00
€53,000.00
€19,500.00
€127,500.00
€41,250.00
€13,750.00
€55,000.00
€6,000.00
€1,500.00
€7,500.00
€47,250.00
€15,250.00
€62,500.00
€110,000.00
€8,000.00
€18,000.00
€136,000.00
€55,000.00
€55,000.00
€22,916.67
€36,666.67
€8,000.00
€3,333.33
€10,500.00
€65,500.00
€16,500.00
€79,500.00
€3,000.00
€9,000.00
€29,250.00
€45,666.67
€55,000.00
€30,000.00
€19,500.00
€104,500.00
€55,000.00
€55,000.00
€8,000.00
€18,000.00
€81,000.00
€12,000.00
€67,000.00
€55,000.00
€20,333.33
€22,500.00
€97,833.33
€1,049,583.33
€177,666.67
€228,000.00
€1,455,250.00
* Withholding tax (pursuant to section 50a of the German
Income Tax Act (EStG)) incl. the reunification surcharge was
also paid over in the following amounts:
€70,037.47
€3,704.46
€12,502.62
€86,244.55
In 2018, no company in the KION Group paid or granted any
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.
KION GROUP AGAnnual Report 2018 CONSOLIDATED FINANCIAL STATEMENTS
Contents
135
CONSOLIDATED
FINANCIAL STATEMENTS
136
CONSOLIDATED INCOME STATEMENT
137
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
138
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
140
CONSOLIDATED STATEMENT OF CASH FLOWS
142
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
144
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
144
170
182
217
Basis of presentation
Notes to the consolidated income statement
Notes to the consolidated statement of financial position
Other disclosures
256
INDEPENDENT AUDITORS’ REPORT
264
RESPONSIBILITY STATEMENT
KION GROUP AGAnnual Report 2018 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
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
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
Earnings per share (in €)
Basic earnings per share
Diluted earnings per share
* Consolidated income statement for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
Note
[7]
2018
7,995.7
– 5,898.1
2,097.6
[8]
[9]
[10]
[11]
[12]
[13]
[15]
– 885.5
– 137.7
– 467.1
86.5
– 63.3
12.2
642.8
99.9
– 197.3
– 97.4
545.3
– 143.7
– 166.5
22.9
401.6
399.9
1.8
3.39
3.39
136
TABLE 038
2017 *
7,598.1
– 5,643.3
1,954.8
– 827.5
– 137.0
– 447.6
75.8
– 71.1
13.6
561.0
132.8
– 229.2
– 96.3
464.7
– 42.2
– 184.9
142.7
422.5
420.9
1.6
3.68
3.68
KION GROUP AGAnnual Report 2018 136
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
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 / losses on financial investments
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 on available-for-sale financial instruments
thereof changes in unrealised gains and losses
thereof tax effect
Note
[28]
[22]
[41]
[22]
Changes in unrealised gains / losses from equity-accounted investments
Other comprehensive income (loss)
Total comprehensive income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
* Consolidated statement of comprehensive income for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
137
TABLE 039
2017 *
422.5
19.7
18.7
26.7
– 8.0
0.0
1.0
– 302.2
– 314.9
– 314.9
0.0
3.7
11.6
– 5.5
– 2.4
8.4
8.5
– 0.1
0.6
2018
401.6
– 6.8
– 0.2
– 3.9
3.7
– 6.4
– 0.1
23.6
35.5
35.9
– 0.3
– 12.2
– 16.0
– 1.3
5.1
0.0
0.0
0.0
0.3
16.8
– 282.5
418.4
416.9
1.5
140.0
138.9
1.1
KION GROUP AGAnnual Report 2018 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
138
Consolidated statement of financial position
Consolidated statement of financial position – Assets
TABLE 040
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
Lease receivables
Contract assets
Trade receivables
Income tax receivables
Other financial assets
Other assets
Cash and cash equivalents
Current assets
Note
31/12/2018
31/12/2017 *
01/01/2017 *
[16]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[13]
[24]
[21]
[33]
[25]
[13]
[22]
[23]
[26]
3,424.8
2,296.8
1,261.8
670.5
1,077.8
82.3
826.2
29.8
58.9
421.7
10,150.6
994.8
271.2
119.3
1,036.4
31.5
83.4
106.2
175.3
3,382.5
2,333.9
1,246.3
608.4
994.9
80.3
647.8
57.1
24.2
475.2
9,850.6
768.6
228.0
100.3
999.4
14.4
119.0
84.3
173.2
2,818.2
2,487.1
3,572.9
2,602.7
1,143.9
543.0
919.1
72.7
531.3
47.5
12.3
514.8
9,960.1
672.4
200.3
117.4
895.9
35.2
82.0
86.2
279.6
2,368.9
Total assets
12,968.8
12,337.7
12,329.0
* Consolidated statement of financial position for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 138
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
139
Consolidated statement of financial position – Equity and liabilities
TABLE 041
in € million
Subscribed capital
Capital reserve
Retained earnings
Accumulated other comprehensive loss *
Non-controlling interests
Equity
Retirement benefit obligation
Non-current financial liabilities
Liabilities from financial services
Lease liabilities
Other non-current provisions
Other financial liabilities
Other liabilities
Deferred taxes
Non-current liabilities
Current financial liabilities
Liabilities from financial services
Lease liabilities
Contract liabilities
Trade payables
Income tax liabilities
Other current provisions
Other financial liabilities
Other liabilities
Current liabilities
Note
31/12/2018
31/12/2017 *
01/01/2017 *
117.9
3,033.1
662.1
– 511.4
3.3
3,305.1
1,043.0
1,818.7
924.4
489.3
98.9
524.6
473.5
626.7
117.9
3,034.0
364.4
– 528.4
4.4
2,992.3
1,002.7
2,024.8
261.0
798.2
95.6
663.6
585.4
702.4
108.6
2,444.4
30.5
– 246.4
5.7
2,342.8
991.0
2,889.1
258.3
722.0
92.3
549.8
551.2
909.6
5,999.1
6,133.7
6,963.2
226.5
548.0
251.3
570.1
904.2
74.4
127.2
288.6
674.2
243.9
176.4
332.9
324.4
923.9
82.6
149.0
298.6
679.9
293.9
91.4
285.2
376.4
802.2
63.0
163.4
287.6
659.9
3,664.6
3,211.7
3,023.0
[27]
[28]
[29]
[30]
[31]
[32]
[35]
[36]
[13]
[29]
[30]
[31]
[33]
[34]
[13]
[32]
[35]
[36]
Total equity and liabilities
12,968.8
12,337.7
12,329.0
* Consolidated statement of financial position for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows
in € million
Earnings before interest and taxes
Note
Amortisation, depreciation and impairment charges of non-current assets
[14]
Non-cash reversals of deferred revenues from leases
Other non-cash income (–) / expenses (+)
Gains (–) / losses (+) on disposal of non-current assets
[8], [9]
2018
642.8
897.9
– 238.7
29.2
– 1.2
140
TABLE 042
2017 *
561.0
896.6
– 256.0
24.6
– 0.2
Change in net working capital **
[24], [25], [33], [34]
Change in leased assets (excluding depreciation)
and receivables / liabilities from leasing business
Change in rental assets (excluding depreciation)
and liabilities from rental business
Cash payments for defined benefit obligations
Change in other provisions
Change in other operating assets / liabilities
Taxes paid
Cash flow from operating activities
Cash payments for purchase of non-current assets
Cash receipts from disposal of non-current assets
Dividends received
Acquisition of subsidiaries / other businesses (net of cash acquired)
Cash receipts / payments for sundry assets
Cash flow from investing activities
[17], [21], [31]
– 137.5
– 74.7
[18], [35]
– 188.5
[28]
[32]
[38]
[38]
[38]
– 54.3
– 37.3
– 19.0
65.4
– 193.2
765.5
5.1
14.2
– 1.6
– 4.7
[38]
– 245.6
– 196.3
– 113.2
– 28.2
– 4.0
38.5
– 136.3
711.9
4.0
9.3
– 13.3
– 19.3
– 237.6
– 258.5
– 218.3
KION GROUP AGAnnual Report 2018 140
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
Consolidated statement of cash flows
(continued)
in € million
Capital contribution from shareholders for the carried out capital increase
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
Interest and principal portion from procurement leases
Cash receipts / payments from other financing activities
Cash flow from financing activities
Effect of 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
* Consolidated statement of cash flows for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
** Net Working Capital comprises inventories, contract assets, trade receivables less contract liabilities and trade payables
141
TABLE 042
2017 *
598.6
2.3
– 4.3
– 86.9
– 2.7
0.5
– 7.4
2,425.3
– 3,340.0
7.5
– 58.1
– 109.0
5.7
– 568.5
2018
0.0
1.7
– 3.6
– 116.8
– 2.8
0.6
– 5.0
1,811.7
– 2,042.6
2.5
– 42.9
– 114.0
– 3.4
– 514.5
– 3.2
– 12.2
2.2
– 106.4
173.2
175.3
279.6
173.2
Note
[38]
[27]
[38]
[38]
[38]
[38]
[38]
[38]
[38]
KION GROUP AGAnnual Report 2018 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
142
Consolidated statement of changes in equity
Consolidated statement of changes in equity *
in € million
Balance as at 01/01/2017
Effects from the initial application of IFRS 15 and IFRS 16
Balance as at 01/01/2017 (restated)
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Dividend of KION GROUP AG
Capital increase
Transaction costs
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
Balance as at 31/12/2017
Balance as at 01/01/2018
Effects from the initial application of
IFRS 9, IFRS 15 and IFRS 16
Net income (loss) for the period
Other comprehensive income (loss)
Balance as at 01/01/2018 (restated)
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
Balance as at 31/12/2018
Note
Subscribed
capital
108.6
Capital
reserves
2,444.4
108.6
2,444.4
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
0.0
9.3
– 0.1
0.1
117.9
117.9
0.0
593.6
– 3.0
– 4.3
3.2
3,034.0
3,034.0
117.9
3,034.0
0.0
0.0
– 0.1
0.1
– 3.5
2.6
Retained
earnings
183.4
– 152.9
30.5
420.9
420.9
– 86.9
364.4
521.3
– 138.3
– 3.9
379.0
399.9
399.9
– 116.8
117.9
3,033.1
662.1
– 218.9
– 283.5
– 10.4
1.9
– 0.4
3,301.7
Accumulated other comprehensive income (loss)
Gains / losses
Gains / losses
attributable to
Equity
Cumulative
on defined
Gains / losses
Gains / losses
from equity-
shareholders
Non-
translation
adjustment
benefit
on hedge
on financial
accounted
of KION
controlling
obligation
reserves
investments
investments
GROUP AG
interests
59.7
– 302.0
59.7
– 302.0
– 314.4
– 314.4
18.7
18.7
– 2.2
– 2.2
1.6
1.6
– 1.9
– 1.9
3.7
3.7
1.8
1.8
– 0.0
– 0.0
8.4
8.4
8.4
8.4
8.4
– 6.4
– 6.4
– 254.7
– 283.3
– 0.6
2,987.9
– 255.1
– 283.3
– 0.6
3,144.4
0.4
– 254.7
35.8
35.8
– 283.3
1.8
– 0.6
3,002.5
– 0.2
– 0.2
– 12.2
– 12.2
0.2
0.2
TABLE 043
Total
2,495.7
– 152.9
2,342.8
422.5
– 282.5
140.0
– 86.9
602.9
– 3.0
– 2.7
– 4.3
3.3
0.2
2,992.3
3,148.8
– 138.3
– 3.9
0.4
3,006.9
401.6
16.8
418.4
– 116.8
– 2.8
– 3.6
2.7
0.2
3,305.1
– 0.5
– 2.7
5.7
0.0
5.7
1.6
1.1
0.0
0.0
0.0
0.0
0.0
0.2
4.4
4.4
0.0
0.0
0.0
4.4
1.8
– 0.3
1.5
0.0
– 2.8
0.0
0.0
0.2
3.3
2,490.0
– 152.9
2,337.1
420.9
– 282.0
138.9
– 86.9
602.9
– 3.0
0.0
– 4.3
3.3
0.0
– 138.3
– 3.9
0.4
399.9
17.0
416.9
– 116.8
0.0
– 3.6
2.7
0.0
* Consolidated statement of changes in equity was restated due to the initial application of IFRS 9, IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 142
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
Accumulated other comprehensive income (loss)
Gains / losses
on hedge
reserves
Gains / losses
on financial
investments
Gains / losses
from equity-
accounted
investments
Equity
attributable to
shareholders
of KION
GROUP AG
Non-
controlling
interests
Cumulative
translation
adjustment
Gains / losses
on defined
benefit
obligation
59.7
– 302.0
59.7
– 302.0
– 314.4
– 314.4
18.7
18.7
– 1.9
– 1.9
3.7
3.7
– 0.0
– 0.0
8.4
8.4
8.4
8.4
8.4
– 6.4
– 6.4
– 2.2
– 2.2
1.6
1.6
2,490.0
– 152.9
2,337.1
420.9
– 282.0
138.9
– 86.9
602.9
– 3.0
0.0
– 4.3
3.3
0.0
– 0.6
2,987.9
– 0.6
3,144.4
– 138.3
– 3.9
0.4
– 0.6
3,002.5
0.2
0.2
399.9
17.0
416.9
– 116.8
0.0
– 3.6
2.7
0.0
5.7
0.0
5.7
1.6
– 0.5
1.1
0.0
0.0
0.0
– 2.7
0.0
0.0
0.2
4.4
4.4
0.0
0.0
0.0
4.4
1.8
– 0.3
1.5
0.0
– 2.8
0.0
0.0
0.2
3.3
– 254.7
– 283.3
– 255.1
– 283.3
1.8
1.8
0.4
– 254.7
35.8
35.8
– 283.3
1.8
– 0.2
– 0.2
– 12.2
– 12.2
* Consolidated statement of changes in equity was restated due to the initial application of IFRS 9, IFRS 15 and IFRS 16
117.9
3,033.1
662.1
– 218.9
– 283.5
– 10.4
1.9
– 0.4
3,301.7
Consolidated statement of changes in equity *
in € million
Balance as at 01/01/2017
Effects from the initial application of IFRS 15 and IFRS 16
Balance as at 01/01/2017 (restated)
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Dividend of KION GROUP AG
Capital increase
Transaction costs
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
Balance as at 31/12/2017
Balance as at 01/01/2018
Effects from the initial application of
IFRS 9, IFRS 15 and IFRS 16
Net income (loss) for the period
Other comprehensive income (loss)
Balance as at 01/01/2018 (restated)
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
Balance as at 31/12/2018
Note
Subscribed
capital
108.6
Capital
reserves
2,444.4
108.6
2,444.4
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
0.0
9.3
– 0.1
0.1
117.9
117.9
0.0
593.6
– 3.0
– 4.3
3.2
3,034.0
3,034.0
117.9
3,034.0
0.0
0.0
– 0.1
0.1
– 3.5
2.6
Retained
earnings
183.4
– 152.9
30.5
420.9
420.9
– 86.9
364.4
521.3
– 138.3
– 3.9
379.0
399.9
399.9
– 116.8
143
TABLE 043
Total
2,495.7
– 152.9
2,342.8
422.5
– 282.5
140.0
– 86.9
602.9
– 3.0
– 2.7
– 4.3
3.3
0.2
2,992.3
3,148.8
– 138.3
– 3.9
0.4
3,006.9
401.6
16.8
418.4
– 116.8
– 2.8
– 3.6
2.7
0.2
3,305.1
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
144
Notes to the consolidated financial statements
Basis of presentation
[1] GENERAL INFORMATION ON
[2] BASIS OF PREPARATION
THE COMPANY
The consolidated financial statements of the KION Group for the
By resolution of the Annual General Meeting dated 9 May 2018,
financial year ended 31 December 2018 have been prepared in
KION GROUP AG’s registered office was moved to Thea-Rasche-
accordance with section 315e of the German Commercial Code
Strasse 8, 60549 Frankfurt am Main, Germany. The relocation
(HGB) in conjunction with the International Financial Reporting
became legally effective when it was entered in the commercial
Standards (IFRSs) of the International Accounting Standards Board
register at the Frankfurt am Main local court under reference HRB
(IASB) applicable as at the reporting date as well as the associated
112163 on 20 June 2018.
interpretations (IFRICs) of the IFRS Interpretations Committee (IFRS
Shandong Heavy Industry Group Co., Ltd., Jinan, People’s
IC) as adopted by the European Union in accordance with Regula-
Republic of China, is the company that prepares the global
tion (EC) No. 1606/2002 of the European Parliament and of the
consolidated financial statements for the largest number of
Council concerning the application of international accounting
affiliated companies. These consolidated financial statements
standards. All of the IFRSs and IFRICs that had been enacted by the
are not publicly available.
reporting date and that were required to be applied in the 2018 finan-
Weichai Power Co., Ltd., Weifang, People’s Republic of
cial year have been applied in preparing the consolidated financial
China, is the company that prepares the global consolidated
statements. Furthermore, IFRS 16 ‘Leases’, which is required to be
financial statements for the smallest number of affiliated com-
applied for financial years commencing on or after 1 January 2019,
panies. These are available in English on the websites of the Hong
was adopted early with effect from 1 January 2018 because of its
Kong Stock Exchange (www.hkexnews.hk) and the company
interactions with IFRS 15 ‘Revenue from Contracts with Customers’.
(www.weichaipower.com).
In order to improve the clarity of presentation, certain items
The KION Group is one of the world’s leading suppliers of
are aggregated in the statement of financial position and the
integrated supply chain solutions. In 2018, the Group and its
income statement. The items concerned are disclosed and
highly skilled employees generated revenue of €7,995.7 million
explained separately in the notes. Assets and liabilities are broken
(2017: €7,598.1 million).
down into current and non-current items in accordance with IAS
The consolidated financial statements and the combined
1.60. The consolidated income statement is prepared in accord-
group management report and management report of the Com-
ance with the cost of sales (function-of-expense) method.
pany were prepared by the Executive Board of KION GROUP AG
The consolidated financial statements are prepared in euros,
on 20 February 2019.
which is the Group’s presentation currency. All amounts are dis-
closed in millions of euros (€ million) unless stated otherwise. Due
to rounding effects, addition of the individual amounts shown may
result in minor rounding differences to the totals. The percent-
ages shown are calculated on the basis of the respective
amounts, rounded to the nearest thousand euros. All of the sep-
arate financial statements of the subsidiaries included in the con-
solidation were prepared as at the same reporting date as the
annual financial statements of KION GROUP AG.
KION GROUP AGAnnual Report 2018 144
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
145
Financial reporting standards to be adopted
for the first time in the current financial year
Financial reporting standards released but not
yet adopted
The following financial reporting standards were adopted for the
In its consolidated financial statements for the year ended
first time in 2018:
– Amendments to IFRS 2 ‘Share-based Payment’: amend-
ments relating to the classification and measurement of
share-based payment transactions
– Amendments to IFRS 4 ‘Insurance Contracts’: exempting
provisions relating to the adoption of IFRS 9 ‘Financial Instru-
ments’ before the effective date of the new version of IFRS 4
– IFRS 9 ‘Financial Instruments’
– IFRS 15 ‘Revenue from Contracts with Customers’ and the
clarifications to IFRS 15 ‘Revenue from Contracts with
Customers’: amendments relating to the identification of
performance obligations, classification as principal or agent,
revenue from licences and transition relief
relation to transfers of property to, or from, investment property
– IFRS 16 ‘Leases’
– Amendments to IAS 40 ‘Investment Property’: clarification in
– IFRIC 22 ‘Foreign Currency Transactions and Advance
– Amendments to IAS 28 ‘Investments in Associates and
Consideration’
Joint Ventures’: amendments in connection with the annual
improvements to IFRSs (2014 – 2016).
The initial application of IFRS 9 ‘Financial Instruments’, IFRS 15
‘Revenue from Contracts with Customers’ and IFRS 16 ‘Leases’
resulted in changes to the presentation of the financial perfor-
mance and financial position and the notes to the financial
31 December 2018, the KION Group has not applied the following
standards and interpretations, which have been issued by the
IASB but were not yet required to be adopted in 2018:
– Amendments to IFRS 3 ‘Business Combinations’: amend-
ments relating to the definition of a business in order to
distinguish it from a group of assets when applying IFRS 3
– Amendments to IFRS 9 ‘Financial Instruments’: amendments
relating to the classification of particular prepayable financial
assets
– IFRS 17 ‘Insurance Contracts’
– Amendments to IAS 1 ‘Presentation of Financial Statements’
and IAS 8 ‘Accounting Policies, Changes in Accounting Esti-
mates and Errors’: clarification of the definition of materiality
– Amendments to IAS 19 ‘Employee Benefits’: amendments in
connection with the remeasurement of net defined benefit
liabilities resulting from plan amendments, curtailments or
settlements
– Amendments to IAS 28 ‘Investments in Associates and Joint
Ventures’: clarification relating to the accounting treatment of
long-term interests that form part of the net investment in an
entity accounted for under the equity method
– IFRIC 23 ‘Uncertainty over Income Tax Treatments’
– Amendments to the Conceptual Framework: amendments to
– Annual Improvements to IFRSs (2015 – 2017).
how the Conceptual Framework is referenced in IFRSs
statements of the KION Group. These changes are described in
These standards and interpretations are expected to be applied
detail in note [6]. The initial application of the other standards and
by the entities included in the KION Group only from the date on
interpretations has had no significant effects.
which they must be adopted for the first time. The effects of the
initial application of these financial reporting standards on the
presentation of the financial position and financial performance of
the KION Group are expected to be insignificant.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
146
[3] PRINCIPLES OF CONSOLIDATION
Transactions with non-controlling interests are treated as
transactions with the Group’s equity providers. Differences
between the consideration paid for the acquisition of a non-
controlling interest and the relevant proportion of the carrying
Acquisitions are accounted for using the acquisition method. In
amount of the subsidiary’s net assets are recognised in equity.
accordance with IFRS 3, the identifiable assets and the liabilities
Gains and losses arising from the disposal of interests are also
assumed on the acquisition date are recognised separately
recognised in equity, provided there is no change in control.
from goodwill, irrespective of the extent of any non-controlling
Associates and joint ventures that are of material impor-
interests. The identifiable assets acquired and the liabilities
tance to the presentation of the financial position and financial
assumed are measured at their fair value.
performance of the KION Group are accounted for using the
The amount recognised as goodwill is calculated as the
equity method.
amount by which the acquisition cost, the amount of non-con-
trolling 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 difference is
recognised in profit or loss.
[4] BASIS OF CONSOLIDATION
For each acquisition, the Group decides on a case-by-case
KION GROUP AG’s equity investments include subsidiaries,
basis whether the non-controlling interest in the acquiree is
joint ventures, associates and financial investments.
recognised at fair value or as a proportion of the net assets of the
In addition to KION GROUP AG, the consolidated financial
acquiree. KION GROUP AG recognises non-controlling interests
statements of the KION Group include, using the acquisition
at the proportionate value of the net assets attributable to them
method, all material subsidiaries over which KION GROUP AG
excluding goodwill.
exercises control. KION GROUP AG controls a subsidiary if it has
In the case of business combinations in stages, previously
decision-making power over the main activities of the entity and
held equity interests are recognised at their fair value at the
can use this power to affect the amount of the variable returns to
acquisition date. The difference between their carrying amount
which it is exposed as a result of the equity investment. Subsidi-
and fair value is recognised in the consolidated income statement.
aries acquired in the course of the financial year are consolidated
For the purpose of impairment testing, goodwill is allocated
from the date on which control is obtained. Companies sold in the
to cash-generating units that are likely to benefit from the busi-
course of the financial year are deconsolidated from the date on
ness combination.
which control is lost.
Contingent consideration elements are included at fair value
A joint venture is an equity interest in which the entity is jointly
at the date of acquisition when determining the purchase consid-
managed by companies in the KION Group and one or more
eration. Contingent consideration elements may consist of equity
partners on the basis of a contractual agreement, and these
instruments or financial liabilities, depending on the structure.
parties have rights to the net assets of the joint venture.
The consolidated financial statements include all of the
parent company’s material subsidiaries. Intragroup balances,
transactions, income and expenses, and gains and losses on
intercompany transactions are eliminated in full. Deferred taxes
are recognised on temporary differences arising from consolidation
transactions.
KION GROUP AGAnnual Report 2018 146
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
147
Associates are entities in which companies in the KION Group
In addition, two joint ventures and seven associates were
are able to exercise significant influence, either directly or indi-
consolidated and accounted for using the equity method as at
rectly, over the financial and operating policies of the entity con-
31 December 2018, which was the same number as at 31 Decem-
cerned. Significant influence is assumed when KION GROUP AG
ber 2017. In each case, the last available annual financial state-
holds between 20 per cent and 50 per cent of the voting rights.
ments were used as the basis for measurement.
Equity interests over which KION GROUP companies are
In 2018, 58 (2017: 56) companies of minor importance were
unable to exercise control or a significant influence, or that are not
recognised at amortised cost or at fair value through other com-
jointly controlled by them, are classified as financial investments.
prehensive income. The non-consolidated subsidiaries and other
The number of equity investments broken down by category
equity investments (joint ventures and associates that are not
is shown in > TABLE 044.
accounted for using the equity method, plus financial invest-
A total of 26 (2017: 24) German and 108 (2017: 114) foreign
ments) are of minor importance to the presentation of the financial
subsidiaries were fully consolidated in addition to KION GROUP AG
position and financial performance of the KION Group, both
as at 31 December 2018.
individually and as a whole.
Shareholdings by categories
TABLE 044
Consolidated subsidiaries
Domestic
Foreign
Equity-accounted associates and joint ventures
Domestic
Foreign
Non-consolidated subsidiaries and other investments
Domestic
Foreign
* Including two cross-border changes of legal form
01/01/2018
Additions *
Disposals *
31/12/2018
138
24
114
9
5
4
56
15
41
3
2
1
–
–
–
5
–
5
7
–
7
–
–
–
3
–
3
134
26
108
9
5
4
58
15
43
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
148
Where other requirements are met, the fully consolidated
companies listed in > TABLE 045 are exempt from the obligation to
disclose annual financial statements and to prepare notes to the
financial statements and management reports in accordance
[5] CURRENCY TRANSLATION
with sections 264 (3) and 264b HGB on account of their inclusion
Financial statements in foreign currencies are translated in
in the consolidated financial statements. In the case of STILL
accordance with the functional currency concept. The functional
Financial Services GmbH, it has been decided solely not to
currency is the currency of the primary economic environment in
disclose the annual financial statements.
which an entity operates. The modified closing-rate method is
For the period ended 31 December 2018, the UK subsidiaries
used for currency translation.
listed in > TABLE 046 exercised the exemption in section 479A
The assets and liabilities of foreign subsidiaries, including
of the UK Companies Act 2006 that releases them from the
goodwill, are translated at the middle spot exchange rate, i.e. at
obligation to have their annual financial statements audited.
the average of the bid or offer rates on the reporting date. Income
These subsidiaries are all held indirectly by KION GROUP AG.
and expenses are translated at the average rate. With the
A detailed overview of all the direct and indirect sharehold-
exception of income and expenses recognised as other compre-
ings of KION GROUP AG is shown in the list of shareholdings
hensive income (loss), equity is recognised at historical rates. The
(note [48]).
resulting translation differences are not taken to income and are
German subsidiaries exempt from disclosure requirements
Subsidiary
BlackForxx GmbH
Eisengießerei Dinklage GmbH
Eisenwerk Weilbach GmbH
Fahrzeugbau GmbH Geisa
KION Financial Services GmbH
KION Information Management Services GmbH
KION Warehouse Systems GmbH
Klaus Pahlke GmbH & Co. Fördertechnik KG
Linde Material Handling GmbH
LMH Immobilien GmbH & Co. KG
LMH Immobilien Holding GmbH & Co. KG
LR Intralogistik GmbH
Schrader Industriefahrzeuge GmbH & Co. KG
STILL Financial Services GmbH
STILL Gesellschaft mit beschränkter Haftung
Urban-Transporte Gesellschaft mit beschränkter Haftung
TABLE 045
Head office
Stuhr
Dinklage
Frankfurt am Main
Geisa
Frankfurt am Main
Frankfurt am Main
Reutlingen
Haan
Aschaffenburg
Aschaffenburg
Aschaffenburg
Wörth an der Isar
Essen
Hamburg
Hamburg
Unterschleißheim
KION GROUP AGAnnual Report 2018 148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
UK subsidiaries exempt from local audit
Subsidiary
Dematic (Services) Ltd.
Linde Castle Ltd.
Linde Holdings Ltd.
Linde Jewsbury’s Ltd.
Linde Material Handling East Ltd.
Linde Material Handling Scotland Ltd.
Linde Material Handling South East Ltd.
Linde Severnside Ltd.
STILL Materials Handling Ltd.
Superlift UK Ltd.
149
TABLE 046
Head office
Banbury
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Exeter
Basingstoke
recognised in other comprehensive income (loss) until sub-
date, monetary items are translated at the closing rate and
sidiaries are disposed of.
non-monetary items at the rate prevailing on the transaction
The financial statements of foreign equity-accounted invest-
date. Currency translation differences are taken to income
ments are also translated using the method described above.
and recognised in other income / expenses or in net financial
Transactions of the consolidated entities in foreign currencies
income / expenses.
are translated into the relevant company’s functional currency
The translation rates used for currencies that are material
at the rate prevailing on the transaction date. On the reporting
to the financial statements are listed in > TABLE 047.
Major foreign currency rates in €
Australia (AUD)
Brazil (BRL)
China (CNY)
United Kingdom (GBP)
USA (USD)
Source: Bloomberg
Average rate
Closing rate
2018
1.5801
4.3073
7.8066
0.8848
1.1809
2017
1.4734
3.6090
7.6292
0.8764
1.1300
2018
1.6268
4.4465
7.8669
0.8990
1.1467
TABLE 047
2017
1.5372
3.9785
7.8024
0.8881
1.2005
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
150
[6] ACCOUNTING POLICIES
Initial application of IFRS 9, IFRS 15
and IFRS 16
or loss upon disposal of these financial assets (FVOCI). Assign-
ment to a particular measurement category depends on the
type of financial instrument, the resulting cash flows and the busi-
ness model used to manage the financial instruments.
For the majority of the KION Group’s financial instruments,
the classification rules in IFRS 9 did not lead to any change to
the respective measurement model. The KION Group assigns
The KION Group adopted IFRS 9 ‘Financial Instruments’, IFRS 15
financial investments previously designated as available for
‘Revenue from Contracts with Customers’ and IFRS 16 ‘Leases’
sale (AfS) under IAS 39 on an instrument-by-instrument basis to
in full and retrospectively for the first time with effect from 1 Jan-
either the FVPL category or the FVOCI category. Financial invest-
uary 2018. Only the amended rules on hedge accounting in
ments held as at 1 January 2018 are recognised at fair value
accordance with IFRS 9 are being applied prospectively. The
through other comprehensive income without recycling to profit
prior-year figures have not been restated for IFRS 9, whereas
or loss upon disposal (FVOCI category). By contrast, equity
for IFRS 15 and IFRS 16 the prior-year figures have been restated
investments in non-consolidated subsidiaries or companies not
in accordance with the transitional provisions applicable in
accounted for under the equity method are now reported under
each case.
other non- current assets. As the cash flows of financial instru-
The disclosures relating to the financial performance and
ments in the other financial investments class that were previ-
financial position of the KION Group, the consolidated income
ously classified in accordance with IAS 39 as available for sale
statement, the consolidated statement of comprehensive
(AfS) or loans and receivables (LaR) do not solely consist of inter-
income, the consolidated statement of financial position, the
est and principal payments, these debt instruments are recog-
consolidated statement of cash flows, the consolidated state-
nised at fair value through profit or loss (FVPL) on the basis of the
ment of changes in equity and the segment report take into
cash flow characteristics test in IFRS 9. As at 1 January 2018,
account the following effects and changes in presentation
trade receivables of €18.6 million were recognised at fair value
resulting from the initial application of new financial reporting
through profit or loss (FVPL) on the basis of the business
standards. With the exception of the aforementioned standards
model test.
applied for the first time, the accounting policies applied in these
> TABLE 048 contains a reconciliation of the financial assets
consolidated financial statements are fundamentally the same as
from the categories in IAS 39 to the categories in IFRS 9 as at
those used for the year ended 31 December 2017. The consoli-
1 January 2018.
dated financial statements are based on the separate financial
statements of the parent and the consolidated subsidiaries,
which are prepared in accordance with uniform groupwide
accounting policies.
IFRS 9 ‘Financial Instruments’
In accordance with the new classification rules in IFRS 9, the
KION Group assigns financial assets to one of three measure-
ment categories: debt instruments measured at fair value through
profit or loss (FVPL), debt instruments measured at amortised
cost (AC) or equity instruments measured at fair value through
other comprehensive income, without reclassification of gains
and losses accumulated in other comprehensive income to profit
KION GROUP AGAnnual Report 2018 150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
Reconciliation of financial assets from IAS 39 to IFRS 9
31/12/2017
Adjustments due to IFRS 9
01/01/2018
Classes and measurement
categories according to IAS 39
in € million
Investments in non-
consolidated subsidiaries
and other investments
AfS
Loans receivable
LaR
Financial receivables
LaR
Other financial investments
AfS
LaR
Lease receivables
in scope of IFRS 16
Trade receivables
LaR
Other financial receivables
thereof non-derivative
receivables
LaR
thereof derivative
financial instruments
FAHfT
Hedge Accounting
Cash and cash equivalents
LaR
Carrying
amount
according to
IAS 39
Reclassi-
fications
Remeasure-
ments
Classes and
measurement categories
according to IFRS 9
36.0
– 24.3
FVOCI
Financial investments
2.2
30.3
0.5
18.4
875.8
Financial receivables
AC
Financial receivables
– 0.1 AC
Other financial investments
2.4
FVPL
Lease receivables
in scope of IFRS 16
Trade receivables
999.4
– 18.6
14.8 AC
FVPL
Other financial receivables
thereof non-derivative
receivables
58.7
– 0.7
AC
22.2
7.8
173.2
thereof derivative
financial instruments
FVPL
Hedge Accounting
Cash and cash equivalents
AC
151
TABLE 048
Carrying
amount
according to
IFRS 9
11.8
2.2
30.3
21.3
875.8
995.6
18.6
58.0
22.2
7.8
173.2
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
152
Initial application of IFRS 9 also results in changes to the subse-
For the vast majority of new business contracts, service
quent measurement of financial assets. The KION Group applies
business contracts and project business contracts, there has
the simplified impairment model of IFRS 9 to all trade receivables,
been no change in the point in time at which or the period of
lease receivables and contract assets and thus recognises losses
time over which the revenue is recognised. A shift in the timing
expected over the entire term. As a consequence of applying the
of revenue recognition was identified only for a small number of
simplified impairment model of IFRS 9, valuation allowances for
contracts and led to an overall increase in equity, after taking
trade receivables fell by €14.8 million. > TABLE 049
deferred taxes into account, of €7.9 million as at 1 January 2017.
Overall, the initial application of IFRS 9 resulted in an increase in
IFRS 16 ‘Leases’
equity, after taking deferred taxes into account, of €14.6 million as
at 1 January 2018. This transition effect was primarily due to the
Indirect leasing business transactions, which were previously
new impairment model based on expected losses.
recognised as sales transactions, are now recognised as leases
Initial application of IFRS 9 has no impact on the classifica-
in accordance with IFRS 15 and IFRS 16. As a result, leased
tion and measurement of KION Group’s financial liabilities.
assets as at 31 December 2017 increased by €724.0 million
All of the KION Group’s hedges in existence as at 1 Janu-
(1 January 2017: €714.2 million). On the other side of the consoli-
ary 2018 satisfy the hedge accounting requirements in IFRS 9
dated statement of financial position, there was a €541.5 million
and continue to be highly effective.
rise in deferred revenue (1 January 2017: €532.7 million), of
which €349.7 million was classified as other non-current liabilities
IFRS 15 ‘Revenue from Contracts with Customers’
(1 January 2017: €341.7 million) and €191.8 million as other
current liabilities (1 January 2017: €191.1 million). Furthermore, the
Following the adoption of IFRS 15, the contract assets previously
change in the reporting of indirect leasing business resulted in
recognised in trade receivables are for the first time reported
additional residual value obligations of €340.7 million as at
separately in the consolidated statement of financial position
31 December 2017 being recognised under liabilities from
and amounted to €100.3 million as at 31 December 2017
financial services (1 January 2017: €335.9 million). As a result,
(1 January 2017: €117.4 million). Contract liabilities, which were
non-current liabilities from financial services went up by
previously reported under other liabilities, also form a separate
€262.4 million (1 January 2017: €258.8 million) and current liabili-
line item; they amounted to €324.4 million as at 31 December
ties from financial services by €78.3 million (1 January 2017:
2017 (1 January 2017: €376.4 million). The KION Group has
€77.2 million). Liabilities from financial services have been
used the exemption under which contracts fulfilled before
reported as a separate line item for the first time and include
1 January 2017 do not have to be reassessed in accordance
liabilities from financial services used to fund the long-term
with IFRS 15. There were no further changes to the presenta-
leasing business, which had previously been reported under
tion of KION Group’s primary financial statements.
Reconciliation of valuation allowances for trade receivables from IAS 39 to IFRS 9
TABLE 049
in € million
Valuation allowances for trade receivables as at 31/12/2017
Remeasurement to equity for the initial application of IFRS 9
Valuation allowances for trade receivables as at 01/01/2018
51.1
– 14.8
36.3
KION GROUP AGAnnual Report 2018 152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
153
other current financial liabilities, of €85.7 million as at 31 Decem-
months. Other property, plant and equipment rose by €318.0 mil-
ber 2017 (1 January 2017: €8.3 million).
lion as at 31 December 2017 (1 January 2017: €240.8 million).
In accordance with IFRS 16, procurement leases that were
Accordingly, other non-current financial liabilities increased by
previously recognised as operating leases but not shown in the
€267.8 million (1 January 2017: €207.0 million) and other current
statement of financial position are recognised as right-of-use
financial liabilities by €72.0 million (1 January 2017: €55.6 mil-
assets under other property, plant and equipment; correspond-
lion). Overall, the initial application of IFRS 16 to the KION Group’s
ing liabilities from procurement leases are reported under
leasing arrangements – which are the same as they were under
other financial liabilities. The KION Group exercises the option to
IAS 17 – led to a reduction in equity, after taking deferred taxes
recognise as an expense right-of-use assets and liabilities from
into account, of €160.8 million as at 1 January 2017.
procurement leases for low-value procurement leases and for
The quantitative effects are summarised in > TABLES 050 – 053.
procurement leases that have a lease term of less than twelve
Effects on the consolidated income statement 2017
in € million
Revenue
Cost of sales
Gross profit
Selling expenses
Research and development costs
Administrative expenses
Other income
Other expenses
Profit from equity-accounted investments
Earnings before interest and taxes
Financial income
Financial expenses
Net financial expenses
Earnings before taxes
Income taxes
Net income for the period
Annual
report 2017
Adjustments
new IFRS
7,653.6
– 5,699.1
1,954.5
– 829.6
– 137.0
– 456.8
75.7
– 71.1
13.6
549.4
132.2
– 213.3
– 81.1
468.3
– 41.9
426.4
– 55.4
55.8
0.4
2.0
– 0.0
9.2
0.1
0.0
–
11.7
0.6
– 15.9
– 15.2
– 3.6
– 0.3
– 3.9
TABLE 050
2017
restated
7,598.1
– 5,643.3
1,954.8
– 827.5
– 137.0
– 447.5
75.7
– 71.1
13.6
561.0
132.8
– 229.2
– 96.3
464.7
– 42.2
422.5
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
Effects on the consolidated statement of financial position as at 01/01/2017
in € million
Leased assets
Rental assets
Other property, plant and equipment
Deferred taxes
Other non-current assets
Non-current assets
Contract assets
Trade receivables
Other current assets
Current assets
Total assets
Retained earnings
Other equity
Equity
Liabilities from financial services
Other financial liabilities
Other liabilities
Deferred taxes
Other non-current liabilities
Non-current liabilities
Liabilities from financial services
Contract liabilities
Other financial liabilities
Other liabilities
Other current liabilities
Current liabilities
154
TABLE 051
01/01/2017
restated
1,143.9
543.0
919.1
514.8
6,839.3
9,960.1
117.4
895.9
1,355.7
2,368.9
Annual
report 2016
Adjustments
new IFRS
429.7
575.3
678.3
419.8
6,839.3
8,942.4
–
998.9
1,355.7
2,354.6
714.2
– 32.3
240.8
95.0
– 0.0
1,017.7
117.4
– 103.1
–
14.3
11,297.0
1,032.0
12,329.0
183.4
2,312.3
2,495.7
–
349.3
202.8
882.5
4,694.4
6,128.9
–
–
222.6
842.1
1,607.8
2,672.5
– 152.9
0.0
– 152.9
258.3
200.5
348.4
27.2
–
834.4
91.4
376.4
65.0
– 182.2
–
350.6
30.5
2,312.3
2,342.8
258.3
549.8
551.2
909.6
4,694.4
6,963.2
91.4
376.4
287.6
659.9
1,607.8
3,023.0
Total equity and liabilities
11,297.0
1,032.0
12,329.0
KION GROUP AGAnnual Report 2018 154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
Effects on the consolidated statement of financial position as at 31/12/2017
in € million
Leased assets
Rental assets
Other property, plant and equipment
Deferred taxes
Other non-current assets
Non-current assets
Contract assets
Trade receivables
Other current assets
Current assets
Total assets
Retained earnings
Accumulated other comprehensive loss
Other equity
Equity
Liabilities from financial services
Other financial liabilities
Other liabilities
Deferred taxes
Other non-current liabilities
Non-current liabilities
Liabilities from financial services
Contract liabilities
Other financial liabilities
Other liabilities
Other current liabilities
Current liabilities
155
TABLE 052
31/12/2017
restated
1,246.3
608.4
994.9
475.2
6,525.8
9,850.6
100.3
999.4
1,387.4
2,487.1
Annual
report 2017
Adjustments
new IFRS
522.3
651.4
676.9
370.5
6,525.8
8,746.9
–
1,094.1
1,387.4
2,481.5
724.0
– 43.0
318.0
104.7
0.0
1,103.7
100.3
– 94.7
–
5.6
11,228.4
1,109.3
12,337.7
521.3
– 528.8
3,156.3
3,148.8
–
407.8
235.7
665.2
3,921.4
5,230.0
–
–
296.7
820.7
1,732.2
2,849.6
– 156.9
0.4
0.0
– 156.5
261.0
255.8
349.7
37.2
–
903.7
176.4
324.4
1.9
– 140.7
–
362.1
364.4
– 528.4
3,156.3
2,992.3
261.0
663.6
585.4
702.4
3,921.4
6,133.7
176.4
324.4
298.6
679.9
1,732.2
3,211.7
Total equity and liabilities
11,228.4
1,109.3
12,337.7
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
Effects on the consolidated statement of cash flows 2017
in € million
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Annual
report 2017
Adjustments
new IFRS
615.8
– 237.6
– 472.5
– 12.2
– 106.4
279.6
173.2
96.0
0.0
– 96.0
0.0
0.0
0.0
0.0
156
TABLE 053
2017
restated
711.9
– 237.6
– 568.5
– 12.2
– 106.4
279.6
173.2
As a result of initial application of the new standards, EBIT and
Due to the recognition of right-of-use assets, other property,
adjusted EBIT (EBIT adjusted for non-recurring items and
plant and equipment went up by €352.0 million to €390.7 million
purchase price allocation effects) for 2017 both rose by €11.7 mil-
as at 31 December 2018 and, as a result of the recognition of
lion to reach €561.0 million and €777.3 million respectively. Of the
liabilities from procurement leases, other financial liabilities
net income of €422.5 million, a share of €420.9 million was
increased by €382.5 million to €421.3 million. Furthermore, initial
attributable to the shareholders of KION GROUP AG. As a result
application of IFRS 16 caused cash flow from operating activities
of applying the new standards for the first time, basic earnings
to rise by €111.2 million to €765.5 million and thus free cash
per share went down by €0.04 to €3.68 and diluted earnings per
flow to rise by €111.2 million to €519.9 million in the consolidated
share by €0.03 to €3.68. Furthermore, the retrospective adjust-
statement of cash flows for 2018.
ment of cash flow from operating activities shown in > TABLE 053
caused free cash flow to increase by €96.0 million to €474.3 mil-
lion in the consolidated statement of cash flows for 2017.
Revenue recognition
Due to the initial application of IFRS 16, in 2018 rental and
lease payments (€111.2 million) for procurement leases previously
Revenue is the fair value of the consideration received for the sale
accounted for off-balance as operating leases under IAS 17 were
of goods and services and rental and lease income (excluding
no longer recognised as expenses in the consolidated income
VAT) after deduction of trade discounts and rebates. In addition to
statement. Instead, depreciation on the recognised right-of-use
the contractually agreed consideration, the transaction price
assets (€97.0 million) and interest expense arising on the
may also include variable elements such as rebates, volume
recognition of liabilities from procurement leases (€14.5 million)
discounts, trade discounts, bonuses and penalties. Revenue is
were reported. As a result of this effect, EBIT and adjusted EBIT
recognised when control over the goods or services passes to
(EBIT adjusted for non-recurring items and purchase price
the customer. Payment terms vary in accordance with the cus-
allocation effects) for 2018 both rose by €14.5 million to reach
tomary conditions in the respective countries; they are not stand-
€642.8 million and €789.9 million respectively.
ardised across the Group. Other criteria may arise, depending on
each individual transaction, as described below:
KION GROUP AGAnnual Report 2018 156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
157
Sale of goods
entities in the KION Group immediately recognise the portion of
the consideration received that exceeds the residual value obliga-
Revenue from the sale of goods is recognised at the point in time
tion as revenue.
when the KION Group delivers goods to a customer, the risks and
rewards incidental to the ownership of the goods sold are sub-
Project business contracts
stantially transferred to the customer and the flow of benefits to
the Group is considered to be sufficiently probable. If a customer
Receivables and revenue from the project business are rec-
is expected to accept goods but has yet to do so, the corre-
ognised over a particular period according to the stage of
sponding revenue is only recognised when the goods are
completion (percentage-of-completion method). The percentage
accepted. In addition to the contractually agreed consideration, in
of completion is the proportion of contract costs incurred up to
the case of key-account customers the transaction price may
the reporting date compared to the total estimated contract costs
also include variable elements such as rebates, volume dis-
as at the reporting date (cost-to-cost method). Under the
counts, trade discounts, bonuses and penalties. The revenue
percentage-of-completion method, project business contracts
from these sales is recognised in the amount of the price speci-
are measured at the amount of the contract costs incurred to
fied in the contract less the estimated price reductions.
date plus the pro rata profit earned according to the percentage
Rendering of services
of completion. If it is probable that the total contract costs will
exceed the contract revenue, the expected loss is immediately
recognised as an expense in the financial year in which the loss
Revenue from the rendering of services is recognised on a straight-
emerges. If the contract costs incurred and the profit and loss
line basis over the period of performance or in accordance with the
recognised exceed the progress billings, the excess is recog-
proportion of the overall service rendered by the reporting date. By
nised as an asset under contract assets. If the progress billings
contrast, revenue from long-term service agreements is recognised
exceed the capitalised costs and recognised profit and loss, the
on the basis of the average term of the service agreements and in
excess is recognised as a liability under contract liabilities (see
line with progressive costs (constant margin).
note [33] for details of the amounts recognised in the statement of
Leases / short-term rentals
financial position).
If the outcome of a project business contract cannot be
reliably estimated, the likely achievable revenue is recognised up
Revenue from direct leasing business is recognised in the amount
to the amount of the costs incurred. Contract costs are rec-
of the sale value of the leased asset if classified as a finance lease
ognised as an expense in the period in which they are incurred.
and in the amount of the lease payments if classified as an oper-
Variations in the contract work, claims and incentive payments
ating lease. If industrial trucks are first sold to and then leased
are recognised if they are likely to result in revenue and their
back from a financing partner to finance leases, no selling margin
amount can be reliably estimated.
in connection with the financing is recognised as the financing
partner usually does not obtain control over the industrial truck.
In the indirect leasing business, industrial trucks are sold to
vendor partners that enter into long-term leases with end cus-
tomers. As the vendor partner usually does not obtain control
over the industrial truck, entities in the KION Group initially treat
the portion of the consideration received that exceeds the resid-
ual value obligation as deferred income and subsequently recog-
nise the revenue in instalments over the term of the lease. If risks
and rewards are substantially transferred to the vendor partner,
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
158
Cost of sales
The cash-generating units (CGUs) identified for the purposes
of testing goodwill and brand names for impairment equate to the
The cost of sales comprises the cost of goods and services sold
LMH EMEA, STILL EMEA, KION APAC and KION Americas Oper-
and includes directly attributable material and labour costs
ating Units in the Industrial Trucks & Services segment and to the
as well as directly attributable overheads, including depreciation
Dematic Operating Unit in the Supply Chain Solutions segment.
of production equipment, amortisation expense on capitalised
The recoverable amount of a CGU is determined by calcu-
development costs and certain intangible assets, and write-downs
lating its value in use on the basis of the discounted cash flow
of inventories. Cost of sales also includes additions to warranty
method. The cash flows forecast for the next five years are
provisions, which are recognised in the amount of the estimated
included in the calculation for the impairment test. The financial
cost at the date on which the related product is sold.
forecasts are based on assumptions relating to the development
Financial income and expenses
of the global economy, commodity prices and exchange
rates. Cash flows beyond the five-year planning horizon were
extrapolated for the LMH EMEA, STILL EMEA, KION APAC
and KION Americas CGUs using a growth rate of 0.8 per cent
Financial income and expenses mainly consist of interest
(2017: 0.5 per cent). The growth rate used for Dematic was
expense on financial liabilities, interest income from financial
1.3 per cent (2017: 0.5 per cent). The higher growth rates reflect
receivables, interest income from leases and the interest cost
long-term inflation trends (especially in Germany and the United
on leases, interest expense from financial services, the interest
States) and the expected medium-term performance of the ITS
cost on procurement leases, exchange rate gains and losses
and SCS segments.
on financial activities and the net interest cost of the defined
CGU cash flows are discounted using a weighted average
benefit obligation.
cost of capital (WACC) that reflects current market assessments
Interest income and expenses are recognised in profit and
of the specific risks to individual CGUs.
loss in accordance with the effective interest method. The
> TABLE 054 shows the significant parameters for impairment
effective interest method is used for calculating the amortised
testing broken down by Operating Unit.
cost of a financial asset or financial liability and the allocation of
interest income and interest expenses over the relevant periods.
Dividends are recognised in income when a resolution on
distribution has been passed. They are reported in the consoli-
dated income statement under other income, provided they are
dividends from non-consolidated subsidiaries.
Goodwill
Goodwill has an indefinite useful life and is therefore not amor-
tised. Instead, it is tested for impairment in accordance with
IAS 36 at least once a year, and more frequently if there are
indications that the asset might be impaired.
For the purposes of internal and external reporting, the
activities of the KION Group are broken down into the Industrial
Trucks & Services, Supply Chain Solutions and Corporate
Services segments.
KION GROUP AGAnnual Report 2018 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
159
Significant parameters for impairment testing
TABLE 054
in %
Industrial Trucks & Services
LMH EMEA
STILL EMEA
KION Americas
KION APAC
Supply Chain Solutions
Dematic
Long-term growth rate
WACC after tax
2018
0.8%
0.8%
0.8%
0.8%
1.3%
2017
0.5%
0.5%
0.5%
0.5%
0.5%
2018
7.3%
7.4%
8.2%
7.7%
8.6%
2017
6.6%
6.7%
7.8%
7.6%
7.6%
The impairment test carried out in the fourth quarter of 2018 did
Other intangible assets with an indefinite useful life are
not reveal any need to recognise impairment losses for intangible
carried at cost and are capitalised brand names. Brand names
assets with an indefinite useful life or for the existing goodwill
are not amortised because they have been established in the
recognised for the LMH EMEA, STILL EMEA, KION APAC,
market for a number of years and there is no foreseeable end to
KION Americas and Dematic CGUs. Using sensitivity analysis, it
their useful life. In accordance with IAS 36, they are tested for
was determined that no impairment losses need to be recognised
impairment at least once a year or whenever there are indications
for goodwill, even if key assumptions vary within realistic limits, in
that the asset might be impaired.
particular variations in WACC of plus or minus 100 basis points.
The impairment test applies an income-oriented method in
which fundamentally the same assumptions are used as in the
impairment test for goodwill. Assessments of indefinite useful life
Other intangible assets
are carried out in every period.
Development costs are capitalised if the capitalisation criteria
Other purchased intangible assets with a finite useful life are
in IAS 38 are met. Capitalised development costs include all costs
carried at historical cost less all accumulated amortisation and all
and overheads directly attributable to the development process.
accumulated impairment losses. If events or market develop-
Once they have been initially capitalised, these costs and
ments suggest impairment has occurred, impairment tests are
internally generated intangible assets – particularly internally
carried out on the carrying amount of items classified as other
generated software – are carried at cost less accumulated
intangible assets with a finite useful life. The carrying amount of
amortisation and accumulated impairment losses. All non-quali-
an asset is compared with its recoverable amount, which is
fying development costs are expensed as incurred and reported
defined as the higher of its value in use and its fair value less costs
in the consolidated income statement under research and
to sell. If the reasons for recognising impairment losses in the past
development costs together with research costs.
no longer apply, the relevant impairment losses are reversed, but
subject to a limit such that the carrying amount of the asset is no
higher than its amortised cost.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
160
Amortisation of intangible assets with a finite useful life is
Leased assets
recognised on a straight-line basis and, with the exception of
the amortisation expense on capitalised development costs, is
If the beneficial ownership of leased assets remains with a
reported under cost of sales. The impairment losses on intangible
KION Group entity as the lessor under an operating lease, the
assets are reported under other expenses.
assets are reported as leased assets in the statement of financial
The useful lives shown in > TABLE 055 are applied in determin-
position. The leased assets are carried at cost and depreciated
ing the carrying amounts of other intangible assets.
on a straight-line basis over the term of the underlying leases.
Leases / short-term rentals
To finance lease contracts, industrial trucks are generally sold
to leasing companies (financing partners) and immediately
leased back (head lease) before being sub-leased to external end
customers (described below as ‘sale and leaseback sub-leases’).
KION Group entities in the Industrial Trucks & Services segment
In accordance with the transitional provisions of IFRS 16, it
conduct leasing and short-term rental business in which they
was not necessary to reassess the sale and leaseback sub-lease
lease or rent industrial trucks and related items of equipment to
portfolio in existence as at 31 December 2017 with regard to the
their customers in order to promote sales.
transfer of control to the financing partner in the head lease. In all
Entities in the KION Group enter into leases as lessors and as
sale and leaseback sub-leases, risks and rewards incidental to
lessees. In line with IFRS 16, these leases are classified as finance
the head lease are, in general, substantially borne by entities in
leases if substantially all of the risks and rewards incidental to
the KION Group. The corresponding assets are therefore
ownership of the leased asset are transferred to the lessee. All
reported as leased assets within non-current assets at the lower
other leases and short-term rentals are classified as operating
of the present value of the lease payments and fair value.
leases, again in accordance with IFRS 16.
However, if risks and rewards incidental to the head lease are
If an entity in the Industrial Trucks & Services segment enters
substantially transferred to the end customer in the sub-lease, a
into a finance lease as the lessor, the future lease payments to be
corresponding lease receivable is recognised. In both cases, the
made by the customer are recognised as lease receivables at an
funding items for these long-term customer leases, which are
amount equal to the net investment in the lease. These are meas-
funded for terms that match those of the leases, are recognised
ured using the simplified impairment approach in accordance
as lease liabilities.
with IFRS 9. Interest income is spread over the term of the lease
in order to ensure a constant return on the outstanding net invest-
ment in the lease.
Useful life of other intangible assets
Customer relationships / client base
Technology
Development costs
Patents and licences
Software
TABLE 055
Years
4 – 15
10 – 15
5 – 7
3 – 15
2 – 10
KION GROUP AGAnnual Report 2018 160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
161
The accounting for contracts concluded from 1 January 2018
In accordance with the transitional provisions of IFRS 16, it
onwards is also determined by whether the financing partner
was not necessary to reassess the sale and leaseback sub-lease
gains control over the industrial truck. As the financing partner
portfolio in existence as at 31 December 2017 with regard to the
usually does not obtain control over the industrial truck, it is rec-
transfer of control to the financing partner in the head lease. If, in
ognised as a leased asset in the statement of financial position or,
the case of sale and leaseback sub-leases, the risks and rewards
if the risks and rewards have been transferred to the end cus-
incidental to the head lease are substantially borne by entities in
tomer, as a lease receivable. The industrial truck recognised as a
the KION Group, these industrial trucks are reported as rental
leased asset is carried at cost, while the lease receivable is rec-
assets within non-current assets. The liabilities for financing
ognised at an amount equal to the net investment in the lease.
this part of the short-term rental fleet are reported under other
The liabilities for financing the leased assets are recognised under
financial liabilities.
liabilities from financial services.
The accounting for contracts concluded from 1 January 2018
In the indirect leasing business, industrial trucks are sold to
onwards is also determined by whether the financing partner
leasing companies that enter into long-term leases with end
gains control over the industrial truck. As the financing partner
customers (vendor partners). As the vendor partner ususally does
usually does not obtain control over the industrial truck, it is rec-
not obtain control over the industrial truck, it is recognised as a
ognised as a rental asset in the statement of financial position and
leased asset in the statement of financial position and carried at
carried at cost. The liabilities for financing this part of the
cost. If the KION Group provides a residual value guarantee, an
short-term rental fleet are reported under liabilities from
amount equivalent to the residual value obligation is recognised
financial services.
under liabilities from financial services. Accordingly, entities in
the KION Group immediately recognise the portion of the con-
sideration received that exceeds the residual value obligation as
Other property, plant and equipment
revenue or they initially treat that portion of the consideration
received as deferred income and subsequently recognise the
Property, plant and equipment is carried at cost less depreciation
revenue on a pro-rata basis over the term of the lease.
and impairment losses. The cost of internally generated machinery
Rental assets
and equipment includes all costs directly attributable to the
production process and an appropriate portion of production
overheads. This includes production-related depreciation and
proportionate costs for administration and social insurance /
Under short-term rental agreements, entities in the KION Group
employee benefits.
rent industrial trucks directly to end customers. Short-term rental
agreements usually have a term ranging from a few hours to a year.
The industrial trucks are carried at cost and depreciated on a
straight-line basis over the normal useful life of between five and
eight years, depending on the product group. If a sale and
leaseback sub-lease arrangement is in place for financing
purposes, the assets are reported in the statement of financial
position either at the lower of the present value of the rental
payments and fair value or at cost, depending on the portfolio
to which they belong.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
162
Depreciation of property, plant and equipment is recognised on a
If an impairment test for an item of property, plant and
straight-line basis and reported under functional costs. The
equipment is performed at the level of a cash-generating unit to
useful lives and depreciation methods are reviewed annually and
which goodwill is allocated and results in the recognition of an
adjusted to reflect changes in conditions.
impairment loss, first the goodwill and, subsequently, the assets
The ranges of useful life below are applied in determining the
must be written down in proportion to their relative carrying
carrying amounts of items of property, plant and equipment.
amounts. If the reason for an impairment loss recognised in prior
> TABLE 056
years no longer applies, the relevant pro-rata impairment losses
are reversed, but subject to a limit such that the carrying amount
KION Group companies also lease property, plant and equip-
of the asset is no higher than its amortised cost. This does not
ment for their own use through leases, which are recognised as
apply to goodwill.
right-of-use assets under other property, plant and equipment.
As a rule, the leases are entered into for defined periods, although
they may contain extension and/or termination options.
Equity-accounted investments
The right-of-use assets are depreciated over the shorter of
their useful life or the term of the lease, unless title to the leased
In accordance with the equity method, associates and joint
assets passes to the lessee when the lease expires, in which case
ventures are measured as the proportion of the interest in the
the right-of-use asset is depreciated and the other financial
equity of the investee. They are initially carried at cost. Subse-
liabilities are reversed over the useful life of the leased assets.
quently, the carrying amount of the equity investment is adjusted
Lease instalments for procurement leases with a term of no
in line with any changes to the KION Group’s interest in the net
more than twelve months and for procurement leases relating to
assets of the investee. The KION Group’s interest in the profit or
low-value assets are expensed on a straight-line basis and
loss generated after acquisition is recognised in income. Other
reported under functional costs.
changes in the equity of associates and joint ventures are recog-
At the end of the lease term, the leased assets are returned
nised in other comprehensive income (loss) in the consolidated
or purchased, or the contract is extended.
financial statements in proportion to the Group’s interest in the
If there are certain indications of impairment of the property,
associate or joint venture.
plant and equipment, the assets are tested for impairment by
If the Group’s interest in the losses made by an associate
comparing the residual carrying amount of the assets with their
or joint venture exceeds the carrying amount of the proportionate
recoverable amount, which is defined as the higher of value in use
equity attributable to the Group, no additional losses are rec-
and fair value less costs to sell. If the residual carrying amount
ognised. Any goodwill arising from the acquisition of an associate
is greater than the recoverable amount, an impairment loss is
or joint venture is included in the carrying amount of the invest-
recognised for an asset. The impairment losses on property,
ment in the associate or joint venture.
plant and equipment are reported under other expenses.
Useful life of other property, plant and equipment
Buildings
Plant and machinery
Office furniture and equipment
TABLE 056
Years
10 – 50
3 – 15
2 – 15
KION GROUP AGAnnual Report 2018 162
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
163
If there is evidence that an associate or joint venture may be
The expected losses are calculated using the probability of
impaired, the carrying amount of the investment in question
default, the exposure at default and, taking into account any col-
is tested for impairment. The carrying amount of the asset is
lateral, the estimated loss given default. The calculation draws on
compared with its recoverable amount. If the carrying amount
observable historical loss data, information on current conditions
is greater than the recoverable amount, an impairment loss is
and the economic outlook.
recognised for the equity investment.
A default is defined as the occurrence of a loss event, such
Other financial assets
as a borrower being in considerable financial difficulties or a
contract being breached. Financial assets are written off if there
are no reasonable prospects of recovering the underlying cash
flows in full or partly. The recoverability is assessed on the basis
Primary financial assets are initially recognised and derecognised
of different indicators (for example, the opening of insolvency
in the financial statements on their settlement dates.
proceedings over the borrower’s assets) that take the relevant
In accordance with IFRS 9, the KION Group categorises
country-specific factors into account.
financial assets as debt instruments recognised at fair value
Equity instruments in the FVOCI category are recognised at
through profit or loss (FVPL), debt instruments measured at
fair value through other comprehensive income. Upon initial
amortised cost (AC) or equity instruments recognised at fair value
recognition at fair value, directly attributable transaction costs are
through other comprehensive income (FVOCI).
included. Gains and losses accumulated in other comprehensive
Debt instruments are measured at amortised cost (AC) if they
income are not reclassified to profit or loss upon disposal of these
are held as part of a business model whose objective is to collect
financial assets. Dividends are recognised in income.
the contractual cash flows, and these cash flows consist solely of
The KION Group assigns the remaining financial assets to the
payments of principal and interest on the principal amount
FVPL category. They are initially recognised at fair value; directly
outstanding. Upon initial recognition, these assets are carried at
attributable transaction costs have to be taken directly to profit or
fair value including directly attributable transaction costs. In
loss. In subsequent periods, financial assets in the FVPL category
subsequent periods they are measured at amortised cost using
are recognised at fair value through profit or loss.
the effective interest method. Low-interest or non-interest-bear-
In 2017, in accordance with IAS 39, the KION Group differ-
ing receivables due in more than one year are carried at their
entiated between financial assets held for trading at fair value
present value.
through profit or loss (FAHfT), available for sale financial assets
In line with the general impairment approach for debt instru-
(AfS) and loans and receivables (LaR).
ments in the AC category, both upon initial recognition and in
subsequent periods the KION Group recognises expected credit
losses in profit or loss by recognising valuation allowances. The
valuation allowances amount to the twelve-month expected
losses, provided no significant increase in credit risk (for example
as a result of material changes to external or internal credit rat-
ings) is observable at the reporting date. Otherwise, lifetime
expected losses are recognised. The simplified impairment
approach is applied to all trade receivables, lease receivables and
contract assets and always covers the lifetime expected losses.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
164
Hedge accounting
Income taxes
Currently, derivative financial instruments in the KION Group
In the consolidated financial statements, current and deferred
comprise currency forwards and interest-rate swaps that are
taxes are recognised on the basis of the tax laws of the jurisdictions
used for hedging purposes to mitigate currency risk and
involved. Deferred taxes are recognised in other comprehensive
interest-rate risk. They are initially recognised and derecognised
income (loss) if they relate to transactions also recognised in other
in the financial statements on their settlement dates.
comprehensive income (loss).
Derivative financial instruments are measured at their fair
Deferred tax assets and liabilities are recognised in accord-
value and are reported as other financial assets or other financial
ance with the liability method for all temporary differences
liabilities as at the reporting date. If they are not part of a formally
between the IFRS carrying amounts and the tax base, as well
documented hedge, derivatives are classified as held for trading
as for temporary consolidation measures.
and assigned to the FVPL category. Derivative financial
Deferred tax assets also include tax refund claims that arise
instruments forming part of a documented hedge are not
from the expected utilisation of existing tax loss carryforwards
assigned to any of the IFRS 9 measurement categories and are
and interest carryforwards in subsequent years and whose
therefore recognised in accordance with the hedge accounting
utilisation is reasonably certain according to current forecasts.
rules described below.
On the basis of this estimate, deferred tax assets have been rec-
The KION Group currently uses cash flow hedges for cur-
ognised on some loss carryforwards and interest carryforwards.
rency risk and interest-rate risk.
Deferred taxes are determined on the basis of the tax rates
In the case of cash flow hedges, derivatives are used to
that will apply at the recovery date, or have been announced, in
hedge future cash flow risks from existing hedged items, planned
accordance with the current legal situation in each country
transactions and firm obligations not reported in the statement of
concerned. In accordance with the provisions in IAS 12, deferred
financial position. The effective portion of changes in the fair
tax assets and liabilities are not discounted. Deferred tax assets
value of derivatives is initially recognised in other comprehensive
are offset against deferred tax liabilities to the extent that they
income (loss) and is subsequently reclassified to the income
have the same maturity and relate to the same taxation authority.
statement when the corresponding hedged item is also rec-
ognised. The ineffective portion of the changes in fair value is
recognised immediately in the income statement.
Inventories
In addition, the KION Group uses an interest-rate swap to
hedge the fair value of a fixed-rate financial liability. The effective
Inventories are carried at the lower of cost and net realisable
portion of changes in the fair value of the interest-rate swap is
value. The acquisition costs of raw materials and merchandise
recognised in the income statement. They are offset by gains and
are calculated on the basis of an average. The cost of finished
losses on the change in the fair value of the hedged financial lia-
goods and work in progress includes direct costs and an
bility, which result in an adjustment in profit or loss of the carrying
appropriate portion of the material and production overheads
amount of the hedged item. The ineffective portion of the hedge
and production-related depreciation directly attributable to the
is recognised immediately in the income statement.
production process. Administrative costs and social insurance /
Further information on risk management and accounting
employee benefits are included to the extent that they are
for derivative financial instruments can be found in notes [40]
attributable to the production process. The amount recognised is
and [41].
an average value or a value determined in accordance with the
FIFO method (FIFO = "first in first out").
KION GROUP AGAnnual Report 2018 164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
165
Net realisable value is the selling price that can be realised
The reversal of an impairment loss must not result in a carry-
less the estimated costs of completion and the estimated costs
ing amount greater than the amortised cost that would have
necessary to make the sale.
arisen if the impairment loss had not been recognised.
Write-downs are recognised for inventory risks resulting from
Trade receivables that are assigned to the FVPL category on
duration of storage, impaired recoverability, etc. If the reasons for
the basis of the business model test in IFRS 9 are recognised at
the recognition of the write-downs no longer apply, they are
fair value through profit or loss.
reversed, but subject to a limit such that the carrying amount of
the asset is no higher than its cost.
Contract balances
Cash and cash equivalents
Cash and cash equivalents comprise cash, credit balances with
banks and current financial assets that can be transformed into
Contract assets mainly relate to work performed in the project
cash at any time and are only subject to a minor level of volatility.
business that has not yet been billed. Contract assets are meas-
ured using the simplified impairment approach in accordance
with IFRS 9. The average loss rates calculated for trade receiva-
bles are used as an approximation of the expected losses from
contract assets.
A contract liability is a company’s obligation to transfer goods
or services to a customer for which the company has received
(or will receive) consideration. Project business contracts with a
net debit balance due to customers are reported under contract
liabilities, as are prepayments received from customers.
Trade receivables
Trade receivables that are held in order to collect the contractual
cash flows are assigned to the AC category. Upon measurement
subsequent to initial recognition, the KION Group applies the
simplified impairment approach of IFRS 9 and thus recognises
lifetime expected losses. To determine lifetime expected losses,
for purposes of the valuation allowance average loss rates are
calculated on a collective basis in accordance with the past
due status of the receivables. The loss rates are calculated on
the basis of observable historical loss data, taking into account
current conditions and the economic outlook (for example on the
basis of expected probability of default for significant countries).
The amount of the valuation allowance recognised is adjusted
in profit or loss if there is a change in the estimate for the under-
lying inputs and thus in the losses to be recognised.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
166
Retirement benefit obligation
Liabilities from financial services
The retirement benefit obligation is calculated in accordance with
Liabilities from financial services comprise all liabilities from
the projected unit credit method. Future pension obligations are
financing the leasing business and the short-term rental fleet on
measured on the basis of the pro rata vested benefit entitlements
the basis of sale and leaseback sub-leases from 1 January 2018
as at the reporting date and discounted to their present value.
onwards, as well as the liabilities that arise from financing the
The calculations include assumptions about future changes in
leasing business by means of lease facilities and the use of
certain parameters, such as expected salary and pension
securitisations. Furthermore, liabilities from financial services
increases and biometric factors affecting the amount of future
arising from the leasing business include residual value obliga-
benefits. Pension provisions are reduced by the fair value of the
tions resulting from the indirect leasing business.
plan assets used to cover the Group’s benefit obligations. Plan
Upon initial recognition, they are recognised at fair value
assets are measured at fair value.
including directly attributable transaction costs. Subsequently,
Remeasurements, including deferred taxes, are recognised
liabilities from financial services are recognised at amortised cost
in other comprehensive income (loss). It is not permitted to
using the effective interest method (AC).
reclassify remeasurements recognised in other comprehensive
income (loss) to profit or loss in future periods. The cost of addi-
tions to pension provisions is allocated to functional costs. The
Other provisions
interest cost on pension obligations and the interest income from
plan assets are netted and reported in net financial income /
Other provisions are recognised when the Group has a legal or
expenses. Further details can be found in note [28].
constructive obligation to a third party as the result of a past event
Financial liabilities
that is likely to lead to a future outflow of resources and that
can be reliably estimated. Where there is a range of possible
outcomes and each individual point within the range has an equal
probability of occurring, a provision is recognised in the amount
The financial liabilities reported by the KION Group essentially
of the mean of the individual points. Measurement is at full cost.
comprise liabilities to banks and liabilities in connection with the
Provisions for identifiable risks and contingent liabilities are
promissory notes that have been issued. Upon initial recognition,
recognised in the amount that represents the best estimate of the
they are recognised at fair value including directly attributable
cost required to settle the obligations. Recourse claims are not
transaction costs. Subsequently, financial liabilities are recog-
taken into account. The settlement amount also includes cost
nised at amortised cost using the effective interest method (AC).
increases identifiable as at the reporting date. Provisions with a
maturity of more than twelve months are discounted using the
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. The
interest cost from unwinding the discount is recognised in
interest expenses.
KION GROUP AGAnnual Report 2018 166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
167
Warranty provisions are recognised on the basis of past or
Other financial liabilities
estimated future claim statistics. The corresponding expense
is recognised in cost of sales at the date on which the revenue is
The KION Group differentiates between financial liabilities held for
recognised. Individual provisions are recognised for claims that
trading and recognised at fair value through profit or loss (FVPL)
are known to the Group.
and financial liabilities that are recognised at amortised cost using
Provisions for expected losses from onerous contracts and
the effective interest method (AC).
other business obligations are measured on the basis of the work
The FVPL category contains derivative financial instruments
yet to be performed.
that are not part of a formally documented hedge. These are
A restructuring provision is recognised when a KION Group
reported under other financial liabilities and must be carried at
entity has prepared a detailed, formal restructuring plan and this
fair value through profit or loss. Derivative financial instruments
plan has raised the valid expectation in those affected that the
forming part of a documented hedge are not assigned to any of
entity will carry out the restructuring by starting to implement that
the IFRS 9 measurement categories.
plan or announcing its main features to those affected by it. The
All other financial liabilities of the KION Group must be
measurement of a restructuring provision only includes the direct
assigned to the AC category. These liabilities are initially rec-
expenditures arising from the restructuring and not associated
ognised at fair value at the time they are entered into. Directly
with the ongoing activities of the entity concerned.
attributable transaction costs are deducted. These liabilities are
Share-based payments
then measured at amortised cost. Any differences between
historical cost and the settlement amount are recognised in
accordance with the effective interest method.
In 2017, the KION Group differentiated between financial lia-
IFRS 2 distinguishes between equity-settled and cash-settled
bilities held for trading and recognised at fair value through profit
share-based payment transactions.
or loss (FLHfT) and financial liabilities that are recognised at
Equity-settled share-based payment transactions are rec-
amortised cost using the effective interest method (FLaC).
ognised at their fair value at the date of grant. The fair value of the
obligation is recognised as an expense under functional costs
over the vesting period and offset against capital reserves.
Trade payables
The portion of the fair value of cash-settled share-based
payments that is attributable to service provided up to the
Trade payables are recognised at amortised cost using the effec-
valuation date is recognised as an expense under functional
tive interest method (AC). Low-interest or non-interest-bearing lia-
costs and is also reported as a liability. The fair value is recalcu-
bilities due in more than one year are carried at their present value.
lated on each reporting date until the end of the performance
period. Any change in the fair value of the obligation must be
recognised (pro rata) under expenses.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
168
Assumptions and estimates
The classification of leases requires estimates to be made
regarding the transferred and retained risks and rewards in
The preparation of the IFRS consolidated financial statements
connection with ownership of the industrial truck. When defining
requires the use of assumptions and estimates for certain line
the lease term, senior management also takes into consideration
items that affect recognition and measurement in the statement
all facts and circumstances that offer an economic incentive to
of financial position and the income statement. The actual
exercise extension options or to not exercise cancellation options.
amounts realised may differ from estimates. Assumptions and
Further information on leases can be found in the sections on
estimates are applied in particular:
leases / short-term rentals, leased assets, rental assets and other
– in assessing the need for and the amount of impairment
losses on intangible assets, property, plant and equipment,
and inventories
lease term
– in determining the useful life of non-current assets
– in classifying and measuring leases and in determining the
– in recognising and measuring defined benefit pension
– in recognising and measuring current and deferred taxes
– in recognising and measuring assets acquired and liabilities
– in evaluating the stage of completion of contracts where the
assumed in connection with business combinations, and
obligations and other provisions
revenue is recognised over a period of time.
property, plant and equipment in the relevant notes.
Defined benefit pension obligations are calculated on the
basis of actuarial parameters, although the value for certain plan
assets is derived from inputs that are not observable in the mar-
ket. As differences due to remeasurements are taken to other
comprehensive income (loss), any change in these parameters
would not affect the net profit for the current period. For further
details about sensitivity analysis in relation to the impact of all
significant assumptions, please refer to the information about
the retirement benefit obligation in note [28].
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 actual outflow of resources for a given event may be different
Goodwill is tested for impairment annually at the level of the
from the amount recognised in other provisions. Further details
cash-generating units to which goodwill is allocated, assuming
can be found in note [32].
division-specific growth rates for the subsequent period. Any
material changes to these and other factors might result in the
recognition of impairment losses. Further information on goodwill
can be found earlier in this note and in note [16].
KION GROUP AGAnnual Report 2018 168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
169
Significant estimates are involved in calculating income taxes.
These estimates may change on the basis of new information and
experience (see also note [13]). Deferred tax assets on tax loss
carryforwards and interest carryforwards are recognised on the
basis of an estimate of the future recoverability of the tax benefit,
i.e. an assumption as to whether sufficient taxable income or tax
relief will be available against which the carryforwards can be
utilised. The actual amount of taxable income in future periods,
and hence the actual utilisation of tax loss carryforwards and
interest carryforwards, may be different from the estimates made
when the corresponding deferred tax assets were recognised.
On first-time consolidation of an acquisition, all identifiable
assets and liabilities are recognised at their fair value at the
acquisition date. The fair values of identifiable assets are
determined using appropriate valuation techniques. These
measurements are based, for example, on estimates of future
cash flows, expected growth rates, exchange rates, discount
rates and useful lives. In the event of material changes to
assumptions or circumstances, estimates must be reassessed
and this can lead to the recognition of an impairment loss for the
asset concerned.
Project business contracts are accounted for using the
percentage-of-completion method based on management
estimates of the contract costs incurred. If estimates change, or
if there are differences between planned and actual costs, this is
directly reflected in the profit or loss from project business
contracts. The Operating Units continually review the cost
estimates and adjust them as appropriate. Further information
on project business contracts can be found earlier in this note
and in note [33].
The impact of a change to an estimate is recognised pro-
spectively when it becomes known and assumptions are
adjusted accordingly.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
170
Notes to the consolidated income statement
[7] REVENUE
> TABLE 057 contains the product categories identified as material
to the KION Group’s financial performance and the timing of
revenue recognition for each of these categories.
Timing of revenue recognition with third parties
TABLE 057
Timing of revenue
recognition
At a point in time
At a point in time
At a point in time
At a point in time
Over a period of time
Over a period of time
Over a period of time
Over a period of time
At a point in time
Product category
Business model
Industrial Trucks & Services
New business
Sale of industrial trucks
Direct and indirect leasing business (in both cases where classified as
finance leases)
Aftersales
Supply of spare parts
Individual orders for repairs and maintenance work
(Full) service contracts
Rental business
Direct long-term rental business and indirect leasing business
(in both cases where classified as operating leases)
Short-term rental business
Fleet management
Sale of used industrial trucks
Used trucks
Other
Various business models, currently categorised as not material to the financial
performance of the KION Group in the IT&S segment
Mainly at a point
in time
Supply Chain Solutions
Business solutions
Project business
Service business
Modernisations and upgrades
Spare parts business
Over a period of time
Over a period of time
At a point in time
Various business models, currently categorised as not material to the financial
performance of the KION Group in the SCS segment
Mainly over a
period of time
Corporate Services
Services
Mainly at a point
in time
KION GROUP AGAnnual Report 2018 170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
171
> TABLES 058 – 059 show revenue from contracts with customers,
broken down by sales region, product category, timing of revenue
recognition and segment.
Disaggregation of revenues with third parties
TABLE 058
in € million
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total revenue
New business
Service business
– Aftersales
– Rental business
– Used trucks
– Other
Business solutions
Service business
Corporate Services
Total revenue
2018
Industrial
Trucks & Services
Supply Chain
Solutions
Corporate
Services
4,287.5
561.9
80.0
138.6
164.8
683.6
5,916.3
3,009.1
2,907.2
1,513.9
900.1
327.8
165.4
459.2
27.1
14.4
1,347.7
8.7
195.1
2,052.1
1,514.0
538.1
5,916.3
2,052.1
23.2
3.4
0.1
0.0
0.0
0.6
27.3
27.3
27.3
20.9
6.4
Total
4,769.9
592.3
94.5
1,486.3
173.5
879.3
7,995.7
3,009.1
2,907.2
1,513.9
900.1
327.8
165.4
1,514.0
538.1
27.3
7,995.7
4,783.0
3,212.7
Timing of revenue recognition
Products and services transferred at a point in time
Products and services transferred over a period of time
4,524.8
1,391.5
237.3
1,814.8
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
172
Disaggregation of revenue with third parties
TABLE 059
2017 *
Industrial
Trucks & Services
Supply Chain
Solutions
Corporate
Services
in € million
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total revenue
New business
Service business
– Aftersales
– Rental business
– Used trucks
– Other
Business solutions
Service business
Corporate Services
Total revenue
4,013.5
536.6
89.7
127.0
157.9
643.5
5,568.2
2,828.8
2,739.5
1,429.5
855.2
306.6
148.3
532.6
8.0
63.9
1,139.6
5.1
255.8
2,005.1
1,512.4
492.7
5,568.2
2,005.1
21.0
3.6
0.1
0.0
0.0
0.1
24.8
24.8
24.8
19.3
5.6
Total
4,567.1
548.2
153.6
1,266.7
163.1
899.3
7,598.1
2,828.8
2,739.5
1,429.5
855.2
306.6
148.3
1,512.4
492.7
24.8
7,598.1
4,495.2
3,102.9
Timing of revenue recognition
Products and services transferred at a point in time
Products and services transferred over a period of time
4,241.0
1,327.2
234.9
1,770.1
* Revenue for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
173
> TABLE 060 shows the revenue that is expected as a result of
performance obligations in existence at the reporting date. This
consists only of revenue from contracts with customers as
defined by IFRS 15. In the Supply Chain Solutions segment,
this revenue is generated by the project and service business. In
the Industrial Trucks & Services segment, it is generated
through aftersales (full-)service contracts with an expected origi-
nal term of more than one year.
Expected future revenue from existing performance obligations
in € million
Total of expected future revenue from existing performance obligations
due within one year
due in one to two years
due in two to three years
due in three to four years
due in four to five years
due in more than five years
TABLE 060
2017
2,342.8
1,523.6
366.2
255.4
104.4
58.6
34.6
2018
2,728.9
1,837.9
506.8
179.6
113.1
54.7
36.9
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
174
[8] OTHER INCOME
The breakdown of other income is as follows: > TABLE 061
Other income
in € million
Foreign currency exchange rate gains
Income from reversal of provisions
Gains on disposal of non-current assets
Rental income
Sundry income
Total other income
* Other income for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
The rise in foreign currency exchange rate gains was largely
attributable to exchange rate gains arising in the course of the
Group companies’ operating activities. This line item also
contains gains on hedges that were entered into in order to
hedge currency risk arising from the operating business but do
not form part of a documented hedge. These gains were offset
by corresponding exchange rate losses (see note [9]). Sundry
income also included income from non-consolidated subsidiaries
and other equity investments amounting to €2.3 million
(2017: €2.1 million).
TABLE 061
2017 *
34.5
2.5
3.3
1.2
34.4
75.8
2018
44.2
2.4
2.3
1.2
36.4
86.5
KION GROUP AGAnnual Report 2018 174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
175
[9] OTHER EXPENSES
The breakdown of other expenses is as follows: > TABLE 062
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 losses were attributable to
exchange rate losses arising in the course of the Group compa-
nies’ operating activities and to hedges that were entered into in
order to hedge currency risk arising from the operating business
and do not form part of a documented hedge (see note [8] for
details of the countervailing gains). Impairment of non-current
assets related to buildings, plant and machinery, office furniture
and equipment, and other property, plant and equipment. Of the
total amount recognised as impairment of non-current assets in
2017, €8.6 million had resulted from giving up the Egemin brand
after it was integrated within the Dematic brand presentation.
TABLE 062
2017
40.1
3.3
14.8
12.8
71.1
2018
50.0
1.1
6.4
5.7
63.3
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
176
[10] SHARE OF PROFIT (LOSS) OF
EQUITY-ACCOUNTED INVEST-
MENTS
The share of profit (loss) of equity-accounted investments in the
reporting year amounted to a profit of €12.2 million (2017:
€13.6 million). Further details on equity-accounted investments
can be found in note [20].
[11] FINANCIAL INCOME
Financial income breaks down as shown in > TABLE 063.
Financial income
in € million
Interest income from leases
Foreign currency exchange rate gains (financing)
Other interest and similar income
Total financial income
* Financial income for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
TABLE 063
2017 *
36.8
87.5
8.5
132.8
2018
43.8
48.9
7.1
99.9
The decrease in financial income in 2018 mainly resulted
The interest income from leases relates to the interest portion
from lower foreign currency exchange rate gains (financing) in
of lease payments in financial services transactions in which
connection with foreign currency positions in internal financing
KION Group entities operate as lessors (finance leases).
and the related hedging transactions. These gains were offset by
corresponding exchange rate losses (see note [12]).
KION GROUP AGAnnual Report 2018 176
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
177
[12] FINANCIAL EXPENSES
Financial expenses break down as follows: > TABLE 064
Financial expenses
in € million
Interest expense from loans
Interest expense from promissory notes
Interest expense from leases
Interest expense from procurement leases
Net interest expense from defined benefit plans
Amortisation of finance costs
Foreign currency exchange rate losses (financing)
Other interest expenses and similar charges
Total financial expenses
* Financial expenses for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
TABLE 064
2017 *
29.6
12.2
48.1
16.3
19.3
8.8
66.6
28.3
229.2
2018
22.9
16.3
51.3
16.9
19.4
4.5
55.2
10.7
197.3
In 2018, financial expenses fell by €31.9 million year on year.
payments received and is therefore reported within revenue
Interest expense from loans decreased due to the corporate
rather than as interest income.
actions carried out in 2017, whereas the interest expense from
The interest expenses from leases also contains further inter-
promissory notes increased. At the time of the early repayment of
est expense attributable to liabilities from financial services in
certain financial liabilities (see also note [29]), deferred borrowing
an amount of €13.0 million (2017: €0.3 million). This includes inter-
costs of €1.9 million (2017: €3.5 million) were reclassified as
est expense on sale and leaseback sub-lease transactions of
financial expenses and thus taken to profit or loss.
€4.2 million (2017: €0.0 million). The income from corresponding
The exchange rate losses included in foreign currency
customer agreements is a component of the rental and lease
exchange rate losses (financing) decreased, as was the case for
payments received and is therefore reported within revenue
exchange rate gains included in foreign currency exchange rate
rather than as interest income.
gains (financing) (see note [11]).
Net interest expense from defined benefit plans relates to
The interest expenses from leases predominantly relates to
the net interest cost on the net defined benefit liability applying
liabilities under sale and leaseback sub-lease transactions for
the discount rate for plans in which pension obligations exceed
the leasing business and for financing the short-term rental fleet.
plan assets.
Sale and leaseback sub-lease transactions entered into in con-
nection with the leasing business incurred interest expenses of
€14.1 million (2017: €27.3 million). The income from corresponding
customer agreements is a component of the rental and lease
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
178
[13] INCOME TAXES
are determined on the basis of the tax rates that will apply at the
recovery date, or have been announced, in accordance with the
current legal situation in each country concerned. The current
corporate income tax rate in Germany is 15.0 per cent plus a
The income tax expense of €143.7 million (2017: €42.2 million)
solidarity surcharge (5.5 per cent of corporate income tax).
consisted of €166.5 million in current tax expense (2017:
Taking into account the average trade tax rate of 14.94 per cent
€184.9 million) and €22.9 million in deferred tax income (2017:
(2017: 15.00 per cent), the combined nominal tax rate for entities
€142.7 million). In the reporting year, the current tax expense
in Germany was 30.77 per cent (2017: 30.82 per cent). The
included income of €32.1 million (2017: €16.2 million) relating to
income tax rates for foreign companies used in the calculation of
previous financial years that was in an amount of €29.4 million
deferred taxes were between 9.0 per cent and 34.0 per cent, as
predominantly due to the offsetting of losses of corporations in
had also been the case in 2017.
connection with an amendment to tax law (section 8c of the
No deferred taxes have been recognised on temporary dif-
German Corporation Tax Act (KStG)). The deferred tax income
ferences of €235.5 million (2017: €231.4 million) between the net
recognised in 2017 had included income of €92.2 million that was
assets reported in the consolidated financial statements for the
due, in particular, to the remeasurement of deferred tax liabilities
Group companies and the tax base for the shares in these Group
in light of the US tax reforms.
companies (outside basis differences) because the KION Group
At the reporting date, there were income tax assets of
is in a position to manage the timing of the reversal of temporary
€31.5 million receivable from tax authorities (2017: €14.4 million)
differences and there are no plans to dispose of investments in
and income tax liabilities of €74.4 million (2017: €82.6 million).
the foreseeable future.
Deferred taxes are recognised for temporary differences
Deferred tax assets are allocated to the following items in the
between the tax base and IFRS carrying amounts. Deferred taxes
statement of financial position: > TABLE 065
Deferred tax assets
in € million
Intangible assets and property, plant and equipment
Other assets
Provisions
Liabilities
Deferred income
Tax loss carry forwards, interest carry forwards and tax credits
Offsetting
Total deferred tax assets
* Deferred tax assets for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
TABLE 065
2017 *
105.3
71.0
229.8
610.2
222.6
38.7
– 802.4
475.2
2018
137.7
141.8
238.7
609.6
186.9
21.4
– 914.4
421.7
KION GROUP AGAnnual Report 2018 178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
Deferred tax liabilities are allocated to the following items in
the statement of financial position: > TABLE 066
Deferred tax liabilities
in € million
Intangible assets and property, plant and equipment
Other assets
Provisions
Liabilities
Deferred income
Offsetting
Total deferred tax liabilities
* Deferred tax liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
179
TABLE 066
2017 *
1,118.5
304.2
16.6
60.1
5.5
– 802.4
702.4
2018
1,071.0
326.1
19.4
110.7
13.9
– 914.4
626.7
The deferred tax liabilities essentially related to the purchase price
be unimpaired because these companies are expected to
allocation in the acquisition of the KION Group and Dematic, par-
generate taxable income in future.
ticularly for intangible assets and property, plant and equipment.
No deferred tax assets have been recognised on tax loss
In 2018, deferred taxes of €8.8 million were recognised in other
carryforwards of €580.7 million (2017: €526.0 million) – of which
comprehensive income (loss), resulting in an increase in equity
€103.1 million (2017: €13.0 million) can only be carried forward on
(2017: minus €10.5 million, resulting in a decrease in equity). Of this
a restricted basis – or on interest carryforwards of €283.9 million
amount, deferred taxes of €3.7 million (2017: minus €8.0 million)
(2017: €185.0 million). No deferred tax assets have been rec-
arose from the remeasurement of the defined benefit obligation.
ognised on other temporary differences of €7.8 million (2017:
Furthermore, deferred taxes of €5.1 million (2017: minus €2.4 mil-
€5.2 million).
lion) were recognised in connection with realised and unrealised
Deferred taxes are recognised on tax loss carryforwards and
changes in the fair value of derivatives in documented hedges. In
interest carryforwards to the extent that sufficient future taxable
2017, deferred taxes of minus €0.1 million had been recognised
income is expected to be generated against which the losses can
on the remeasurement of available-for-sale financial instruments,
be utilised. The total amount of unrecognised deferred tax assets
resulting in a decrease in equity.
relating to loss carryforwards is therefore €137.4 million (2017:
The change in deferred taxes included currency effects of
€124.5 million), of which €111.2 million (2017: €120.9 million)
€7.0 million that were recognised in other comprehensive
concerns tax losses that can be carried forward indefinitely.
income (loss) under cumulative translation adjustment, resulting
The KION Group’s corporation-tax loss carryforwards in
in a decrease in equity (2017: €33.9 million, resulting in an
Germany as at 31 December 2018 amounted to €115.2 million
increase in equity).
(31 December 2017: €109.1 million), while trade-tax loss
In 2018, the parent company and subsidiaries that reported
carryforwards stood at €95.9 million (31 December 2017:
losses for 2018 or 2017 recognised net deferred tax assets on
€88.6 million). There were also foreign tax loss carryforwards
temporary differences and on loss carryforwards totalling
totalling €454.4 million (31 December 2017: €481.1 million).
€21.1 million (2017: €24.2 million). The assets were considered to
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
180
The interest that can be carried forward indefinitely in Ger-
reconciliation is an aggregation of the individual company-specific
many as at 31 December 2018 amounted to €283.9 million
reconciliations prepared in accordance with relevant local tax
(31 December 2017: €185.0 million). This increase stemmed
rates, taking into account consolidation effects recognised in
largely from the offsetting of losses of corporations in Germany in
income. The expected tax rate applied in the reconciliation is
connection with an amendment to tax law (section 8c KStG).
30.77 per cent (2017: 30.82 per cent). > TABLE 067
The table below shows the reconciliation of expected income
tax expenses to effective income tax expenses. The Group
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
Non-taxable income / tax-exempt income
Taxes relating to other periods
Deferred taxes relating to prior periods
Non-creditable withholding tax on dividends
Other
TABLE 067
2017 *
464.7
– 143.2
– 2.6
3.2
– 27.9
92.2
– 5.8
34.7
16.2
3.4
– 9.8
– 2.5
2018
545.3
– 167.8
– 2.4
6.5
– 14.8
1.9
– 6.6
11.0
32.1
– 0.8
– 2.3
– 0.5
Effective income taxes (current and deferred taxes)
– 143.7
– 42.2
* Income taxes for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
181
[14] OTHER INCOME STATEMENT
[15] EARNINGS PER SHARE
DISCLOSURES
Basic earnings per share is calculated by dividing the net income
The cost of materials rose by €117.7 million in the reporting year
accruing to the KION GROUP AG shareholders by the weighted
to €3,691.4 million (2017: €3,573.7 million).
average number of shares outstanding during the reporting
Personnel expenses went up by €110.5 million to €2,100.2 mil-
period (2018: 117,917,578 no-par-value shares; 2017: 114,328,999
lion in 2018 (2017: €1,989.7 million). These personnel expenses
no-par-value shares). The net income accruing to the sharehold-
included wages and salaries of €1,653.4 million (2017:
ers of KION GROUP AG was €399.9 million (2017: €420.9 million);
€1,567.8 million), social security contributions of €364.2 million
information about determining the net income (loss) accruing to
(2017: €343.5 million) and expenses for pensions of €82.6 million
the KION GROUP AG shareholders can be found in the consoli-
(2017: €78.5 million). The interest cost from the unwinding of the
dated income statement. Basic earnings per share for the
discount on estimated pension obligations is not recognised
reporting period came to €3.39 (2017: €3.68). The 165,558
under personnel expenses and is instead reported under financial
no-par-value treasury shares repurchased by KION GROUP AG
expenses as a component of interest cost of the defined benefit
were not included in this figure as at 31 December 2018 (31
obligation. Pension expenses essentially comprised the pension
December 2017: 160,829).
entitlements of €41.4 million vested in 2018 (2017: €40.6 million)
Diluted earnings per share is calculated by adding the potential
and unrecognised past service cost of €1.4 million (2017: income
dilutive no-par-value shares that employees can obtain for free
of €0.1 million) arising from plan amendments and curtailments.
under the employee share option programme (KEEP) to the
Impairment losses and depreciation expenses on property,
weighted average number of shares outstanding during the
plant and equipment together with impairment losses and amor-
reporting period. The calculation of diluted earnings per share was
tisation expenses on intangible assets amounted to €897.9 mil-
based on a weighted average of 117,935,296 no-par-value shares
lion in the reporting year (2017: €896.6 million). Inventories were
issued (2017: 114,356,934 no-par-value shares). Diluted earnings
written down by €25.3 million (2017: €18.0 million).
per share for the reporting period came to €3.39 (2017: €3.68).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
182
Notes to the consolidated statement of financial position
[16] GOODWILL AND OTHER
INTANGIBLE ASSETS
Goodwill is broken down by segment as follows: > TABLE 068
Goodwill broken down by segment
in € million
Industrial Trucks & Services
LMH EMEA
STILL EMEA
KION Americas
KION APAC
Supply Chain Solutions
Dematic
Total goodwill
TABLE 068
2017
1,511.0
817.7
549.7
23.5
120.1
1,871.5
1,871.5
3,382.5
2018
1,500.7
817.2
549.2
21.3
112.9
1,924.2
1,924.2
3,424.8
The change in goodwill in 2018 mainly resulted from currency
indefinite useful life. As at 31 December 2018, the brand names
effects.
allocated to the KION APAC CGU had a carrying amount of
The Group intends to retain and further strengthen the Linde,
€7.8 million (31 December 2017: €7.8 million) and had an indefinite
STILL, OM and KION brand names on a long-term basis. Brand
useful life. The brand names allocated to the Supply Chain
names worth €466.2 million are assigned to the LMH EMEA CGU
Solutions segment were worth €350.6 million as at 31 Decem-
(31 December 2017: €466.2 million) and brand names worth
ber 2018 (31 December 2017: €350.6 million) and essentially had
€114.6 million to the STILL EMEA CGU (31 December 2017:
an indefinite useful life. > TABLE 069
€114.8 million). These assets are not amortised as they have an
KION GROUP AGAnnual Report 2018 182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
Intangible assets
in € million
Goodwill
Brand names
Technology and
development
Sundry
intangible assets
183
TABLE 069
Total
6,175.6
9.6
– 346.5
104.2
– 0.3
– 217.5
– 8.6
Balance as at 01/01/2017
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Balance as at 31/12/2017
Gross carrying amount
as at 31/12/2017
Accumulated amortisation
Balance as at 01/01/2018
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Reclassification
Balance as at 31/12/2018
Gross carrying amount
as at 31/12/2018
Accumulated amortisation
3,572.9
9.5
– 199.8
–
–
–
–
3,382.5
3,382.5
–
3,382.5
0.2
42.1
–
–
–
–
–
3,424.8
3,424.8
–
954.3
–
– 0.9
–
–
– 0.2
– 8.6
944.6
955.2
– 10.6
944.6
–
– 0.2
–
–
– 0.1
–
–
944.3
954.9
– 10.6
723.7
–
– 59.8
75.4
–
– 69.0
–
924.6
0.1
– 86.0
28.8
– 0.3
– 148.2
–
670.3
719.0
5,716.5
917.2
– 246.9
670.3
–
16.1
84.0
– 0.2
– 76.6
–
– 4.0
1,049.5
– 330.5
719.0
0.1
21.0
26.7
– 0.0
– 106.1
– 1.7
4.0
6,304.4
– 588.0
5,716.5
0.3
78.9
110.7
– 0.2
– 182.8
– 1.7
–
689.7
662.9
5,721.6
992.4
– 302.7
1,000.1
– 337.3
6,372.2
– 650.6
The total carrying amount for technology and development assets
lion); these expenses are reported under cost of sales. Research
as at 31 December 2018 was €689.7 million (31 December 2017:
and development costs totalling €137.7 million (2017: €137.0 mil-
€670.3 million). Development costs of €84.0 million were capital-
lion) were expensed.
ised in the reporting year (2017: €75.4 million). Amortisation
Other intangible assets relate in particular to licences, patents,
expenses of €76.6 million were also recognised (2017: €69.0 mil-
software and customer relationships.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
[17] LEASED ASSETS
The changes in leased assets in 2018 and 2017 were as follows:
> TABLE 070
Leased assets
in € million
Balance as at 01/01/
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Impairment
Reclassification
Balance as at 31/12/
Gross carrying amount as at 31/12/
Accumulated depreciation
184
TABLE 070
2017 *
1,143.9
0.5
– 12.0
588.5
– 169.1
– 305.6
–
0.1
1,246.3
2,056.0
– 809.7
2018
1,246.3
–
– 9.7
514.9
– 189.4
– 306.3
– 0.4
6.4
1,261.8
1,978.2
– 716.4
* Leased assets for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
Leased assets are attributable to the Industrial Trucks & Services
Leased assets resulted in future lease payments expected to
segment and relate to industrial trucks in the amount of
be paid by customers under operating leases amounting to
€1,261.8 million (31 December 2017: €1,246.3 million) that are pro-
€599.3 million (31 December 2017: €516.7 million).
vided for use to external customers under operating leases in the
The maturity structure of these expected future payments in
direct leasing business or as part of the indirect leasing business.
the leasing business is shown in > TABLE 071.
Leased assets include assets provided to customers with a
residual book value of €405.4 million (31 December 2017:
€419.7 million) that are financed by means of sale and leaseback
sub-lease transactions with leasing companies. Leased assets in
connection with indirect leasing business are worth €639.5 mil-
lion (31 December 2017: €724.4 million); the corresponding resid-
ual value obligations stood at €319.5 million (31 December 2017:
€340.7 million).
KION GROUP AGAnnual Report 2018 184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
Expected future payments from leasing business
in € million
Payments from leasing business
due within one year
due in one to two years
due in two to three years
due in three to four years
due in four to five years
due in more than five years
* Leased assets for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
[18] RENTAL ASSETS
The changes in rental assets in 2018 and 2017 were as follows:
> TABLE 072
Rental assets
in € million
Balance as at 01/01/
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Impairment
Reclassification
Balance as at 31/12/
Gross carrying amount as at 31/12/
Accumulated depreciation
* Rental assets for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
185
TABLE 071
2017 *
516.7
186.2
126.3
94.9
62.8
34.8
11.8
TABLE 072
2017 *
543.0
0.5
– 9.4
343.7
– 93.7
– 175.8
–
–
608.4
933.2
– 324.8
2018
599.3
200.5
153.5
115.6
76.8
42.6
10.3
2018
608.4
–
– 8.6
572.8
– 296.7
– 196.0
– 2.9
– 6.5
670.5
1,081.6
– 411.1
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
186
Rental assets are allocated solely to the Industrial Trucks &
Services segment and comprise assets in the short-term rental
fleet. On the opposite side of the statement of financial position to
the rental assets are liabilities from financial services of €307.1 mil-
lion (31 December 2017: €0.0 million) arising from the financing of
[19] OTHER PROPERTY, PLANT AND
EQUIPMENT
the short-term rental fleet by means of sale and leaseback
The changes in the carrying amounts of other property, plant and
sub-lease transactions and liabilities of €289.9 million recognised
equipment are shown in > TABLE 073.
in other financial liabilities (31 December 2017: €515.7 million)
arising on contracts entered into up to 31 December 2017.
Other property, plant and equipment
in € million
Land and buildings
Plant & machinery
and office furniture &
equipment
Advances paid
and assets under
construction
Balance as at 01/01/2017 *
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Impairment
Reclassification
Balance as at 31/12/2017 *
Gross carrying amount as at 31/12/2017
Accumulated depreciation
Balance as at 01/01/2018
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Impairment
Reclassification
Balance as at 31/12/2018
Gross carrying amount as at 31/12/2018
Accumulated depreciation
557.1
1.4
– 13.1
109.6
– 2.0
– 53.8
– 0.5
3.0
601.7
1,113.6
– 511.9
601.7
–
– 3.8
96.0
– 1.3
– 80.4
– 0.7
14.1
625.5
1,224.2
– 598.7
324.8
2.0
– 11.0
152.3
– 2.7
– 129.0
– 5.8
15.8
346.5
1,201.4
– 854.9
346.5
0.0
– 0.5
149.1
– 2.6
– 125.9
– 0.6
16.0
382.0
1,225.2
– 843.2
37.3
0.3
– 1.1
37.2
– 6.0
–
–
– 20.9
46.7
46.7
–
46.7
–
0.1
54.2
– 0.7
–
–
– 30.0
70.3
70.3
–
* Other property, plant and equipment for 2017 were restated due to the initial application of IFRS 16
TABLE 073
Total
919.1
3.7
– 25.1
299.1
– 10.8
– 182.8
– 6.2
– 2.0
994.9
2,361.7
– 1,366.8
994.9
0.0
– 4.2
299.3
– 4.6
– 206.4
– 1.3
0.0
1,077.8
2,519.7
– 1,441.9
KION GROUP AGAnnual Report 2018 186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
187
Land and buildings in the amount of €18.3 million (31 Decem-
leases (31 December 2017: €347.4 million). Of this figure,
ber 2017: €18.3 million) were largely pledged as collateral for
€276.4 million was attributable to land and buildings (31 Decem-
accrued retirement benefits under partial retirement agreements.
ber 2017: €247.6 million) and €114.3 million to plant & machinery
Other property, plant and equipment included a figure of
and office furniture & equipment (31 December 2017: €99.8 mil-
€390.7 million for right-of-use assets related to procurement
lion). > TABLE 074
Right-of-use assets in other property, plant and equipment
TABLE 074
in € million
Balance as at 01/01/2017 *
Currency translation adjustments
Additions
Disposals
Depreciation
Other
Balance as at 31/12/2017 *
Gross carrying amount as at 31/12/2017
Accumulated depreciation
Balance as at 01/01/2018
Currency translation adjustments
Additions
Disposals
Depreciation
Other
Balance as at 31/12/2018
Gross carrying amount as at 31/12/2018
Accumulated depreciation
Land and buildings
Plant & machinery
and office furniture &
equipment
185.0
– 0.9
100.1
– 0.5
– 36.0
–
247.6
403.5
– 155.9
247.6
– 0.6
81.5
– 0.4
– 51.0
– 0.7
276.4
483.6
– 207.2
75.1
– 1.1
80.8
– 0.7
– 54.7
0.4
99.8
147.6
– 47.8
99.8
– 0.8
69.6
– 0.3
– 53.8
– 0.2
114.3
214.6
– 100.2
Total
260.1
– 2.0
180.9
– 1.2
– 90.8
0.4
347.4
551.1
– 203.7
347.4
– 1.4
151.1
– 0.7
– 104.9
– 0.9
390.7
698.2
– 307.5
* Other property, plant and equipment for 2017 were restated due to the initial application of IFRS 16
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
188
The expense recognised in 2018 for procurement leases with a
The carrying amount of the equity-accounted investments
term of up to twelve months came to €13.0 million (2017: €14.6 mil-
mainly resulted from the shares (10.0 per cent) in Linde Hydraulics
lion); the expense for procurement leases that relate to low-value
GmbH & Co. KG, Aschaffenburg (‘Linde Hydraulics’), the shares
assets was €5.1 million (2017: €3.2 million).
(45.0 per cent) in Linde Leasing GmbH, Wiesbaden, the shares
There were also obligations arising from short-term procure-
(45.0 per cent) in Linde High Lift Chile S.A., Santiago de Chile,
ment leases that already existed as at 31 December 2018 but will
Chile, and the shares (50.0 per cent) in JULI Motorenwerk s.r.o,
be expensed in 2019 in an amount of €3.2 million (31 Decem-
Moravany, Czech Republic. The associates and joint ventures
ber 2017: €2.4 million).
[20] EQUITY-ACCOUNTED
INVESTMENTS
can be seen in the list of shareholdings (see note [48]). Their
financial information is summarised below. > TABLES 075 – 076
The amounts in the tables are based on the share held by the
KION Group in the relevant associate or joint venture.
The KION Group reported equity-accounted investments with a
total carrying amount of €82.3 million as at 31 December 2018
(31 December 2017: €80.3 million).
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
TABLE 075
2017
43.8
5.2
– 0.7
4.5
TABLE 076
2017
36.4
8.5
1.3
9.7
2018
46.6
6.6
1.0
7.6
2018
35.7
5.6
0.1
5.7
KION GROUP AGAnnual Report 2018 188
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
189
[21] LEASE RECEIVABLES
In the case of leases under which KION Group entities lease
assets directly to end customers, the Group’s net investment in
the lease is reported as a lease receivable.
The amounts recognised as lease receivables are based on
the following data: > TABLE 077
Maturity analysis of lease receivables
in € million
Nominal value of outstanding lease payments
due within one year
due in one to two years
due in two to three years
due in three to four years
due in four to five years
due in more than five years
Plus unguaranteed residual values
Less unearned financial income
TABLE 077
2017
854.9
222.6
209.4
165.0
129.9
86.7
41.4
2018
1,069.5
311.5
256.9
208.2
152.2
89.5
51.2
135.7
107.3
107.8
86.5
Present value of outstanding lease payments
1,097.3
875.8
Outstanding lease payments include payments from non-cancel-
lable leases amounting to €732.8 million (31 December 2017:
€715.2 million).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
[22] OTHER FINANCIAL ASSETS
The breakdown of other financial assets of €113.2 million
(31 December 2017: €176.1 million) is shown in > TABLE 078.
Other financial assets
in € million
Investments in non-consolidated subsidiaries and other investments
Financial investments
Loans receivable
Financial receivables
Other financial investments
Derivative financial instruments
Sundry other financial assets
Other non-current financial assets
Derivative financial instruments
Financial receivables
Sundry other financial assets
Other current financial assets
190
TABLE 078
2017
36.0
–
2.2
–
18.9
–
–
57.1
30.0
30.3
58.7
119.0
2018
–
5.2
–
1.1
21.0
1.0
1.4
29.8
8.9
34.7
39.8
83.4
Total other financial assets
113.2
176.1
The financial investments essentially comprise the equity invest-
As of 1 January 2018, the non-consolidated equity invest-
ment in Balyo SA of €5.2 million. This equity investment, which
ments and the other equity investments not accounted for under
has been assigned to the FVOCI category under IFRS 9 owing to
the equity method are reported as other non-current assets (see
the strategic partnership with the company, is now recognised at
note [23]).
fair value through other comprehensive income without recycling
Other financial investments comprise long-term investments
to profit or loss upon disposal. As at 31 December 2017, this
that are held in order to cover the defined benefit obligation and
financial investment had been included under non-consolidated
do not qualify as plan assets.
subsidiaries and other equity investments in an amount of
€11.7 million.
KION GROUP AGAnnual Report 2018 190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
191
[23] OTHER ASSETS
[24] INVENTORIES
Other assets of €165.1 million (31 December 2017: €108.5 million)
The reported inventories break down as follows: > TABLE 080
comprise the following: > TABLE 079
The year-on-year expansion in inventories was largely attributable
As at 31 December 2017, shares in non-consolidated equity
to increases in materials and supplies (53.5 per cent), work in
investments and other equity investments not accounted for
progress (21.3 per cent) and finished goods (19.9 per cent). This
under the equity method had been reported as other non-current
overall expansion was due to short-term supply bottlenecks at
financial assets (see note [22]).
suppliers in the Industrial Trucks & Services segment that mainly
Pension assets relate to asset surpluses from two (31 Decem-
occurred in the first half of 2018 but had not been completely
ber 2017: two) defined benefit plans in the United Kingdom, in
eliminated by 31 December 2018.
which plan assets exceed the present value of the defined benefit
obligation (see note [28]).
Other assets
in € million
Investments in non-consolidated subsidiaries and other investments
Pension assets
Other non-current assets
Deferred charges and prepaid expenses
Sundry tax receivables
Other current assets
Total other assets
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
TABLE 079
2017
–
24.2
24.2
40.2
44.0
84.3
2018
25.6
33.3
58.9
49.0
57.2
106.2
165.1
108.5
TABLE 080
2017
185.2
109.0
459.0
15.4
768.6
2018
284.2
132.3
550.6
27.8
994.8
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
192
In 2018, write-downs of €25.3 million were recognised on inven-
tories (2017: €18.0 million). Reversals of write-downs had to be
recognised in the amount of €6.5 million (2017: €7.5 million)
because the reasons for the write-downs no longer existed.
[25] TRADE RECEIVABLES
The trade receivables break down as follows: > TABLE 081
Trade receivables
in € million
Receivables from third parties
thereof receivables not due and overdue ≤ 90 days
thereof receivables overdue > 90 days ≤ 180 days
thereof receivables overdue > 180 days
thereof receivables adjusted for individual valuation allowances
Receivables from third parties measured at fair value through profit or loss (FVPL)
Trade receivables from non-consolidated subsidiaries, equity-accounted investments and other investments
Valuation allowances for trade receivables
thereof valuation allowances for receivables not due and overdue ≤ 90 days
thereof valuation allowances for receivables overdue > 90 days ≤ 180 days
thereof valuation allowances for receivables overdue > 180 days
thereof individual valuation allowances
Total trade receivables
in € million
Receivables from third parties
thereof receivables from third parties before valuation allowances
thereof valuation allowances for receivables overdue > 90 days ≤ 180 days
thereof valuation allowances for receivables overdue > 180 days
thereof other valuation allowances
Trade receivables from non-consolidated subsidiaries, equity-accounted investments and other investments
Total trade receivables
* Trade receivables for 2017 were restated due to the initial application of IFRS 15
TABLE 081
2018
1,005.5
917.6
28.6
23.4
35.9
15.6
53.2
– 37.8
– 1.5
– 1.9
– 3.2
– 31.1
1,036.4
2017 *
958.5
1,009.6
– 10.0
– 25.8
– 15.3
40.9
999.4
KION GROUP AGAnnual Report 2018 192
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
193
Change in valuation allowances for trade receivables
TABLE 082
in € million
Valuation allowances as at 31/12/
Remeasurement to equity for the initial application of IFRS 9
Valuation allowances as at 01/01/
Additions
Reversals
Utilisations
Currency translation adjustments
Valuation allowances as at 31/12/
2018
51.1
– 14.8
36.3
10.4
– 3.3
– 5.1
– 0.5
37.8
2017
40.4
–
40.4
20.6
– 6.3
– 2.4
– 1.2
51.1
The change in valuation allowances for trade receivables is
presented in > TABLE 082. The average loss rates used for the rec-
ognition of valuation allowances for expected losses vary depend-
ing on the Operating Unit and the period by which the receivable
[27] EQUITY
is past due. They currently range from 0.0 per cent to 4.0 per cent.
Subscribed capital and capital reserves
[26] CASH AND CASH EQUIVALENTS
As at 31 December 2018, the Company’s share capital amounted
to €118.1 million, which was unchanged on 31 December 2017,
and was fully paid up. It was divided into 118.1 million no-par-
value shares.
The Annual General Meeting on 11 May 2017 voted to create
The change in cash and cash equivalents is shown in the consol-
new authorised capital that will enable the KION Group to
idated statement of cash flows. For more detailed information,
continue to meet its funding needs quickly and flexibly. Subject to
please also refer to note [38]. > TABLE 083
the consent of the Supervisory Board, the Executive Board is
authorised until 10 May 2022 to increase the Company’s share
Cash and cash equivalents
in € million
Balances with banks, cash and cheques
Pledged cash
Total cash and cash equivalents
TABLE 083
2017
172.8
0.4
173.2
2018
171.6
3.7
175.3
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
194
capital by up to €10.879 million by way of an issue of up to
past contributions to earnings by the consolidated entities,
10,879,000 new no-par-value bearer shares (2017 Authorised
provided they have not been distributed.
Capital).
The figure for retained earnings in 2017 decreased owing to
With the consent of the Supervisory Board, the Executive
the effects of the transition to IFRS 9, IFRS 15 and IFRS 16, which
Board of KION GROUP AG decided on 22 May 2017 to utilise
are described in note [6].
some of the authorised capital created by the 2017 Annual
The distribution of a dividend of €0.99 per share (2017:
General Meeting. The share capital was increased against cash
€0.80 per share) to the shareholders of KION GROUP AG resulted
contributions by issuing 9.3 million new no-par-value bearer
in an outflow of funds of €116.8 million in May 2018 (2017:
shares. The gross proceeds from the capital increase came to
€86.9 million).
€602.9 million. An amount of €593.6 million was paid into the
capital reserves.
The total number of shares outstanding as at 31 Decem-
Appropriation of profit
ber 2018 was 117,924,442 no-par-value shares (31 Decem-
ber 2017: 117,929,171 no-par-value shares). Between 10 Septem-
KION GROUP AG’s net profit for 2018 was €236.3 million, of
ber 2018 and 27 September 2018, a further 66,000 treasury
which €94.8 million will be transferred to other revenue reserves.
shares (KEEP 2017: 60,000 treasury shares) were repurchased
The Executive Board and the Supervisory Board will propose to
via the stock exchange at an average price of €54.17 (2017:
the Annual General Meeting to be held on 9 May 2019 that an
€72.15) in order to provide the shares for employees’ own invest-
amount of €141.5 million be appropriated from the distributable
ments and the free shares under the KEEP 2018 employee share
profit of €141.7 million for the payment of a dividend of €1.20 per
option programme. The total cost was €3.6 million ((2017:
dividend-bearing share. It is also proposed that the remaining
€4.3 million). Due to the issue of 22,580 bonus shares under
sum of €0.2 million be carried forward to the next accounting
KEEP 2015 (KEEP 2014: 27,363 bonus shares) and 38,691
period. This equates to a dividend payout rate of 35 per cent of
no-par-value shares (2017: 36,294 no-par-value shares) under
net income.
KEEP 2018, KION GROUP AG held 165,558 treasury shares at
the reporting date (31 December 2017: 160,829). These treasury
shares are not dividend-bearing and do not confer any voting
rights. Further details on the KEEP employee share option
programme can be found in note [45]. In February 2019, a further
Accumulated other comprehensive
income (loss)
13,674 no-par-value shares were issued for participants’ own
The breakdown of accumulated other comprehensive income
investments under KEEP 2018.
(loss) is shown in > TABLE 043.
As at 31 December 2018, KION Group employees held
The currency translation adjustment contains the exchange
options on a total of 43,655 no-par-value shares (31 Decem-
differences arising from the financial statements prepared in a
ber 2017: 50,166 no-par-value shares). The share options granted
foreign currency of foreign subsidiaries, associates and joint
under the employee share option programme are not dividend-
ventures.
bearing and do not confer any voting rights.
The gains / losses on the defined benefit obligation are the
Retained earnings
result of remeasuring defined benefit pension obligations (see
also note [28]).
The gains / losses on hedge reserves are the effective portion
of the changes in the fair value of hedging instruments in
The changes in retained earnings are shown in the consolidated
documented hedges. The gains / losses on financial investments
statement of changes in equity in > TABLE 043. The retained
relate to the remeasurement of the equity investment in Balyo SA
earnings comprise the net income (loss) for the financial year and
KION GROUP AGAnnual Report 2018 194
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
195
at fair value (FVOCI category under IFRS 9; 2017: AfS category
Defined benefit plans
under IAS 39).
The gains / losses from equity-accounted investments contain
In the case of defined benefit plans, the beneficiaries are granted
the share of other comprehensive income (loss) from associates
a specific benefit by the Group or an external pension fund. Due
and joint ventures accounted for under the equity method.
to future salary increases, the benefit entitlement at the retirement
Non-controlling interests
age of the beneficiary is likely to be higher than the amount
granted as at the reporting date. Pensions are often adjusted
after an employee reaches retirement age. The amount of the
Group’s obligation, which is defined as the actuarial present value
Non-controlling interests in companies in the KION Group
of the obligation to provide the level of benefits currently earned
amounted to €3.3 million (31 December 2017: €4.4 million).
by each beneficiary, is expressed as the present value of the
[28] RETIREMENT BENEFIT
OBLIGATION
defined benefit obligation (DBO) including adjustments for future
salary and pension increases.
The KION Group currently grants pensions to almost all
employees in Germany and a number of foreign employees.
These pensions consist of fixed benefit entitlements and are
therefore reported as defined benefit plans in accordance with
IFRS. As at 31 December 2018, the KION Group had set up
The retirement benefit obligation is recognised for obligations to
defined benefit plans in 13 countries. For all of the significant
provide current and future post-employment benefits. Post-
defined benefit plans within the Group, the benefits granted to
employment benefit plans are classified as either defined benefit
employees are determined on the basis of their individual income,
plans or defined contribution plans, depending on the substance
i.e. either directly or by way of intermediate benefit arrangements.
of the plan as derived from its principal terms and conditions.
The largest of the KION Group’s defined benefit plans – together
accounting for 92.7 per cent of the global defined benefit
obligation (31 December 2017: 93.0 per cent) – are in Germany,
Defined contribution plans
the United Kingdom and the US.
In the case of defined contribution pension plans, the Group pays
contributions to government or private pension insurance providers
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 amount of future pension benefits is based solely on the
amount of the contributions paid by the employer (and in some
cases the beneficiaries themselves) to the external pension fund,
including income from the investment of these contributions. The
total expense arising from defined contribution plans amounted
to €93.3 million in 2018 (2017: €92.9 million). Of this total, contri-
butions paid by employers into government-run schemes came
to €76.7 million (2017: €72.8 million). The defined contribution
plan expense is reported within the functional costs.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
196
Germany
United Kingdom
In Germany, the pension benefits granted comprise Compa-
In the United Kingdom, defined benefit pension obligations
ny-funded pension entitlements and employees’ payment of part
predominantly relate to two plans. The defined benefits include
of their salary into the pension scheme. The existing pension
not only a life-long retirement pension but also surviving depend-
plans were closed to new entrants with effect from 1 January
ants’ benefits. The amount of the pension depends on employ-
2018. As part of the restructuring of the pension plans, the
ees’ length of service and final salary.
guaranteed rate of return on contributions and the pension factors
The two plans were closed to new employees more than ten
used for the annuitisation of capital commitments were adjusted
years ago. Each plan is monitored by its own board of trustees,
to reflect conditions in financial markets.
which oversees the running of the plan as well as its funded
The contributions to the new pension plans will be invested in
status and the investment strategy. The members of the board of
investment funds under contractual trust arrangements; returns
trustees comprise people appointed by the company involved
on plan assets will be passed on to the pension beneficiaries
and selected plan beneficiaries.
when an insured event occurs. Members of the Executive Board
Under UK law, the board of trustees is obliged to have a
and other executives are predominantly covered by individual
valuation of the plan carried out at least every three years. The
pension plans. For details of the pension entitlements of
trustees and the Company are currently assessing the valuation
KION GROUP AG Executive Board members, please refer to the
of the pension plans as at 1 January 2018. A new agreement with
information in note [46]. The amount of the benefits paid to exec-
the trustees is expected to be reached in 2019.
utives depends on the type of entitlement. A very small proportion
In addition, collateral in rem in the form of charges on the real
of pension benefits are granted in the form of final-salary-linked
estate of Group companies in the UK and flexible collateral in
benefit obligations. The overwhelming majority of the existing
respect of the rental fleets of UK dealers within a maximum over-
pension entitlements are a combination of a defined benefit
all limit of approximately €20.0 million were extended for the
obligation and a defined contribution component. The pension
benefit of the pension funds. The term of this collateral is limited
plan for senior managers was closed to new entrants with effect
to 1 July 2021, and the overall limit will not be reduced by pay-
from 1 January 2018. The revised pension plan is structured in
ments made by the KION Group. The likelihood of the guarantee
the same way as the aforementioned plan for employees covered
being used is deemed low in view of the position of the individual
by collective pay agreements and those not subject to such
companies with regard to their current and future financial and
agreements. Different contributions are granted to senior manag-
earnings situations.
ers depending on their role.
Beside the securities-linked pension entitlements, some of
United States
the KION Group’s pension obligations in Germany under the
Following the acquisition of Dematic, the KION Group maintains
closed plans are financed by way of contractual trust arrange-
three main defined benefit pension plans in the US. The defined
ments (CTAs). The assets transferred to the trustee qualify as plan
benefits include not only a life-long retirement pension but also
assets within the meaning of IAS 19. The trustees are required to
surviving dependants’ benefits.
follow a defined investment strategy and guidelines. There are no
Unionised employees receive pension entitlements on the
statutory minimum funding requirements. In the event of the
basis of fixed amounts for each month of service. Salaried
Company’s insolvency, the company pension scheme in Germany
employees receive benefits that generally depend on their period
is to a large extent protected by law by the insolvency protection
of service and on their average final salary fixed on the date the
scheme (Pensions-Sicherungs-Verein Versicherungsverein auf
plan concerned was frozen. These defined benefit plans have been
Gegenseitigkeit, PSVaG).
frozen for some time now in relation to future periods of service.
KION GROUP AGAnnual Report 2018 196
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
197
Two of the plans are subject to statutory minimum funding
vary depending on the economic conditions affecting the
provisions that each specify a certain coverage ratio and provide
currency in which benefit obligations are denominated and in
for annual payments to maintain the required ratio. In 2018, a
which fund assets are invested, as well as capital market
one-off sum of €17.8 million was paid.
expectations.
Other countries
Benefit obligations are calculated on the basis of current
biometric probabilities as determined in accordance with actuarial
Furthermore, significant asset volumes are invested in external
principles. The calculations also include assumptions about
pension funds with restricted access in Switzerland and the
future employee turnover based on employee age and years of
Netherlands. Decisions on additions to plan assets take into
service and about the probability of retirement. The defined benefit
account the change in plan assets and pension obligations. They
obligation is calculated on the basis of the significant weighted-
also take into account the statutory minimum coverage require-
average assumptions as at the reporting date shown in > TABLE 084.
ments and the amounts deductible under local tax rules.
The assumed discount rate is determined on the basis of the
Measurement assumptions
yield as at the reporting date on AA-rated, fixed-interest senior
corporate bonds with maturities that match the expected maturi-
ties of the pension obligations. Pension obligations in foreign
companies are calculated on a comparable basis taking into
In accordance with IAS 19 ‘Employee Benefits’, pension provi-
account any country-specific requirements.
sions are recognised to cover obligations arising from the current
Future increases in salaries are estimated on an annual basis
and future pension entitlements of active and (after the vesting
taking into account factors such as inflation and the overall
period has expired) former employees of the KION Group and
economic situation.
their surviving dependants. The discount rate used to calculate
The biometric mortality rates used in the calculation are
the defined benefit obligation at each reporting date is deter-
based on published country-specific statistics and empirical
mined on the basis of current capital market data and long-term
values. Since 2018, the Heubeck ‘Richttafeln 2018 G’ mortality
assumptions about future salary and pension increases in
tables have been used as the biometric basis in Germany. The
accordance with the best estimate principle. These assumptions
S2PA tables (standard mortality tables for self-administered
Assumptions underlying provisions for pensions and other post-employment benefits
TABLE 084
Germany
UK
USA
Other
Discount rate
Salary increase rate
Pension increase rate
2018
1.90%
2.75%
1.75%
2017
1.95%
2.75%
1.75%
2018
2.65%
4.12%
3.37%
2017
2.35%
4.12%
3.37%
2018
4.25%
2017
3.60%
–
–
–
–
2018
1.43%
1.74%
0.26%
2017
1.41%
1.49%
0.27%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
198
pension schemes (SAPS) based on normal health) are applied to
In the case of externally funded pension plans, this present
the two defined benefit plans in the United Kingdom. In the US,
value of the defined benefit obligation is reduced by the fair value
calculations use the modified RP-2014 mortality tables with
of the assets of the external pension fund (plan assets). If the plan
the generational projection from the Mortality Improvement
assets exceed the present value of the defined benefit obligation
Scale MP-2016.
(net assets), a corresponding asset is recognised in accordance
The actuarial assumptions not listed in > TABLE 084, such as
with IAS 19. IAS 19.64 in conjunction with the supplementary
employee turnover, invalidity, etc., are determined in accordance
explanatory information in IFRIC 14 states that the recognition of
with recognised forecasts in each country, taking into account
an asset for an excess of plan assets is only permitted if the
the circumstances and forecasts in the companies concerned.
company concerned, in its function as the employer, gains
The significant weighted-average assumptions shown in
economic benefits in the form of reductions in future contribu-
> TABLE 085 were applied to the calculation of the net interest
tions to the plan or in the form of refunds from the plan (this is the
cost and the cost of benefits earned in the current year (current
case for the defined benefit plans in the United Kingdom). If the
service cost).
present value of the defined benefit obligation is not covered by
Differences between the forecast and actual change in the
the plan assets, the net obligation is reported under the retirement
defined benefit obligation and changes in related assets (known
benefit obligation.
as remeasurements) are recognised immediately in other com-
In two defined benefit plans in the United Kingdom, plan
prehensive income (loss) in accordance with IAS 19. This serves
assets exceed the present value of the defined benefit obligation.
to ensure that the pension liability in the statement of financial
Stipulations limiting the asset to be recognised in the statement of
position is the present value of the defined benefit obligation.
financial position do not apply.
Assumptions underlying pensions expenses
TABLE 085
Germany
UK
USA
Other
Discount rate
Salary increase rate
Pension increase rate
2018
1.95%
2.75%
1.75%
2017
1.90%
2.75%
1.75%
2018
2.35%
4.12%
3.37%
2017
2.55%
4.12%
3.47%
2018
3.60%
2017
4.05%
–
–
–
–
2018
1.41%
1.49%
0.27%
2017
1.35%
2.51%
0.28%
KION GROUP AGAnnual Report 2018 198
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
199
Statement of financial position
The change in the present value of the defined benefit obligation
(DBO) is shown in > TABLE 086.
Changes in defined benefit obligation
TABLE 086
Germany
UK
USA
Other
Total
in € million
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
1,001.4
974.7
428.9
448.5
210.0
218.1
124.2
127.8 1,764.4
1,769.1
Present value of defined benefit
obligation as at 01/01/
Group changes
Exchange differences
Current service cost
Past service cost (+) and income (–)
Interest expense
Employee contributions
Pension benefits directly
paid by company
–
–
0.5
–
–
–
– 4.6
– 17.4
36.7
35.5
–
18.8
3.7
–
18.0
3.5
– 15.9
– 15.6
0.9
1.4
9.9
–
–
1.0
–
10.9
–
–
–
9.3
0.2
–
7.6
–
–
Pension benefits paid by funds
Liability transfer out to third parties
– 1.6
– 0.2
– 1.2
– 19.9
– 16.6
– 7.6
– 0.5
–
–
–
Actuarial gains (–) and losses (+)
arising from
changes in demographic assumptions
0.5
–
– 10.6
– 0.4
– 0.6
changes in financial assumptions
15.1
– 11.8
– 18.7
experience adjustments
2.9
– 1.7
1.9
2.8
0.1
– 17.2
1.0
–
– 28.2
0.1
–
7.7
–
– 0.4
– 7.7
–
5.0
14.2
1.2
–
2.0
3.6
–
1.7
1.0
–
– 4.6
4.0
– 0.1
1.4
1.0
–
0.5
6.7
– 50.2
41.4
1.4
38.0
4.7
40.6
– 0.1
38.1
4.5
– 1.5
– 2.7
1.9
– 1.9
– 17.5
– 17.9
– 2.7
– 31.9
– 28.3
0.1
1.7
– 0.4
0.0
– 0.0
– 10.7
– 0.7
– 0.7
– 21.4
4.6
4.5
0.7
0.0
6.6
– 0.5
Present value of defined benefit
obligation as at 31/12/
1,061.2 1,001.4
389.1
428.9
202.7
210.0
130.2
124.2 1,783.3
1,764.4
thereof unfunded
thereof funded
459.5
436.9
0.0
0.0
7.2
7.3
601.7
564.5
389.1
428.9
195.5
202.6
39.0
91.3
37.6
505.7
481.8
86.6 1,277.6
1,282.6
The DBO in the other countries was predominantly attributable to
subsidiaries in Switzerland (2018: €54.7 million; 2017: €50.2 million)
and the Netherlands (2018: €35.9 million; 2017: €35.7 million).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
200
The change in the fair value of plan assets is shown in > TABLE 087.
The changes in the retirement benefit obligations reported in
Employees in Germany paid a total of €3.7 million (2017:
the statement of financial position are shown in > TABLE 089.
€3.5 million) into the KION pension plan in 2018.
The payments expected for 2019 amount to €22.2 million (in
2017: €26.1 million for 2018), which includes direct payments of
Statement of cash flows
pension benefits amounting to €19.8 million (in 2017: €19.3 million
for 2018) that are not covered by corresponding reimbursements
In the case of obligations not covered by external assets,
from plan assets.
payments to beneficiaries are made directly by the Company and
The reconciliation of funded status and net defined benefit
therefore have an impact on cash flow from operating activities. If
obligation to the amounts reported in the consolidated statement
the benefit obligations are backed by external assets, the
of financial position as at 31 December is shown in > TABLE 088.
payments are made from existing plan assets and have no effect
Overall, the funding ratio (ratio of plan assets to the present
on the Company’s cash flow. Instead, any contributions made to
value of the defined benefit obligation) in the KION Group was
the external pension fund by the Company result in a cash outflow
43.4 per cent (2017: 44.5 per cent).
for operating activities.
Changes in plan assets
TABLE 087
Germany
UK
USA
Other
Total
in € million
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Fair value of plan assets as at 01/01/
93.8
86.3
448.7
455.7
165.0
167.0
78.4
81.4
785.9
790.4
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
–
–
1.8
3.7
0.8
– 1.6
– 0.0
2.3
–
–
1.6
3.5
0.9
–
–
– 5.0
– 17.9
10.4
11.1
–
0.3
–
3.9
– 1.2
– 19.9
– 16.6
– 0.1
–
–
–
7.7
6.1
–
17.6
– 7.6
–
2.9
– 15.2
12.4
– 17.0
18.0
–
– 21.9
5.6
–
3.9
–
1.7
0.9
1.0
1.1
–
–
–
– 3.9
4.4
– 43.6
0.8
1.0
1.3
19.2
4.7
19.7
19.1
4.5
10.0
– 7.7
– 2.7
– 2.7
– 31.9
– 28.3
–
1.8
– 0.4
82.0
–
1.8
0.6
– 30.4
– 0.1
33.9
78.4
773.5
785.9
Fair value of plan assets as at 31/12/
100.7
93.8
419.1
448.7
171.7
165.0
KION GROUP AGAnnual Report 2018 200
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
201
Funded status and net defined benefit obligation
TABLE 088
in € million
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Germany
UK
USA
Other
Total
Present value of the funded
defined benefit obligation
Fair value of plan assets
Surplus (+) / deficit (–)
Present value of the unfunded
defined benefit obligation
Net liability (–) / net asset (+)
as at 31/12/
Reported as
– 601.7 – 564.5 – 389.1 – 428.9 – 195.5 – 202.6
– 91.3
– 86.6 – 1,277.6 – 1,282.6
100.7
93.8
419.1
448.7
171.7
165.0
– 501.1 – 470.7
30.0
19.8
– 23.7
– 37.6
82.0
– 9.3
78.4
773.5
785.9
– 8.1
– 504.1
– 496.7
– 459.5 – 436.9
– 0.0
– 0.0
– 7.2
– 7.3
– 39.0
– 37.6
– 505.7
– 481.8
– 960.5 – 907.5
30.0
19.8
– 30.9
– 45.0
– 48.2
– 45.8 – 1,009.7
– 978.5
“retirement benefit obligation“
– 960.5 – 907.5
Reported as “Other non-current assets“
– 0.0
–
– 3.3
33.3
– 4.4
– 30.9
– 45.0
– 48.2
– 45.8 – 1,043.0 – 1,002.7
24.2
–
–
–
–
33.3
24.2
Changes in retirement benefit obligation
TABLE 089
in € million
Balance as at 01/01/
Group changes
Exchange differences
Total service cost
Net interest expense
Pension benefits directly
paid by company
Remeasurements
Balance as at 31/12/
Germany
UK
USA
Other
Total
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
907.5
888.3
4.4
–
5.0
–
0.5
–
–
36.7
17.0
–
– 0.0
– 0.2
35.5
16.5
0.1
0.1
0.0
0.1
45.0
51.2
45.8
46.4 1,002.7
991.0
–
1.6
0.2
1.5
–
0.2
–
– 6.3
0.1
2.1
– 0.4
– 3.9
–
2.4
–
0.3
3.6
0.7
– 1.5
– 1.1
0.1
0.5
–
– 0.8
3.9
0.6
–
1.9
40.6
19.3
0.5
– 7.3
39.5
19.3
– 1.9
– 17.5
– 17.9
– 1.3
– 19.8
0.1
– 0.2
– 6.4
– 0.3
– 1.3
15.9
– 15.6
16.2
– 16.4
– 1.0
– 0.3
960.5
907.5
3.3
4.4
30.9
45.0
48.2
45.8 1,043.0 1,002.7
Employer contributions to plan assets
Liability transfer out to third parties
– 0.8
– 0.2
– 0.9
– 0.4
– 0.3
– 0.3
– 17.6
–
–
– 15.9
– 15.6
–
–
–
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
202
For the main pension entitlements in the KION Group, a sum of
the year under review on the basis of the maximum length of
€17.5 million (2017: €17.9 million) was paid directly by the Company
service achievable by each employee.
and a sum of €31.9 million (2017: €28.3 million) was paid from plan
Past service cost arises if there is a change to the pension
assets in the reporting year. Cash contributions to plan assets in
entitlement and it is recognised immediately in full.
2018 amounted to €19.7 million (2017: €10.0 million).
The net interest cost / income, which is calculated by
Income statement
multiplying the net liability (present value of the defined benefit
obligation minus plan assets) or the net assets (if the plan assets
exceed the present value of the defined benefit obligation) at the
start of the year by the discount rate, is also recognised in the
In accordance with IAS 19, actuarial computations are performed
income statement.
for benefit obligations in order to determine the amount to be
The breakdown of the net cost of the defined benefit obliga-
expensed in each period in accordance with fixed rules. The
tion (expenses less income) recognised in the income statement
expenses recognised in the income statement for pensions and
for 2018 is shown in > TABLE 090.
similar obligations consist of a number of components that must
The KION Group’s net financial expenses include a net
be calculated and disclosed separately.
interest cost of €18.8 million (2017: €18.9 million). All other
The service cost is the new pension entitlement arising in the
components of pension expenses are recognised under
financial year and is recognised in the income statement. It is
functional costs.
calculated as the present value of that proportion of the expected
The actual total return on plan assets in 2018 was minus
defined benefit obligation when the pension is paid attributable to
€11.2 million (2017: plus €53.1 million).
Cost of defined benefit obligation
TABLE 090
in € million
Current service cost
Past service cost (+) and income (–)
Total service cost
Interest expense
Interest income on plan assets
Net interest expense (+) / income (–)
Total cost of defined benefit obligation
Germany
UK
USA
Other
Total
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
36.7
35.5
0.9
1.4
2.3
9.9
1.0
–
1.0
10.9
0.2
–
0.2
7.6
0.1
–
0.1
7.7
3.6
4.0
41.4
–
– 0.1
3.6
1.7
3.9
1.4
1.4
42.8
38.0
40.6
– 0.1
40.5
38.1
–
35.5
18.0
– 1.6
– 10.4
– 11.1
– 6.1
– 5.6
– 0.9
– 0.8
– 19.2
– 19.1
16.5
52.0
– 0.5
– 0.2
1.8
0.8
1.5
1.7
2.1
2.2
0.7
4.4
0.6
4.5
18.8
61.5
18.9
59.5
–
36.7
18.8
– 1.8
17.0
53.7
KION GROUP AGAnnual Report 2018 202
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
203
Accumulated other comprehensive income (loss)
TABLE 091
Germany
UK
USA
Other
Total
in € million
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Accumulated other comprehensive
income / loss as at 01/01/
– 334.0
– 350.4
– 45.1
– 57.1
Exchange differences
–
–
0.4
2.1
7.9
0.4
11.6
– 24.0
– 26.0
– 395.1
– 421.9
– 1.3
– 0.3
0.7
0.4
1.5
Gains (+) and losses (–)
arising from remeasurements
of defined benefit obligation
Gains (+) and losses (–)
arising from remeasurements
of plan assets
Accumulated other comprehensive
income / loss as at 31/12/
– 18.5
13.5
27.4
– 2.5
16.8
– 20.4
– 0.1
0.8
25.6
– 8.7
2.3
2.9
– 15.2
12.4
– 17.0
18.0
– 0.4
0.6
– 30.4
33.9
– 350.2
– 334.0
– 32.6
– 45.1
8.1
7.9
– 24.8
– 24.0
– 399.4
– 395.1
Other comprehensive income (loss)
Composition of plan assets
The breakdown of the remeasurement of the defined benefit
The plan assets of the main pension plans consist of the following
obligation recognised in the statement of comprehensive income
components: > TABLE 092
in 2018 is presented in > TABLE 091.
The components of the remeasurements of the defined ben-
efit obligations are listed in > TABLE 086.
The gains and losses on the remeasurement of plan assets
are attributable entirely to experience adjustments. The changes
in estimates relating to defined benefit pension entitlements
resulted in a €0.2 million decrease in equity as at 31 Decem-
ber 2018 after deduction of deferred taxes (31 December 2017:
increase of €18.7 million).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
204
Fair value of plan assets
TABLE 092
in € million
Shares
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
USA
Other
Total
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
27.0
27.9
7.2
–
38.6
100.7
14.3
–
14.3
26.7
28.8
6.7
–
31.6
93.8
9.0
–
9.0
34.8
53.8
332.0
362.9
–
–
–
–
76.9
80.8
–
–
72.6
78.9
–
–
52.3
32.0
14.1
13.5
419.1
448.7
171.7
165.0
15.8
–
15.8
7.9
–
7.9
–
–
–
–
–
–
10.3
12.6
7.8
35.9
15.4
82.0
48.0
35.9
12.1
10.1
12.1
5.4
46.3
149.0
163.1
453.3
482.7
15.0
35.9
12.1
46.3
81.6
4.5
120.4
78.4
773.5
785.9
47.8
46.3
1.5
78.0
35.9
42.1
64.7
46.3
18.4
Sensitivity analysis
Future pension benefit payments
The present value of the defined benefit obligation is based on
The pension benefit payments shown in > TABLE 094 are forecast
the significant assumptions detailed in > TABLE 084 above. If one
for the next ten years for the defined benefit pension entitlements
assumption were to vary and the other assumptions remained
in existence as at 31 December 2018. The expected pension
unchanged, the impact on the present value of the defined benefit
benefits break down into future benefits to be paid directly by the
obligation would be as shown in > TABLE 093.
employer (for 2019: €19.8 million) and future benefits to be paid
The sensitivity analysis shown in > TABLE 093 is not represent-
from existing plan assets (for 2019: €36.3 million).
ative of an actual change in the present value of the defined ben-
As at the reporting date, the average duration of the defined
efit obligation because variations in the significant assumptions
benefit obligation, weighted on the basis of the present value of
are unlikely to occur in isolation as, to some extent, the assump-
the defined benefit obligation, was 21.5 years in Germany (2017:
tions are interrelated. Sensitivity is determined using the same
22.2 years), 14.3 years in the United Kingdom (2017: 15.5 years),
methods (projected unit credit method) as for the measurement
12.9 years in the US (2017: 14.1 years) and 15.7 years in the other
of the obligation recognised in the consolidated statement of
countries (2017: 16.0 years).
financial position as at 31 December 2018.
KION GROUP AGAnnual Report 2018 204
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
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
in € million
Germany
24.2
22.0
23.2
25.8
29.1
163.8
2019
2020
2021
2022
2023
2024 to 2028
Risks
205
TABLE 093
2017
– 279.7
373.1
18.7
– 18.7
42.2
– 40.2
61.7
TABLE 094
Total
56.2
54.7
56.8
59.2
63.4
341.2
2018
– 280.2
377.0
17.7
– 17.9
39.5
– 37.9
63.7
Other
4.1
4.4
4.9
4.4
4.9
26.8
UK
18.6
18.5
18.4
18.5
18.5
93.0
USA
9.2
9.7
10.2
10.6
10.9
57.5
The plan assets are predominantly invested in corporate
bonds and inflation-linked UK government bonds, particularly in
The funding ratio, the defined benefit obligation and the associ-
the United Kingdom. The market risk attaching to plan assets –
ated costs depend on the performance of financial markets. The
above all in the case of equities – is mitigated by defining an
return on plan assets is assumed to equal the discount rate,
investment strategy and investment guidelines and constantly
which is determined on the basis of the yield earned on AA-rated,
monitoring the assets’ performance. Moreover, a downward
fixed-interest senior corporate bonds. If the actual return on plan
trend in financial markets could have a significant effect on
assets falls below the discount rates applied, the net obligation
minimum funding requirements, some of which apply outside
arising out of the pension plans increases. The amount of the net
Germany.
obligation is also particularly affected by the discount rates, and
The KION Group also bears the full risk of possible future
the current low level of interest rates – especially in the eurozone –
pension adjustments resulting from changes in longevity and
is resulting in a comparatively large net obligation.
inflation.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
206
Payroll-based contributions to the KION pension plan made by
> TABLE 095 shows the contractual maturity structure of the
employees in Germany are invested in fund units. If the actual
financial liabilities.
returns on these fund units fall below the minimum rate of return
that has been guaranteed to participating employees, the
KION Group’s personnel expenses rise.
Liabilities to banks
[29] FINANCIAL LIABILITIES
Senior facilities agreement
KION GROUP AG signed a syndicated loan agreement (senior
facilities agreement, SFA), originally for €1,500.0 million, with a
syndicate of international banks on 28 October 2015. As at
31 December 2018, the SFA consisted solely of a revolving credit
The financial liabilities reported by the KION Group as at
facility of €1,150.0 million. This has a variable interest rate and,
31 December 2018 essentially comprised interest-bearing liabili-
following the agreement in 2018 of an extension to its term, it can
ties to banks and the promissory notes. The liabilities to banks
be drawn down until February 2023. As at 31 December 2018,
were predominantly attributable to the loan for the financing of
the amount drawn down was €101.8 million (31 December 2017:
the Dematic acquisition and liabilities under the syndicated
€184.7 million, which included other loan liabilities and contingent
loan agreement.
Maturity structure of financial liabilities
in € million
Liabilities to banks
due within one year
due in one to five years
due in more than five years
Promissory notes
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
TABLE 095
2017
1,253.7
236.5
1,017.2
–
2018
826.4
221.9
604.5
–
1,214.3
1,007.3
–
744.5
469.8
4.6
4.6
–
–
–
744.0
263.3
7.7
7.4
0.3
–
226.5
1,818.7
243.9
2,024.8
KION GROUP AGAnnual Report 2018 206
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
207
liabilities). The drawdowns under the revolving credit facility are
were deducted from the fair value on initial recognition and will be
classified as short term.
expensed over subsequent periods. The KION Group has entered
into an interest-rate derivative to hedge the risk of a change in the
Acquisition facilities agreement
fair value of the tranche with a fixed coupon. This is accounted for
On 4 July 2016, KION GROUP AG reached agreement with a
as a fair value hedge (see note [41]).
group of banks on a bridge loan to finance the acquisition of
The promissory note issued in 2017 in a nominal amount
Dematic (acquisition facilities agreement, AFA), originally in an
totalling €1,010.0 million is divided into three tranches with varying
amount of €3,000.0 million. As at 31 December 2018, it consisted
maturities and floating-rate or fixed coupons: a tranche of
solely of a floating-rate loan in a nominal amount of €600.0 million
€746.0 million maturing in May 2022, a tranche of €236.5 million
that is due to mature in October 2021.
maturing in April 2024 and a tranche of €27.5 million maturing in
At the end of 2017, this loan had a nominal amount of
April 2027. Issuance of this promissory note resulted in directly
€1,000.0 million. It was partly repaid in 2018 using the funds from
attributable transaction costs of €3.2 million. These were
the issuance of a further promissory note of €200.0 million and
deducted from the fair value of each tranche on initial recognition
using cash received from operating activities. As a result of the
and will be expensed over subsequent periods. The KION Group
early repayment, previously deferred borrowing costs of €1.9 mil-
has entered into a number of interest-rate derivatives in order to
lion were recognised under financial expenses.
hedge the interest-rate risk resulting from the floating-rate
Promissory notes
tranches of this promissory note. The interest-rate derivatives are
accounted for as cash flow hedges (see note [41]).
The SFA, AFA and promissory notes are not collateralised.
KION GROUP AG has issued guarantees to the banks for all of
In 2018, a promissory note was issued in a nominal amount of
the payment obligations under the SFA and AFA and it is the
€200.0 million. It will mature in June 2025 and has both float-
borrower in respect of all the payment obligations resulting from
ing-rate and fixed coupons. The resulting funds were used to
the promissory notes.
repay part of the floating-rate loan under the AFA. Directly
> TABLE 096 gives details of the changes in financial liabilities
attributable transaction costs of €0.5 million were incurred in
and lists the applicable terms and conditions.
connection with the issuance of the promissory note. These
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
208
Credit terms
TABLE 096
Interest rate
Carrying amount
Maturity
in € million
Multicurrency Revolving Credit Facility (SFA)
Term Loan Facility (AFA)
Promissory note (5 years term)
Promissory note (7 years term)
Promissory note (7 years term)
Promissory note (10 years term)
Other liabilities to banks
Other financial liabilities to non-banks
Total financial liabilities
EURIBOR + Margin
EURIBOR + Margin
EURIBOR + Margin /
fixed rate
EURIBOR + Margin /
fixed rate
EURIBOR + Margin /
fixed rate
EURIBOR + Margin /
fixed rate
Various currencies and
interest terms
2018
101.8
597.3
744.5
235.9
206.4
27.4
127.2
4.6
2017
178.0
994.1
744.0
235.8
–
27.4
81.6
7.7
2,045.2
2,268.7
2023
2021
2022
2024
2025
2027
Covenants
Among other stipulations, the contractual terms of the SFA, AFA
and promissory notes set out certain covenants. In addition,
there is a financial covenant that involves ongoing testing of
[30] LIABILITIES FROM FINANCIAL
SERVICES
adherence to a defined maximum level of leverage. Non-compli-
The liabilities from financial services relate to the financing of
ance with the covenants or with the defined maximum level of
the long-term leasing business and residual value obligations
leverage as at a particular reporting date may potentially give
arising from the indirect leasing business in an amount of
lenders a right of termination or lead to an increase in interest
€1,165.3 million (31 December 2017: €437.4 million) and to the
payments.
financing of industrial trucks for the short-term rental fleet in
All covenants were complied with in the past financial year, as
an amount of €307.1 million (31 December 2017: €0.0 million).
was the case in 2017.
> TABLE 097
KION GROUP AGAnnual Report 2018 208
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
209
Liabilities from financial services
TABLE 097
in € million
Non-current liabilities from financial services
thereof from leasing business
thereof from short-term rental fleet financing
thereof from asset-backed securities
thereof other
Current liabilities from financial services
thereof from leasing business
thereof from short-term rental fleet financing
thereof from leasing credit facilities
thereof from asset-backed securities
thereof other
2018
924.4
601.9
244.6
77.9
–
548.0
157.7
62.5
307.3
20.4
–
2017
261.0
261.0
–
–
–
176.4
79.7
–
85.7
–
11.0
Liabilities from financial services arising from the leasing busi-
Furthermore, liabilities from financial services include lia-
ness encompass liabilities from financing by means of sale and
bilities from lease facilities in an amount of €307.3 million
leaseback sub-lease transactions with leasing companies in an
(31 December 2017: €85.7 million) and liabilities from the issuance
amount of €440.2 million (31 December 2017: €0.0 million). They
of notes (securitisation) through K-Lift S.A., Luxembourg, in an
also
include
residual value obligations of €319.5 million
amount of €98.3 million (31 December 2017: €0.0 million). On the
(31 December 2017: €340.7 million) resulting from the indirect
opposite side of the statement of financial position, there are
leasing business.
lease receivables funded from these resources worth €580.0 mil-
lion (31 December 2017: €58.3 million) and leased assets of
€212.5 million (31 December 2017: €27.4 million).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
210
The maturities of the liabilities from financial services are shown in
Whereas lease liabilities stood at €740.6 million (31 Decem-
> TABLE 098.
[31] LEASE LIABILITIES
ber 2017: €1,131.1 million), lease receivables arising from sale and
leaseback sub-lease transactions entered into up to 31 Decem-
ber 2017 amounted to €514.3 million (31 December 2017:
€739.2 million) and leased assets under sale and leaseback sub-
lease transactions totalled €268.6 million (31 December 2017:
€419.7 million).
The amounts recognised as lease liabilities (the present value
Lease liabilities relate solely to finance lease obligations arising
of future lease payments) are based on the maturities shown in
from sale and leaseback sub-lease transactions entered into up
> TABLE 099.
to 31 December 2017 for the financing of long-term leases with
end customers.
Maturity analysis of liabilities from financial services
TABLE 098
in € million
Total future payments from financial services (gross)
due within one year
due in one to two years
due in two to three years
due in three to four years
due in four to five years
due in more than five years
Maturity analysis of lease liabilities
in € million
Total future lease payments (gross)
due within one year
due in one to two years
due in two to three years
due in three to four years
due in four to five years
due in more than five years
2018
1,539.9
589.7
244.8
240.9
209.2
172.7
82.5
2018
801.6
291.5
217.5
158.9
94.4
30.0
9.4
2017
456.1
187.2
69.6
68.2
59.2
48.8
23.2
TABLE 099
2017
1,203.9
363.1
359.4
255.3
148.5
42.9
34.7
KION GROUP AGAnnual Report 2018 210
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
211
[32] OTHER PROVISIONS
Other provisions relate to the following items: > TABLE 100
Other provisions
TABLE 100
in € million
Balance as at 01/01/2018
thereof non-current
thereof current
Group changes
Additions
Utilisations
Reversals
Additions to accrued interest
Currency translation adjustments
Other adjustments
Balance as at 31/12/2018
thereof non-current
thereof current
Provisions
for product
warranties
Provisions for
personnel
Other
obligations
Total other
provisions
81.6
21.8
59.8
0.1
39.2
– 25.8
– 15.0
0.0
0.3
0.6
81.0
23.5
57.5
95.8
53.8
42.1
–
31.7
– 40.4
– 13.3
0.2
0.1
5.8
80.0
52.5
27.5
67.2
20.1
47.2
0.0
30.1
– 17.0
– 13.7
0.0
– 0.3
– 1.1
65.2
22.9
42.2
244.6
95.6
149.0
0.1
101.0
– 83.3
– 42.0
0.2
0.2
5.3
226.2
98.9
127.2
The provisions for product warranties include contractual and
relating to variable remuneration. The provisions for partial
statutory obligations arising from the sale of industrial trucks,
retirement obligations are recognised on the basis of individual
spare parts and automation solutions. It is expected that the bulk
contractual arrangements and agreements under collective
of the cash payments will be incurred within the next two years
bargaining law.
after the reporting date.
Other obligations comprise, among others, provisions for
The provisions for personnel comprise provisions for partial
restructuring, litigation and expected losses from onerous
retirement obligations, long-service awards, annual bonuses,
contracts.
severance pay, obligations under social plans and obligations
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
212
[33] CONTRACT BALANCES
[34] TRADE PAYABLES
Of the contract assets of €119.3 million (31 December 2017:
As at 31 December 2018, trade payables of €904.2 million
€100.3 million), €114.7 million was attributable to project business
(31 December 2017: €923.9 million) included liabilities to non-
contracts with a net credit balance due from customers
consolidated subsidiaries, equity-accounted investments and
(31 December 2017: €100.3 million) and €4.5 million to other
other equity investments of €23.7 million (31 December 2017:
contract assets (31 December 2017: €0.0 million). Of the contract
€23.7 million).
assets recognised as at 1 January 2018, €88.1 million was billed
in 2018 (2017: €61.3 million). By contrast, contract assets rose
year on year because the goods and services provided by the
KION Group before the agreed payment deadlines increased by
€213.8 million in the reporting year (2017: €177.7 million). As had
been the case in the previous year, no write-downs were
recognised on contract assets.
Of the contract liabilities, €498.7 million was attributable to
project business contracts with a net debit balance due to
customers (31 December 2017: €255.9 million) and €71.4 million
to prepayments received from customers (31 December 2017:
€68.5 million). Contract liabilities are recognised as revenue as
soon as the contractual goods and services have been provided.
The revenue recognised in the reporting period that was
included in the contract liability balance at the beginning of
the period amounted to €292.6 million (2017: €265.7 million).
Contract liabilities rose year on year, in particular because the
prepayments received from customers increased by €221.8 mil-
lion to €558.3 million in the reporting year (2017: €336.5 million).
KION GROUP AGAnnual Report 2018 212
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
213
[35] OTHER FINANCIAL LIABILITIES
Other financial liabilities comprise the following items: > TABLE 101
Other financial liabilities
TABLE 101
in € million
Liabilities from short-term rental fleet financing
Liabilities from procurement leases
Derivative financial instruments
Sundry other financial liabilities
Other non-current financial liabilities
Liabilities from short-term rental fleet financing
Liabilities from procurement leases
Derivative financial instruments
Liabilities from accrued interest
Sundry other financial liabilities
Other current financial liabilities
2018
185.0
327.1
7.9
4.7
524.6
104.9
94.2
6.4
15.2
67.9
288.6
2017*
350.6
287.5
1.9
23.6
663.6
165.1
81.7
3.3
14.5
34.1
298.6
Total other financial liabilities
813.2
962.2
* Other financial liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
The non-current derivative financial instruments consist of a
leaseback sub-lease transactions entered into up to 31 Decem-
number of interest-rate derivatives that were entered into in order
ber 2017 in the amount of €289.9 million (31 December 2017:
to hedge the interest-rate risk resulting from the floating-rate
€515.7 million).
tranches of the promissory note.
The amounts recognised as liabilities from short-term rental
Liabilities from short-term rental fleet financing relate to the
fleet financing and from procurement leases are based on the
financing of the short-term rental fleet by means of sale-and-
maturities shown in > TABLE 102.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
214
Maturity analysis of other financial liabilities
TABLE 102
Procurement leases
Financing short-term rental fleet
in € million
Total future payments (gross)
due within one year
due in one to two years
due in two to three years
due in three to four years
due in four to five years
due in more than five years
2018
464.1
105.8
79.7
57.5
45.7
34.0
141.3
2017 *
402.0
90.6
70.0
50.1
39.5
29.4
122.3
* Other financial liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
[36] OTHER LIABILITIES
Other liabilities comprise the following items: > TABLE 103
Other liabilities
in € million
Deferred income
Other non-current liabilities
Deferred income
Personnel liabilities
Social security liabilities
Tax liabilities
Other current liabilities
Total other liabilities
* Other liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
2018
315.0
122.8
86.6
53.8
34.4
12.2
5.2
2018
473.5
473.5
250.0
266.8
51.6
105.8
674.2
2017 *
552.0
189.1
163.6
102.0
65.2
23.1
9.1
TABLE 103
2017 *
585.4
585.4
267.9
253.0
48.2
110.8
679.9
1,147.6
1,265.3
KION GROUP AGAnnual Report 2018 214
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
215
[37] CONTINGENT LIABILITIES
AND OTHER FINANCIAL
COMMITMENTS
Contingent liabilities
The contingent liabilities include guarantees to external parties. In
addition, guarantees of €2.3 million related to contingent liabilities
assumed jointly with another shareholder of a joint venture
(31 December 2017: €1.6 million). > TABLE 104
Contingent liabilities
in € million
Liabilities on guarantees
Litigation
The legal risks arising from the KION Group’s business are typical
of those faced by any company operating in this sector. The
Group companies are a party in a number of pending lawsuits in
various countries. The individual companies cannot assume with
any degree of certainty that they will win any of the lawsuits or that
the existing risk provision in the form of insurance or provisions
will be sufficient in each individual case. However, the KION Group
believes it is unlikely that these ongoing lawsuits will require funds
to be utilised that exceed the provisions recognised.
TABLE 104
2017
48.2
2018
89.5
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
216
Other financial commitments
Sundry other financial commitments included future payment
obligations to an associate amounting to €1.3 million (31 Decem-
ber 2017: €1.3 million). > TABLE 105
Other financial commitments
in € million
Commitments under licence and support agreements
Capital expenditure commitments in property, plant and equipment
Other financial commitments
Total other financial commitments
* Other financial commitments for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
TABLE 105
2017 *
56.1
51.6
1.3
109.0
2018
99.7
59.0
1.3
160.0
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
217
Other disclosures
[38] CONSOLIDATED STATEMENT OF
CASH FLOWS
Net cash used for financing activities came to €514.5 million
(2017: €568.5 million). While financial debt taken on during the
year came to €1,811.7 million (2017: €2,425.3 million), repayments
were higher at €2,042.6 million (2017: €3,340.0 million). Net cash
of €40.4 million was also used for interest payments (2017: net
The consolidated statement of cash flows shows the changes in
cash used of €50.6 million). The costs of obtaining financing in the
cash and cash equivalents in the KION Group resulting from cash
year under review amounted to €5.0 million (2017: €7.4 million).
inflows and outflows in the year under review, broken down into
Payments made for interest portions and principal portions under
cash flow from operating, investing and financing activities. The
procurement leases amounted to €114.0 million in the reporting
effects on cash from changes in exchange rates are shown
year (2017: €109.0 million). The distribution of a dividend of €0.99
separately. Cash flow from operating activities is presented using
per share (2017: €0.80 per share) resulted in a cash outflow of
the indirect method in which the profit or loss for the year is
€116.8 million (2017: €86.9 million), while the acquisition of 66,000
adjusted for non-cash operating items.
treasury shares (2017: 60,000 treasury shares) required an out-
The KION Group’s net cash provided by operating activities
flow of €3.6 million (2017: €4.3 million). Additional information for
totalled €765.5 million, which was significantly higher than the
2018 on the changes to liabilities arising from financing activities
prior-year figure (2017: €711.9 million). This increase made up for
can be found in > TABLES 106 – 107.
the higher net working capital, the rise in the volume of rentals
Negative currency effects reduced cash and cash equiva-
and leasing, and higher tax payments.
lents by €3.2 million (2017: €12.2 million). Overall, cash and cash
Net cash used for investing activities amounted to €245.6 mil-
equivalents increased only slightly year on year, from €173.2 million
lion (2017: net cash used of €237.6 million). Cash payments for
as at 31 December 2017 to €175.3 million as at 31 Decem-
development (R&D) and for property, plant and equipment
ber 2018.
(excluding right-of-use assets related to procurement leases)
amounted to €258.5 million (2017: €218.3 million).
Free cash flow – the sum of cash flow from operating activi-
ties and investing activities – improved to €519.9 million in the
reporting period (2017: €474.3 million).
Reconciliation of liabilities arising from financing activities 2018
TABLE 106
in € million
Non-current financial liabilities
Current financial liabilities
Liabilities from accrued interest
Liabilities from procurement leases
Total liabilities financial activities
01/01/2018
Cash flows
2,024.8
– 200.0
243.9
14.5
369.1
2,652.3
– 30.9
– 42.9
– 114.0
– 387.8
Non-cash changes
Foreign
exchange
movement
Other
changes
8.0
– 7.9
– 0.0
– 1.6
– 1.5
– 14.1
21.5
43.7
167.7
218.7
31/12/2018
1,818.7
226.5
15.2
421.2
2,481.7
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
218
Reconciliation of liabilities arising from financing activities 2017
TABLE 107
in € million
Non-current financial liabilities
Current financial liabilities
Liabilities from accrued interest
Liabilities from procurement leases *
01/01/2017
Cash flows
2,889.1
– 860.5
293.9
12.4
283.6
– 54.2
– 58.1
– 109.0
Total liabilities financial activities
3,478.9
– 1,081.8
* Liabilities from procurement leases for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
Non-cash changes
Foreign
exchange
movement
Other
changes
– 0.5
– 4.4
– 0.0
– 0.4
– 5.3
– 3.2
8.5
60.3
194.9
260.5
31/12/2017
2,024.8
243.9
14.5
369.1
2,652.3
[39] INFORMATION ON FINANCIAL
INSTRUMENTS
line with IFRS 7, the tables show the carrying amounts and fair
values of financial assets and liabilities. Derivative financial instru-
ments forming part of a documented hedge are not assigned to
any of the IFRS 9 or IAS 39 measurement categories and are
therefore not included in > TABLES 108 – 109. The lease receivables,
The KION Group uses both primary and derivative financial instru-
lease liabilities, liabilities from procurement leases and liabilities
ments. The following section summarises the relevance of these
from short-term rental fleet financing shown in these tables fall
financial instruments for the KION Group.
within the scope of IFRS 16 and are therefore not assigned to any
The following tables show the measurement categories used
of the IFRS 9 and IAS 39 measurement categories.
in accordance with IFRS 9 (2017: in accordance with IAS 39). In
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
219
Carrying amounts and fair values broken down by class 2018
TABLE 108
Classes
in € million
Financial assets
Financial investments
Financial receivables
Other financial investments
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
Promissory notes
Other financial liabilities to non-banks
Liabilities from financial services
Lease liabilities ¹
Trade payables
Other financial liabilities
thereof liabilities from procurement leases ¹
thereof liabilities from short-term rental fleet financing ¹
thereof non-derivative liabilities
thereof derivative financial instruments
1 as defined by IFRS 16
Categories
Carrying
amount
FVPL
AC
FVOCI
Fair value
5.2
35.9
21.0
1,097.3
1,036.4
51.2
41.2
9.9
175.3
826.4
1,214.3
4.6
1,472.4
740.6
904.2
813.2
421.2
289.9
87.8
14.3
5.2
35.9
21.0
15.6
1,020.9
6.5
41.2
175.3
826.4
1,214.3
4.6
1,472.4
904.2
87.8
2.5
5.2
35.9
21.0
1,102.0
1,036.4
51.2
41.2
9.9
175.3
829.1
1,222.0
4.6
1,477.0
743.0
904.2
822.1
429.2
290.8
87.8
14.3
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
220
Carrying amounts and fair values broken down by class 2017 *
TABLE 109
Classes
in € million
Financial assets
Investments in non-consolidated
subsidiaries and other investments
Loans receivable
Financial receivables
Other financial investments
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
Promissory note
Other financial liabilities to non-banks
Liabilities from financial services
Lease liabilities ¹
Trade payables
Other financial liabilities
thereof liabilities from
procurement leases¹
thereof liabilities from short-term
rental fleet financing¹
thereof non-derivative liabilities
thereof derivative financial instruments
Carrying
amount
FAHfT
AfS
LaR
FLaC
FLHfT
Fair value
Categories
36.0
2.2
30.3
18.9
875.8
999.4
88.7
58.7
30.0
173.2
1,253.7
1,007.3
7.7
437.4
1,131.1
923.9
962.2
369.1
515.7
72.1
5.2
36.0
0.5
2.2
30.3
18.4
999.4
58.7
173.2
22.2
36.0
2.2
30.3
18.9
878.2
999.4
88.7
58.7
30.0
173.2
1,259.6
1,021.0
7.7
439.7
1,138.1
923.9
963.8
367.7
518.8
72.1
5.2
1,253.7
1,007.3
7.7
437.4
923.9
72.1
1.0
1 as defined by IFRS 16
* Financial liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
221
The net gains and losses on financial instruments in 2018 are
trade payables of the same amount. In addition, there was a
broken down by IFRS 9 categories as shown in > TABLE 110. The
potential offsetting volume of €4.6 million in connection with
measurement categories shown for 2017 are based on the
derivative financial instruments as at 31 December 2018
categorisation rules in IAS 39. Gains and losses on financial
(31 December 2017: €3.1 million). The potential offsetting volume
instruments do not include gains / losses arising on hedging
essentially arose from netting arrangements in framework
transactions that are part of a documented hedge (see also
agreements governing derivatives trading that the KION Group
note [41]).
had entered into with commercial banks.
In 2018, the measurement at fair value of the equity instru-
ments in the FVOCI category led to a loss of €6.4 million that was
recognised in other comprehensive income; accumulated gains
Fair value measurement
and losses from these financial instruments will not be reclassi-
fied to profit or loss upon disposal.
The majority of the cash and cash equivalents, financial receiva-
The net gains and losses include interest income of €6.2 mil-
bles, other non-derivative receivables and liabilities, and trade
lion (2017: €7.8 million) and interest expenses of €57.7 million
receivables and trade payables recognised at amortised cost
(2017: €72.9 million) that result from financial instruments meas-
have short remaining terms to maturity. The carrying amounts of
ured at amortised cost (AC category) and are recognised within
these financial instruments are roughly equal to their fair values.
net financial income / expenses. Currency translation gains and
The fair value of liabilities to banks, of promissory notes
losses, dividends, valuation allowances for expected and incurred
and of liabilities from financial services corresponds to the present
losses, the marking-to-market of derivatives that are not part of a
value of the outstanding payments, taking account of the current
documented hedge and other measurement effects are also
interest-rate curve and the Group’s own default risk. This fair
included in the net gains and losses.
value, calculated for the purposes of disclosure in the notes to the
As at the reporting date, the KION Group’s trade receivables
financial statements, is classified as Level 2 of the fair value
of €1.3 million (31 December 2017: €0.4 million) were offset by
hierarchy.
Net gains and losses on financial instruments broken down by category
TABLE 110
in € million
Financial assets measured at amortised cost (AC)
Equity instruments measured at fair value through other comprehensive income (FVOCI)
Financial instruments measured at fair value through profit or loss (FVPL)
Financial liabilities measured at amortised cost (AC)
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)
2018
– 1.9
– 6.4
– 16.9
– 58.1
2017
– 7.3
15.1
35.8
– 94.6
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
222
The fair value of lease receivables, lease liabilities, liabilities from
The following tables show the assignment of fair values to the
short-term rental fleet financing and liabilities from procurement
individual classification levels as defined by IFRS 7 for financial
leases corresponds to the present value of the net lease payments,
instruments measured at fair value. > TABLES 111 – 112
taking account of the current market interest rate for similar leases.
Financial instruments measured at fair value
TABLE 111
in € million
Financial assets
thereof financial investments
thereof other financial investments
thereof trade receivables
thereof derivative financial instruments
Financial liabilities
thereof derivative financial instruments
Fair Value Hierarchy
Level 1
Level 2
5.2
21.0
15.6
9.9
14.3
2018
51.7
5.2
21.0
15.6
9.9
14.3
14.3
Financial instruments measured at fair value
TABLE 112
in € million
Financial assets
thereof investments in non-consolidated subsidiaries and other investments
thereof other financial investments
thereof derivative financial instruments
Financial liabilities
thereof derivative financial instruments
Fair Value Hierarchy
Level 1
Level 2
11.7
0.5
30.0
5.2
2017
42.1
11.7
0.5
30.0
5.2
5.2
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
223
Level 1 essentially comprises the financial investment in Balyo
SA, for which the fair value is calculated using prices quoted in an
[40] FINANCIAL RISK REPORTING
active market.
The fair value of other financial investments is determined
using prices quoted in an active market and other observable
Capital management
inputs. They are assigned to Level 2.
Trade receivables that are recognised at fair value through
One of the prime objectives of capital management is to ensure
profit or loss are assigned to Level 2. Their fair value is calculated
liquidity at all times. Measures aimed at achieving these objectives
using the transaction price achievable in an active market. The
include the optimisation of the capital structure, the reduction of
transaction price is largely influenced by the default risk of the
liabilities and ongoing Group cash flow planning and manage-
counterparty.
ment. Close cooperation between local units and the Group head
Interest-rate swaps and currency forwards are also classified
office ensures that the local legal and regulatory requirements
as Level 2. The fair value of derivative financial instruments is
faced by foreign Group companies are taken into account in
determined by the system using appropriate valuation methods
capital management.
on the basis of the observable market information at the reporting
Net financial debt – defined as the difference between financial
date. The default risk for the Group and for the counterparty is
liabilities and cash and cash equivalents – is the key performance
taken into account on the basis of gross figures. The fair value of
measure used in liquidity planning at Group level and amounted
interest-rate swaps is calculated as the present value of the future
to €1,869.9 million as at 31 December 2018 (31 December 2017:
cash flows. Both contractually agreed payments and forward
€2,095.5 million).
interest rates are used to calculate the cash flows, which are then
The financial liabilities reported by the KION Group as at
discounted on the basis of a yield curve that is observable in the
31 December 2018 consisted of liabilities under the syndicated
market. The fair value of the currency forwards is calculated by
loan agreement (SFA), liabilities under the loan for the financing of
the system using the discounting method based on forward rates
the Dematic acquisition (AFA) and promissory notes (see also
on the reporting date.
note [29]). The SFA comprises a floating-rate revolving credit
In order to eliminate default risk to the greatest possible
facility of €1,150.0 million maturing in February 2023, of which
extent, the KION Group only enters into derivatives with invest-
€101.8 million was drawn down as at 31 December 2018
ment-grade counterparties.
(31 December 2017: €184.7 million). As at 31 December 2018, the
If events or changes in circumstances make it necessary to
drawdown under the AFA consisted of a floating-rate bullet loan
reclassify financial instruments to a different level, they are reclas-
in a nominal amount of €600.0 million (31 December 2017:
sified at the end of a reporting period. As had also been the case
€1,000.0 million) maturing in October 2021. The nominal amount
in 2017, no financial instruments were transferred between the
of the promissory notes issued totalled €1,210.0 million as at
levels of the fair value hierarchy in 2018.
31 December 2018 (31 December 2017: €1,010.0 million).
Taking into account credit facilities that had not yet been
utilised, the unrestricted cash and cash equivalents available to
the KION Group as at 31 December 2018 amounted to
€1,219.8 million (31 December 2017: €1,138.0 million).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
224
Default risk
Liquidity risk
In certain finance and operating activities, the KION Group is
Based on the definitions in IFRS 7, a liquidity risk arises if an entity
subject to credit risk, i.e. the risk that partners will fail to meet their
is unable to meet its financial liabilities. In order to ensure financial
contractual obligations. This risk is defined as the risk that a
flexibility and solvency, the KION Group maintains a liquidity
counterparty will default, and hence is limited to a maximum of
reserve in the form of cash and a revolving credit facility agreed
the carrying amount of the assets relating to the counterparty
with a syndicate of international banks under the SFA. The age
involved. Default risk is limited by diversifying business partners
structure of financial liabilities is reviewed and optimised continually.
based on certain credit ratings. The Group only enters into trans-
The KION Group is assigned credit ratings by Fitch Ratings
actions with business partners and banks holding a good credit
and Standard & Poor’s. These credit ratings have not changed
rating and subject to fixed limits. The potential default risk
since 2017. In January 2017, Fitch Ratings gave the Group an
attaching to financial assets is also mitigated by secured forms of
investment-grade long-term issuer rating of BBB– with a stable
lending such as reservation of title, credit insurance and
outlook. The rating awarded by the rating agency Standard &
guarantees, and potential netting agreements. Apart from this,
Poor’s for the KION Group has been BB+ with a positive outlook
the Group does not hold any significant collateral.
since September 2017.
Counterparty risks involving our customers are managed by
The following tables show all of the contractually agreed
the individual Group companies. To reflect the default risk,
undiscounted payments under recognised financial liabilities as
valuation allowances are recognised for defaults that have
at 31 December 2018 and 2017, including derivative financial
occurred and for expected defaults (see note [25]). Valuation
instruments with negative fair values. > TABLES 113 – 114
allowances are based on the credit risk associated with the
receivables, the level of loss in the event of a default and, taking
account of any collateral, the estimated loss given default. This
risk is assessed mainly using factors such as customer credit
rating and failure to adhere to payment terms.
Financial transactions are only entered into with selected
partners that have an investment-grade credit rating. The
underlying default risk remains insignificant.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
225
Liquidity analysis of financial liabilities and derivatives 2018
TABLE 113
in € million
Primary financial liabilities
Liabilities to banks
Promissory notes
Other financial liabilities to non-banks
Liabilities from financial services
Lease liabilities
Trade payables
Other financial liabilities
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2018
Cash flow
2019
Cash flow
2020 – 2023
Cash flow
from 2024
826.4
1,214.3
4.6
1,472.4
740.6
904.2
798.9
14.3
– 233.3
– 14.5
– 4.6
– 589.7
– 291.5
– 904.2
– 316.4
– 646.0
– 798.8
–
– 867.7
– 500.7
–
– 403.9
–
– 476.4
–
– 82.5
– 9.4
–
– 146.6
310.2
– 324.5
13.4
– 21.7
0.2
–
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
226
Liquidity analysis of financial liabilities and derivatives 2017 *
TABLE 114
in € million
Primary financial liabilities
Liabilities to banks
Promissory note
Other financial liabilities to non-banks
Liabilities from financial services
Lease liabilities
Trade payables
Other financial liabilities
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2017
Cash flow
2018
Cash flow
2019 – 2022
Cash flow
from 2023
1,253.7
1,007.3
7.7
437.4
1,131.1
923.9
957.0
5.2
– 267.1
– 1,083.2
–
– 7.4
– 187.2
– 363.1
– 923.9
– 351.9
– 788.8
– 0.3
– 245.7
– 806.1
–
– 542.8
–
– 295.5
–
– 23.2
– 34.7
–
– 131.4
182.5
– 189.9
16.2
– 18.9
2.6
– 1.6
* Financial liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
The calculation of future cash flows for derivative financial liabili-
Risks arising from financial services
ties includes all transactions that have negative fair values as at
the reporting date.
The leasing activities of the Industrial Trucks & Services segment
In 2018, the KION Group sold financial assets with a total
mean that the KION Group may be exposed to residual value
value of €152.3 million (2017: €132.0 million) in factoring transac-
risks from the marketing of trucks that are returned by the lessee
tions. In some cases, the KION Group retains insignificant rights
at the end of a long-term lease and subsequently sold or
and obligations in connection with fully derecognised financial
re-rented. Residual values in the markets for used trucks are
assets, primarily the provision of limited reserves for defaults. The
therefore constantly monitored and forecast. The KION Group
recognised assets that serve as reserves for defaults and are
regularly assesses its aggregate risk position arising from
reported under other current financial assets stood at €3.1 million
financial services.
as at 31 December 2018 (31 December 2017: €2.6 million). The
The risks identified are immediately taken into account by the
short remaining term of these financial assets means their carry-
Company by recognising impairments or provisions and in the
ing amount was almost the same as their fair value. The maxi-
costing of new lease contracts by adjusting the residual values.
mum downside risk arising on the transferred financial assets that
Risk-mitigating factors include the demand for used trucks, which
are to be fully derecognised amounted to €19.9 million as at
stabilises the residual values of the KION Group’s industrial
31 December 2018 (31 December 2017: €16.2 million).
trucks. The majority of the residual values have underlying
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
227
remarketing agreements that transfer any residual-value risk to
Currency risk
the leasing company. This had a positive impact on the financial
results in 2018. Groupwide standards to ensure that residual
In accordance with its treasury risk policy, the KION Group
values are calculated conservatively, combined with an IT system
hedges exchange rate risks both locally at the level of the individ-
for residual-value risk management, reduce risk and provide the
ual companies and centrally via KION GROUP AG using
basis on which to create the transparency required.
prescribed hedging ratios.
The KION Group mitigates its liquidity risk and interest-rate
The main hedging instruments employed are foreign-
risk attaching to financial services by ensuring that most of its
currency forwards, provided that there are no country-specific
transactions and funding loans have matching maturities and by
restrictions on their use.
constantly updating its liquidity planning. Long-term leases are
In the Industrial Trucks & Services segment, hedges are
primarily based on fixed-interest agreements. The credit facilities
entered into at company level for highly probable future
provided by various banks and an effective dunning process
transactions on the basis of rolling 15-month forecasts, as well as
ensure that the Group has sufficient liquidity.
for firm obligations not reported in the statement of financial
In order to exclude currency risk, the KION Group generally
position. Currency risk arising from customer-specific project
finances its leasing business in the local currency used in each
business contracts in the Supply Chain Solutions segment is
market.
hedged on a project-specific basis at individual company level.
The counterparty risk inherent in the leasing business contin-
Some of these hedges are classified as cash flow hedges for
ues to be insignificant. The Group also mitigates any losses from
accounting purposes in accordance with IFRS 9 (see note [41]).
defaults by its receipt of the proceeds from the sale of repos-
In addition, foreign-currency forwards are employed to hedge
sessed trucks. Furthermore, receivables management and credit
the currency risks arising in the course of internal financing.
risk management are refined on an ongoing basis. Besides the
> TABLE 115 shows an overview of the foreign-currency forwards
design of the business processes, it also encompasses the risk
entered into by the KION Group.
management and control processes.
Foreign-currency forwards
Fair value
Notional amount
in € million
Foreign-currency forwards (assets)
Foreign-currency forwards (liabilities)
Cash flow hedge
Held for trading
Cash flow hedge
Held for trading
2018
2.4
6.5
4.6
1.9
2017
7.8
22.1
2.3
1.0
2018
180.4
332.1
211.8
112.8
TABLE 115
2017
224.8
502.1
100.3
95.3
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
228
Significant currency risk arising from financial instruments is
Interest-rate risk
measured using a currency sensitivity method. Currency risks
from financial instruments as defined by IFRS 7 are only included
Interest-rate risk within the KION Group is managed centrally. The
in calculating currency sensitivity if the financial instruments are
basis
for decision-making
includes sensitivity analyses of
denominated in a currency other than the functional currency of
interest-rate risk positions in key currencies.
the reporting entity concerned. This means that currency risks
The Group’s financing takes the form of floating-rate and
resulting from the translation of the separate financial statements
fixed-rate financial liabilities. It has entered into interest-rate
of subsidiaries into the Group reporting currency, i.e. currency
swaps in order to hedge interest-rate risk arising on the
translation risks, are not included.
floating-rate financial liabilities. The majority of these hedges are
Currency risk relevant to currency sensitivity in the KION
accounted for as cash flow hedges for accounting purposes in
Group arises mainly in connection with derivative financial
accordance with IFRS 9. An interest-rate swap has also been
instruments, trade receivables and trade payables. It is assumed
entered into to hedge the risk of a change in the fair value of a
that the portfolio of financial instruments as at the reporting date
fixed-rate financial liability. This is accounted for as a fair value
is representative of the portfolio over the whole of the year. The
hedge (see note [41]). > TABLE 117 provides an overview of the
sensitivity analysis for the relevant currencies is shown in
interest-rate derivatives used by the KION Group.
> TABLE 116. The table shows the after-tax impact from changes in
A shift in the relevant yield curve of + / – 50 basis points (bps)
exchange rates considered to be possible (+ 10.0 per cent:
(2017: + / – 50 bps) was simulated to assess interest-rate risk. The
increase in the value of the euro against the other currencies of
cumulative effect after tax resulted from variable-rate exposures
10.0 per cent; – 10.0 per cent: fall in the value of the euro against
and is shown in > TABLE 118.
the other currencies of 10.0 per cent).
Foreign-currency sensitivity
TABLE 116
Impact on net income
Impact on other comprehensive
income (loss)
Increase in the
value of the
euro of + 10.0%
Fall in the
value of the
euro of – 10.0%
Increase in the
value of the
euro of + 10.0%
Fall in the
value of the
euro of – 10.0%
2018
2017
0.2
20.5
0.2
11.4
– 0.3
– 9.4
– 0.3
– 13.9
7.6
6.3
9.2
5.1
– 11.9
– 2.9
– 11.2
– 6.3
in € million
GBP
USD
in € million
GBP
USD
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
Interest-rate swaps
Fair value
Notional amount
in € million
2018
2017
Interest-rate swaps (assets)
Interest-rate swaps (liabilities)
Fair value hedge
Held for trading
Cash flow hedge
Held for trading
1.0
–
7.3
0.6
–
0.1
1.9
–
2018
100.0
–
760.0
90.0
229
TABLE 117
2017
–
50.0
760.0
–
TABLE 118
Interest-rate sensitivity
in € million
Net income
Other comprehensive income (loss)
+ 50 bps
– 50 bps
+ 50 bps
– 50 bps
2018
– 0.6
7.3
2018
– 0.4
– 2.5
2017 *
– 0.1
9.9
2017 *
– 1.2
– 4.9
* Financial liabilities for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
[41] HEDGE ACCOUNTING
Hedging currency risk
ber 2018 were entered into at average hedging rates of
£0.8984 to €1 (2017: £0.8962 to €1) and US$1.2077 to €1 (2017:
US$1.1675 to €1).
The critical-terms-match method is used to measure the
prospective effectiveness of the hedges. Ineffective portions can
arise if the critical terms of the hedged item and hedge no longer
In accordance with its treasury risk policy, the KION Group
match; this is determined using the dollar-offset method.
applies cash flow hedge accounting in hedging the currency risks
On account of the short-term nature of the Group’s payment
arising from highly probable future transactions and firm obliga-
terms, reclassifications to the income statement and the recog-
tions not reported in the statement of financial position in various
nition of the corresponding cash flows generally take place in the
currencies. Foreign-currency forwards with settlement dates in
same reporting period. A foreign-currency receivable or liability is
the same month as the expected cash flows from the Group’s
recognised when goods are despatched or received. Until the
operating activities are used as hedges. The critical terms of the
corresponding payment is received, changes in the fair value of
hedging instruments and the hedged items are therefore
the derivative are recognised in the income statement such that
matched. The hedge ratio for these hedges is 1:1. The currency
they largely offset the effect of the measurement of the
forwards used as hedges will mature in 2020 at the latest.
foreign-currency receivable or liability at the reporting date.
The main currency hedges relate to pound sterling and the
In total, foreign-currency cash flows of €392.1 million (2017:
US dollar. The currency forwards in existence as at 31 Decem-
€325.2 million) were hedged and designated as hedged items, of
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
230
which €372.4 million is expected by 31 December 2019 (2017:
The critical-terms-match method is used to measure the
€306.7 million expected by 31 December 2018). The remaining
prospective effectiveness of the hedges. Ineffective portions can
cash flows designated as hedged items fall due in the period up
arise if the critical terms of the hedged item and hedge no longer
to 31 December 2020 (2017: 31 December 2019).
match; this is determined using the dollar-offset method.
Hedging of interest-rate risk
Change in the hedge reserve
The KION Group uses cash flow hedge accounting in connection
The change in the hedge reserves within other comprehensive
with the hedging of interest-rate risk. It also uses a fair value
income (loss) is presented in > TABLE 119. Because the cash flow
hedge to hedge the risk of a change in the fair value of fixed-rate
hedges are highly effective, the change in the fair value of the
financial liabilities. The hedge ratio used in both cases is 1:1. The
hedged items corresponds to the change in the fair value of the
critical terms of the hedging instruments and the hedged items
hedging instruments. These changes in fair value can be seen
are matched. The interest-rate swaps used as hedges reflect the
from the unrealised gains and losses in other comprehensive
maturity profile of the hedged items and will mature in 2025.
income (loss).
The KION Group has issued floating-rate and fixed-rate
promissory notes as part of its financing (see also note [29]). It has
hedged the interest-rate risk arising on the variable-rate tranches
of the promissory note by entering into a number of interest-rate
swaps, thereby transforming the variable interest-rate exposure
into fixed-rate obligations. In 2018, the weighted, hedged risk-free
[42] SEGMENT REPORT
fixed interest rate remained unchanged year on year at
The Executive Board, as the chief operating decision-maker
0.5 per cent. In total, variable cash flows of €4.1 million (2017:
(CODM), manages the KION Group on the basis of the following
€12.9 million) were hedged and designated as hedged items, of
segments: Industrial Trucks & Services, Supply Chain Solutions
which €3.4 million relates to cash flows that are expected in
and Corporate Services. Segment reporting therefore takes into
2020 to 2023 (2017: €10.2 million expected in 2019 to 2022).
account the organisational and strategic focus of the KION Group.
The remaining cash flows of €0.7 million (2017: €2.6 million
expected as from 2023) are likely to materialise in 2024. Because
the hedge is highly effective, the change in the fair value of the
hedged item corresponds to the change in the fair value of the
hedging instrument.
Moreover, the risk of a change in the fair value of a fixed-rate
tranche of the promissory note that was issued in 2018 and will
mature in 2025 is hedged using an interest-rate swap, thereby
creating a EURIBOR-based variable-rate obligation. The carrying
amount of the hedged promissory note tranche (€100.0 million),
which is recognised under financial liabilities, included an adjust-
ment of €6.8 million as at 31 December 2018 that was attributable
to the change in fair value resulting from the hedged risk. Because
the hedge is highly effective, this change in fair value corresponds
to the change in the fair value of the hedging instrument.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
231
Reconciliation of hedge reserves resulting from hedges of currency and interest rate risks
TABLE 119
in € million
Balance as at 01/01/2017
Changes in unrealised gains and losses
Changes in gains (–) and losses (+) to revenue
Changes in gains (–) and losses (+) to cost of sales
Tax effect of changes in reserves
Balance as at 31/12/2017
in € million
Balance as at 01/01/2018
Changes in unrealised gains and losses
Changes in gains (–) and losses (+) to revenue
Changes in gains (–) and losses (+) to cost of sales
Tax effect of changes in reserves
Balance as at 31/12/2018
Currency risk
Interest-rate risk
– 2.2
12.9
– 1.5
– 4.0
– 2.8
2.4
0.3
– 1.3
–
–
0.4
– 0.6
Currency risk
Interest-rate risk
2.4
– 4.9
– 0.2
– 1.1
1.7
– 2.2
– 0.6
– 11.1
–
–
3.4
– 8.3
Description of the segments
Industrial Trucks & Services
to picking and value-added packing. This segment is primarily
involved in customer-specific, longer-term project business
operated under the leadership of the Dematic brand. With
So that it can fully cater to the needs of material handling customers
global resources, eleven production facilities worldwide and
worldwide, the business model of the Industrial Trucks & Services
regional teams of experts, Dematic is able to plan and deliver
segment covers key steps of the value chain: product develop-
logistics solutions with varying degrees of complexity anywhere
ment, manufacturing, sales and service, truck rental and used
in the world.
trucks, fleet management and financial services that support the
core industrial truck business. The segment operates a multi-
Corporate Services
brand strategy involving the three international brands Linde,
The Corporate Services segment comprises the other activities of
STILL and Baoli plus the two local brands Fenwick and OM Voltas.
the holding and service companies in the KION Group. The
Supply Chain Solutions
service companies provide services for all segments in the KION
Group. The bulk of the total revenue in this segment is generated
The Supply Chain Solutions segment, with its Dematic Operating
by internal IT and logistics services.
Unit, is a strategic partner to customers in a variety of industries,
supplying them with integrated technology and software solutions
with which to optimise their supply chains. Manual and automated
solutions are provided for all functions along customers’ supply
chains, from goods inward and multishuttle warehouse systems
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
232
Segment management
segments (‘adjusted EBIT’). Intra-group transactions are generally
conducted on an arm’s-length basis. Segment reports are
The KPIs used to manage the segments are order intake, revenue
prepared in accordance with the same accounting policies as the
and adjusted EBIT. Segment reporting therefore includes a
consolidated financial statements, as described in note [6].
reconciliation of externally reported consolidated earnings before
> TABLES 120 – 121 show information on the KION Group’s
interest and tax (EBIT) – including effects from purchase price
operating segments for 2018 and 2017.
allocations and non-recurring items – to the adjusted EBIT for the
Segment report 2018
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before taxes
Net financial expenses / income
EBIT
+ Non-recurring items
+ PPA items
= Adjusted EBIT
Segment assets
Segment liabilities
Capital expenditure ¹
Amortisation and depreciation ²
Order intake
Number of employees ³
Industrial
Trucks & Services
Supply Chain
Solutions
Corporate
Services
Consolidation /
Reconciliation
5,916.3
5.7
5,922.0
569.6
– 55.6
625.2
12.6
17.6
655.4
9,645.6
6,881.0
195.4
113.2
6,210.6
25,533
2,052.1
3.1
2,055.2
47.5
– 16.9
64.4
7.2
108.6
180.2
4,909.6
2,084.2
47.8
29.2
2,425.2
6,799
27.3
271.9
299.2
343.6
– 24.9
368.5
1.1
–
369.6
1,784.8
4,080.3
15.4
15.7
299.2
796
–
– 280.7
– 280.7
– 415.3
–
– 415.3
–
–
– 415.3
– 3,371.2
– 3,381.8
–
–
– 278.3
−
1 Capital expenditure including capitalised development costs, excluding right-of-use assets
2 On intangible assets and property, plant and equipment (excluding right-of-use assets and PPA items)
3 Number of employees (full-time equivalents) as at balance sheet date 31/12/; allocation according to the contractual relationship
TABLE 120
Total
7,995.7
–
7,995.7
545.3
– 97.4
642.8
21.0
126.2
789.9
12,968.8
9,663.7
258.5
158.1
8,656.7
33,128
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
Segment report 2017 *
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before taxes
Net financial expenses / income
EBIT
+ Non-recurring items
+ PPA items
= Adjusted EBIT
Segment assets
Segment liabilities
Capital expenditure ¹
Amortisation and depreciation ²
Order intake
Number of employees ³
Industrial
Trucks & Services
Supply Chain
Solutions
Corporate
Services
Consolidation /
Reconciliation
5,568.2
4.0
5,572.2
584.0
– 56.2
640.2
1.7
0.9
642.7
9,031.3
6,342.7
153.7
104.7
5,859.5
24,090
2,005.1
4.5
2,009.5
– 18.1
– 1.5
– 16.6
29.9
175.3
188.7
4,770.0
2,040.6
47.0
26.7
2,099.2
6,820
24.8
241.8
266.6
486.5
– 37.5
523.9
8.5
–
532.4
1,894.6
4,328.7
17.5
14.9
266.6
698
−
– 250.3
– 250.3
– 587.7
– 1.1
– 586.5
0.0
–
– 586.5
– 3,358.2
– 3,366.5
–
–
– 246.2
–
1 Capital expenditure including capitalised development costs, excluding right-of-use assets
2 On intangible assets and property, plant and equipment (excluding right-of-use assets and PPA items)
3 Number of employees (full-time equivalents) as at balance sheet date 31/12/; allocation according to the contractual relationship
* Segment report for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
233
TABLE 121
Total
7,598.1
−
7,598.1
464.7
– 96.3
561.0
40.1
176.2
777.3
12,337.7
9,345.4
218.3
146.3
7,979.1
31,608
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
234
External revenue by region is presented in > TABLE 122.
Capital expenditure includes additions to intangible assets
Revenue in Germany came to €1,533.2 million in 2018 (2017:
and property, plant and equipment. Leased assets are described
€1,400.5 million). There are no relationships with individual
in note [17]. > TABLE 123
customers that generate revenue deemed to be significant as a
proportion of total consolidated revenue.
Capital expenditure in Germany came to €156.3 million in 2018
Financial income and expenses including all interest income
(2017: €122.6 million).
and expenses are described in notes [11] and [12].
Depreciation / amortisation relates to intangible assets with
The non-recurring items mainly comprised consultancy
finite useful lives and property, plant and equipment.
costs totalling €21.0 million in 2018 (2017: €40.1 million). They
The regional breakdown of non-current assets excluding
are now attributable to process standardisation as part of the
financial assets, financial instruments, deferred tax assets and
integration of Dematic and to the redirection of sales activities in
post-employment benefits is shown in > TABLE 124.
South Africa.
Non-current assets attributable to Germany amounted to
The effects from purchase price allocations comprised net
€3,395.7 million as at 31 December 2018 (31 December 2017:
write-downs and other expenses in relation to the hidden reserves
€3,399.4 million).
and charges identified as part of the acquisition processes.
Revenue with third parties broken down by customer location
in € million
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total revenue
* Revenue for 2017 was restated due to the initial application of IFRS 15 and IFRS 16
TABLE 122
2017 *
4,567.1
548.2
153.6
1,266.7
163.1
899.3
7,598.1
2018
4,769.9
592.3
94.5
1,486.3
173.5
879.3
7,995.7
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
235
Capital expenditure broken down by company location *
TABLE 123
in € million
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total capital expenditure
* Capital expenditure including capitalised development costs, excluding right-of-use assets
Non-current assets broken down by company location
in € million
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total non-current assets (IFRS 8)
* Non-current assets for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
2018
190.2
14.6
0.1
34.6
1.6
17.3
2017
162.8
6.6
0.6
31.6
3.5
13.3
258.5
218.3
TABLE 124
2017 *
5,174.0
273.5
20.3
2,395.0
99.4
603.9
8,566.0
2018
5,295.7
344.1
5.0
2,422.4
98.7
565.8
8,731.8
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
236
[43] EMPLOYEES
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 2018
(see note [48]).
The KION Group employed an average of 32,524 full-time
In July 2018, Weichai Power (Luxembourg) Holding S.à r.l.,
equivalents (including trainees and apprentices) in the reporting
Luxembourg (‘Weichai Power’), increased its stake in KION
year (2017: 31,064). The number of employees (with part-time
GROUP AG from 43.3 per cent to 45.0 per cent. Weichai Power
staff included on a pro rata basis) is shown by region in > TABLE 125.
Co. Ltd., Weifang, People’s Republic of China, therefore indirectly
The KION Group employed an average of 547 trainees and
holds a 45.0 per cent stake in KION GROUP AG. The distribution
apprentices in 2018 (2017: 541).
of a dividend of €0.99 per share (2017: €0.80 per share) to Weichai
[44] RELATED PARTY DISCLOSURES
Power resulted in an outflow of funds from KION GROUP AG of
€50.6 million (2017: €37.7 million).
The revenue that the KION Group generated in 2018 and
2017 from selling goods and services to related parties, and vice
versa, is shown in > TABLES 126 – 127 along with the associated
receivables and liabilities as at the reporting date. The receivables
In addition to the subsidiaries included in the consolidated finan-
include a loan that the KION Group has granted to Linde Hydrau-
cial statements, the KION Group has direct or indirect business
lics GmbH & Co. KG, Aschaffenburg. This involved a commitment
relationships with a number of non-consolidated subsidiaries,
of €9.3 million (31 December 2017: €9.3 million), from which the
joint ventures and associates in the course of its ordinary busi-
KION Group had a loan receivable of €8.0 million as at 31 Decem-
ness activities.
ber 2018 (31 December 2017: €8.0 million) with a variable
interest rate.
Employees (average)
Germany
France
United Kingdom
Italy
Rest of Europe
USA
Asia
Rest of world
Total employees
TABLE 125
2017
9,127
3,508
2,396
1,094
5,100
3,038
4,267
2,534
2018
9,887
3,619
2,383
1,212
5,673
2,938
4,402
2,410
32,524
31,064
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
Related party disclosures 2018
in € million
Non-consolidated subsidiaries
Associates (equity-accounted)
Joint ventures (equity-accounted)
Other related parties *
Total
Receivables
Liabilities
Sales of goods
and services
29.3
36.0
3.0
15.3
83.6
12.9
10.8
92.8
5.0
121.5
30.9
179.6
63.1
38.8
312.3
* ‘Other related parties’ include, among others, transactions with Weichai Power and its affiliated companies
Related party disclosures 2017 *
in € million
Non-consolidated subsidiaries
Associates (equity-accounted)
Joint ventures (equity-accounted)
Other related parties **
Total
Receivables
Liabilities
Sales of goods
and services
28.7
25.1
1.5
10.9
66.2
15.8
11.2
56.0
2.7
85.7
31.1
158.1
56.8
23.5
269.4
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
** ‘Other related parties’ include, among others, transactions with Weichai Power and its affiliated companies
237
TABLE 126
Purchases
of goods
and services
22.1
133.1
78.6
11.5
245.3
TABLE 127
Purchases
of goods
and services
21.7
126.4
83.2
7.7
239.0
The members of the Executive Board and Supervisory Board of
Assets Supervision and Administration Commission of Shandong
KION GROUP AG are also related parties. Details of the remuner-
People’s Government of the People’s Republic of China, Jinan,
ation of the Executive Board and Supervisory Board can be found
People’s Republic of China. This Commission acts on behalf of
in note [46].
the People’s Republic of China. The exemption for govern-
In its consolidated financial statements, which are published
ment-related entities was applied. There were no transactions
on the website of the Hong Kong Stock Exchange, Weichai
that were significant, either individually or taken together, between
Power Co. Ltd. states that its highest-level parent company is
the KION Group and companies with which the KION Group is
Shandong Heavy Industry Group Co., Ltd., Jinan, People’s
closely associated solely because of its relationship with
Republic of China, which itself is owned by the State-owned
Shandong Heavy Industry Group Co., Ltd.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
238
[45] VARIABLE REMUNERATION
KEEP employee equity programme
However, KION GROUP AG has the right to satisfy each pro-
gramme participant’s entitlement by paying a cash settlement
instead of granting a bonus share. For employees taking part for
the first time, the KION Group offers a special incentive in the
form of starter packages. Under KEEP 2018, the KION Group will
bear the cost of one KION share (free share) in each of the first
On 1 October 2018, the Executive Board of KION GROUP AG
seven share packages that an employee takes up.
decided to launch a further share option programme for employ-
The right to obtain a bonus share lapses if participants sell
ees (KEEP 2018). In addition to the employees in the countries
their own investment in KION shares or cease to work for the
that had been included in the previous year, employees in the
KION Group. The change in the number of bonus shares to be
United States were permitted to participate for the first time. The
granted is shown in > TABLE 128.
period during which eligible employees could take up this offer by
In 2018, 4,225 free shares were issued to employees as part
making a declaration of acceptance ran from 2 to 19 Octo-
of their starter packages (2017: 2,545 free shares).
ber 2018. To be eligible to participate in KEEP 2018, employees
The free shares to be issued are measured at their fair value
needed, at the start of the offer phase, to have had a permanent,
on the day on which employees obtain the right to acquire shares
uninterrupted employment contract with a participating KION
as their own investment. The fair value on the grant date is deter-
Group company for at least one year. Currently, KION GROUP AG
mined on the basis of Monte Carlo simulation. The measurement
plus 19 German (2017: 17) and 62 foreign (2017: 60) subsidiaries
parameters used are shown in > TABLE 129.
are eligible to take part in KEEP. The Company is considering
For KEEP 2018, the fair value of a bonus share was €42.03
whether to extend the employee share option programme to
(KEEP 2017: €62.02; KEEP 2016: €52.51).
other countries over the coming years.
The fair value of the bonus shares to be granted is recognised
KEEP is a share matching plan. Participating employees
as an expense and paid into capital reserves over the three-year
acquire KION shares for their own investment purposes. Each set
holding period. The holding period for KEEP 2015 ended on
of three KION shares represents a share package. Once the
1 October 2018 and the bonus shares were issued to the eligible
three-year holding period has expired, employees are entitled to
employees at no cost.
one free matching share (bonus share) for each share package.
Development of the granted bonus shares
in units
Balance as at 01/01/
Granted bonus shares
Exercised bonus shares
Forfeited bonus shares
Balance as at 31/12/
TABLE 128
2017
67,106
12,098
– 27,363
– 1,675
50,166
2018
50,166
17,455
– 22,580
– 1,386
43,655
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
239
Significant measurement parameters for the KION GROUP AG Share Matching Programme
TABLE 129
Measurement parameters
Expected dividend
Price of the KION share as at grant date
KEEP 2018
KEEP 2017
KEEP 2016
€0.99
€44.59
€0.88
€64.62
€0.88
€55.02
In 2018, an expense totalling €1.0 million was recognised under
At the beginning of the performance period on 1 January
functional costs for free shares and bonus shares in connection
2018 (2017 tranche: 1 January 2017; 2016 tranche: 1 January
with the employee share option programme (2017: €0.9 million).
2016), the managers were allocated a total of 188,531 phantom
Of this amount, €0.3 million related to KEEP 2018, €0.2 million to
shares for this tranche (2017 tranche: 171,573 phantom shares;
KEEP 2017 (2017: €0.2 million), €0.2 million to KEEP 2016 (2017:
2016 tranche: 180,963 phantom shares). The allocation was
€0.2 million) and €0.2 million to KEEP 2015 (2017: €0.3 million).
based on a particular percentage of each manager’s individual
In 2017, there had also been an amount of €0.2 million relating
gross annual remuneration at the time of grant. At the end of the
to KEEP 2014.
performance period, the number of the phantom shares is
Each year, the Executive Board of KION GROUP AG
amended depending on the degree to which the relevant targets
decides whether there will be an offer made under the employee
are achieved. The resulting final number of phantom shares
share option programme that year and which companies
multiplied by the smoothed price of KION GROUP AG shares at
will participate.
KION performance share plan (PSP)
for managers
the end of the performance period determines the amount of
cash actually paid. The KION Group has the right to adjust the
amount payable at the end of the performance period in the event
of exceptional occurrences or developments. The maximum
amount payable is limited to 200.0 per cent of the value of the
shares allotted to an individual at the grant date.
The 2018 tranche of the long-term, variable remuneration compo-
The pro-rata expense calculation based on the fair value of
nent for the managers in the KION Group (LTI 2018) with a defined
the phantom shares on each valuation date is carried out using
period (three years) was granted with effect from 1 January 2018.
Monte Carlo simulation. The measurement parameters shown in
The remuneration component measured over the long term is
> TABLE 130 were used to value the phantom shares on the
based in equal parts on the total shareholder return (TSR) of KION
reporting date.
GROUP AG shares compared with the performance of the MDAX
index as a measure of market performance, and with return on
capital employed (ROCE) as an internal measure. It also depends
on the performance of KION GROUP AG shares during the
relevant period.
The performance period for the 2018 tranche ends on
31 December 2020 (2017 tranche: 31 December 2019). The 2016
tranche expired on 31 December 2018 and will be paid out in the
first quarter of 2019.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
240
Significant measurement parameters of the KION Performance Share Plans
TABLE 130
Measurement parameters
Expected volatility of the KION share
Expected volatility of the MDAX Index
Risk-free interest rate
Expected dividend
Price of the KION share at valuation date
Price of the MDAX Index at valuation date
Initial value of the KION share (60-days average)
Initial value of the MDAX Index (60-days average)
Valuation date 31/12/2018
Tranche 2018
Tranche 2017
25.0%
10.0%
– 0.63%
€0.99
€41.41
30.0%
15.0%
– 0.69%
€0.99
€41.41
€21,523.65
€21,523.65
€69.85
€53.85
€26,396.86
€21,178.13
Taking account of the remaining term of two years (2018 tranche)
the 2017 tranche (2017: expense of €3.9 million) and a pro-rata
and one year (2017 tranche), the historic volatility of KION shares
expense for twelve months of €1.4 million for the 2018 tranche
was used to determine the volatility on which the valuation is
were recognised under functional costs. Furthermore, an expense
based. As at 31 December 2018, the fair value of one phantom
of €4.3 million for the 2015 tranche had been recognised under
share was €23.76 for the 2017 tranche (31 December 2017:
functional costs in 2017.
€65.60) and €24.25 for the 2018 tranche. On that date, the total
fair value based on 153,909 phantom shares was €3.7 million
(2017 tranche; 31 December 2017: €11.6 million) and €4.3 million
(2018 tranche based on 176,360 phantom shares). The amount of
€3.8 million that is expected to be paid out for the 2016 tranche
KION performance share plan (PSP) for the
Executive Board
(2017: €11.4 million for the 2015 tranche) is calculated on the basis
The members of the Executive Board have been promised a mul-
of a preliminary total target achievement rate. In March 2018, a
tiple-year variable remuneration component in the form of a per-
payment from the 2015 tranche was made on the basis of the
formance share plan with a three-year term in each case. The
achievement of the long-term targets that were defined in 2015 at
remuneration component measured over the long term is based
the start of the performance period.
in equal parts on the total shareholder return (TSR) of KION
The total carrying amount for liabilities in connection with
GROUP AG shares compared with the performance of the MDAX
share-based remuneration was €7.7 million as at 31 Decem-
index as a measure of market performance, and with return on
ber 2018 (31 December 2017: €23.0 million). Of this amount,
capital employed (ROCE) as an internal measure. It also depends
€3.8 million related to the 2016 tranche (31 December 2017:
on the performance of KION GROUP AG shares during the
€7.8 million), €2.4 million to the 2017 tranche (31 December 2017:
relevant period.
€3.9 million) and €1.4 million to the 2018 tranche. In 2017, there
The performance period for the 2018 tranche ends on
had also been an amount of €11.4 million relating to the 2015
31 December 2020 (2017 tranche: 31 December 2019). The 2016
tranche. In 2018, income of €4.0 million in respect of the 2016
tranche expired on 31 December 2018 and will be paid out in the
tranche (2017: expense of €5.2 million), income of €1.4 million for
first quarter of 2019. At the beginning of the performance period
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
241
on 1 January 2018 (2017 tranche: 1 January 2017; 2016 tranche:
€4.0 million), €1.1 million to the 2017 tranche (31 December 2017:
1 January 2016), the Executive Board members were allocated a
€1.6 million) and €0.5 million to the 2018 tranche. In 2017, there
total of 72,170 phantom shares for this tranche (2017 tranche:
had also been an amount of €9.5 million relating to the 2015
82,265 phantom shares; 2016 tranche: 104,438 phantom shares)
tranche. In 2018, income of €1.9 million in respect of the 2016
on the basis of the starting price of KION shares (60-day average).
tranche (2017: expense of €2.3 million), income of €0.4 million for
The shares were allocated on the basis of an allocation value in euros
the 2017 tranche (2017: expense of €1.6 million) and a pro-rata
specified in each Executive Board member’s service contract.
expense for twelve months of €0.5 million for the 2018 tranche
At the end of the performance period, the number of the
were recognised under functional costs. Furthermore, an expense
phantom shares is amended depending on the degree to which
of €3.6 million for the 2015 tranche had been recognised under
the relevant targets are achieved. The resulting final number of
functional costs in 2017.
phantom shares multiplied by the smoothed price of KION
GROUP AG shares at the end of the performance period
determines the amount of cash actually paid. The Supervisory
Board can also use a discretionary personal performance
multiplier to adjust the final payment at the end of the perfor-
mance period by + / – 30.0 per cent. The maximum amount paya-
ble is limited to 200.0 per cent of the value of the shares allotted
to an individual at the grant date.
[46] REMUNERATION OF THE EXECU-
TIVE BOARD AND SUPERVISORY
BOARD
The pro-rata expense calculation based on the fair value of
Executive Board
the phantom shares on each valuation date is carried out using
Monte Carlo simulation. The measurement parameters shown in
Responsibilities
> TABLE 130 were used to value the phantom shares on the
Gordon Riske, Chief Executive Officer (CEO), is responsible for
reporting date.
the LMH EMEA, STILL EMEA and KION Americas Operating
Taking account of the remaining term of two years (2018
Units in the Industrial Trucks & Services segment. He also remains
tranche) and one year (2017 tranche), the historic volatility of KION
in charge of the following group functions: corporate office,
shares was used to determine the volatility on which the valuation
corporate communications, corporate strategy, internal audit,
is based. As at 31 December 2018, the fair value of one phantom
corporate compliance and KION Invest.
share was €23.76 for the 2017 tranche (31 December 2017:
Dr Eike Böhm, in his role as Chief Technology Officer (CTO),
€65.60) and €24.25 for the 2018 tranche. On that date, the total
has groupwide responsibility for research and development in
fair value based on 63,695 phantom shares was €1.5 million (2017
both the Industrial Trucks & Services and the Supply Chain
tranche; 31 December 2017: €4.2 million) and €1.8 million (2018
Solutions segments, including modules & components, and for
tranche based on 72,170 phantom shares). The amount of
procurement, quality, the production system and the KION
€2.1 million that is expected to be paid out for the 2016 tranche
Product Development Optimisation (KPDO) initiative.
(2017: €9.5 million for the 2015 tranche) is calculated on the basis
Anke Groth, in her role as Chief Financial Officer (CFO), is in
of a preliminary total target achievement rate. In March 2018, a
charge of corporate accounting & tax, corporate controlling,
payment from the 2015 tranche was made on the basis of the
corporate finance / M&A, investor relations, financial services,
achievement of the long-term targets that were defined in 2015
legal affairs and logistics / Urban. As Labour Relations Director,
at the start of the performance period.
she is further responsible for corporate HR and health, safety &
The total carrying amount for liabilities in connection with
environment.
share-based remuneration was €3.8 million as at 31 Decem-
Ching Pong Quek, Chief Asia Pacific Officer, heads up the
ber 2018 (31 December 2017: €15.1 million). Of this amount,
KION APAC Operating Unit and thus the entire Asia business
€2.1 million related to the 2016 tranche (31 December 2017:
within the Industrial Trucks & Services segment.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
242
Susanna Schneeberger, in the newly created role of Chief Digital
As in the previous year, no loans or advances were made to
Officer (CDO), is responsible for the Dematic Operating Unit in the
members of the Executive Board in 2018. The present value of
Supply Chain Solutions segment and for the groupwide areas of
the defined benefit obligation in respect of Executive Board
software development, KION Group IT, data protection, mobile
members as at 31 December 2018 was €8.3 million (31 Decem-
automation and the Digital Campus.
ber 2017: €8.3 million).
Remuneration
The total remuneration paid to former members of the Exec-
utive Board in 2018 amounted to €0.3 million (2017: €0.3 million).
The remuneration paid to the Executive Board comprises a fixed
Defined benefit obligations to former members of the Executive
salary and non-cash benefits, pension entitlements and perfor-
Board or their surviving dependants amounting to €10.5 million
mance-related components. The variable performance-related
(31 December 2017: €9.8 million) were recognised in accordance
components comprise an annually recurring component linked to
with IAS 19.
business performance and a multi-year performance-related
Further details of Executive Board remuneration, including
component in the form of the KION performance share plan for all
the individual amounts for each member, can be found in the
members of the Executive Board. The pension entitlements
remuneration report within the combined management report
consist of retirement, invalidity and surviving dependants’ benefits.
(see pages 113 to 131).
An expense of €5.7 million was recognised for the total remu-
neration for members of the Executive Board in 2018 (2017:
€13.6 million). This consisted of short-term remuneration amount-
Supervisory Board
ing to €6.5 million (2017: €5.0 million), post-employment benefits
totalling €1.0 million (2017: €1.1 million) and share-based payments
The total remuneration paid to the members of the Supervisory
of minus €1.8 million (2017: €7.5 million). The short-term remuner-
Board for the performance of their tasks at the parent company
ation comprised non-performance-related components amount-
and subsidiaries in 2018 amounted to €1.5 million (2017: €1.4 mil-
ing to €4.5 million (2017: €3.1 million) and performance-related
lion). There were no loans or advances to members of the Super-
components amounting to €2.1 million (2017: €1.9 million). The
visory Board in 2018. Furthermore, the members of the Supervi-
current service cost resulting from pension provisions for the
sory Board did not receive any remuneration or benefits for
Executive Board is reported under post-employment benefits.
services provided as individuals, such as consulting or brokerage
The long-term incentive components take the form of a perfor-
activities.
mance share plan (see also note [45]).
Members of the Supervisory Board also received short-term
Under section 314 HGB, disclosure of the expense for
employee benefits of €0.7 million for employee services (2017:
share-based payments is not required. Rather, the payments
€0.8 million).
must be included in the Executive Board members’ remuneration
Further details of Supervisory Board remuneration, including
for the year in which they are paid on the basis of the fair value at
the individual amounts for each member, can be found in the
the individual grant dates. The fair value of the share-based
remuneration report within the combined management report
payments at their individual grant dates, including tax equalisa-
(see pages 132 to 133).
tion, amounted to €5.5 million (2017: €3.9 million). Furthermore,
disclosure of post-employment benefits (expense of €1.0 million;
2017: expense of €1.1 million) is not required. On this basis, the
total remuneration of the members of the Executive Board pursu-
ant to section 314 HGB came to €12.0 million (2017: €8.9 million).
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
243
[47] MEMBERS OF THE EXECUTIVE
BOARD AND SUPERVISORY
BOARD
Executive Board
Gordon Riske
Chief Executive Officer (CEO)
Member of the Board of Directors of Linde Material Handling
Asia Pacific Pte., Ltd., Singapore, Singapore
Chairman of the Board of Directors of Linde Material Handling
Hong Kong Ltd., Hong Kong, People’s Republic of China
Member of the Advisory Board of Fujian JULI Motor Co., Ltd.,
Putian, People’s Republic of China
Chairman of the APAC Advisory Board of Euro Asia Consulting
Co., Ltd. Shanghai, People’s Republic of China (since 1 Novem-
ber 2018)
Susanna Schneeberger
Chairman of the Board of Directors of Linde (China) Forklift Truck
Member of the Executive Board / CDO (since 1 October 2018)
Co., Ltd., Xiamen, People’s Republic of China
Non-Executive Director of Weichai Power Co., Ltd., Weifang,
Member of the Supervisory Board of Concentric AB, Linköping,
People’s Republic of China
Sweden
Member of the Executive Board of the non-profit Hertie Foundation,
Member of the Supervisory Board of Hempel A/S, Kongens
Frankfurt am Main
Dr Eike Böhm
Lyngby, Denmark
Dr Thomas Toepfer
Member of the Executive Board / CTO
Member of the Executive Board / CFO (until 31 March 2018)
Member of the Advisory Board of JULI Motorenwerke s.r.o.,
Chairman of the Supervisory Board of STILL GmbH, Hamburg
Moravany, Czech Republic (since 29 August 2018)
(until 31 March 2018)
Member of the Board of Directors of Linde (China) Forklift Truck
Chairman of the Supervisory Board of Linde Material Handling
Co., Ltd., Xiamen, People’s Republic of China (since 8 Novem-
GmbH, Aschaffenburg (until 31 March 2018)
ber 2018)
Chairman of the Board of Directors of KION North America
Member of the Supervisory Board of e.GO Mobile AG, Aachen
Corp., Summerville, USA (until 8 March 2018)
Anke Groth
Member of the Executive Board / CFO (since 1 June 2018)
Supervisory Board
Ching Pong Quek
Dr John Feldmann
Member of the Executive Board / Chief Asia Pacific Officer
Chairman of the Supervisory Board
Member of the Board of KION South Asia Pte Ltd., Singapore,
Former member of the Board of Executive Directors of BASF SE,
Singapore
Ludwigshafen
President and CEO of KION Asia Ltd., Hong Kong, People’s
Member of the Supervisory Board of HORNBACH Baumarkt
Republic of China
AG, Bornheim
Chairman of KION Baoli Forklift Co., Ltd., Jiangsu, People’s
Chairman of the Supervisory Board of HORNBACH Holding AG
Republic of China
& Co. KGaA, Neustadt an der Weinstrasse (since 6 July 2018)
Member of the Board of Directors of KION India Pvte. Ltd.,
Member of the Supervisory Board of HORNBACH Management
Pune, India
AG, Annweiler am Trifels
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
244
Özcan Pancarci 1
Member of the Board of Directors of Diebold Nixdorf Inc., Ohio,
Deputy Chairman of the Supervisory Board
USA
Member of the Supervisory Board of Douglas GmbH, Düsseldorf
Chairman of the Plants I and II Works Council, Linde Material
Member of the Supervisory Board of Douglas Holding AG,
Handling GmbH, Aschaffenburg
Düsseldorf
Chairman of the Group Works Council of the KION Group
Member of the Supervisory Board of Kirk Beauty Investments
Deputy Chairman of the Supervisory Board of Linde Material
SA, Luxembourg
Handling GmbH, Aschaffenburg
Member of the Shareholders’ Committee of Tipico Group Ltd.,
Birgit A. Behrendt
Malta
Vice President of Joint Ventures, Alliances and Commercial
Martin Fahrendorf 1 (since 10 May 2018)
Affairs at Ford of Europe GmbH, Cologne
Chairman of the Works Council of Dematic GmbH and Dematic
Member of the Executive Board of Ford of Europe GmbH,
Services GmbH, Heusenstamm
Cologne
Member of the Supervisory Board of Ford Werke GmbH,
Denis Heljic 1 (until 9 May 2018)
Cologne
Head of Service at the Dortmund / Krefeld main branch of STILL
Member of the Supervisory Board of Ford Deutschland Holding
GmbH, Hamburg
GmbH, Cologne
Member of the Board of Directors of Ford Sollers Holding LLC,
Jiang Kui
Chelny, Russia
President of Shandong Heavy Industry Group Co., Ltd., Jinan,
Member of the Audit Committee of Ford Sollers Holding LLC,
People’s Republic of China
Chelny, Russia
Member of the Board of Directors of Ferretti International Hold-
Member of the Board of Directors of Ford Otosan (Ford Otomotiv
ing S.p.A., Milan, Italy
Sanayi A.S.), Istanbul, Turkey (since 19 March 2018)
Member of the Board of Directors of Ferretti S.p.A., Milan, Italy
Member of the Advisory Board of Getrag Ford Transmission
Member of the Executive Board of Hydraulics Drive Technology
GmbH, Cologne (since 1 January 2018)
Beteiligungs GmbH, Aschaffenburg
Stefan Casper 1
Verwaltungs GmbH, Aschaffenburg
Chairman of the Works Council of KION Warehouse Systems
Member of the Board of Directors of PSI, Delaware, USA
GmbH, Reutlingen
Member of the Board of Directors of Shandong Heavy Industry
Member of the Supervisory Board of Linde Hydraulics
India Private Ltd., Pune, India
Dr Alexander Dibelius
Member of the Board of Directors of Shantui Construction
Managing Partner at CVC Capital Partners (Deutschland)
Machinery Co. Ltd. Jining, People’s Republic of China
GmbH, Frankfurt am Main
Member of the Board of Directors of Sinotruk (BVI) Limited, Brit-
Deputy Chairman of the Board of Directors of Breitling S.A.,
ish Virgin Islands (since 23 November 2018)
Grenchen, Switzerland
Member of the Board of Directors of Sinotruk (Hong Kong)
Member of the Board of Directors of CVC Capital Partners
Limited, Hong Kong, People’s Republic of China (since
(Luxembourg) SARL, Luxembourg
23 November 2018)
Chairman of the Supervisory Board of Diebold Nixdorf AG,
Member of the Board of Directors of Sinotruck Jinan Power Co.
Paderborn
Ltd, Jinan, People’s Republic of China (since 23 November 2018)
Chairman of the Supervisory Board of Diebold Nixdorf Interna-
Member of the Board of Directors of Ballard Power Systems
tional GmbH, Paderborn
Inc., Burnaby, Canada (since 23 November 2018)
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
245
Chairman of the Board of Directors of Weichai Ballard Hy-Energy
Alexandra Schädler 1
Technologies Co. Ltd., Weifang, People’s Republic of China
Trade Union Secretary on the National Executive of IG Metall,
(since 26 November 2018)
Frankfurt am Main
Member of the Board of Directors of Weichai Power Co., Ltd.,
Member of the Supervisory Board of Linde Material Handling
Weifang, People’s Republic of China
GmbH, Aschaffenburg
Member of the Supervisory Board of Opel Automobile GmbH,
Olaf Kunz 1
Rüsselsheim (since 1 June 2018)
Head of Collective Bargaining at IG Metall District Office for the
Coast, Hamburg
Dr Frank Schepp 2
Member of the Supervisory Board of STILL GmbH, Hamburg
Vice President of Quality at KION GROUP AG, Frankfurt am
Main (based in Aschaffenburg)
Dr Michael Macht (since 9 October 2018)
Shareholder and member of the Supervisory Board of Endur-
Tan Xuguang (until 30 September 2018)
ance Capital Aktiengesellschaft, Munich
Chairman of the Board of Directors and President of Shandong
Member of the Supervisory Board of Ferretti S.p.A., Milan, Italy
Heavy Industry Group Co., Ltd., Jinan, People’s Republic of
Member of the Supervisory Board of Linde & Wiemann SE&Co.
China
KG, Dillenburg
Chairman of the Board of Directors of China National Heavy
Chairman of the Advisory Board of Schweizer Group GmbH &
Duty Truck Group Co., Ltd., Jinan, People’s Republic of China
Co. KG, Hattenhofen
(since 1 September 2018)
Member of the Supervisory Board of Weichai Power Co. Ltd.,
Chairman of the Board of Directors of Ferretti International
Weifang, People’s Republic of China
Holding S.p.A., Milan, Italy
Jörg Milla 1
Chairman of the Board of Directors of Ferretti S.p.A., Milan, Italy
Chairman of the Board of Directors of Weichai Holding Group
Chairman of the Works Council of STILL GmbH, Hamburg
Co., Ltd., Weifang, People’s Republic of China
Deputy Chairman of the Supervisory Board of STILL GmbH,
Chairman of the Board of Directors and Chief Executive Officer
Hamburg
of Weichai Power Co., Ltd., Weifang, People’s Republic of China
Dr Christina Reuter
Claudia Wenzel 1
Head of Central Manufacturing Engineering & Operational
Full-time works council member, HQ and plant 2 at Linde Mate-
Excellence for Space Equipment Operations at Airbus Defence
rial Handling GmbH, Aschaffenburg
and Space GmbH, Taufkirchen
Xu Ping
Hans Peter Ring
Partner and Member of the Management Committee at King &
Management Consultant, Munich
Wood Mallesons, Beijing, People’s Republic of China
Member of the Supervisory Board of Airbus Defence and Space
Member of the Board of Directors of Ferretti International
GmbH, Taufkirchen
Holding S.p.A., Milan, Italy
Member of the Supervisory Board of Fokker Technologies
Holding B.V., Papendrecht, Netherlands
1 Employee representatives
2 Executive representatives
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
246
[48] LIST OF THE SHAREHOLDINGS
OF KION GROUP AG,
FRANKFURT AM MAIN
The shareholdings of the KION Group as at 31 December 2018
are listed below. > TABLE 131
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
1 KION GROUP AG
Frankfurt am Main Germany
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
Consolidated subsidiaries
Domestic
2 BlackForxx GmbH
3 Dematic GmbH
4 Dematic Holdings GmbH
5 Dematic Logistics GmbH
6 Dematic Services GmbH
7 DH Services GmbH
Stuhr
Germany
Heusenstamm
Germany
23 100.00% 100.00%
56 100.00% 100.00%
Frankfurt am Main Germany
1 100.00% 100.00%
[1]
Bielefeld
Germany
56 100.00% 100.00%
Heusenstamm
Germany
3 100.00% 100.00%
Frankfurt am Main Germany
53 100.00% 100.00%
[2]
8 Eisengießerei Dinklage GmbH
9 Eisenwerk Weilbach GmbH
10 Fahrzeugbau GmbH Geisa
Dinklage
Germany
Frankfurt am Main Germany
Geisa
Germany
11 KION Financial Services GmbH
Frankfurt am Main Germany
12 KION Information Management Services GmbH
Frankfurt am Main Germany
13 KION Warehouse Systems GmbH
Reutlingen
14 Klaus Pahlke GmbH & Co. Fördertechnik KG
Haan
Germany
Germany
15 Linde Material Handling GmbH
Aschaffenburg
Germany
23 100.00% 100.00%
15 100.00% 100.00%
23 100.00% 100.00%
15 100.00% 100.00%
1 100.00% 100.00%
23 100.00% 100.00%
15 100.00% 100.00%
1 100.00% 100.00%
16 LMH Immobilien GmbH & Co. KG
Aschaffenburg
Germany
15 & 17
99.64% 99.64%
17 LMH Immobilien Holding GmbH & Co. KG
Aschaffenburg
Germany
18 LMH Immobilien Holding Verwaltungs-GmbH
Aschaffenburg
Germany
15
94.00% 94.00%
15 100.00% 100.00%
19 LMH Immobilien Verwaltungs-GmbH
Aschaffenburg
Germany
15 100.00% 100.00%
20 LR Intralogistik GmbH
Wörth a. d. Isar
Germany
23 100.00% 100.00%
21 Schrader Industriefahrzeuge GmbH & Co. KG
Essen
22 STILL Financial Services GmbH
Hamburg
23 STILL Gesellschaft mit beschränkter Haftung
Hamburg
Germany
Germany
Germany
15 100.00% 100.00%
11 100.00% 100.00%
15 100.00% 100.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
247
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
24 Urban-Transporte Gesellschaft
Unterschleißheim Germany
15 100.00% 100.00%
mit beschränkter Haftung
25 Willenbrock Fördertechnik GmbH & Co. KG
Bremen
26 Willenbrock Fördertechnik GmbH & Co. KG
Hannover
27 Willenbrock Fördertechnik Holding GmbH
Bremen
Foreign
28 Dematic Holdings Pty. Ltd.
29 Dematic Pty. Ltd.
30 Linde Material Handling Pty. Ltd.
31 Dematic NV
32 STILL NV
33 Dematic Sistemas e Equipamentos
de Movimentação de Materiais Ltda.
34 KION South America Fabricação de
Equipamentos para Armazenagem Ltda.
Belrose
Belrose
Huntingwood
Zwijndrecht
Wijnegem
Indaiatuba /
São Paulo
Indaiatuba /
São Paulo
Germany
Germany
Germany
Australia
Australia
Australia
Belgium
Belgium
Brazil
Brazil
27
27
15
74.00% 74.00%
74.00% 74.00%
74.00% 74.00%
56 100.00% 100.00%
28 100.00% 100.00%
15 100.00% 100.00%
56 & 3 100.00% 100.00%
23 & 87 100.00% 100.00%
81 & 3 100.00% 100.00%
23 100.00% 100.00%
35 Dematic Logistics de Chile Ltda.
Santiago de Chile Chile
54 & 111 100.00% 100.00%
36 STILL DANMARK A/S
37 BARTHELEMY MANUTENTION SAS
38 Bastide Manutention SAS
39 Bretagne Manutention SAS
40 Dematic SAS
Kolding
Vitrolles
Bruguières
Pacé
Bussy-Saint-
Georges
Denmark
France
France
France
France
41 FENWICK FINANCIAL SERVICES SAS
Elancourt
France
42 FENWICK-LINDE OPERATIONS SAS
Cenon-sur-Vienne France
43 FENWICK-LINDE SAS
44 KION France SERVICES SAS
Elancourt
Elancourt
45 LOIRE OCEAN MANUTENTION SAS
Saint-Herblain
France
France
France
46 Manuchar SAS
47 MANUSOM SAS
48 Société Angoumoisine de
Manutention (SAMA) SAS
49 SM Rental SAS
50 STILL Location Services SAS
51 STILL SAS
52 URBAN LOGISTIQUE SAS
Gond-Pontouvre
France
Rivery
Champniers
Roissy-Charles-
de-Gaulle
France
France
France
Marne-la-Vallée
France
Marne-la-Vallée
France
Elancourt
France
23 100.00% 100.00%
43
80.00% 82.00%
43 100.00% 100.00%
43 100.00% 100.00%
56 100.00% 100.00%
44 100.00% 100.00%
43 100.00% 100.00%
44 100.00% 100.00%
15 100.00% 100.00%
43
71.18% 74.04%
43 100.00% 100.00%
51 100.00% 100.00%
51 100.00% 100.00%
43 100.00% 100.00%
44 100.00% 100.00%
44 100.00% 100.00%
24 100.00% 100.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
248
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
53 Dematic (Services) Ltd.
54 Dematic Ltd.
55 Dematic Group Ltd.
56 Dematic Holdings UK Ltd.
57 KION FINANCIAL SERVICES Ltd.
58 Linde Castle Ltd.
59 Linde Creighton Ltd.
60 Linde Holdings Ltd.
61 Linde Jewsbury’s Ltd.
62 Linde Material Handling (UK) Ltd.
63 Linde Material Handling East Ltd.
64 Linde Material Handling Scotland Ltd.
65 Linde Material Handling South East Ltd.
66 Linde Severnside Ltd.
67 Linde Sterling Ltd.
68 Mirror Bidco Ltd.
69 STILL Materials Handling Ltd.
70 Superlift UK Ltd.
71 KION India Pvt. Ltd.
72 Linde Material Handling (Ireland) Ltd.
73 Baoli EMEA S.p.A.
74 Dematic S.r.l.
75 Emhilia Material Handling S.p.A.
76 KION Rental Services S.p.A.
77 Linde Material Handling Italia S.p.A.
78 STILL S.p.A.
(until 2018: OM Carrelli Elevatori S.p.A.)
Banbury
Banbury
Banbury
Banbury
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Banbury
Exeter
Basingstoke
Pune
Walkinstown
Lainate
Cernusco sul
Naviglio
Modena
Milan
Buguggiate
Lainate
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
India
Ireland
Italy
Italy
Italy
Italy
Italy
Italy
4 100.00% 100.00%
56 100.00% 100.00%
7 100.00% 100.00%
81 100.00% 100.00%
70 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
70 100.00% 100.00%
62 100.00% 100.00%
60 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
7 100.00% 100.00%
70 100.00% 100.00%
15 100.00% 100.00%
107 100.00% 100.00%
60 100.00% 100.00%
23 100.00% 100.00%
56 100.00% 100.00%
77 100.00% 100.00%
73 & 77 & 78 100.00% 100.00%
15 100.00% 100.00%
15 & 73 100.00% 100.00%
79 Dematic Ltd.
80 K-LIFT S.A.
Mississauga
Canada
81 100.00% 100.00%
Luxembourg
Luxembourg
–
–
–
[3], [4]
81 Dematic Group S.à r.l.
Senningerberg
Luxembourg
7 100.00% 100.00%
82 Dematic (Malaysia) Sdn. Bhd.
Petaling Jaya
Malaysia
105 100.00% 100.00%
83 Dematic Logistics de Mexico S. de R.L. de C.V. Monterrey
84 DMTC Technology Services, S. de. R.L. de C.V. Monterrey
85 Dematic Trading de Mexico S. de. R.L. de C.V.
Monterrey
Mexico
Mexico
Mexico
54 & 111 100.00% 100.00%
54 & 111 100.00% 100.00%
54 & 111 100.00% 100.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
249
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
86 Dematic B.V.
87 STILL Intern Transport B.V.
88 STILL Norge AS
89 AUSTRO OM PIMESPO Fördertechnik GmbH
90 Linde Material Handling Austria GmbH
91 STILL Gesellschaft m.b.H.
92 Dematic Poland Sp. z o.o.
93 Linde Material Handling Polska Sp. z o.o.
94 STILL POLSKA Sp. z o.o.
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
s’Hertogenbosch Netherlands
6 100.00% 100.00%
Hendrik-
Ido-Ambacht
Heimdal
Linz
Linz
Netherlands
23 100.00% 100.00%
Norway
Austria
Austria
23 100.00% 100.00%
78 100.00% 100.00%
15 & 89 100.00% 100.00%
Wiener Neudorf
Austria
23 100.00% 100.00%
Poznań
Warsaw
Gadki
Poland
Poland
Poland
3 100.00% 100.00%
15 100.00% 100.00%
23 100.00% 100.00%
95 STILL MATERIAL HANDLING ROMANIA SRL
Giurgiu
Romania
15 & 23 100.00% 100.00%
96 OOO “Linde Material Handling Rus”
97 OOO “STILL Forklifttrucks”
98 Linde Material Handling AB
99 Linde Material Handling Financial Services AB
100 Nordtruck AB
101 STILL Sverige AB
102 Dematic Suisse Sagl
103 Linde Material Handling Schweiz AG
104 STILL AG
105 Dematic S.E.A. Pte. Ltd.
106 KION South Asia Pte. Ltd.
Moscow
Moscow
Örebro
Örebro
Örnsköldsvik
Malmö
Lugano
Dietlikon
Otelfingen
Singapore
Singapore
107 Linde Material Handling Asia Pacific Pte. Ltd.
Singapore
108 Linde Material Handling Slovenská republika s.r.o. Trenčin
109 STILL SR, spol. s.r.o.
110 Linde Viličar d.o.o.
111 Dematic Logistic Systems S.A.U.
112 Islavista Spain S.A.U.
113 KION Rental Services S.A.U.
114 Linde Material Handling Ibérica, S.A.U.
115 STILL, S.A.U.
Nitra
Celje
Coslada
L’Hospitalet de
Llobregat
Barcelona
Pallejá
L’Hospitalet de
Llobregat
Russia
Russia
Sweden
Sweden
Sweden
Sweden
Switzerland
Switzerland
Switzerland
Singapore
Singapore
Singapore
Slovakia
Slovakia
Slovenia
Spain
Spain
Spain
Spain
Spain
15 & 9 100.00% 100.00%
15 & 23 100.00% 100.00%
15 100.00% 100.00%
98 100.00% 100.00%
98 100.00% 100.00%
23 100.00% 100.00%
56 100.00% 100.00%
15 100.00% 100.00%
23 100.00% 100.00%
56 100.00% 100.00%
15 100.00% 100.00%
15 100.00% 100.00%
15 & 118 100.00% 100.00%
23 & 121 100.00% 100.00%
15 100.00% 100.00%
56 100.00% 100.00%
15 100.00% 100.00%
112 100.00% 100.00%
112 100.00% 100.00%
112 100.00% 100.00%
116 Linde Material Handling (Pty) Ltd.
Linbro Park
South Africa
15 100.00% 100.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
250
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
117 KION Supply Chain Solutions Czech, s.r.o.
Český Krumlov
Czech Republic
55 100.00% 100.00%
118 Linde Material Handling Česká republika s.r.o.
Prague
Czech Republic
15 & 23 100.00% 100.00%
119 Linde Material Handling Parts
Český Krumlov
Czech Republic
15 100.00% 100.00%
Distribution CZ s.r.o.
120 Linde Pohony s.r.o.
121 STILL ČR spol. s.r.o.
122 STILL Regional Service Center, s.r.o.
Český Krumlov
Czech Republic
15 100.00% 100.00%
Prague
Prague
Czech Republic
15 & 23 100.00% 100.00%
Czech Republic
23 100.00% 100.00%
123 STILL ARSER Iş Makineleri Servis ve Ticaret A.Ş.
Izmir
Turkey
23
51.00% 51.00%
124 Linde Magyarország Anyagmozgatási Kft.
Dunaharaszti
Hungary
15 100.00% 100.00%
125 STILL Kft.
126 Dematic Corp.
Környe
Hungary
23 100.00% 100.00%
Grand Rapids
United States
68 100.00% 100.00%
127 KION North America Corp.
Summerville
United States
15 100.00% 100.00%
128 Dematic International Trading Ltd.
Shanghai
129 Dematic Logistics Systems Ltd.
Suzhou
130 Egemin Asia Pacific Automation Ltd.
Causeway Bay –
Hong Kong
131 Egemin (Shanghai) Trading Company Ltd.
Shanghai
132 KION ASIA (HONG KONG) Ltd.
Kwai Chung –
Hong Kong
133 KION Baoli (Jiangsu) Forklift Co., Ltd.
Jiangjiang
134 Linde Material Handling Hong Kong Ltd.
Kwai Chung –
Hong Kong
135 Linde (China) Forklift Truck Corporation Ltd.
Xiamen
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
People’s
Republic of
China
81 100.00% 100.00%
81 100.00% 100.00%
31 100.00% 100.00%
130 100.00% 100.00%
15 100.00% 100.00%
132 100.00% 100.00%
15 100.00% 100.00%
15 100.00% 100.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
251
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
Non-consolidated subsidiaries
Domestic
136 Comnovo GmbH
Dortmund
Germany
15 100.00% 100.00%
137 KION IoT Systems GmbH
Frankfurt am Main Germany
1 100.00% 100.00%
138 Klaus Pahlke Betriebsführungs-GmbH
Haan
Germany
15 100.00% 100.00%
139 Linde Material Handling Rental Services GmbH
Aschaffenburg
Germany
15 100.00% 100.00%
140 OM Deutschland GmbH
Neuhausen a. d.
Fildern
Germany
78 100.00% 100.00%
[R]
141 proplan Transport- und Lagersysteme GmbH
Aschaffenburg
Germany
1 100.00% 100.00%
142 Schrader Industriefahrzeuge Verwaltung GmbH
Essen
143 Trainingscenter für Sicherheit und
Bremen
Transport GmbH
144 Willenbrock Fördertechnik Beteiligungs-GmbH
Bremen
145 Willenbrock Fördertechnik Beteiligungs-GmbH
Hannover
Foreign
146 Lansing Bagnall (Aust.) Pty. Ltd.
Huntingwood
147 NDC Automation Pty. Ltd.
148 NDC Manage Pty. Ltd.
149 Baoli France SAS
150 SCI Champ Lagarde
151 Castle Lift Trucks Ltd.
152 Creighton Materials Handling Ltd.
153 D.B.S. Brand Factors Ltd.
154 Fork Truck Rentals Ltd.
155 Fork Truck Training Ltd.
156 FSU Investments Ltd.
157 Lancashire (Fork Truck) Services Ltd.
158 Linde Heavy Truck Division Ltd.
159 McLEMAN FORK LIFT SERVICES LTD.
160 Regentruck Ltd.
161 SDI Group Ltd.
162 SDI Group UK Ltd.
Belrose
Belrose
Elancourt
Elancourt
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Banbury
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Banbury
Banbury
Germany
Germany
Germany
Germany
Australia
Australia
Australia
France
France
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
15 100.00% 100.00%
27
74.00% 74.00%
27
27
74.00% 74.00%
74.00% 74.00%
62 & 15 100.00% 100.00%
29 100.00% 100.00%
29 100.00% 100.00%
44 100.00% 100.00%
43 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
67 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
81 100.00% 100.00%
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
67 100.00% 100.00%
[R]
62 100.00% 100.00%
59 100.00% 100.00%
62 100.00% 100.00%
[R]
156 & 81 100.00% 100.00%
161 100.00% 100.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
252
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
163 Stephensons Enterprise Fork Trucks Ltd.
164 Sterling Mechanical Handling Ltd.
165 Trifik Services Ltd.
166 Urban Logistics (UK) Ltd.
Basingstoke
Basingstoke
Basingstoke
Basingstoke
UK
UK
UK
UK
167 Handling & Storage Equipment (Ireland) Ltd.
Walkinstown
Ireland
168 Parmacarr Service Srl.
169 QUALIFT S.p.A.
170 URBAN LOGISTICA S.R.L.
171 WHO Real Estate UAB
Torrile
Verona
Lainate
Vilnius
Italy
Italy
Italy
Lithuania
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
[R]
[R]
[R]
[R]
[3]
67 100.00% 100.00%
62 100.00% 100.00%
62 100.00% 100.00%
24 100.00% 100.00%
72 100.00% 100.00%
78 100.00%
–
77 100.00% 100.00%
24 100.00% 100.00%
27
74.00% 74.00%
172 Linde Material Handling (Malaysia) Sdn. Bhd.
Petaling Jaya
Malaysia
107 100.00% 100.00%
173 Linde Viljuškari d.o.o.
174 IBER-MICAR S.L.U.
Vrčin
Gavà
Serbia
Spain
90 100.00% 100.00%
15 100.00% 100.00%
175 Dematic Thailand Co. Ltd.
Bangkok
Thailand
105 & 198
73.89% 73.89%
176 Linde Material Handling (Thailand) Co., Ltd.
Pathum Thani
Thailand
107 100.00% 100.00%
177 Baoli Material Handling Europe s.r.o.
178 Použitý Vozík CZ, s.r.o.
Prague
Prague
Czech Republic
133 100.00% 100.00%
Czech Republic
118 100.00% 100.00%
179 Urban Transporte spol. s.r.o.
Moravany
Czech Republic
24 100.00% 100.00%
180 TOV “Linde Material Handling Ukraine”
Kiev
Ukraine
15 & 9 100.00% 100.00%
Associates (equity-accounted investments)
Domestic
181 Carl Beutlhauser Kommunal- und
Fördertechnik GmbH & Co. KG
Hagelstadt
Germany
15
25.00% 25.00%
182 Hans Joachim Jetschke Industriefahrzeuge
Hamburg
Germany
15
21.00% 21.00%
(GmbH & Co.) KG
183 Linde Hydraulics GmbH & Co. KG
Aschaffenburg
Germany
184 Pelzer Fördertechnik GmbH
Kerpen
Germany
Foreign
185 Linde High Lift Chile S.A.
186 Labrosse Equipement SAS
187 Normandie Manutention SAS
Santiago de Chile Chile
Saint-Péray
Saint-Etienne-du-
Rouvray
France
France
15
15
15
43
43
10.00% 10.00%
24.96% 24.96%
45.00% 45.00%
34.00% 34.00%
34.00% 34.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
253
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
Joint Ventures (equity-accounted investments)
Domestic
188 Linde Leasing GmbH
Wiesbaden
Germany
15
45.00% 45.00%
Foreign
189 JULI Motorenwerk s.r.o.
Moravany
Czech Republic
15 & 23
50.00% 50.00%
Associates (at cost)
Domestic
190 JETSCHKE GmbH
Hamburg
Germany
191 Linde Hydraulics Verwaltungs GmbH
Aschaffenburg
Germany
192 MV Fördertechnik GmbH
193 Supralift Beteiligungs- und
Kommunikationsgesellschaft mbH
194 Supralift GmbH & Co. KG
Foreign
195 Chadwick Materials Handling Ltd.
196 Bari Servizi Industriali S.c.a.r.l.
197 Carretillas Elevadoras Sudeste S.A.
198 Dematic Holding (Thailand) Co., Ltd.
199 Motorové závody JULI CZ s.r.o.
200 DEMATIC ELECTROMECHANICAL
SYSTEMS MIDDLE EAST L.L.C.
Blankenhain
Hofheim am
Taunus
Hofheim am
Taunus
Corsham
Modugno
Murcia
Bangkok
Moravany
Dubai
Germany
Germany
15
15
15
15
21.00% 21.00%
10.00% 10.00%
25.00% 25.00%
50.00% 50.00%
Germany
15
50.00% 50.00%
UK
Italy
Spain
Thailand
Czech Republic
United Arab
Emirates
62
78
114
105
15
3
48.00% 48.00%
25.00% 25.00%
38.54% 38.54%
48.90% 48.90%
50.00% 50.00%
49.00% 49.00%
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
254
List of shareholdings as at 31 December 2018 (continued)
TABLE 131
No. Name
Registered office Country
Parent
company
Share-
holding
2018
Share-
holding
2017
Note
Financial investments
Foreign
201 Balyo SA
202 TPZ Linde Viličari Hrvatska d.o.o.
Ivry-sur-Seine
Zagreb
France
Croatia
15
15
6.48%
6.48%
20.00% 20.00%
[5]
[5]
[1] Formerly ‘DH Services Luxembourg Holding S.à r.l’, change of registered office from Luxembourg to Germany
[2] Formerly ‘DH Services Luxembourg S.à r.l’, change of registered office from Luxembourg to Germany
[3] Addition during 2018
[4] Consolidated in accordance with IFRS 10 as structured entity
[5] No material influence
[R] Dormant company
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
255
[49] AUDITORS’ FEES
[52] INFORMATION ON PREPARATION
AND APPROVAL
The fees recognised as an expense and paid to the auditors of
the consolidated financial statements in 2018 amounted to
The Executive Board of KION GROUP AG prepared the consoli-
€2.3 million (2017: €2.1 million) for the audit of the financial
dated financial statements on 20 February 2019 and approved
statements, €0.1 million (2017: €0.1 million) for other attestation
them for forwarding to the Supervisory Board. The Supervisory
services, €0.0 million (2017: €0.0 million) for tax consultancy
Board has the task of examining and deciding whether to approve
services and €0.0 million (2017: €0.1 million) for other services.
the consolidated financial statements.
[50] COMPLY-OR-EXPLAIN STATEMENT
REGARDING THE GERMAN
CORPORATE GOVERNANCE
CODE (DCGK)
Frankfurt am Main, 20 February 2019
The Executive Board
In December 2018, the Executive Board and Supervisory Board
Gordon Riske
of KION GROUP AG submitted their comply-or-explain statement
for 2018 relating to the recommendations of the German Corpo-
rate Governance Code government commission pursuant to
section 161 AktG. The comply-or-explain statement has been
made permanently available to shareholders on the website of
KION GROUP AG at kiongroup.com/comply_statement.
Dr Eike Böhm
Anke Groth
[51] EVENTS AFTER THE
REPORTING DATE
On 5 February 2019, Dr Feldmann informed KION GROUP AG
that he will be stepping down as chairman of the Supervisory
Board and as a member of the Supervisory Board at the end of
the upcoming Annual General Meeting.
Ching Pong Quek
Susanna Schneeberger
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
256
Independent auditors’ report
To KION GROUP AG, Frankfurt am Main / Germany
Report on the audit of the consolidated
financial statements and the combined
management report
Audit opinions
– the accompanying combined management report as a whole
provides an appropriate view of the Group’s position. In all
material respects, this combined management report is con-
sistent with the consolidated financial statements, complies
with German legal requirements and appropriately presents
the opportunities and risks of future development. Our audit
opinion on the combined management report does not cover
the content of the statement on corporate governance pur-
We have audited the consolidated financial statements of KION
suant to Sections 289f (4) and 315d German Commercial
GROUP AG, Frankfurt am Main/Germany, and its subsidiaries
Code (HGB) included in the combined management report.
(the Group) – which comprise the consolidated statement of
financial position as at 31 December 2018, the consolidated
Pursuant to Section 322 (3) Sentence 1 German Commercial
statement of profit and loss, the consolidated statement of com-
Code (HGB), we declare that our audit has not led to any reserva-
prehensive income, the consolidated statement of cash flows and
tions relating to the legal compliance of the consolidated financial
the consolidated statement of changes in equity for the financial
statements and of the combined management report.
year from 1 January to 31 December 2018 and the notes to the
consolidated financial statements including a summary of signifi-
Basis for audit opinions
cant accounting methods. In addition, we have audited the com-
We conducted our audit of the consolidated financial statements
bined management report on the Parent and the Group of KION
and of the combined management report in accordance with
GROUP AG, Frankfurt am Main/Germany, for the financial year
Section 317 German Commercial Code (HGB) and the Regulation
from 1 January to 31 December 2018. In accordance with the
(EU) No. 537/2014 (referred to subsequently as “EU Audit Regula-
German legal requirements, we have not audited the content of
tion”) and in compliance with German Generally Accepted Stand-
the statement on corporate governance pursuant to Sections
ards for Financial Statement Audits promulgated by the Institut
289f (4) and 315d German Commercial Code (HGB) included in
der Wirtschaftsprüfer [Institute of Public Auditors in Germany]
the combined management report.
(IDW). Our responsibilities under these requirements and princi-
ples are further described in the section “Auditor’s responsibilities
In our opinion, on the basis of the knowledge obtained in the audit,
for the audit of the consolidated financial statements and the
– the accompanying consolidated financial statements com-
ply, in all material respects, with the IFRSs, as adopted by the
combined management report” of our auditor’s report. We are
independent of the group entities in accordance with the require-
ments of European law and German commercial and professional
EU, and the additional requirements of German commercial
law, and we have fulfilled our other German professional respon-
law pursuant to Section 315e (1) German Commercial Code
sibilities in accordance with these requirements. In addition, pur-
(HGB) and, in compliance with these requirements, give a
suant to Article 10 (2f) of the EU Audit Regulation, we declare that
true and fair view of the assets, liabilities, and financial
we have not provided non-audit services prohibited under Article
position of the Group as at 31 December 2018, and of its
5 (1) of the EU Audit Regulation. We believe that the audit evi-
financial performance for the financial year from 1 January to
dence we have obtained is sufficient and appropriate to provide a
31 December 2018, and
basis for our audit opinions on the consolidated financial state-
ments and the combined management report.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
257
Key audit matters in the audit of the consolidated
ducted at the level of the operating entities, which represent
financial statements
the cash-generating units, by determining the corresponding
Key audit matters are those matters that, in our professional
realisable amount and comparing that realisable amount with
judgement, were of most significance in our audit of the consoli-
the corresponding carrying value. The realisable amount is
dated financial statements for the financial year from 1 January to
determined using the discounted cash flow method on the
31 December 2018. These matters were addressed in the con-
basis of KION GROUP AG’s budget consisting of the operative
text of our audit of the consolidated financial statements as a
three-years plan (2019 budget and 2020 to 2021 medium-term
whole and in forming our audit opinion thereon; we do not provide
budget) as well as of a projection concerning two further
a separate audit opinion on these matters.
years, which is adjusted using assumptions about long-term
growth rates. The result of this measurement highly depends
In the following we present the key audit matters we have deter-
on the legal representatives’ estimation of the anticipated cash
mined in the course of our audit:
flows of the corresponding operating entity as well as the dis-
count rate used (weighted average cost of capital – WACC)
1. Recoverability of the goodwill and brand names with indefinite
and, therefore, is subject to great uncertainty. Therefore and
useful life as recognised in the consolidated statement of
due to the underlying complexity of the valuation models
financial position
applied, this matter was of particular significance in the scope
2. Recognition of leases as regards sales
of our audit.
3. Realisation of revenue regarding the project business in the
Supply Chain Solutions segment
For information provided by the Parent on the goodwill and
brand names with indefinite useful life, please refer to notes [6]
Our presentation of these key audit matters has been structured
and [16] to the consolidated financial statements.
as follows:
a) description (including reference to corresponding information
standing of the method applied in the impairment test, the
in the consolidated financial statements)
budget process of KION as well as the definition of the
b. During our audit, we, among other things, obtained an under-
b) auditor’s response
cash-generating units and assessed the determination of the
WACC. In this context, we considered the Group’s adherence
1. Recoverability of the goodwill and brand names with indefinite
to the budget process over the past years.
useful life as recognised in the consolidated statement of
financial position
Regarding the impairment test, we examined the appropriate-
a. As at 31 December 2018, the carrying amount of the goodwill
ness of the expected future cash flows mainly by comparing
and brand names with indefinite useful life in the consolidated
the information with the operative budget (2019) approved by
financial statements is mEUR 3,424.8 (26.4 per cent of the
the supervisory board and with the medium-term budget
Group’s total assets) and mEUR 943.4 (7.3 per cent of the
(2020 to 2021) approved by the legal representatives and by
Group’s total assets), respectively. The goodwill and brand
examining the key measurement assumptions and parame-
names with indefinite useful lives are tested by the legal repre-
ters for plausibility based on expectations about macroeco-
sentatives for impairment each year. This impairment test is
nomic and industry-specific trends. As a significant portion of
conducted regardless of whether there are external or internal
the value in use has been determined based on projected
indicators for an impairment. The impairment test is con-
cash flows for the period following the five-year budget (period
KION GROUP AGAnnual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
258
of perpetuity), we also examined in particular the sustained
services is recognised in addition to an asset. In compliance
growth rate applied for the period of perpetuity based on
with IFRS 15, the types of indirect consumer financing agree-
industry-specific market expectations. With respect to the
ments have now been uniformly classified as leases within the
evaluation of the discount rate, we consulted internal valuation
meaning of IFRS 16.
specialists, who convinced themselves of the appropriateness
of the discount rate used based on market comparisons. Due
Groupwide, consistent lease applications shall ensure that the
to the great significance of the goodwill and the brand names
recognition, categorisation and classification of the various
with indefinite useful life in the consolidated financial state-
contract types according to the IFRSs are complete and cor-
ments, we finally conducted sensitivity analyses with regard to
rect. The determination of the criteria and parameters in these
both the growth expectations of the future cash flows from the
applications is subject to the legal representatives’ judgement.
operating entities and the applied discount rate.
The classification and entry routines of the lease applications
are updated, programmed and managed centrally in Ger-
2. Recognition of leases as regards sales
many, including necessary adjustments as part of the initial
a. To a great extent, KION uses leases as a sales instrument in
application of the new IFRS, while the contract input is per-
the segment Industrial Trucks & Services. The corresponding
formed locally in the operating entities or the Group’s own
agreements comprise contracts, under which the KION enti-
financial services entities. In this context, the new lease
ties qualify as contract parties, and those, under which the
application, which replaces the previous application, was
lease object was sold to external finance partners. The follow-
finally introduced in the operating group entities.
ing three contract types are primarily used:
– Single step lease: The lease object is directly leased to the
– Sale and leaseback sublease: The lease object is sold to a
consumer;
financial partner and subsequently leased back. At the same
time, the lease object is also rented out under a sublease
contract to the consumer.
– Indirect consumer financing: The (lease) object is sold to a
finance partner, who rents it out to a consumer.
Due to the high transaction volume in connection with the var-
ious contract types, any errors in this area may considerably
affect the consolidated financial statements. For this reason,
the assessment of the accounting for leases was of particular
significance in the scope of our audit.
For information provided by the Parent on the accounting for
leases, please refer to the notes [6], [17], [18], [21], [30], [31] and
[35] to the consolidated financial statements.
As at 31 December 2018, the carrying value of the receivables
b. As part of our audit, we first updated our understanding of the
and assets under the lease agreements is mEUR 1,097.3
process including our understanding of the existing contract
(8.5 per cent of total assets) and mEUR 1,932.3 (14.9 per cent
types as well as the company’s internal controls regarding
of total assets), respectively.
leases.
Single-step leases are classified as finance leases or operat-
In the light of our understanding of the organisational compo-
ing leases within the meaning of IFRS 16. For sale and lease
sition and the overall process, the audit on the one hand
back sublease contracts concluded until and including
focused on the lease applications used and on the other hand
31 December 2017, an asset and a lease liability is accounted
on the completeness and accuracy of the data input in the
for taking advantage of the right of continuance specified in
individual component areas.
IFRS 16. For sale and lease back sublease contracts con-
cluded after 31 December 2017, the transaction is classified
as a finance lease. Accordingly, a liability related to financial
KION GROUP AGAnnual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
259
With respect to the lease applications used, we examined the
3. Realisation of revenue regarding the project business in the
appropriateness, implementation and, where required, effec-
Supply Chain Solutions segment
tiveness of certain IT controls in line with our audit strategy. As
a. The revenue in the Supply Chain Solutions segment amounts
part of this examination, we consulted internal IT specialists.
to mEUR 2,052.1 in the financial year 2018 (prior year: mEUR
2,005.1). This accounts for 25.7 per cent (prior year: 26.4 per
In a next step, we obtained an understanding of whether the
cent) of the Group’s total revenue.
automated entry and classification routines used in the lease
applications comply with the relevant IFRSs. To this end, we
A significant portion of the revenue generated in the Supply
first examined the KION IFRS Accounting Manual, which rep-
Chain Solutions segment (mEUR 1,514.0; prior year: mEUR
resents the basis for routine programming, for conformity with
1,512.4) relates to the project business (73.8 per cent of the
the IFRSs. In addition, we assessed whether the entry and
segment’s total revenue). Revenue for the project business-re-
classification routines have been appropriate. Therefore, we
lated customer contracts is recognised in line with the corre-
examined the agreements on the basis of judgemental selec-
sponding period unless there is an alternative possibility of use
tions or by applying sampling methods. However, we made
and right to the services already rendered. The revenue to be
sure that all contract types were subject to our examination.
realised is determined based on the percentage of completion
Based on the data inputs, we assessed for each selected con-
method. The percentage of completion is determined based
tract whether the results of the lease applications comply with
on the proportion of the contract costs that have already been
the relevant IFRSs.
incurred to the total contract costs estimated as at the report-
We examined the data inputs made in the financial year in the
ing date.
individual component areas for accuracy directly in the oper-
The revenue highly depends on estimations subject to the
ating entities on a sample basis in the form of mathematical
legal representatives’ judgement, in particular with regard to
and statistical methods and extrapolated any identified devia-
the total contract costs and the resulting percentage of com-
tions to the corresponding basic population. In this context,
pletion. Also taking into account the high amount of revenue
apart from the accuracy, we audited the appropriate cut-off and
related to the project business in the consolidated financial
completeness of the data inputs on the basis of the original con-
statements, we considered this matter to be of particular
tracts. Where required, we received confirmations of third par-
significance in the scope of our audit.
ties to assess the completeness of the entered contracts.
Due to the introduction of the new lease application, which
business in the Supply Chain Solutions segment, please refer
was concluded in the financial year in the operating group
to the notes [6] and [7] to the consolidated financial statements.
For information on revenue realisation related to the project
entities, we also assessed whether the necessary migration of
the historical contract data was complete and correct by com-
paring – on the level of the contracts – the results of the new lease
application with the results of the previous lease application.
KION GROUP AGAnnual Report 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
260
b. In the scope of our audit, we deepened our knowledge of the
In addition, the other information comprises the separate non-
processes concerning the project business including our
financial group report, which is expected to be published subse-
understanding of the corresponding internal controls of the
quently on KION GROUP AG’s website by 30 April 2019.
Group. We examined the appropriateness of the internal con-
trols’ design and implementation regarding the estimation of
Our audit opinions on the consolidated financial statements and
the percentage of completion and continued review of con-
on the combined management report do not cover the other
tract costs.
information, and consequently we do not express an audit opin-
ion or any other form of assurance conclusion thereon.
Considering this, we selected projects based on risk consid-
erations. First, we assessed – based on the individual basis of
In connection with our audit of the consolidated financial state-
the contracts – whether the projects meet the requirements
ments, our responsibility is to read the other information and, in
for revenue recognition according to the percentage of com-
doing so, to consider whether the other information
pletion method. Subsequently, we assessed the estimation
made for the individual contracts. To this end, we examined
the current cost reports and project calculations taking into
account the customer contracts with respect to the percent-
age of completion of the selected projects. To this end, we
additionally consulted the employees responsible for the rele-
– is materially inconsistent with the consolidated financial
statements, with the combined management report or our
knowledge obtained in the audit, or
– otherwise appears to be materially misstated.
vant projects on matters such as the current project phase,
Responsibilities of the legal representatives and the supervisory
any risks including fines and changes to original assumptions
board for the consolidated financial statements and the combined
and requested explanations for unexpected project develop-
management report
ments, which were compared with supplementary evidence.
The legal representatives are responsible for the preparation of
In addition, we have convinced ourselves, where required, of
the consolidated financial statements that comply, in all material
the project progress on site and have taken into account the
respects, with IFRSs, as adopted by the EU, and the additional
adherence to the budget planning based on retrospective
requirements of German commercial law pursuant to Section
analyses of selected projects.
315e (1) German Commercial Code (HGB) and that the consoli-
Other information
dated financial statements, in compliance with these require-
ments, give a true and fair view of the assets, liabilities, financial
The legal representatives are responsible for the other informa-
position, and financial performance of the Group. In addition, the
tion. The other information comprises the following documents
legal representatives are responsible for such internal control as
received prior to the date of this auditors’ report:
they have determined necessary to enable the preparation of
– the statement on corporate governance included in the com-
– the legal representatives’ confirmation relating to the consol-
bined management report
idated financial statements and to the combined manage-
consolidated financial statements that are free from material mis-
statement, whether due to fraud or error.
In preparing the consolidated financial statements, the legal rep-
resentatives are responsible for assessing the Group’s ability to
ment report pursuant to Section 297 (2) Sentence 4 and Sec-
continue as a going concern. They also have the responsibility for
tion 315 (1) Sentence 5 German Commercial Code (HGB),
disclosing, as applicable, matters related to going concern. In
respectively
– the remaining parts of the Annual Report, with the exception
of the audited consolidated financial statements and com-
addition, they are responsible for financial reporting based on the
going concern basis of accounting unless there is an intention to
liquidate the Group or to cease operations, or there is no realistic
bined management report and our auditor’s report.
alternative but to do so.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
261
Furthermore, the legal representatives are responsible for the
users taken on the basis of these consolidated financial state-
preparation of the combined management report that, as a
ments and this combined management report.
whole, provides an appropriate view of the Group’s position and
is, in all material respects, consistent with the consolidated finan-
We exercise professional judgement and maintain professional
cial statements, complies with German legal requirements, and
appropriately presents the opportunities and risks of future devel-
opment. In addition, the legal representatives are responsible for
scepticism throughout the audit. We also
– identify and assess the risks of material misstatement of the
consolidated financial statements and of the combined man-
such arrangements and measures (systems) as they have consid-
agement report, whether due to fraud or error, design and
ered necessary to enable the preparation of a combined man-
perform audit procedures responsive to those risks, and
agement report that is in accordance with the applicable German
obtain audit evidence that is sufficient and appropriate to
legal requirements, and to be able to provide sufficient appropri-
provide a basis for our audit opinions. The risk of not detect-
ate evidence for the assertions in the combined management
ing a material misstatement resulting from fraud is higher
report.
than for one resulting from error, as fraud may involve collu-
sion, forgery, intentional omissions, misrepresentations, or
The supervisory board is responsible for overseeing the group’s
financial reporting process for the preparation of the consolidated
financial statements and of the combined management report.
the override of internal control.
– obtain an understanding of internal control relevant to the
audit of the consolidated financial statements and of arrange-
Auditor’s responsibilities for the audit of the consolidated financial
management report in order to design audit procedures that
statements and the combined management report
are appropriate in the circumstances, but not for the purpose
Our objectives are to obtain reasonable assurance about whether
of expressing an audit opinion on the effectiveness of these
ments and measures relevant to the audit of the combined
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and whether
the combined management report as a whole provides an appro-
systems.
– evaluate the appropriateness of accounting policies used by
the legal representatives and the reasonableness of esti-
priate view of the Group’s position and, in all material respects, is
mates made by the legal representatives and related disclo-
consistent with the consolidated financial statements and the
knowledge obtained in the audit, complies with the German legal
requirements and appropriately presents the opportunities and
sures.
– conclude on the appropriateness of the legal representa-
tives’ use of the going concern basis of accounting and,
risks of future development, as well as to issue an auditor’s report
based on the audit evidence obtained, whether a material
that includes our audit opinions on the consolidated financial
uncertainty exists related to events or conditions that may
statements and on the combined management report.
cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty
Reasonable assurance is a high level of assurance, but is not a
exists, we are required to draw attention in the auditor’s
guarantee that an audit conducted in accordance with Section
report to the related disclosures in the consolidated financial
317 German Commercial Code (HGB) and the EU Audit Regula-
statements and in the combined management report or, if
tion and in compliance with German Generally Accepted Stand-
such disclosures are inadequate, to modify our respective
ards for Financial Statement Audits promulgated by the Institut
audit opinions. Our conclusions are based on the audit evi-
der Wirtschaftsprüfer (IDW) will always detect a material misstate-
dence obtained up to the date of our auditor’s report. How-
ment. Misstatements can arise from fraud or error and are con-
ever, future events or conditions may cause the Group to
sidered material if, individually or in the aggregate, they could rea-
cease to be able to continue as a going concern.
sonably be expected to influence the economic decisions of
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
262
– evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and whether the consolidated financial statements present
and significant audit findings, including any significant deficien-
the underlying transactions and events in a manner that the
cies in internal control that we identify during our audit.
consolidated financial statements give a true and fair view of
the assets, liabilities, financial position and financial perfor-
We also provide those charged with governance with a statement
mance of the Group in compliance with IFRSs, as adopted by
that we have complied with the relevant independence require-
the EU, and with the additional requirements of German
ments, and communicate with them all relationships and other
commercial law pursuant to Section 315e (1) German Com-
matters that may reasonably be thought to bear on our independ-
mercial Code (HGB).
– obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
ence, and where applicable, the related safeguards.
From the matters communicated with those charged with
within the Group to express audit opinions on the consoli-
governance, we determine those matters that were of most
dated financial statements and on the combined manage-
significance in the audit of the consolidated financial statements
ment report. We are responsible for the direction, supervision
of the current period and are therefore the key audit matters. We
and performance of the group audit. We remain solely
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter.
responsible for our audit opinions.
– evaluate the consistency of the combined management
report with the consolidated financial statements, its con-
formity with German law, and the view of the Group’s position
it provides.
– perform audit procedures on the prospective information
presented by the legal representatives in the group manage-
ment report. On the basis of sufficient appropriate audit evi-
dence we evaluate, in particular, the significant assumptions
used by the legal representatives as a basis for the prospec-
tive information, and evaluate the proper derivation of the
prospective information from these assumptions. We do not
express a separate audit opinion on the prospective informa-
tion and on the assumptions used as a basis. There is a sub-
stantial unavoidable risk that future events will differ materi-
ally from the prospective information.
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
263
Other legal and regulatory requirements
Other information pursuant to Article 10 EU Audit Regulation
We were elected as group auditor by the general meeting on
9 May 2018. We were engaged by the supervisory board on
25 May 2018 and 24 September/24 October 2018. We have been
the group auditor of KION GROUP AG, Frankfurt am Main /
Germany, which was named KION Holding 1 GmbH until
12 June 2013, without interruption since the financial year 2007.
Since the financial year 2013, the company has been a public
interest entity within the meaning of Section 319a (1) Sentence 1
German Commercial Code (HGB).
We declare that the audit opinions expressed in this auditor’s
report are consistent with the additional report to the audit com-
mittee pursuant to Article 11 of the EU Audit Regulation (long-
form audit report).
German public auditor responsible for the
engagement
The German Public Auditor responsible for the engagement is
Kirsten Gräbner-Vogel.”
Frankfurt am Main / Germany, 20 February 2019
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Signed:
Crampton
Signed:
Gräbner-Vogel
Wirtschaftsprüfer
Wirtschaftsprüferin
[German Public Auditor]
[German Public Auditor]
KION GROUP AGAnnual Report 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Responsibility statement
264
Responsibility statement
To the best of our knowledge, and in accordance with the
applicable reporting principles for consolidated financial report-
ing, the consolidated financial statements give a true and fair view
of the financial performance and financial position of the Group,
and the group management report, which is combined with the
Company’s management report, 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.
Frankfurt am Main, 20 February 2019
The Executive Board
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
KION GROUP AGAnnual Report 2018 265
KION GROUP AGAnnual Report 2018 ADDITIONAL INFORMATION
Contents
267
ADDITIONAL
INFORMATION
268
QUARTERLY INFORMATION
269
MULTI-YEAR OVERVIEW
270
DISCLAIMER
271
FINANCIAL CALENDAR
271
CONTACT
KION GROUP AGAnnual Report 2018 ADDITIONAL INFORMATION
Quarterly information
268
Quarterly information
Quarterly information
TABLE 132
in € million
Order intake
Q4
Q3
Q2
Q1
2018
2017 *
2018
2017 *
2018
2017 *
2018
2017 *
2,287.4
2,279.6
2,060.3
1,847.2
2,424.0
1,970.5
1,885.0
1,881.7
thereof Industrial Trucks & Services
1,724.2
1,579.6
1,454.8
1,351.6
1,546.5
1,513.7
1,485.2
1,414.6
thereof Supply Chain Solutions
556.3
692.9
598.5
492.7
874.2
452.3
396.3
461.3
Total revenue
2,225.5
1,963.4
1,895.9
1,832.4
2,031.1
2,001.3
1,843.3
1,801.0
thereof Industrial Trucks & Services
1,685.8
1,547.1
1,417.9
1,312.9
1,449.6
1,398.1
1,368.8
1,314.1
thereof Supply Chain Solutions
Adjusted EBITDA
thereof Industrial Trucks & Services
thereof Supply Chain Solutions
533.0
457.2
395.2
65.4
412.0
404.9
371.7
41.6
472.7
380.1
326.0
56.1
516.1
381.1
318.3
73.1
578.8
377.0
318.0
64.0
599.8
387.7
323.1
71.3
470.7
340.9
301.0
46.1
481.6
322.0
275.6
49.7
Adjusted EBITDA margin
20.5%
20.6%
20.0%
20.8%
18.6%
19.4%
18.5%
17.9%
thereof Industrial Trucks & Services
23.4%
24.0%
23.0%
24.2%
21.9%
23.1%
22.0%
thereof Supply Chain Solutions
12.3%
10.1%
11.9%
14.2%
11.1%
11.9%
EBIT
thereof Industrial Trucks & Services
thereof Supply Chain Solutions
Adjusted EBIT
thereof Industrial Trucks & Services
thereof Supply Chain Solutions
206.2
195.7
22.2
252.3
213.8
49.9
169.7
204.9
– 20.4
219.7
206.1
28.9
168.6
156.2
20.9
192.7
157.4
43.8
136.1
149.4
4.9
195.5
150.3
61.2
142.1
136.1
19.4
187.0
148.2
51.5
159.8
159.7
16.2
210.4
159.4
64.1
Adjusted EBIT margin
11.3%
11.2%
10.2%
10.7%
9.2%
10.5%
thereof Industrial Trucks & Services
12.7%
13.3%
11.1%
11.4%
10.2%
11.4%
thereof Supply Chain Solutions
9.4%
7.0%
9.3%
11.9%
8.9%
10.7%
9.8%
125.8
137.1
1.9
157.9
135.9
35.0
8.6%
9.9%
7.4%
21.0%
10.3%
95.3
126.3
– 17.3
151.6
127.0
34.5
8.4%
9.7%
7.2%
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 268
ADDITIONAL INFORMATION
Multi-year overview
Multi-year overview
KION Group multi-year overview
in € million
Order intake
Revenue
Order book ¹,²
Financial performance
EBITDA
Adjusted EBITDA ³
Adjusted EBITDA margin ³
EBIT
Adjusted EBIT ³
Adjusted EBIT margin ³
2018
8,656.7
7,995.7
3,300.8
1,540.6
1,555.1
19.4%
642.8
789.9
9.9%
2017 *
7,979.1
7,598.1
2,614.6
1,457.6
1,495.8
19.7%
561.0
777.3
10.2%
2017
7,979.1
7,653.6
2,614.6
1,185.7
1,223.9
16.0%
549.4
765.6
10.0%
2016
5,833.1
5,587.2
2,396.6
889.5
931.6
16.7%
434.8
537.3
9.6%
2015
5,215.6
5,097.9
864.0
824.2
850.0
16.7%
422.8
482.9
9.5%
269
TABLE 133
2014
4,771.2
4,677.9
764.1
714.2
780.4
16.7%
347.0
442.9
9.5%
Net income
401.6
422.5
426.4
246.1
221.1
178.2
Financial position ¹
Total assets
Equity
Net financial debt
ROCE 4
Cash flow
Free cash flow 5
Capital expenditure 6
12,968.8
12,337.7
11,228.4
11,297.0
3,305.1
1,869.9
9.3%
2,992.3
2,095.5
9.3%
3,148.8
2,095.5
9.9%
2,495.7
2,903.4
6.9%
6,440.2
1,848.7
573.5
11.9%
6,128.5
1,647.1
810.7
11.4%
519.9
258.5
474.3
218.3
378.3
218.3
– 1,850.0
166.7
332.7
142.6
305.9
133.1
Employees 7
33,128
31,608
31,608
30,544
23,506
22,669
1 Figures as at balance sheet date 31/12/ (adjusted due to the final purchase price allocation Dematic)
2 Order backlog 2016 adjusted to reflect specific customer orders from long-term construction contracts in the segment SCS
3 Adjusted for PPA 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 right-of-use assets
7 Number of employees (full-time equivalents) as at balance sheet date 31/12/
* Key figures for 2017 were restated due to the initial application of IFRS 15 and IFRS 16
KION GROUP AGAnnual Report 2018 ADDITIONAL INFORMATION
Disclaimer
270
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 to 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 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 2018 group management report, which has been combined with the Company’s management report. However, other factors could also have an
adverse effect on our business performance and results. 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. 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).
KION GROUP AGAnnual Report 2018 270
ADDITIONAL INFORMATION
Financial calendar / Contact
271
FINANCIAL CALENDAR
CONTACT
28 February 2019
Contacts for the media
Contacts for investors
Publication of 2018 annual report
Financial statements press conference
Michael Hauger
Senior Vice President
Dr Karoline Jung-Senssfelder
Vice President Corporate Strategy
25 April 2019
Corporate Communications
and Investor Relations
Quarterly statement for the period
Phone: +49 69 201 107 655
Phone: +49 69 201 107 450
ended 31 March 2019 (Q1 2019),
michael.hauger@kiongroup.com
karoline.jung-senssfelder@kiongroup.com
Frank Grodzki
Senior Director External Communications
Phone: +49 69 201 107 496
frank.grodzki@kiongroup.com
conference call for analysts
9 May 2019
Annual General Meeting
25 July 2019
Interim report for the period ended
30 June 2019 (Q2 2019), conference call
for analysts
24 October 2019
Quarterly statement for the period
ended 30 September 2019 (Q3 2019),
conference call for analysts
Subject to change without notice
Securities identification numbers
KION GROUP AG
This annual report is available in German
ISIN: DE000KGX8881
Thea-Rasche-Strasse 8
and English at kiongroup.com under
WKN: KGX888
60549 Frankfurt am Main | Germany
Investor Relations / Financial Reports.
Phone: +49 69 201 100
Fax: +49 69 201 107 690
info@kiongroup.com
www.kiongroup.com
The content of the German version
is authoritative.
kiongroup.com/
ir
KION GROUP AGAnnual Report 2018 KION GROUP AG
Corporate Communications
Thea-Rasche-Strasse 8
60549 Frankfurt am Main | Germany
Phone: +49 69 201 100
Fax: +49 69 201 107 690
info@kiongroup.com
www.kiongroup.com