D I G I T A L I S A T I O N
E N E R G Y
A U T O M A T I O N
I N N O V A T I O N
ANNUAL REPORT
2019
P E R F O R M A N C E
KION Group
Key figures for 2019
2
KION Group overview
in € million
Order intake
Revenue
Order book ¹
Financial performance
EBITDA
Adjusted EBITDA ²
Adjusted EBITDA margin ²
EBIT
Adjusted EBIT ²
Adjusted EBIT margin ²
Net income
Financial position ¹
Total assets
Equity
Net financial debt
ROCE ³
Cash flow
Free cash flow 4
Capital expenditure 5
Employees 6
2019
9,111.7
8,806.5
3,631.7
1,614.6
1,657.5
18.8%
716.6
850.5
9.7%
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%
Change
2019 / 2018
5.3%
10.1%
10.0%
4.8%
6.6%
–
11.5%
7.7%
–
444.8
401.6
422.5
10.7%
13,765.2
12,968.8
12,337.7
3,558.4
1,609.3
9.7%
568.4
287.4
3,305.1
1,869.9
9.3%
519.9
258.5
2,992.3
2,095.5
9.3%
474.3
218.3
6.1%
7.7%
– 13.9%
–
9.3%
11.2%
34,604
33,128
31,608
4.5%
1 Figures as at balance sheet date 31/12/
2 Adjusted for PPA items and non-recurring items
3 ROCE is defined as the proportion of adjusted EBIT to capital employed
4 Free cash flow is defined as cash flow from operating activities plus cash flow from investing activities
5 Capital expenditure including capitalised development costs, excluding right-of-use assets
6 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).
FIRM FOCUS ON OUR CUSTOMERS
When it comes to finding the right answers to our
customers’ questions and requests, the KION Group is
ahead of the pack. What drives us day after day is a
desire to provide customers with bespoke, efficient and
intelligent solutions for their intralogistics needs in con-
junction with a full range of premium services and advice.
With our KION 2027 strategy, we have put everything in
place to ensure that we, and our customers, can continue
to go from strength to strength. The five fields of action
in KION 2027 – energy, digital, automation, innovation
and performance – set out the path that we need to take
in order to generate further profitable growth and meet
the needs of our customers both now and in future.
3
Contents
4
Company
A
8
14
16
24
28
B
32
C
44
45
62
94
107
111
D
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135
136
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242
250
E
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257
257
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
4
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 world-
wide, the KION Group’s logistics solutions optimise the
flow of material and information within factories, ware-
houses 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 comprehensive
range of intelligent supply chain and automation solu-
tions. The Linde and STILL brands serve the premium
industrial truck segment. Baoli focuses on industrial
trucks in the economy segment. Among the regional
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
Intralogistics 4.0
How the
KION Group is
adding value
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 2019
KION GROUP AG
COMPANY
Segments
5
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
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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 2019
KION GROUP AG
TO OUR SHAREHOLDERS
Contents
7
TO OUR
SHAREHOLDERS
8
14
16
24
28
LETTER TO SHAREHOLDERS
EXECUTIVE BOARD
REPORT OF THE SUPERVISORY BOARD
KION SHARES
SERVICES FOR SHAREHOLDERS
KION GROUP AGAnnual Report 2019
8
Letter to Shareholders
Dear shareholders, customers,
partners and friends of the KION Group,
Our employees made 2019 a year of impressive success for the KION Group,
demonstrating their talent, experience, huge commitment and a great deal of passion
in their efforts on behalf of our customers. We easily outperformed the market as a
whole and strengthened our market position. Moreover, we not only achieved our
ambitious business objectives but in some cases even exceeded them significantly,
despite increasingly difficult conditions for the industry that were brought about by
macroeconomic challenges, several delays to Brexit, trade disputes and bilateral
protectionist tariffs. These pleasing results for 2019 are the work of our more than
34,000 highly skilled employees. Our success represents a fantastic team effort,
and my Executive Board colleagues and I would like to say a big thank you.
In 2019, the global market for industrial trucks contracted by 2.1 per cent compared
with the prior year. Yet the value of the KION Group’s order intake increased by a total
of 5.3 per cent on 2018, mainly because of the strong growth in the Supply Chain
Solutions segment. The consolidated revenue generated in the period January to
December 2019 rose by a robust 10.1 per cent year on year. Adjusted EBIT was also
higher than in the previous year, increasing by 7.7 per cent to €850.5 million. At 444.8 mil-
lion, our net income was also up significantly by 10.7 per cent. We hit our targets for
all of the key performance indicators, partly thanks to the global boom in e-commerce.
Once again, we have delivered proof of our leading role in the industry. The strong
results illustrate how we have succeeded in making an enduring improvement to the
Group’s resilience in recent years. They also show that we are able to maintain our
course, even in choppy waters. And we have put everything in place to ensure that
we can write further chapters in our story of success over the coming years.
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSLetter to Shareholders 9
GORDON RISKE
CEO
Paving the way for success: KION 2027
Our corporate strategy, KION 2027, provides the basis for our success, and we are
now reaping the rewards of our rigorous implementation of the strategy. We are
steadily strengthening our market-leading position through our efforts in five fields
of action: energy, digital, automation, innovation and performance.
We are already a leading player in every part of the material handling market. One
such area is efficient energy use. The New Energy Systems department brings
together the KION Group’s knowledge and skills relating to current and future drive
technologies. Powerful lithium-ion batteries are a particular focus. The advantages
of this technology for our customers are high energy efficiency, top-up charging to
save time, zero-emission operation and user-friendly processes. Fuel cells are
another important focus in the field of energy, because worldwide interest in hydrogen
as an alternative energy source is increasing. Here too, our Linde and STILL brands
are already taking the lead.
KION GROUP AGTO OUR SHAREHOLDERSLetter to ShareholdersAnnual Report 2019 10
The digital transfor-
mation will become
the decisive distin-
guishing factor for
many industries.
A crucial competitive edge
In the years ahead, digital transformation and the increasing degree of automation will
be the decisive distinguishing factor for many industries and businesses. These trends
are also significantly shaping and changing the intralogistics sector, as rapid, reliable
and efficient supply chains create a crucial competitive edge in the web economy.
In modern warehouses, digitalisation and automation go hand in hand. A prime
example is the latest innovation from our automation specialist Dematic. As well as
large distribution centres, small decentralised warehouses are springing up in towns
and cities in response to consumer demand for ever-shorter delivery times and to
enable omnichannel fulfilment. These small storage areas, which can be found at the
back of local supermarkets, for example, are known as micro-fulfilment solutions.
We are one of the driving forces in this area of innovation. But digitalisation is not
only making logistics execution easier, it is also improving the planning of end-to-end
flows of goods. The Dematic iQ Virtual software provides customers with a ‘digital
twin’ that simulates an entire warehouse. These days, more and more industrial
trucks can move around the warehouse autonomously thanks to automation tech-
nology. Driverless trucks are already used wherever there are recurring processes.
The KION Group is the global market leader in this rapidly expanding market. This
trend will continue to grow, leading to more accurate analysis and activity in real time
once the 5G communications standard is introduced. As a result, our customers
will be able to operate even more efficiently.
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSLetter to Shareholders 11
Innovation is in our DNA
Dematic is not the only company that embodies the KION Group’s capacity to innovate.
Two brand-new generations of Linde and STILL counterbalance trucks with a load
capacity of 2.0 to 3.5 tonnes are bringing the future a step closer. Linde’s new forklift
trucks are designed with the demands of Industry 4.0 firmly in mind. Thanks to connec-
tivity as a standard feature, data from the trucks can be sent to the KION cloud. As a
result, the new generation of trucks can be adapted throughout their lifecycle to changing
customer requirements, including to ones that we do not even know about today.
Connectivity, remote diagnostics and predictive maintenance increase the trucks’ uptime
and help our customers to reduce their costs.
We are ensuring
that our customers
have a crucial
competitive edge.
STILL, the KION Group’s other premium brand company, is particularly focused on
fitting its industrial trucks with powerful electric drives. In a new model series, developers
have managed to significantly increase handling capacity in the load category up
to 3.5 tonnes and, at the same time, improve energy efficiency. The range is also out-
standing: the trucks can easily complete a three-shift operation without needing to
have their battery changed.
All these – and many other exciting new products – show that around the world the
KION Group is bringing together exceptional people with a truly innovative mindset.
Our strength lies in listening to customers, understanding their problems and finding
individually tailored solutions for their complex requirements. In different ways and in
different fields, we are ensuring that our customers have a crucial competitive edge. We
are using our strength in innovation to continually set new standards in the industry.
KION GROUP AGTO OUR SHAREHOLDERSLetter to ShareholdersAnnual Report 2019 12
Investment for further growth
To maintain our rate of innovation at a high level going forward, we are continuing to
forge ahead with the optimisation of our manufacturing operations and investing in
the expansion of our worldwide capacity. Fiscal year 2020 is expected to be charac-
terised by strategic capital expenditure in medium- to long-term growth. Alongside
the modernisation of existing plants in Aschaffenburg, Hamburg, Châtellerault and
Luzzara, we are currently planning to build new factories in Poland and China. Two
further plants – in Pune (India) and near the city of Xiamen in China – were completed
just recently. And with KION Battery Systems GmbH, KION Group has established
a new joint venture with BMZ Holding GmbH for the development and production of
lithium-ion batteries.
The planned expansion of our business in China is a key part of our growth strategy.
By constructing another factory for counterbalance trucks in Jinan, eastern China, we
are extending our product portfolio, seizing opportunities for growth in the value seg-
ment and taking even greater advantage of the increasing electrification of industrial
trucks in China, one of the fastest-growing and most important markets in the world.
As well as capital expenditure of around €100 million, we will create more than 800
new jobs at our new site in the province of Shandong by 2025. Our new highly auto-
mated plant, the adjoining KION Value Competence Center and the expansion of our
sales and service network will enable us to harness further potential in this important
market and significantly strengthen our position.
In addition to expanding our product range and capacities, we will strengthen the
software development for automation solutions and at the same time further develop
our range of products with respect to energy systems. We will also press ahead with
the ongoing expansion of our global sales and service network and the Group’s
digital transformation.
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSLetter to Shareholders 13
Positive prospects despite growing challenges
The KION Group is excellently placed to continue benefiting from global megatrends
in the coming years. The main drivers here remain the growing tendency of consumers
to buy online, increasingly fragmented supply chains in the global economy and the
desire for new drive systems and energy sources. Although the economy is expected
to weaken and the market for industrial trucks is losing momentum, we anticipate that
we will continue to generate profitable growth and further improve our market position
in 2020. In recent years, we have become industry leaders in terms of profitability
and achieved a strong cash flow position. This will allow us to make substantial stra-
tegic investments in 2020, creating an even stronger foundation for profitable growth
in future.
The KION Group has evolved a great deal over the past twelve months. Nonetheless,
we remain true to the aspiration that is embodied by our name: In the east African
Masai language, the word ‘Kion(gozi)’ means the one who leads. To be a leader,
we need an edge. We work tirelessly for this every day on behalf of our customers,
deploying the most effective technology, the best people and outstanding ideas.
With best wishes,
Gordon Riske
Chief Executive Officer
KION GROUP AG
KION GROUP AGTO OUR SHAREHOLDERSLetter to ShareholdersAnnual Report 2019 14
TO OUR SHAREHOLDERS
Executive Board
Executive Board of
KION GROUP AG
GORDON RISKE
Chief Executive Officer (CEO)
born in 1957 in Detroit (USA)
ANKE GROTH
DR EIKE BÖHM
CHING PONG QUEK
Chief Financial Officer (CFO) and
Labour Relations Director
born in 1970 in Gelsenkirchen (Germany)
Chief Technology Officer (CTO)
born in 1962 in Pforzheim (Germany)
Chief APAC & Americas Officer (CAPAO)
born in 1967 in Batu Pahat / Johor (Malaysia)
KION GROUP AGAnnual Report 2019
Ching Pong Quek
Anke Groth
Gordon Riske
Dr. Eike Böhm
16
Report of the Supervisory Board of
KION GROUP AG
Dear shareholders,
I am delighted to be reporting for the first time as chairman on the work of our
Company’s Supervisory Board in 2019.
Targets achieved despite difficult conditions
The KION Group proved to be a reliable performer yet again in 2019. Every aspect
of the outlook for the past reporting year was borne out by the results achieved and,
in some cases, comfortably exceeded. The Company enjoyed a successful year,
although 2019 was not always easy. Economic conditions proved challenging. Inter-
national trade disputes and uncertainty surrounding other major issues, such as
Brexit, took their toll on the investment climate in markets important to our Company.
And yet the KION Group was able to keep the effects of these difficult conditions
in check, outperform the market as a whole and strengthen its own market position
thanks to the fantastic efforts of the entire workforce. Global demand for highly effi-
cient industrial trucks remains firmly at unprecedented levels, although the individual
regional markets present a distinctly mixed picture. There has been robust growth in
demand for integrated, connected and increasingly automated intralogistics solutions
for customers in industry, retail and wholesale. The steps taken by the Company after
acquiring Dematic are having an effect, yielding measurable success that is clearly
reflected in the Company’s overall results. This is confirmation of the disciplined
operational management of the Company and of the focus on the fields of action
defined in the KION 2027 strategy.
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSReport of the Supervisory Board 17
DR MICHAEL MACHT
Chairman
Against this backdrop, it was only logical to work with the Executive Board last year
to tackle the next phase in the implementation of KION 2027. A clear sign of the
Company’s commitment to taking the necessary steps is the earmarking of significant
funds for capital expenditure on projects in the five fields of action (energy, digital,
automation, innovation and performance). The Supervisory Board sees 2020 as a year
of transition. Building on the very solid results for the financial years spanned by the
first phase of the strategy, the Company now plans to invest at locations where products
and services will bring lasting added value for its customers in future. One prominent
example is the announcement that the Company will be pursuing a growth strategy in
the Chinese market involving the local development of a brand-new line of modular
material handling equipment for the mid-price product segment. These trucks are to
be produced at a new factory in China.
The Supervisory Board held extensive and in-depth discussions with the Executive
Board on this willingness to invest while economic conditions are difficult to forecast.
Although the volume of the capital expenditure programme means that the Company will
have to take a short break from improving its profitability in 2020, the Supervisory Board
agreed with the Executive Board that it was the right time to take action for the future.
KION GROUP AGTO OUR SHAREHOLDERSReport of the Supervisory BoardAnnual Report 2019 18
Personnel matters relating to the Executive Board
In view of the aforementioned new strategy for the Asia-Pacific region, it made sense
to ensure that the Company had the right people in place to successfully implement
the strategy. Consequently, Ching Pong Quek’s term of appointment as a member of
the Executive Board and as Chief Asia Pacific Officer was extended for a further five
years. Mr Quek will play an important role in the strategic realignment of the Company
in the Chinese market over the coming years. To achieve its very ambitious goals,
the Company needs an experienced and successful officer in the region who is familiar
with its day-to-day business and its strengths and weaknesses and who is able to imple-
ment the strategic path that has been laid out. Mr Quek meets this brief in all respects.
The Supervisory Board and Ms Schneeberger, whose responsibilities on the Executive
Board include the Supply Chain Solutions segment (Dematic) and digitalisation topics,
reached agreement by amicable and mutual consent that she will leave the KION Group
due to differing views on corporate strategy. Ms Schneeberger therefore stepped
down as a member of the Executive Board of KION GROUP AG on 12 January 2020.
The Supervisory Board would like to thank Ms Schneeberger for her contributions
during her time at the Company.
Strengthening of corporate governance in the Company
Over the course of the year, the Supervisory Board scrutinised the initiatives announced
by German lawmakers and the government commission responsible for the German
Corporate Governance Code. Although the provisions of the law to implement the
second Shareholder Rights’ Directive and the new German Corporate Governance
Code did not come into effect in 2019, despite earlier announcements to the contrary,
the Supervisory Board made significant preparations in the reporting year that will
enable the KION Group to adequately apply these new rules for listed companies in
Germany. The Supervisory Board of KION GROUP AG hopes that the lawmakers and
government commission will now maintain a phase of stability for the legislation and
Code and will refrain from introducing further new rules over the next few years.
With regard to its own arrangements, the Supervisory Board has resolved to make
changes so that the terms of office of shareholder representatives on the Supervisory
Board end on different dates rather than on the same date. The aim of introducing
a ‘staggered board’ is to ensure that not all shareholder representatives have to be
elected by the Annual General Meeting at the same time. The main reason for switch-
ing the end dates in this way is because holding elections for the full contingent of
shareholder representatives can result in major changes and the loss of continuity of
experience and expertise on the Supervisory Board. The elections may also come
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSReport of the Supervisory Board 19
at the same time as key Executive Board members have to be re-appointed. This can
lead to the perception, particularly among investors, that the management of the
Company is (temporarily) uncertain and unstable.
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. 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. Between
meetings of the Supervisory Board and between those of its committees, the chairmen
of the Supervisory Board and Audit Committee remained in close contact at all
times with the Chief Executive Officer and Chief Financial Officer. There was also
regular contact between the chairman of the Audit Committee and those responsible
for internal audit and compliance in the Company.
Corporate governance matters handled by the Supervisory Board
The Supervisory Board and its committees held in-depth discussions on the Super-
visory Board’s own obligations in relation to the Company’s corporate governance
decisions and declarations before adopting unanimous resolutions.
Contrary to expectations, no amendments were made to the German Corporate
Governance Code in 2019. At its meeting on 19 December 2019, the Supervisory
Board held its final discussion on the KION Group’s compliance with the unchanged
recommendations and suggestions of the Code and issued an unchanged declaration
of conformity 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 AGTO OUR SHAREHOLDERSReport of the Supervisory BoardAnnual Report 2019 20
The Supervisory Board must review the content of the non-financial Group report,
which the Company is obliged to publish in accordance with section 315b of the
German Commercial Code (HGB). The Supervisory Board engaged our Company’s
auditors for the preparation of this review of the 2018 report, which was presented
to the Supervisory Board for a decision in April 2019 and published on 30 April 2019,
and of the upcoming report for 2019. No concerns were raised as a result of the
Supervisory Board’s review of the report. As was the case in the previous year, the
Supervisory Board will take account of the auditors’ assessment in its own review
of the 2019 non-financial Group report, which will take place in April 2020, i.e. after
this report of the Supervisory Board has been submitted. After carrying out detailed
preparations, the Supervisory Board will make a decision promptly to ensure that the
report can be published on time by the end of April.
The Executive Board and Supervisory Board provide a detailed report on corporate
governance at KION GROUP AG in the corporate governance report. This is com-
bined with the declaration on corporate governance and can be found on pages 32
to 41 of this annual report and on the KION GROUP AG website at kiongroup.com/
GovernanceReport.
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 21 February 2020.
The auditors reviewed this report and issued an auditors’ report. Based on their audit,
which they completed on 21 February 2020 without having identified any deficiencies,
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.
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSReport of the Supervisory Board
21
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 2 March 2020
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.
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 2019, the Supervisory Board and its committees dealt with the matters at hand
and made the necessary decisions at a total of 17 meetings. These consisted of
seven 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
committees with advance information. In 2019, all members of the Supervisory Board
attended all Supervisory Board meetings and the meetings of the respective commit-
tees of which they were members apart from in the following cases:
There were five (of the seven) Supervisory Board meetings at each of which one
member sent apologies and two committee meetings at each of which one member
sent apologies. There was also one Supervisory Board meeting at which two members
sent apologies. In the period since 9 May 2019, during which Mr Tan Xuguang has
been a member of the Supervisory Board, he has attended one of the five meetings.
KION GROUP AGTO OUR SHAREHOLDERSReport of the Supervisory BoardAnnual Report 2019 22
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, consolidated financial statements and combined management report for
KION GROUP AG and the Group for the year ended 31 December 2019 following
their engagement by the Annual General Meeting on 9 May 2019. The corresponding
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 20 February 2019, and committee members
were given the opportunity to speak to the auditors in person.
The auditors were appointed by the chairman of the Supervisory Board on 23 July 2019.
The key audit matters were discussed and set out accordingly at the Audit Committee’s
meeting on 23 October 2019.
The auditors submitted their report and the documents relating to the 2019 financial
statements to the members of the Audit Committee and the members of the Super-
visory Board, in each case with the required lead time. The Audit Committee and
Supervisory Board each discussed the report extensively, in both cases in the pres-
ence of the auditors. The auditors reported in detail on the main findings of the audit
on each occasion.
The auditors issued an unqualified opinion for the separate financial statements,
consolidated financial statements and group management report, which was combined
with the Company’s management report, on 21 February 2020. Having itself scruti-
nised the Company’s separate financial statements, consolidated financial statements
and combined management report for the year ended 31 December 2019, the Super-
visory Board – on the basis of a recommendation from the Audit Committee – agreed
with the findings of the audit by the auditors after further discussing these findings
at its meeting on 2 March 2020. 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 statements and consolidated financial statements for
the year ended 31 December 2019 prepared by the Executive Board, thereby adopting
the annual financial statements.
KION GROUP AGAnnual Report 2019TO OUR SHAREHOLDERSReport of the Supervisory Board 23
At its meeting on 2 March 2020, 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 €1.30 per no-par-value
share. In doing so, the Supervisory Board took account of the Company’s financial
situation and performance, its medium-term financial and capital-expenditure
planning and the interests of the shareholders. The Supervisory Board believes the
proposed dividend is appropriate.
Personnel changes on the Supervisory Board
On 9 May 2019, there was a change at the helm of the Supervisory Board. After
Dr John Feldmann stepped down as a shareholder representative on the Supervisory
Board and thus as its chairman, the Supervisory Board elected me as its new chair-
man during its constitutive meeting on 9 May 2019. We owe a debt of gratitude to
Dr Feldmann for his great dedication and significant contributions to the Company
during his tenure as chairman of the Supervisory Board. He played a key role in the
KION Group’s transformation from a European industrial truck manufacturer into one
of the world’s leading providers of intralogistics and automation solutions. While
Dr Feldmann was chairman of the Supervisory Board, the Company also put in place
an Executive Board that is diverse, international and equipped with the necessary
expertise for the future.
As I was initially appointed as a member of the Supervisory Board by the court for
a limited period, the Annual General Meeting elected me as a shareholder represent-
ative on the Supervisory Board on 9 May 2019. The Annual General Meeting also
elected Mr Tan Xuguang as a shareholder representative on the Company’s Super-
visory Board on 9 May 2019.
The details of this report were discussed thoroughly at the Supervisory Board meeting
on 2 March 2020 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 2019.
Dr Michael Macht
Chairman
KION GROUP AGTO OUR SHAREHOLDERSReport of the Supervisory BoardAnnual Report 2019
TO OUR SHAREHOLDERS
KION shares
KION shares
24
Significant rally in the equity markets despite
concerns about the economy
Sharp rises in the KION share price
Over the course of 2019, KION shares recouped most of the
Although the global economy was experiencing a period of
losses that they had suffered in the previous year. The first four
weakness and tensions surrounding trade and other geopolitical
months of trading were characterised by a strong uptrend. The
issues remained high, equity markets worldwide staged a marked
shares then lost momentum on the back of a contracting indust-
recovery over the course of 2019, with some reaching record
rial truck market and fresh concerns about restrictions on global
highs. This was influenced by improved expectations, which had
trade. After reaching their low for the year in August, the share
previously assumed a significant economic slowdown in places,
price returned to a positive course that continued until the end of
or even a recession. Moreover, various risk factors diminished
the year. The shares ended 2019 at €61.56, which was an
noticeably, including the threat of a hard Brexit, destabilisation of
increase of 38.9 per cent compared with the close of 2018. At the
the euro due to a lack of budgetary discipline and interest-rate
end of 2019, market capitalisation stood at €7.3 billion, of which
hikes in the US. Widespread falls in company profits had already
€4.0 billion was attributable to shares in free float. The average
been largely priced in and had triggered a major downturn in the
daily Xetra trading volume in 2019 was 283.4 thousand shares or
stock markets in 2018. Consequently, an upward trend emerged
€14.8 million (2018: 295.7 thousand shares or €18.7 million).
in 2019. The interest-rate environment provided a tailwind as,
> DIAGRAM 001
apart from equities and products based on them, few invest-
ments with good returns were available. Over the year as a whole,
the DAX added 25.5 per cent while the MDAX gained 31.2 per cent.
Share price performance in 2019 compared with the DAX and MDAX
DIAGRAM 001
€80
€70
€60
€50
€40
44.33 € *
KION GROUP AG
DAX
MDAX
€30
€20
€10
€0
61.56 € *
+ 38.9% *
* Closing price
01 / 2019
02 / 2019
03 / 2019
04 / 2019
05 / 2019
06 / 2019
07 / 2019
08 / 2019
09 / 2019
10 / 2019
11 / 2019
12 / 2019
KION GROUP AGAnnual Report 2019 TO OUR SHAREHOLDERS
KION shares
25
Further increase planned after record dividend
in 2019
Stable shareholder structure
The shareholder structure remained almost unchanged in the
The Annual General Meeting on 9 May 2019, at which 87.4 per cent
reporting year. Weichai Power Co., Ltd., Weifang, People’s Repu-
of the voting share capital was represented, adopted the resolu-
blic of China, KION GROUP AG’s anchor shareholder, has retai-
tion on the appropriation of profit for 2018 with an overwhelming
ned its 45.0 per cent stake and thus is still the largest single
majority. The payment of €1.20 per dividend-bearing share was
shareholder, while KION GROUP AG continues to hold 0.1 per cent
21.2 per cent higher than in the prior year. The total dividend
of the shares. The free float therefore accounted for 54.9 per cent
payout rose from approximately €116.8 million to €141.5 million,
at the end of 2019.
which equates to a dividend payout rate of around 35 per cent.
Between 9 and 20 September 2019, KION GROUP AG repur-
The Executive Board and Supervisory Board of KION
chased a total of 60,000 shares (around 0.05 per cent of the
GROUP AG will propose a dividend of €1.30 per share (2018:
share capital) for use in the KION Employee Equity Programme
€1.20) to the Annual General Meeting on 12 May 2020. This equa-
(KEEP). By 31 December 2019, a total of 67,104 shares had
tes to a total dividend payout of €153.4 million and thus a rise of
been purchased by staff (2018: 38,691 shares). The number of
8.4 per cent compared with the prior year. With earnings per
shares held in treasury stood at 130,644 as at the reporting date.
share for 2019 of €3.86, this equates to a dividend payout rate of
> DIAGRAM 002
around 34 per cent. > TABLE 001
Basic information on KION shares
TABLE 001
Shareholder structure as at 31 December 2019
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, FTSE4Good
0.1%
KION GROUP AG
45.0%
WEICHAI POWER
54.9%
FREE FLOAT
KION GROUP AGAnnual Report 2019 TO OUR SHAREHOLDERS
KION shares
26
KION shares mainly recommended as a buy
Stable credit ratings
As at 31 December 2019, 22 brokerage houses were following
The KION Group continues to have an investment-grade credit
and reporting on the KION Group (2018: 21). Of this total, ten ana-
rating. In October 2019, Fitch Ratings confirmed the Group’s
lysts recommended KION shares as a buy, eight rated them as
long-term issuer rating of BBB– with a stable outlook. Standard &
neutral and four advised selling them. The median target price
Poor’s has classified the KION Group as BB+ with a stable
specified by the share analysts was €62.50 (31 December
outlook since December 2019.
2018: €64.00). > TABLE 002
KION GROUP AGAnnual Report 2019 TO OUR SHAREHOLDERS
KION shares
27
Share data
TABLE 002
Closing price at the end of 2018
High for 2019
Low for 2019
Closing price at the end of 2019
Market capitalisation at the end of 2019
Performance in 2019
€44.33
€66.64
€40.29
€61.56
€7,269.6 million
38.9%
Average daily XETRA trading volume in 2019 (no. of shares)
283.4 thousand
Average daily XETRA trading volume in 2019 (€)
Share capital
Number of shares
Earnings per share for 2019
Dividend per share for 2019 *
Dividend payout rate *
Total dividend payout *
Equity ratio as at 31/12/2019
* Proposed dividend for the fiscal year 2019
€14.8 million
€118,090,000
118,090,000
€3.86
€1.30
33.7%
€153.4 million
25.9%
KION GROUP AGAnnual Report 2019 TO OUR SHAREHOLDERS
Services for shareholders
28
Services for shareholders
Active investor relations work
presentations, form part of the extensive information for investors
that is available on the Company’s website.
The objective of investor relations is to ensure, through conti-
nuous dialogue, that the capital markets value the Company
appropriately. The Executive Board and the KION Group’s
Information on the website
investor relations team continued their active dialogue with
investors and analysts last year. The KION Group participated
Detailed information on KION shares as well as press releases,
in many investor conferences in Germany and abroad and
reports, presentations and information about the Annual
held numerous roadshows and one-on-one meetings.
General Meeting can be found at kiongroup.com/ir. The KION
The Annual General Meeting of KION GROUP AG on
Group’s annual report is also available here, both as a PDF file
9 May 2019, at which 87.4 per cent of the share capital was repre-
and as an interactive online version. The contact details of the
sented, approved the Supervisory Board and Executive Board’s
investor relations team can be found under IR Contact. Infor-
proposals with a large majority.
mation on corporate governance in the Group is published at
The speeches of the Chief Executive Officer and the chairman
kiongroup.com/Governance.
of the Supervisory Board were broadcast live at kiongroup.
com / agm. A webcast of the Chief Executive Officer’s speech is
also available on the Company’s website.
When the 2018 annual report was published on 28 February
2019, the Executive Board of KION GROUP AG held a financial
statements press conference and conference call. It also held an
Analyst Day, at which it presented Dematic’s project business
and provided insights into the KION Group’s digital activities. In
addition, the Executive Board held conference calls to report on
each set of quarterly results. Recordings from the financial
statements press conference and the transcripts from the annual
and quarterly conference calls, along with the associated
kiongroup.com/
Ir
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
Contents
31
CORPORATE
GOVERNANCE
32
32
32
35
38
CORPORATE GOVERNANCE REPORT
Declaration of conformity 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 2019 CORPORATE GOVERNANCE
Corporate governance report
32
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 declaration of conformity on 3 / 12 Decem
ber 2018.
Both decisionmaking bodies again considered the recom
Corporate governance covers the whole system of managing and
mendations of the Code in detail and, on 2 / 19 December 2019,
monitoring an enterprise, the principles and guidelines that shape
issued the following declaration of conformity for KION GROUP AG
its business policy and the system of internal and external control
as required by section 161 (1) AktG:
and monitoring mechanisms. The Executive Board and Super
Since issuing the last declaration of conformity in December
visory Board of KION GROUP AG believe that a commitment,
2018, KION GROUP AG has complied with all but one of the
born from responsibility for the Company, to rigorous corporate
recommendations of the German Corporate Governance Code
governance in accordance with the accepted standards is essen
(the ‘Code’) as amended on 7 February 2017 and intends to do so
tial to the Company’s longterm success. Compliance with these
in the future.
principles also promotes the trust that our investors, employees,
In derogation of section 3.8 (3) of the Code, the articles of
business partners and the public have in the management and
association of KION GROUP AG do not provide for a deductible
monitoring of the Company.
for members of the Supervisory Board under D&O insurance. The
There is a close correlation between the corporate govern
Company believes that such a deductible is not customary on an
ance report required by the German Corporate Governance
international level and would therefore make it considerably more
Code (the ‘Code’) as amended on 7 February 2017 and the
difficult to find independent candidates for the Supervisory
content of the declaration on corporate governance required by
Board, in particular candidates from outside Germany.
section 289f and section 315d of the German Commercial Code
(HGB). For this reason, the Executive Board and the Supervisory
Frankfurt am Main, 2 / 19 December 2019
Board of KION GROUP AG have combined the two statements
below in accordance with section 3.10 of the Code. The declara
tion on corporate governance pursuant to section 289f and
For the Executive Board:
section 315d HGB is part of the combined management report.
According to section 317 (2) sentence 6 HGB, the information
Gordon Riske
Anke Groth
provided in accordance with section 289f and section 315d HGB
does not have to be reviewed by the auditor.
1. Declaration of conformity
pursuant to section 161 (1) AktG
For the Supervisory Board:
Dr Michael Macht
Section 161 (1) of the German Stock Corporation Act (AktG)
public on the website of KION GROUP AG at kiongroup.com/
The declaration of conformity is permanently available to the
requires the management board and supervisory board of a
conformity.
publicly listed company to issue an annual declaration stating that
the company has complied with, and intends to comply with, the
recommendations of the Code or stating the recommendations
2. Corporate governance practices
with which it has not complied or does not intend to comply, and
the reasons why.
The corporate governance of KION GROUP AG is essentially, but
not exclusively, determined by the provisions of the German
Stock Corporation Act and the German Codetermination Act
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
Corporate governance report
33
(MitbestG) and also follows the recommendations of the German
financial statements and combined management report to be
Corporate Governance Code. KION GROUP AG complies with all
fully compliant with the relevant statutory and regulatory require
the Code’s recommendations, with one exception. These funda
ments and, in particular, the applicable financial reporting stand
mental principles are combined with a commitment to sustaina
ards. Changes to these requirements and standards are analysed
ble business, taking account of society’s expectations in the
on an ongoing basis and taken into account as appropriate.
markets in which the Company operates.
Details can be found in the risk report, which is part of the com
In 2019, the Executive Board and the Supervisory Board (or
bined 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,
decisionmaking 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 reg
the Supervisory Board’s Audit Committee. The KION Group’s risk
ular reports on the standard accounting processes, on changes
management system is documented in a Group risk policy that
to the regulatory environment and the internal control and risk
defines tasks, processes and responsibilities and sets out the
management systems, and on the audit of financial statements
rules for identifying, assessing, reporting and managing risk.
and the effectiveness of this, and then reported back to the full
Specific individual risks are then reported by each Group entity
Supervisory Board on these matters.
using an online reporting tool. Reporting on crosssegment 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 reassessed 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 broadranging 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 employ
example, systembased and manual reconciliation processes,
ees should receive regular training on the most important compli
clear separation of functions, strict compliance with the double
ance subjects, in particular anticorruption, liability of senior
checking principle and written policies and procedures. The over
management / directors’ and officers’ liability, data protection and
arching aim is for the separate financial statements, consolidated
IT security, communications, competition law, and foreign
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
Corporate governance report
34
trade / export controls. Compliance activities are also focused on
independent auditors, Deloitte GmbH Wirtschaftsprüfungs
these areas.
gesellschaft (Deloitte). The separate financial statements, consol
The Executive Board of KION GROUP AG bears collective
idated financial statements, combined management report and
responsibility for the functioning of compliance management
nonfinancial report are discussed by the Audit Committee and
within the Group; the compliance department reports to the Chief
then reviewed and approved by the Supervisory Board.
Executive Officer of KION GROUP AG. He has delegated the
The independent auditors review the condensed consoli
performance of compliance duties to the Chief Compliance
dated interim financial statements and condensed interim group
Officer. The presidents of the Operating Units are responsible for
management report in the halfyear financial report. They also
compliance within the operating business, while the functional
review the nonfinancial report. The Executive Board discusses
managers are responsible for core administrative processes in
the two quarterly statements and the halfyear financial report
the departments at the Group’s headquarters. Ultimate responsi
with the Audit Committee before they are published.
bility for the compliance management system of course remains
with the Chief Executive Officer of the Group. The KION compli
2.6 Avoiding conflicts of interest
ance department, the KION compliance team and the KION
compliance committee provide operational support to the afore
Conflicts of interest between the governing bodies and other
mentioned functions. The KION compliance department focuses
decisionmakers in the Company or significant shareholders go
mainly on preventing compliance violations by providing guid
against the principles of good corporate governance and may be
ance, information, advice and training. It manages the KION
harmful to the Company. KION GROUP AG and its governing
compliance team, in which local and regional compliance officers
bodies therefore adhere strictly to the recommendations of the
of the Group are represented.
German Corporate Governance Code on this subject. The
Actual or suspected incidents of noncompliance can be
employees of KION GROUP AG and its subsidiaries are made
reported anonymously or otherwise by contacting an external
aware of the problem of conflicts of interest as part of compliance
24hour compliance hotline, by sending an email or letter, by
training and are bound by rules on how to behave in the event of
calling an internal KION Group hotline or by contacting a compli
actual or potential conflicts of interest. Every Executive Board
ance officer directly.
member must disclose potential conflicts of interest to the
As part of its work, the compliance department at KION
Supervisory Board immediately and must also inform the other
GROUP AG cooperates closely with the legal, internal audit and
Executive Board members. All transactions between KION
human resources departments. The KION compliance committee,
GROUP AG and Executive Board members or related parties
which is staffed by the heads of these departments and chaired
must be concluded on an arm’slength basis.
by the Chief Compliance Officer, operates as a crossfunctional
The Company attaches high priority to preventing possible
committee that primarily advises on and examines reported inci
conflicts of interest from occurring in the first place. This is espe
dents of noncompliance and, if appropriate, issues a punishment.
cially important given that Weichai Power has a stake of
45.0 per cent in KION GROUP AG. The Company achieves these
2.5 Audit of the financial statements
aims by avoiding business scenarios or personnel structures that
could give the impression of a conflict of interest and by taking
The Company’s independent auditors, which are appointed by
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 nonexecutive 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 sepa
his appointment was extended to 31 December 2020, for which
rate and consolidated financial statements, Ms Kirsten Gräbner
the Supervisory Board had previously given its consent. Appropri
Vogel has been the global lead service partner at the appointed
ate precautions have been taken to ensure that this role at a parent
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
Corporate governance report
35
company of the Company does not create a conflict of interest
relating personally to Mr Riske. Formal processes have been put in
place to ensure that Mr Riske, in his role as a nonexecutive
director of Weichai Power Co., Ltd., is not involved in transactions
Responsibilities of Executive Board members
as at 31 December 2019
TABLE 003
Member
Responsibilities
that could give rise to a conflict with the interests of the KION
Gordon Riske
Group. Nor is Mr Riske involved in transactions relating to the
exercise of voting rights by Weichai Power or its subsidiaries 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
nonexecutive 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.
Dr Eike Böhm
3. Working methods of the Executive Board
and Supervisory Board and composition of
the committees of the Supervisory Board
3.1 Working methods of the Executive Board
Anke Groth
The Executive Board of KION GROUP AG comprises five members.
It is responsible for managing the Company in the Company’s
interest, i.e. taking account of shareholders, customers, employ
ees 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 respon
sible for his or her own area of responsibility and keeps the other
board members informed of developments on an ongoing basis.
> TABLE 003
Ching Pong Quek
Susanna
Schneeberger
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
Module & Component Development
Procurement
Quality
Production System
KION New Energy Systems
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
Performance Excellence
Chief Asia Pacific Officer of KION
GROUP AG
KION APAC
CDO of KION GROUP AG
Dematic
Software Development
KION Group IT
Data Protection
Digital Campus
Mobile Automation
The distribution of responsibilities has been adjusted, after
Susanna Schneeberger had stepped down from the Executive
Board in January 2020.
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
Corporate governance report
36
The rules of procedure laid down by the Supervisory Board define
The Supervisory Board of KION GROUP AG consists of 16
the areas of responsibility of the Executive Board members and
members, eight of whom are employee representatives and eight
the way in which they work together. The full Executive Board
are shareholder representatives. The shareholder representatives
normally meets every 14 days and meetings are chaired by the
are elected by the Annual General Meeting by simple majority.
Chief Executive Officer. Individual Executive Board members
The Supervisory Board has drawn up rules of procedure for its
sometimes take part via video conference. At the meetings, the
work that apply in addition to the requirements of the articles of
board members discuss measures and business that, under the
association. According to these rules, the chairman of the Supervi
Executive Board’s rules of procedure, must be approved by the
sory Board coordinates its work and the cooperation with the
full Executive Board. Resolutions of the full Executive Board are
Executive Board, chairs the meetings of the Supervisory Board
passed by simple majority unless a greater majority is required by
and represents it externally. The Supervisory Board meets in per
law. The Chief Executive Officer has a casting vote in the event of
son at least twice in each half of a calendar year, and adopts its
a tied vote. Resolutions of the Executive Board may also be
resolutions at these meetings. In 2019, there were seven Supervi
adopted between meetings. Taking account of the requirements
sory Board meetings in total. The focus of the Super visory Board’s
of section 90 AktG, the Executive Board provides the Supervisory
advisory activities is detailed in the Supervisory Board’s report to
Board with regular, timely and comprehensive information on all
the Annual General Meeting. Between these meetings, resolutions
matters of relevance to the business as a whole relating to the
may also be adopted in writing, by telephone or by other similar
intended operating policy, strategic planning, business perfor
forms of voting, provided that the chairman of the Supervisory
mance, financial position, financial performance and business
Board or, in his absence, his deputy, decides on this procedure for
risks. The Chief Executive Officer discusses these matters regu
the individual case concerned. The Supervisory Board adopts res
larly with the chairman of the Supervisory Board.
olutions by a simple majority of the votes cast unless a different
The Executive Board’s rules of procedure specify that impor
procedure is prescribed by law. If a vote is tied, the matter will only
tant transactions are subject to approval by the Supervisory
be renegotiated if the majority of the Supervisory Board vote in
Board. Budget planning, major acquisitions or capital expendi
favour of this option. Otherwise the Board must vote again without
ture, for example, require the consent of the Supervisory Board.
delay. If this new vote on the same matter also results in an equal
In accordance with its articles of association, the Company is
number of votes for and against, the chairman of the Supervisory
represented by two members of the Executive Board or by one
Board has a casting vote. The Supervisory Board regularly reviews
member of the Executive Board acting conjointly with a Prokurist
the efficiency of its work with support from an external advisor.
(person with full commercial power of representation).
3.3 Working methods and composition of the committees of
3.2 Working methods of the Supervisory Board
the Supervisory Board
The Supervisory Board of KION GROUP AG appoints the
KION GROUP AG’s Supervisory Board had four standing
members of the Executive Board and advises and monitors the
committees in the year under review. These are defined in the
Executive Board in its management of the Company. The Super
Supervisory Board’s rules of procedure. Their tasks, responsibil
visory Board is fully involved from an early stage in all decisions
ities and work processes comply with the provisions of the
that are fundamental to KION GROUP AG. The Executive Board
German Stock Corporation Act and the German Corporate
and Supervisory Board of KION GROUP AG have a close and
Governance Code. The chairman of each committee reports
trusting working relationship focused on ensuring the sustained
regularly to the full Supervisory Board on the committee’s work.
success of the Company. The members of the Executive Board
The minutes of the committee meetings are made available to all
attend Supervisory Board meetings, although the Supervisory
Supervisory Board members. The standing committees have
Board also meets regularly without the Executive Board.
each drawn up rules of procedure that define their tasks and
working methods.
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Corporate governance report
37
Executive Committee
Members of the Executive Committee as at 31 December 2019:
The Executive Committee consists of four shareholder represent
Dr Michael Macht (chairman)
atives and four employee representatives. Its chairman is always
Özcan Pancarci (deputy chairman)
the chairman of the Supervisory Board. It prepares the meetings
Dr Alexander Dibelius
of the Supervisory Board and is responsible for ongoing matters
Jiang Kui
between Supervisory Board meetings. The Executive Committee
Olaf Kunz
also prepares the Supervisory Board’s decisions relating to cor
Jörg Milla
porate governance, particularly amendments to the declaration of
Hans Peter Ring
conformity pursuant to section 161 AktG reflecting changed
Claudia Wenzel
circumstances and the checking of adherence to the declaration
of conformity. It also prepares documents for the Supervisory
Mediation Committee
Board when Executive Board members are to be appointed or
The Mediation Committee comprises the chairman of the Super
removed and, if applicable, when a new Chief Executive Officer is
visory Board, his deputy, an employee representative and a
to be appointed. Documents relating to any matters in connection
shareholder representative. It only convenes in exceptional cases.
with Executive Board remuneration are also compiled by the
If the twothirdsofvotes majority required by section 27 (3) and
Executive Committee. In addition, the Executive Committee is
section 31 (3) MitbestG is not reached in a vote by the Super
responsible for resolutions concerning the conclusion, amend
visory Board on the appointment of an Executive Board member,
ment and termination of Executive Board employment contracts
the Mediation Committee must propose candidates for the post
and agreements with Executive Board members governing
to the Supervisory Board within one month. The chairman of the
pensions, severance packages, consultancy and other matters
Supervisory Board does not have a casting vote on the candi
and for resolutions on any matters arising as a result of such
dates proposed.
contracts and agreements, unless they relate to remuneration.
The responsibilities of the Executive Committee also include res
Members of the Mediation Committee as at 31 December 2019:
olutions about the extension of loans to Executive Board
Dr Michael Macht (chairman)
members, Supervisory Board members and parties related to
Özcan Pancarci (deputy chairman)
them within the meaning of sections 89 and 115 AktG, as well as
Jörg Milla
resolutions
to approve contracts with Supervisory Board
Hans Peter Ring
members outside their Supervisory Board remit. In consultation
with the Executive Board, the Executive Committee regularly
discusses longterm succession planning for the Executive Board.
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
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38
Audit Committee
4. Diversity
The Audit Committee comprises four members. Its primary
purpose is to monitor financial reporting (including nonfinancial
One of the main concerns of good corporate governance is to
reporting), the accounting process, the effectiveness of the
ensure that appointments to the Executive Board and Super
internal control system, the risk management system, the internal
visory Board are appropriate to the specific needs of the busi
audit system, the auditing of the financial statements and compli
ness. Key criteria in this regard include the professional and
ance, thereby supporting the Supervisory Board in its task of
personal skills and qualifications of the members of the Executive
monitoring the Company’s management. The Audit Committee
Board and Supervisory Board as well as diversity in the composi
also reviews the work carried out by the independent auditors
tion of both boards – including an appropriate degree of female
and checks that the independent auditors are qualified and
representation – and the independence of the Supervisory Board.
independent. It is also responsible for engaging the independent
auditors, determining the focus of the audit and agreeing the fee.
Composition of the Supervisory Board
In addition, the Audit Committee exercises the rights in investee
The Supervisory Board has laid down specific requirements and
companies set forth in section 32 (1) MitbestG.
objectives for its composition in recognition of its responsibilities
Members of the Audit Committee as at 31 December 2019:
KION GROUP AG. Besides having the minimum professional
Hans Peter Ring (chairman)
skills required to be a Supervisory Board member, as specified by
Alexandra Schädler (deputy chairwoman)
law and the highest courts, all members of the Supervisory Board
and obligations and taking into account the business needs of
Dr Michael Macht
Jörg Milla
The chairman of the Audit Committee, Hans Peter Ring, is an
independent member of the Supervisory Board and has the
required expertise in the areas of accountancy and auditing
specified in sections 100 (5) and 107 (4) AktG.
Nomination Committee
The Nomination Committee has four members, all of whom are
of KION GROUP AG should meet the following criteria:
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
shareholder representatives and are elected by the shareholder
may be held at any one time.
representatives on the Supervisory Board. The Nomination
Committee’s task is to propose new candidates for the Super
Other targets set by the Supervisory Board with regard to its
visory Board to the Company’s Annual General Meeting.
composition are a standard age limit of no more than 70 at the
Members of the Nomination Committee as at 31 December 2019:
membership of four terms of office. All of the current Supervisory
Dr Michael Macht (chairman)
Board members meet these requirements.
Dr Alexander Dibelius (deputy chairman)
In addition, the Supervisory Board redefined in 2019 what it
time of appointment / election and a maximum limit for length of
Birgit A. Behrendt
Jiang Kui
considers to be an adequate number of independent Supervisory
Board members. Accordingly, four shareholder representatives
on the Supervisory Board should be independent within the
meaning of section 5.4.2 of the Code. These four members are
currently Ms Behrendt, Dr Reuter, Dr Dibelius and Mr Ring.
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
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As regards the employee representatives, the Supervisory
Each of these fields of competence is currently covered by at
Board believes their role as representatives of the employees
least six members of the Supervisory Board.
does not, per se, compromise their independence.
As 31.25 per cent of its members are female (five of 16), the
The Supervisory Board is of the opinion that the priority in
Supervisory Board meets the statutory requirements regarding
aiming for a board composition based on diversity is the expertise
gender representation on supervisory boards pursuant to section
of the individual members and a balanced mix of personal quali
96 (2) AktG. The shareholder representatives and the employee
ties, experience, skills, qualifications and knowledge in line with
representatives are agreed that attaining the objectives in relation
the requirements of the business. This is the basis on which the
to diversity, in particular the objectives relating to the involvement
Supervisory Board has drawn up its profile of skills and expertise.
of women and people from different cultural backgrounds, is
The following profile of skills and expertise defines the knowledge
considered to be in the interests of KION GROUP AG and a task
acquired through professional practice (experience) and theoreti
that forms part of the collective responsibility of the entire Super
cal / academic knowledge (expertise) that should be represented
visory Board. The Supervisory Board therefore supports the
on the Supervisory Board:
– Experience
– Automotive industry, components and drive technologies
– Intralogistics
inclusion of additional female members and members from differ
ent cultural backgrounds who meet the above criteria insofar as
the skills requirements are met.
When proposing candidates to the Annual General Meeting
in future, the Nomination Committee and Supervisory Board will
– Automation, particularly automation in intralogistics
take all of the aforementioned targets into account and strive to
– Service / aftersales business, particularly in intralogistics
ensure that the profile of skills and expertise is still achieved. The
– Development of international marketing strategies and
Nomination Committee and Supervisory Board have no influence
product portfolio strategies
– Expertise
– Development and assessment of technology
on the composition of the group of employee representatives on
the Supervisory Board because the employees in Germany are
free to choose whom they elect.
– Service / aftersales business models and technological
developments in this area
– Digitalisation and automation
– Indepth understanding of the markets in EMEA, the
Americas and Asia
– Experience
– Management of companies with an international presence,
including the development of corporate cultures and organi
sational structures
– Supervisory board membership in companies with an
international presence
– Acquisitions and strategic alliances
– Experience and expertise
– Corporate governance and compliance principles as well
as their implementation in at least two of the regions
relevant to the Company
– Accounting and auditing
– Capital markets and international finance.
KION GROUP AGAnnual Report 2019 CORPORATE GOVERNANCE
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40
Composition of the Executive Board
Appointments to management positions below the level of the
Against the background of the aforementioned diversity consid
Executive Board of KION GROUP AG
erations as well as demographic requirements and strategic
When selecting candidates for senior management levels, the
operating challenges, the Supervisory Board strives for diversity
Executive Board generally considers that it is under an obligation
at Executive Board level, not only in terms of appropriate female
to make such selections on the basis of diversity, capability,
representation but also in respect of experience, skills, expertise,
character and experience.
cultural background and personality. Ultimately, however, the
As regards the number of women appointed to senior
Supervisory Board is guided exclusively by the skills and qualifi
management positions in the Company, the Executive Board is
cations of the persons concerned when making appointments to
striving in its implementation of the new KION 2027 strategy to
the Executive Board.
increase the current proportion of women in management
When implementing these objectives during the process of
positions. In this context, the Executive Board set the target at
appointing successors or recruiting for a new position, the Super
10 per cent for the first management level below the Executive
visory Board draws up a shortlist of candidates who appear to be
Board of KION GROUP AG and at 30 per cent for the second
suitable for the Company as a result of their strategic manage
management level, to be achieved by 31 December 2021. The
ment experience, expertise, skills and qualifications. Demo
specification of this type of target is required by Germany’s ‘Act
graphic criteria (including the standard retirement age of 65 for
for the equal participation of women and men in managerial
Executive Board members) and diversity criteria are then also
positions in the private and public sectors’.
taken into account. However, these criteria are of a subordinate
nature when making a final decision on the person to appoint. In
2017, the Supervisory Board therefore set the target for the
minimum proportion of women on the Executive Board of KION
GROUP AG at 0 per cent, 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 2019, two of the five Executive Board members were
female: Ms Anke Groth and Ms Susanna Schneeberger. The
proportion of women on the Executive Board of KION GROUP AG
was therefore 40 per cent as at 31 December 2019.
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41
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
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,
was run successfully in 2019, for example. KION GROUP AG is
also an active member of the initiative ‘Chefsache. Drive the
Change – For Men and Women’. This network of companies and
leaders from industry and science, the public sector and the
media advocates equal opportunities for women and men. By
participating in this initiative, KION GROUP AG’s ambition and
objective is to promote the change of mindset that is required
throughout society by exploring new concepts and approaches.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Contents
43
COMBINED
MANAGEMENT REPORT
44
45
45
54
57
62
62
65
81
86
94
94
96
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
104
Opportunity report
107
DISCLOSURES RELEVANT TO ACQUISITIONS
111
REMUNERATION REPORT
111
130
Executive Board remuneration
Supervisory Board remuneration
COMBINED MANAGEMENT REPORT
Preliminary remarks
44
Preliminary remarks
COMBINED MANAGEMENT REPORT
The combined management report published in the 2019 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 perfor-
mance), 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 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
45
Fundamentals of the KION Group
PROFILE OF THE
KION GROUP
Organisational structure
The parent company of KION GROUP AG is Weichai Power
(Luxembourg) Holding S.à r.l., Luxembourg (‘Weichai Power’), a
subsidiary of Weichai Power Co. Ltd., Weifang, People’s Republic
of China, which, to the knowledge of the Company, held
45.0 per cent of the shares at the end of 2019. The free float
accounted for 54.9 per cent of the shares, while the remaining
0.1 per cent were treasury shares.
The KION Group is one of the world’s leading suppliers of
integrated supply chain solutions. Its portfolio encompasses
industrial trucks such as forklift trucks and warehouse trucks, as
Management and control
well as automation and software solutions and related services
for the optimisation of supply chains. Across more than 100 coun-
Corporate governance
tries worldwide, the KION Group designs, builds and supports
logistics solutions that optimise material and information flow
The KION Group follows generally accepted standards of
within factories, warehouses and distribution centres.
sound, responsible corporate governance. The German Corporate
In terms of unit sales, the KION Group is the largest manufac-
Governance Code (DCGK) provides the framework for manage-
turer of industrial trucks in Europe and second-largest worldwide.
ment and control. As required by section 289f and section 315d
The Linde and STILL brands serve the premium industrial truck
of the German Commercial Code (HGB), the corporate govern-
segment. Baoli focuses on industrial trucks at the lower end of the
ance standards that the Group applies are set out in the decla-
volume segment and in the economy segment. Among KION’s
ration on corporate governance. This declaration also contains
regional industrial truck brand companies, Fenwick is the top
the declaration of conformity pursuant to section 161 AktG, which
material-handling provider in France and OM Voltas is a leading
was issued by the Executive Board and Supervisory Board of
provider of industrial trucks in India. Dematic is a leading global
KION GROUP AG on 2 / 19 December 2019, and the corporate
supplier of integrated automation technology, software and ser-
governance report pursuant to section 3.10 of the German
vices for the optimisation of supply chains. Around 1.5 million of
Corporate Governance Code, which also provides information
the Group’s industrial trucks and over 6,000 of its installed intral-
about the compliance standards in the Group. The declaration on
ogistics systems are deployed by customers in all industries and
corporate governance can be viewed and downloaded on the
of all sizes on six continents.
Company’s website. It also forms part of this annual report and is
The KION Group comprises the parent company KION
a component of the combined management report.
GROUP AG, which is a public limited company under German
The essential features of the remuneration system are
law, and its subsidiaries. The KION Group’s strategic management
described in the ‘Remuneration report’ section. The total amounts
holding company, KION GROUP AG, is listed on the Frankfurt
for Executive Board remuneration and Supervisory Board
Stock Exchange and is part of the MDAX, the STOXX Europe 600,
remuneration are also reported in the notes to the consolidated
the MSCI World and MSCI Germany Small Cap indices, and the
financial statements (note [46]).
FTSE Euro Mid Cap. Details of treasury shares (pursuant to sec-
tion 160 (1) no. 2 of the German Stock Corporation Act (AktG)) are
provided in note [27] ‘Equity’ in the notes to the consolidated
financial statements.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
46
Non-financial declaration
responsibilities of the Executive Board members as at 31 Decem-
ber 2019 are listed in the declaration on corporate governance.
A separately published sustainability report provides detailed
information on the sustainable management of the KION Group.
Supervisory Board
It contains the KION Group’s report on non-financial matters as
required under the German law to implement the corporate social
The Supervisory Board, which was formed in accordance with
responsibility (CSR) directive. The non-financial Group report
the German Codetermination Act (MitbestG), comprises 16 people.
focuses on targets, action steps and due diligence processes
It advises the Executive Board in its handling of significant
relating to the key environmental, social and employee-related
matters and business transactions. To increase the efficiency of
aspects of the KION Group’s business model, the observance of
its work, the Supervisory Board is supported by four standing
human rights and the fight against corruption and bribery.
committees: the Nomination Committee, the Executive Committee,
In accordance with the statutory disclosure deadlines defined
the Audit Committee and the Mediation Committee.
in section 325 of the German Commercial Code (HGB), the KION
On 9 May 2019, the Annual General Meeting of KION GROUP
Group publishes its annual sustainability report (including the
AG elected Dr Michael Macht and Tan Xuguang, Chairman of
non-financial report) by no later than the end of April each year on
Weichai Power, to the Supervisory Board as shareholder repre-
its website (www.kiongroup.com), where it will remain available
sentatives for a term of three years. Dr Michael Macht, who has
for at least ten years.
Executive Board
been a court-appointed member of the Supervisory Board since
9 October 2018, was then elected as chairman of the Supervisory
Board. He succeeds Dr John Feldmann, whose resignation from
the Supervisory Board took effect at the conclusion of the Annual
The Executive Board of KION GROUP AG was responsible for the
General Meeting. Tan Xuguang had previously been a member of
operational management of the KION Group in 2019 and its five
the Supervisory Board from 9 June 2013 until he stepped down
members remained unchanged during the reporting period. The
from his position on 30 September 2018.
Executive Board maintains a relationship of trust with, and is
monitored by, the Company’s Supervisory Board.
The Supervisory Board and Ms Schneeberger, whose
Business model and organisational structure
responsibilities on the Executive Board include the Supply Chain
Solutions segment (Dematic) and digitalisation topics, reached
The KION Group’s business model is designed so that customers
agreement by amicable and mutual consent that she will leave
of all sizes and from all sectors can obtain the full spectrum of
the KION Group due to differing views on corporate strategy.
material handling products and services from a single source.
Ms Schneeberger stepped down as a member of the Executive
Thanks to its broad technology base, diversified product port-
Board of KION GROUP AG on 12 January 2020.
folio and worldwide service network, the KION Group is able to
In September 2019, the Supervisory Board of KION GROUP
bring a comprehensive portfolio of such products and services
AG passed a resolution to reappoint Ching Pong Quek as a mem-
to the market.
ber of the Executive Board and Chief Asia Pacific Officer for a fur-
The KION Group’s market activities are divided into five
ther five years. His new term of office starts on 1 July 2020 and will
operating units: LMH EMEA, STILL EMEA, KION APAC, KION
continue until 30 June 2025. Responsibility for Logistics / Urban was
Americas and Dematic. LMH EMEA and STILL EMEA each con-
passed from Anke Groth, CFO, to Dr Eike Böhm, CTO, with effect
centrate on Europe, the Middle East and Africa. KION APAC and
from 1 April 2019. The new central Logistics System unit now brings
KION Americas hold cross-brand responsibility for industrial
together the internal logistics processes for the two segments
truck business in the Asia-Pacific region and the Americas
Industrial Trucks & Services and Supply Chain Solutions. The
respectively. Dematic is the global supply chain solutions busi-
ness. While the Operating Units have full operational and com-
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
47
mercial responsibility within their markets, KION GROUP AG is
the strategic management holding company and is responsible
– KION Financial Services (FS) is an internal funding partner for
the Industrial Trucks & Services segment, providing finance
for the groupwide strategy and groupwide business standards.
solutions to support sales.
For internal management purposes, the KION Group has
divided its operating business into two segments that corre-
So that it can fully cater to the needs of material handling customers
spond to the segments as required by international financial
worldwide, the business model of the Industrial Trucks & Services
reporting standards (IFRS 8). The industrial truck business,
segment covers the key steps of the value chain: product develop-
including the supporting financial services, is shown in the
ment, manufacturing, sales and service, truck rental and used
Industrial Trucks & Services segment, while activities focusing
trucks, fleet management and financial services that support the
on end-to-end supply chain solutions make up the Supply Chain
core industrial truck business.
Solutions segment. The two segments complement each other
The segment earns just over half of its revenue from the sale
in terms of their respective market position and regional pres-
of industrial trucks. The product portfolio includes counterbal-
ence. The Corporate Services segment comprises the other
ance trucks powered by an electric drive or internal combustion
activities and holding functions of the KION Group. These
engine, warehouse trucks (ride-on and hand-operated) and
include service companies that provide services such as IT and
towing vehicles for industrial applications covering all load ranges.
logistics across all segments.
Worldwide research and development activities enable the
Industrial Trucks & Services segment to consolidate its technol-
Industrial Trucks & Services segment
ogy leadership, which it is extending in the areas of energy-
efficient and low-emission drive technologies and automation
The Industrial Trucks & Services segment encompasses the
solutions. In this field, the KION Group operates 16 production
activities of the international brand companies Linde, STILL and
facilities for industrial trucks and components in eight countries.
Baoli, the local brand companies Fenwick and OM Voltas plus
So that it can ensure security of supply and the availability of
the financial services business.
spare parts for important components in order to meet customers’
– Linde is an international premium brand and technology
leader that manufactures forklift and warehouse trucks
specific requirements, the segment manufactures major compo-
nents itself – notably lift masts, axles, counterweights and safety
equipment. Other components – such as hydraulic components,
and provides accompanying fleet management solutions,
electronic components, rechargeable batteries, engine compo-
driver assistance systems and service options, meeting
nents and industrial tyres – are purchased through the global
even the most demanding customer requirements in terms of
procurement organisation.
technology, efficiency, functionality and design. In France,
As a rule, industrial trucks are built according to the cus-
Linde products are sold under the Fenwick brand.
– STILL, a provider of forklift trucks, warehouse trucks and
intralogistics systems, is a leading innovator in its field and
tomer’s individual specifications. Networked fleet management
solutions and the advantages for customers in terms of total cost
of ownership (TCO) support the international Linde and STILL
has a particular focus on the European and Latin American
brands’ premium positioning. The segment is underpinned by
markets.
– Baoli is the international brand for the lower end of the
– OM Voltas is the local brand company for the Indian market,
volume segment and the economy segment.
through which the KION India Pvt. Ltd. subsidiary manufac-
tures and sells electric and IC forklift trucks and warehouse
trucks.
an extensive sales and service network comprising around
1,800 outlets in over 100 countries and staffed by more than
18,000 service employees, roughly half of whom are employed
by the KION Group.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
48
The worldwide vehicle fleet, which consisted of around 1.5 million
Supply Chain Solutions segment
industrial trucks at the end of 2019, provides a broad base for the
service business. This business helps to smooth out fluctuations
Through the Dematic brand, the Supply Chain Solutions segment
in the segment’s revenue, reduces dependency on market cycles
is, in terms of revenue, the leading global supplier of state-of-the-
and supports new truck sales by maintaining lasting customer
art integrated automation technology, software and services for
relationships. Extensive services such as software-based fleet
the optimisation of supply chains.
management are offered, mainly for premium products. There are
Manual and automated solutions are provided for all functions
also individual orders for repairs and maintenance work as well as
along customers’ supply chains, from goods inward and multi-
for spare parts. In addition, the Operating Units have extensive
shuttle warehouse systems to picking, automated palletising and
used truck and rental truck businesses, allowing peaks in capacity
automated guided vehicle systems. Picking equipment con-
requirements to be met and customers to be supported after their
trolled by radio, voice or light is available for nearly all goods and
leases have expired.
packaging types. Automated storage and retrieval systems
Financial services support new truck business in many mar-
(ASRS), robotic picking systems and compact, powerful split-
kets, forming another pillar of the service business. Its activities
case and pallet picking stations can be used to achieve very fast
comprise the financing of long-term lease business for external
throughput times and picking rates. At the same time, cross-
customers, the internal financing of the short-term rental busi-
docking solutions increase the efficiency of the system as a whole
ness and the related risk management. In the large sales markets
by eliminating the unnecessary handling and storage of goods.
with a high volume of financing and lease activities, legally inde-
The micro-fulfilment system was developed to speed up the
pendent FS companies handle this business. About half of all new
processing of retailers’ online orders.
trucks are financed via the KION Group itself or via external banks
Real-time management of the supply chain solutions is based
and financing partners. Offering financial services is therefore
on the proprietary software platform Dematic iQ, which can be
part of the truck sales process. Leases are generally linked to a
easily integrated into the customer’s existing application land-
service contract covering the term of the finance agreement.
scape. By providing real-time material flow data analyses, among
other things, Dematic iQ can help with the data-based optimisa-
tion of all processes to ensure seamless order processing. It also
supports performance management functions for measuring and
controlling performance.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
49
The segment is primarily involved in customer-specific,
longer-term project business. With nine production facilities in
North America, Europe, China and Australia and regional teams
of experts, Dematic is able to plan and deliver logistics solutions
with varying degrees of complexity anywhere in the world.
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 auto-
mated storage and retrieval systems, sorters and conveyors,
are manufactured inhouse or, in some cases, by third parties.
Modernisation work and services (customer services), which
usually cover the entire lifetime of an installed system, are
provided to local customers by approximately 1,500 employees
in over 20 countries. The service business benefits from an
installed base of more than 6,000 systems. > DIAGRAM 003
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
50
Production sites of the KION Group
Production sites of the KION Group
DIAGRAM 003
Dinklage
Zwijndrecht
Châtellerault
Offenbach
Reutlingen
Milan
Hamburg
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 centre, 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 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
51
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
Offenbach: Conveyor, sortation, storage and retrieval systems
Italy
Milan: Sortation systems
Czech Republic
Stříbro: Conveyor systems
Mexico
Holland
Salt Lake City
Summerville
Monterrey
Monterrey: Conveyor, sortation, storage and retrieval systems,
system components
United States
Holland: Automated guided vehicle systems
Salt Lake City: Conveyor, sortation, storage and retrieval systems,
automated guided vehicle systems, system components
Indaiatuba
Pune
Jingjiang
Suzhou
Xiamen
Sydney
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
52
Market and influencing factors
Regulatory frameworks have a major impact on the business
model, both in the Industrial Trucks & Services segment and in
According to the KION Group’s estimates, the material handling
the Supply Chain Solutions segment. The products and services
market – comprising industrial trucks and supply chain solutions
of companies in the KION Group have to comply with the specific
and related services – has expanded at a faster rate than global
legal requirements in their respective markets. Compliance
economic growth over the past five years. The value of the market
with the different requirements has to be verified or certified.
has increased at an average annual rate of around 6 per cent in
Many of the legal requirements are enshrined in product-specific
that time.
standards and other norms (e.g. EN, ISO and DIN).
Of the relevant market volume, almost 60 per cent is esti-
Legal requirements also apply to the construction and
mated to be attributable to industrial trucks and related services,
operation of production facilities, including in relation to air pollu-
which are essential elements in the production and logistics
tion avoidance, noise reduction, waste production & disposal and
processes of many manufacturers as well as in the wholesale
health & safety. The KION Group fulfils all of these requirements
and retail sectors. The remaining market volume is accounted for
as well as all the legal provisions pertaining to exports and
by supply chain solutions, the growth of which is fuelled in no
financing business.
small part by the increasing automation and digitalisation of
production and logistics processes in various industries. The
Influencing factors in the Industrial
main overarching growth drivers are the advancing interconnec-
Trucks & Services segment
tivity of the global economy and the demand for decentralised
warehouse and logistics capacity in response to value chains and
Despite a decline in orders in 2019, the value of the global market
supply chains that are becoming increasingly fragmented. The
for industrial trucks has, according to the KION Group’s esti-
strong growth of e-commerce and the increasing prevalence of
mates, increased by an average of 4 per cent annually over the
omnichannel approaches in all kinds of industries is boosting
past five years. This is due in equal measure to the growth in the
capital expenditure on the reconfiguration of supply chains.
volume of new truck business and the rise in the contribution from
Economic conditions in the different regions and the rates of
the service business compared to the past. Measured in terms of
growth in global trade have a major influence on customers’
units ordered, 36 per cent of the global market was attributable to
willingness to invest. Historically, new business in the Industrial
IC counterbalance trucks in 2019, while electric forklift trucks
Trucks & Services segment has shown a very strong correlation
accounted for 16 per cent and warehouse technology 48 per cent.
with the performance of broad economic indicators, such as
It should be noted that the per-unit price for warehouse technol-
industrial output. By contrast, the Supply Chain Solutions
ogy is considerably lower than for counterbalance trucks, which
segment tends to be less cyclical owing to longer project cycles,
is why the breakdown by value shows that counterbalance trucks
often lasting for several years, and to the stable growth of e-com-
clearly dominate. IC counterbalance trucks continue to make up
merce. In both segments, the service business is generally
a comparatively high proportion of the total unit volume in growth
more stable than the product or project business as it is linked to
regions. The strongest growth in the new truck business in recent
the installed base of trucks and systems over their entire lifetime.
years has been for forklift trucks and warehouse trucks powered
The economic situation is also affected by competition levels,
by an electric motor. Much of the additional volume is attributable
exchange rates and changes in commodity prices.
to the electrification of manual hand pallet trucks, which are being
Economic trends within individual customer sectors are
replaced by entry-level trucks in the lower weight categories.
another important factor. The most significant of these sectors
Better drive technologies, in particular lithium-ion drives, are also
are manufacturing, the food industry, general merchandise
contributing to the growth in electric trucks and equipment.
and grocery wholesale and retail, logistics services and pure
Moreover, driverless transport solutions developed by automat-
e-commerce, which has the highest growth rates.
ing standard warehouse trucks are becoming more and more
appealing to customers.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
53
All price segments continue to benefit from customers’
courier services – are also contributing to this. At the same time,
growing requirements regarding the quality, efficiency and eco-
the focus of technological progress is increasingly shifting
friendliness of industrial trucks and from higher expectations in
towards software and robotics solutions. According to the market
terms of service, availability of spare parts and flexible rental solu-
research company Interact Analysis, there will be strong growth
tions. In this segment, customers are much more focused than
in the market for robotic sorting systems as key components of
before on optimising total cost of ownership and, increasingly, on
automated distribution centres, in automated guided vehicles
the ability to integrate the trucks into fully automated intralogistics
(AGVs) and in autonomous mobile robots (AMRs), and these
solutions. At the same time, there is mounting competitive pressure
solutions will become increasingly prevalent as a result.
worldwide as some manufacturers in the economy segment based
in emerging markets are pursuing an international expansion
strategy. In mature markets and, increasingly, in growth regions,
Market position
the large number of trucks in use also provides a strong base for
replacement business and rising demand for services.
In 2019, the Industrial Trucks & Services segment achieved a
14.2 per cent share of the global market based on unit sales
Influencing factors in the Supply Chain Solutions segment
(2018: 14.1 per cent) and is thus still the second-largest manufac-
turer of industrial trucks. It significantly expanded its position as
According to the KION Group’s estimates, the market for supply
market leader in Europe thanks to a smaller decline in orders than
chain solutions has expanded much faster than the market for
the market as a whole. At the same time, the KION Group is a
industrial trucks and services over the past five years owing to
leading global producer of electric forklift and warehouse trucks.
growing demand in the main customer industries. Both the
In China, it is still the leading foreign manufacturer in terms of
project business (business solutions) and downstream ser-
revenue and number three overall. The KION Group is also
vices (customer services) have contributed to this expansion.
among the leading providers in Brazil and India.
The service business benefits from the growing number of
The Supply Chain Solutions segment (Dematic) is the biggest
installed systems and the trend towards the outsourcing of
provider in the global market for warehouse automation in terms
logistics processes.
of revenue. This is supported by data from 2018 gathered by
The growth of e-commerce has a major influence on demand
Interact Analysis, which also puts Dematic as the leading vendor
for supply chain solutions, including warehouse automation and
in the fast-growing AGV and AMR segment.
solutions for sorting and for automated goods transport. Accord-
ing to market analysis by the Ecommerce Foundation, global
online trade (B2C) expanded at an average rate of around
14 per cent between 2014 and 2019. Increasing complexity, cost
pressures and shifting customer expectations require shorter
lead times, a more efficient flow of goods, a wider product range
and process reliability. This is pushing up demand for decen-
tralised warehouse and logistics capacity that enables faster
deliveries and, due to automated processes, keeps down per-
sonnel expenses and floor space costs. The digitalisation and
automation of industrial production and supply chains and the
omnichannel strategies being adopted in traditional industries –
for example supermarket chains, grocery wholesale and retail,
fashion, food and beverage manufacturing, and parcel and
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
54
STRATEGY OF THE KION GROUP
Objectives of the KION 2027 strategy
– Efficient use of capital: The KION Group continually strives to
optimise the return on capital employed (ROCE). Besides
increasing earnings, the focus here is on asset management
and efficient use of capital.
– Resilience: Profitability throughout the various market cycles
is to be guaranteed by a robust business model. This will
The KION Group forged ahead with the implementation of its
involve greater diversification in terms of regions and cus-
KION 2027 strategy during the reporting year. The KION 2027
tomer sectors alongside efforts to expand the service busi-
strategy provides the framework for profitable growth in the
ness and further optimise the production network.
Group and specifies groupwide targets. The strategy is aligned
with the KION Group’s vision: ‘We are the best company in the
During the reporting year, the KION Group paved the way for
world at understanding our customers’ material handling needs
further expansion of the business in the key growth market of
and providing the right solutions.’
China. For example, plans were finalised for an additional plant for
The KION 2027 strategy is unlocking the potential of both
counterbalance trucks in Jinan in Eastern China, which will form
operating segments and placing an even greater focus on a
an important base for the further successful implementation of
shared, customer-centric innovation, sales and brand strategy.
the KION Group’s growth strategy. Particular attention was also
The emphasis is on developing and marketing integrated, auto-
paid to increasing the Company’s resilience through even greater
mated and sustainable supply chain solutions and mobile auto-
international diversification of new business and through a strong
mation solutions for customers around the world. In the Industrial
service business. By expanding its production capacity in
Trucks & Services segment, products and services are being
southern China, Poland and India and by continuing to invest
transitioned to sustainable energy concepts and being comple-
significantly in the development of products and solutions, the
mented with consultancy and project work. And in the Supply
KION Group intends to become even more robust in the face of
Chain Solutions segment, the range of options for customers is
downturns in the market cycle and disruptions to global trade.
being expanded through system solutions for special require-
ments in the relevant customer segments. The KION 2027 strategy
provides the framework in the Group and sets groupwide targets:
– 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 adjusted
EBIT margin so that it is permanently in double digits.
KION GROUP AGAnnual Report 2019 OUR STRATEGY
VISION
We are the best company in the world at
understanding the customers’ material handling
needs and providing the right solutions.
ASPIRATION
COMBINED MANAGEMENT REPORT
ENABLERS
Fundamentals of the KION Group
CUSTOMER
ORIENTATION
Be the most customer-
oriented player in the
industry
INNOVATION
Lead the industry
through new offerings
DIGITALIZ ATION
Create value through
Strategic fields of action and measures
digitalization
in 2019
PEOPLE
Be the most attractive
employer in the industry
Five fields of action have been defined for the KION 2027 strategy –
energy, digital, automation, innovation and performance – for
which a wide range of strategic measures were implemented
in 2019:
FIELDS OF ACTION
CORE OBJECTIVES
55
GROW TH
Grow above the material
handling market growth
PROFITABILIT Y
Remain most profitable
player in the industry
RESILIENCE
Maintain profitability across
business cycle
CAPITAL EFFICIENCY
Provide return on capital
for shareholders
OVERALL OBJECTIVE
PROFITABLE
GROW TH
Grow profit above
revenue growth
We are leading the material handling
industry in the efficient use of energy
through our products and solutions.
We focus on new energy sources
for industrial trucks
and related services.
We transform our business into the
digital world. For customers we develop
digital solutions to improve
their intralogistics efficiency.
Internally we digitalize
our processes to
improve our
performance.
Our solutions allow customers to
benefit from automation effectively,
supporting them on their journey to
“lights-out” warehouses.
We drive innovation in the
material handling industry
through an effective innovation
ecosystem and a state-of-the-art
development process &
speed.
We continuously improve the
efficiency in our Group as well
as the performance
of our products.
FOUNDATION
Energy
The joint venture KION Battery Systems GmbH, agreed with
BMZ Holding GmbH in 2019, is an important part of this. Both
The KION Group continually develops its products and solutions
KION
OPERATING MODEL
so that its customers are able to use energy as efficiently and
PEOPLE
partners can draw on comprehensive expertise in the field of
OUR SHARED
KION GROUP VALUES
lithium-ion technology. At the BMZ site in Karlstein am Main,
sustainably as possible. Electric-powered forklift trucks and
20180212_Strategie_Poster_Summit_A3.indd 1
Germany, a production facility is being created that is set to
12.02.18 16:02
warehouse trucks already make up 85.5 per cent of the KION
initially manufacture batteries for counterbalance trucks and then
Group’s order intake in terms of units. A focus of the strategy is to
at a later point in time also make batteries for warehouse
develop and commercialise new energy sources for industrial
trucks. The collaboration is strengthening the KION Group’s
trucks and related services, such as the provision of advice on
position in the energy-efficient drive technology segment and
energy matters.
creating capacity to equip everything from entire future truck
fleets to heavy-duty trucks capable of handling large loads.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
56
In a parallel development, Linde and STILL have expanded their
huge importance for the intralogistics of the future, mobile auto-
lithium-ion battery portfolio and are now covering the main load
mation activities have been coordinated on a cross-segment
ranges in various capacity classes in response to customer
basis by the Mobile Automation unit, which forms part of KION’s
requirements. The new models that Linde and STILL have brought
digital function.
to the market are available with a lithium-ion battery, as is the N20
The mobile automation team has forged ahead with incorpo-
low-lift order picker, now much improved in terms of ergonomics
rating autonomous trucks and automated guided vehicle sys-
and safety, and the RX series of electric forklift trucks from STILL,
tems (AGVs) into end-to-end solutions for warehouses. Dematic
including the new RX 60. Linde’s portfolio of fuel cell trucks was
Compact, an automated system for the transport of pallets, is one
also expanded (see ‘Research and development’).
of the new solutions on offer in this segment. The IFOY Award
Digital
presented to STILL in the category AGV & Intralogistics Robot
in 2019 (see ‘Customers’) provided further confirmation of the
company’s prominent position in the market.
The KION Group is gearing its business to customers’ increas-
The piloting of Dematic’s PackMyRide, the first fully auto-
ingly digitalised processes in order to improve their intralogistics
mated parcel-loading solution for the ‘last mile’ stage of delivery,
efficiency. The digitalisation of customer solutions – including
was another step taken last year. PackMyRide integrates the
through the use of the proprietary warehouse management sys-
intralogistics systems with automated guided vehicle systems
tem Dematic iQ – is being accompanied by the digitalisation of
and thus uses the full breadth of the KION Group’s technology.
internal processes and resulting improvements in performance.
A further innovation is Dematic’s micro-fulfilment automation
The KION Group is not only integrating software into its solutions
system, which was introduced in the fourth quarter of 2019 and is
but is also increasingly marketing software solutions as standalone
tailored to the requirements of omnichannel retailers with high
products. Internal organisational structures are also being mod-
throughput rates.
ernised in order to pave the way for agile development and embed
it across the Group.
Innovation
Dematic launched iQ Virtual onto the market in the report-
ing year, an emulation and simulation platform that enables
The KION Group develops technologies on a cross-segment
automated intralogistics systems to be visualised and validated.
basis and in doing so drives forward innovation in the material
The digital networking of industrial trucks is also playing an
handling market. It is continuing to invest significantly in research
ever greater role. The H20–H35 IC counterbalance trucks from
and development at a rate of 2.7 per cent of revenue.
the 1202 product line that Linde has recently introduced onto
In addition to efficient development processes, the KION
the market reflect this trend and offer digital networking capa-
Group also works with an effective innovation ecosystem. It
bility as standard. As part of the digitalisation of internal pro-
partners with research institutes, universities and companies so
cesses, fleet management solutions have been migrated to
that it can go to market with new products and solutions within a
KION’s corporate cloud so that they can be made available to
short space of time. Support comes from KION Invest, which
customers even more quickly than before.
since early 2019 has been working with start-ups to drive forward
new technologies and business models that will benefit KION
Automation
Group customers in the future.
KION Digital Campus, the KION Group’s agile innovation
In the field of automation, the KION Group offers specific and
laboratory for new digital solutions and business models,
scalable solutions for a wide range of customer requirements,
continued to provide support last year in important product
from single forklift trucks right up to fully automated large-scale
developments, including digitally networked forklifts and ware-
warehouses. These are helping customers move closer to the
house trucks for Industry 4.0 applications.
goal of a ‘lights-out’ warehouse. Since 2019, because of their
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
57
Performance
MANAGEMENT SYSTEM
The KION Group is continually improving internal efficiency,
optimising the performance of its products from a customer
perspective and fully leveraging synergies.
Core key performance indicators
The efficiency drive continued at European production sites
in the Industrial Trucks & Services segment in 2019 and in some
The KION Group’s strategy, which centres on value and growth,
areas was completed. From early 2021, efficiency is set to be
is reflected in how the Company is managed. The performance
further enhanced by the relocation of a product series from
targets of the Group and the segments are based on selected
Aschaffenburg to the new Polish site in Kołbaskowo, near Szczecin.
financial indicators, as is the performance-based remuneration
In the past year, a group-wide programme (Performance
paid to managers. It uses five core key performance indicators
Excellence) was launched to optimise processes and increase
(KPIs), which remained unchanged in the reporting year, to con-
efficiency. The programme, which addresses various areas for
tinuously monitor market success, profitability, financial strength
increasing earnings and reducing costs, already showed first
and liquidity. The KPIs used to manage the segments are order
signs of success and led to cost savings in the fiscal year under
intake, revenue and adjusted EBIT. The KPIs are measured and
review. It is also expected to contribute to the Company’s suc-
made available to the Executive Board on a monthly basis as part
cess in the coming fiscal years.
of the internal reporting process. > TABLE 004
Efforts also continued to be focused on making product
development even more efficient, based on a global, modular
platform strategy that allows for localisation with minimal effort.
Key performance indicators
in € million
Order intake
Revenue
Adjusted EBIT *
Free cash flow
ROCE
* Adjusted for PPA items and non-recurring items
TABLE 004
2018
8,656.7
7,995.7
789.9
519.9
9.3%
2019
9,111.7
8,806.5
850.5
568.4
9.7%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
58
Alternative performance measures
Order intake
The KION Group’s financial reports are prepared in line with
Order intake comprises all orders received from customers
International Financial Reporting Standards (IFRS). As well as
within a specific period minus any cancellations. Order intake is
reporting on the financial key performance indicators defined
broken down by segment, region and product category in the
under IFRS, the KION Group also uses alternative performance
KION Group’s management reporting so that growth drivers
measures (APM). APMs are company-specific indicators that are
and pertinent trends can be identified and analysed at an early
not directly based on any laws or accounting standards. Some
stage. Order intake is a leading indicator for future revenue. The
are company-specific adjustments of certain financial KPIs, for
length of time between receipt and invoicing of an order varies
example the adjustment of these KPIs for non-recurring items
depending on the segment, region and product category. Order
(e.g. ‘adjusted EBIT’). APMs are used both internally for manage-
intake is shown in > TABLE 004.
ment purposes and externally for communicating and reporting
to a range of stakeholders.
EBIT (earnings before interest and tax)
KPIs used by the KION Group
Earnings before interest and tax (EBIT) is a measure of perfor-
mance that is adjusted for company-specific financing activities
and the effects of differing international tax regimes. EBIT is
The following is an overview of the KPIs used by the KION Group
shown in > TABLE 037 in the consolidated income statement.
to comply with the reporting obligations prescribed by law.
Adjusted EBIT
Order book
The order book provides a record of all customer orders on a
the KION Group’s financial performance is adjusted EBIT. It is
particular reporting date that are yet to be invoiced. In the Indus-
EBIT adjusted for company-specific purchase price allocation
trial Trucks & Services segment, this only includes orders for new
effects and non-recurring items. A reconciliation of EBIT to
trucks. For long-term construction contracts in the Supply Chain
adjusted EBIT is presented in > TABLE 011.
The key figure used for operational management and analysis of
Solutions segment, services that have already been rendered are
deducted from the total value of the contract with the customer.
Adjusted EBIT margin
The order book is shown in the section ‘Financial position and
financial performance of the KION Group’.
The adjusted EBIT margin is the ratio of adjusted EBIT to revenue.
It is shown in the section ‘Financial position and financial perfor-
mance of the KION Group’.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
59
EBITDA (earnings before interest, tax,
Earnings before tax
depreciation and amortisation)
EBITDA is defined as earnings before interest and tax plus
for company-specific the effects of differing international tax
amortisation, depreciation and impairment minus reversals of
regimes. Earnings before tax is shown in the consolidated income
Earnings before tax is a measure of performance that is adjusted
impairment on non-current assets. EBITDA is a measure of
statement in > TABLE 037.
performance that is adjusted for company-specific financing
activities, the effects of differing international tax regimes and the
Net financial debt
effects of the company-specific application of amortisation and
depreciation methods and margins of discretion in valuations.
Net financial debt is an indicator of the Company’s liquidity
Amortisation, depreciation, impairment and reversals of impair-
situation and capital structure. It is the sum of long-term and
ment on non-current assets are shown in the statement of cash
short-term financial liabilities less cash and cash equivalents. Net
flows in > TABLE 041.
Adjusted EBITDA
financial debt is shown in > TABLE 019.
Industrial net operating debt
Adjusted EBITDA is EBITDA adjusted for company-specific
Industrial net operating debt is an indicator of the liquidity situa-
purchase price allocation effects and non-recurring items. A
tion and capital structure for the operating business excluding
reconciliation of EBITDA to adjusted EBITDA is presented in
lease activities of the lessor. It is therefore defined as net financial
> TABLE 012.
Adjusted EBITDA margin
debt plus liabilities from short-term rental fleet financing and liabil-
ities from procurement leases. A reconciliation of net financial
debt to industrial net operating debt is presented in > TABLE 019.
The adjusted EBITDA margin is the ratio of adjusted EBITDA to
Leverage on net financial debt
revenue. It is shown in the section ‘Financial position and financial
performance of the KION Group’.
Leverage on net financial debt is the ratio of net financial debt to
EBITDA for the long-term lease business
the section ‘Financial position and financial performance of the
adjusted EBITDA for the previous twelve months and is shown in
KION Group’.
EBITDA for the long-term lease business comprises the earnings
before interest, tax, depreciation and amortisation generated by
long-term direct and indirect leases in the Industrial Trucks &
Services segment (with the Company as lessor) and is used to
measure the performance of the lease business. EBITDA for the
long-term lease business is shown in the section ‘Financial posi-
tion and financial performance of the KION Group’.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
60
Capital employed
Free cash flow
Capital employed is the working capital that is required to achieve
Free cash flow is the main KPI for managing the KION Group’s
the operational objectives. > TABLE 005 shows how the figure for
liquidity and financing. It is determined by the KION Group’s oper-
capital employed is arrived at.
ating activities and investing activities. Carefully targeted man-
agement of working capital and detailed planning of capital
ROCE (return on capital employed)
expenditure are thus important tools in the generation of free
cash flow. Free cash flow describes the cash flow that is available
ROCE is a measure of the profitability and efficiency of the capital
to pay dividends and interest and to repay liabilities. It is the sum
employed. It is the ratio of adjusted EBIT to capital employed as
of cash flow from operating activities and cash flow from investing
at the reporting date and is calculated annually. ROCE is shown
activities. Free cash flow is shown in > TABLE 004.
in > TABLE 005.
Return on capital employed (ROCE)
in € million
Total assets
– less selected assets ¹
– less selected liabilities ²
Capital employed
Adjusted EBIT
ROCE
1 Lease receivables, income tax receivables, cash and cash equivalents, PPA items and several items of other financial assets / other assets
2 Sundry other provisions, trade payables, the majority of other liabilities as well as several items of other financial liabilities
TABLE 005
2018
12,968.8
– 1,730.4
– 2,708.0
8,530.3
789.9
9.3%
2019
13,765.2
– 2,120.6
– 2,861.8
8,782.7
850.5
9.7%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Fundamentals of the KION Group
61
Capital expenditure
Currency-adjusted changes
For the KION Group, this item includes capitalised development
Currency-adjusted changes shows the percentage change in a
costs and spending on property, plant and equipment and
KPI (e.g. order intake, revenue) during the reporting period
excludes right-of-use assets. The KION Group’s capital expendi-
excluding the effects of changes in exchange rates.
ture is shown in the section ‘Financial position and financial
performance of the KION Group’.
Projected KPIs
Net working capital
The projected KPIs reflect the Company’s expectations regarding
future developments and are therefore forward-looking. They
Net working capital is defined as the sum of inventories, trade
are calculated in the same way as the APMs that are described
receivables and contract assets less trade payables and contract
in this section.
liabilities. It is shown in the section ‘Financial position and
financial performance of the KION Group’.
R&D spending as a percentage of revenue
The item R&D spending as a percentage of revenue is the ratio of
expenditure on research and development to revenue and is
shown in > TABLE 025.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
62
Report on the economic position
MACROECONOMIC AND SECTOR-
SPECIFIC CONDITIONS
Macroeconomic conditions
particularly pronounced in the eurozone, which is heavily reliant
on exports. In the US, impetus for growth declined over the
course of the year as tax incentives expired. The downturn in
growth in the emerging markets was mainly due to the economic
slowdown in China and India.
Both global industrial output and the volume of global trade
were down significantly on the prior year. These trends were
The rate at which the world’s economy is expanding slowed
driven mainly by the fact that businesses were much less willing
significantly in 2019. According to the International Monetary
to invest in the face of heightened risks related to the geopolitical
Fund, global economic growth for 2019 stood at only 2.9 per cent,
situation and trade policy. The US dispute with China, the Euro-
compared with 3.6 per cent in the prior year. The developed
pean Union and other key trading partners as well as the unpre-
economies and the emerging markets both recorded falls in
dictable impact of an imminent Brexit were particular sources of
their growth rates. The decline in the pace of expansion was
ongoing uncertainty. > DIAGRAM 004
Gross domestic product in 2019 – real year-on-year change
DIAGRAM 004
CHINA
INDIA
WORLD
USA
EUROZONE
BRAZIL
RUSSIA
JAPAN
2.9%
2.3%
1.2%
1.2%
1.1%
1.0%
6.1%
4.8%
GERMANY
0.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Source: International Monetary Fund (as at 21/01/2020)
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
63
Sectoral conditions
The Americas region (North, Central and South America) saw
a year-on-year decline of 6.7 per cent. Whereas North America
The global material handling market, which comprises industrial
registered a significant contraction, the Central and South Amer-
trucks and supply chain solutions, expanded in the reporting year
ican market was close to its prior-year level. The APAC region
according to the KION Group’s estimates. However, the global
recorded moderate growth of 3.9 per cent, mainly because of a
market for industrial trucks contracted slightly in 2019 in terms of
rise in unit sales of warehouse trucks in China.
unit sales after several consecutive years of growth. The escala-
Across the regions, new orders of warehouse trucks were up
tion of the trade dispute during the reporting period and the
slightly on the prior-year level (+1.0 per cent). One of the main
resultant weakening of global trade depressed demand in key
reasons for this growth was again that manual equipment was
sales regions. At the same time, however, demand rose sharply
being replaced by entry-level electric trucks in the lower price
for warehouse automation and for sorting and picking solutions.
segment. By contrast, order numbers for IC trucks were down
Contributing factors here included the creation of additional
by 5.2 per cent and for electric forklift trucks by 3.6 per cent.
warehouse and sorting capacity for the growing e-commerce
> TABLE 006
market and the implementation of omnichannel strategies.
Supply Chain Solutions
Industrial Trucks & Services
In 2019, order numbers in the global market for industrial trucks
2019. According to market research company Interact Analysis,
fell by 2.1 per cent year on year to around 1.5 million trucks. The
the rate of expansion was more than 10 per cent again. The
market picked up slightly in the second half of the year, mainly
increase was disproportionally high in the APAC region in com-
due to an uptrend in the APAC (Asia-Pacific) region. In the EMEA
parison to the US market, which is dominated by e-commerce,
region (western Europe, eastern Europe, Middle East and Africa),
and to the EMEA market.
The market for supply chain solutions delivered strong growth in
the KION Group’s main sales region, new orders were down by
6.2 per cent compared with the prior year. Both western Europe
and eastern Europe also fell short of the level of new orders
achieved in 2018.
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
2019
406.1
88.8
35.6
266.8
39.5
672.5
2018
435.0
94.1
36.2
288.8
39.5
647.3
1,509.2
1,540.9
TABLE 006
Change
– 6.7%
– 5.6%
– 1.8%
– 7.6%
– 0.1%
3.9%
– 2.1%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
64
E-commerce activities and the related realignment of supply
Business performance in the Group
chains towards an omnichannel approach remained the main
growth drivers. In order to speed up processing times and make
In 2019, the KION Group laid the foundations for expanding its
the flow of goods more efficient, a growing number of companies
market share in the growth regions of the material handling
invested in the expansion and optimisation of their warehousing
market by making significant investments in new production
and logistics capacity. This included not only automated ware-
facilities. It also entered into a strategic partnership that greatly
house systems but also solutions for individual processes, such
improved its positioning in the growing market of energy-efficient
as picking and packing, plus fully integrated end-to-end solutions.
drive technology.
Procurement markets
A new plant at the production site in Pune is contributing to
the expansion of KION’s presence in the APAC region. In terms of
unit sales, the KION Group is already a leading supplier of indus-
Price trends for the commodities used by the KION Group were
trial trucks in India. The additional capacity will help to consolidate
mixed over the course of 2019. The price of steel, the most
this leading position. The work on converting and modernising
important commodity, fell steadily as the year progressed and at
the plant, which was purchased in the first quarter of 2019, was
the end of 2019 was well below its average price for 2018. The
completed before the end of the year, meaning that production
copper price was also down at year-end on the high average
was able to commence. The new factory, in which capital of
price of the prior year. The price of Brent crude did increase in the
around €15 million is being invested, incorporates a research
first months of the year but at the end of 2019 was lower than the
and development centre, a training centre for service personnel
average value for the previous year. The rubber price bounced
and an additional space to support Dematic’s growth in India.
back significantly after weakening for a period in 2018, but
The KION Group is investing over €60 million in the con-
then experienced a sharp correction in the middle of the year.
struction of a new factory for industrial trucks in Kołbaskowo,
However, the average price for the year as a whole was higher
near Szczecin in Poland. The aim is to expand the Group’s pro-
than for 2018.
Financial markets
duction facilities in Europe and unlock even more of the market
potential in the EMEA region. In line with the groupwide growth
strategy, the new plant will produce Linde electric and IC
counterbalance trucks, including model series that are currently
manufactured at the factories in Aschaffenburg and Xiamen.
In the reporting year, the KION Group billed 48.2 per cent of
The cutting-edge production facility in Poland is due to go into
revenue in foreign currencies, the most important of which in
operation in early 2021.
addition to the US dollar were the Chinese renminbi and pound
In July 2019, KION GROUP AG and BMZ Holding GmbH
sterling. The euro continued to record moderate falls against the
signed an agreement to develop and manufacture lithium-ion
US dollar over the course of 2019. Relative to the dollar, the euro
batteries for industrial trucks in the EMEA region within the frame-
was worth 5.2 per cent less on average in 2019 than in 2018.
work of a joint venture. The objective is to meet the rapidly
The weaker euro boosted the export business, but made
growing demand for lithium-ion battery systems in the intralo-
commodities more expensive, as they are mainly traded in US
gistics market. The joint venture, which was launched in the
dollars. Overall, however, the effects of exchange rate fluctuations
beginning of 2020, underlines the KION Group’s unchanged
on the business situation and financial performance in the
strategic focus on the development of more energy-efficient drive
reporting year were negligible.
technologies for use in electric-powered intralogistics vehicles.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
65
In order to comprehensively exploit the potential of the North
At €444.8 million, net income was up by 10.7 per cent
American market for warehouse automation, a complete product
(2018: €401.6 million). This improvement can primarily be
line of automated very narrow aisle trucks, including fleet
explained by better operating profit and declining purchase price
management software, was launched onto the market by Linde
allocation effects. Basic earnings per share attributable to the
and integrated with Dematic’s intralogistics systems. As a result
shareholders of the KION Group came to €3.86 in 2019 (2018:
of the synergy potential thereby created, Industrial Trucks & Ser-
€3.39) based on a weighted average of 117.9 million no-par-value
vices is now able to offer a full range of material handling solutions
shares outstanding during the reporting year. KION GROUP AG
specifically focussed on the North American market. And thus, a
will propose a dividend of €1.30 per share to the 2020 Annual
major order was already secured in the past financial year.
General Meeting (2018: €1.20), which is a rise of 8.3 per cent.
FINANCIAL POSITION AND FINANCIAL
PERFORMANCE OF THE KION GROUP
Free cash flow increased significantly year on year to reach
€568.4 million (2018: €519.9 million), largely thanks to the higher
level of earnings. Net financial debt equated to 1.0 times adjusted
EBITDA, representing a further year-on-year improvement
(2018: 1.2 times).
In the Industrial Trucks & Services segment, the KION Group
was able to stand up to fierce competition and again recorded
Overall assessment of the economic situation
increases in order intake and revenue compared with the previous
year. Key factors in its competitiveness were a product portfolio
The KION Group continued along its path of profitable growth in
that is geared to customers’ needs and a broad range of services.
2019, successfully consolidating its position despite very chal-
The growth in revenue enabled the segment to further improve its
lenging market conditions. Order intake rose by 5.3 per cent from
operating profit in 2019. Over the course of the year, the segment
€8,656.7 million to €9,111.7 million and revenue by 10.1 per cent
also overcame the negative effects of the bottlenecks that had
from €7,995.7 million to €8,806.5 million. Both these KPIs were
occurred at individual suppliers.
therefore higher than in 2018. Adjusted EBIT also went up,
The Supply Chain Solutions segment capitalised on the still
increasing by 7.7 per cent to €850.5 million (2018: €789.9 million).
favourable market conditions and, bolstered by the high level of
Earnings in 2019 were helped not only by the healthy revenue
orders received in 2018, notched up significant gains in revenue
growth but also by the fact that material prices rose only moder-
and earnings. Dematic secured major orders in important cus-
ately. The adjusted EBIT margin contracted by 0.2 percentage
tomer segments throughout the reporting year. This was partly
points year on year, from 9.9 per cent to 9.7 per cent. This was
thanks to the addition of new fully automated solutions and sys-
because the two operating segments saw disproportionately
tems to the product portfolio that enable even simpler and faster
strong growth in their lower-margin businesses – new trucks and
processes. Product innovation also helped the segment to further
business solutions – compared with the growth of the service
strengthen its position in the most promising functional areas of
business.
warehouse automation, for example micro-fulfilment solutions.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
66
Comparison between actual and
forecast growth
(€805 million to €875 million). Free cash flow amounted to
€568.4 million and was therefore well above the 2019 target range
(€380 million to €480 million). This made it possible to reduce the
The KION Group achieved, and in some cases significantly
liquidity tied up in net working capital to a greater extent by the
exceeded, the targets that it had set itself for its core KPIs in 2019.
end of the year than had been expected. At 9.7 per cent, the
The value of the KION Group’s order intake totalled
KION Group’s ROCE was as predicted (target range: 9.0 per cent
€9,111.7 million, which was higher than the target range
to 10.0 per cent).
(€8,250 million to €8,950 million) specified in the outlook for 2019.
In the Industrial Trucks & Services segment, revenue exceeded
This was due in no small part to the Group’s strong finish to the
expectations, whereas order intake and adjusted EBIT were within
year. The level of orders was actually very good throughout the
the target ranges.
year, which meant revenue at €8,806.5 million was also above the
In the Supply Chain Solutions segment, order intake and
expected range (€8,150 million to €8,650 million). At €850.5 mil-
adjusted EBIT were above the target range, whereas revenue was
lion, adjusted EBIT was in the top half of the target range
at the upper end of the range. > TABLES 007 – 008
Comparison between actual and forecast growth – KION Group
TABLE 007
in € million
Order intake
Revenue
Adjusted EBIT
Free cash flow
ROCE
KION Group
2019
Outlook
8,250 – 8,950
8,150 – 8,650
805 – 875
380 – 480
9.0% – 10.0%
2019
Actual
9,111.7
8,806.5
850.5
568.4
9.7%
Comparison between actual and forecast growth – segments
TABLE 008
in € million
Order intake *
Revenue *
Adjusted EBIT *
Industrial Trucks & Services
Supply Chain Solutions
2019
Outlook
6,250 – 6,450
6,050 – 6,250
2019
Actual
2019
Outlook
6,330.5
2,000 – 2,500
6,410.2
2,100 – 2,400
685 – 720
695.1
190 – 225
2019
Actual
2,771.0
2,378.8
228.1
* Disclosures for the Industrial Trucks & Services and Supply Chain Solutions segments also include intra-group cross-segment order intake, revenue and effects on EBIT
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
67
Business situation and financial performance
of the KION Group
by 10.0 per cent to €3,631.7 million as at the reporting date (2018:
€3,300.8 million). This provides a good starting point for 2020.
Level of orders
Revenue
The KION Group’s order intake amounted to €9,111.7 million,
Consolidated revenue also surged, increasing by 10.1 per cent to
which was 5.3 per cent higher than the figure for the previous
€8,806.5 million (2018: €7,995.7 million). In the Industrial Trucks &
year (2018: €8,656.7 million). The value of order intake improved
Services segment, revenue generated from external customers
by 1.9 per cent in the Industrial Trucks & Services segment, which
went up by 8.2 per cent to €6,403.7 million (2018: €5,916.3 mil-
bucked the downward trend in the wider market to some extent.
lion), predominantly thanks to strong new truck business. The
In the EMEA region, where the segment generates a lot of its
revenue generated by the Supply Chain Solutions segment from
orders, the market contracted significantly. However, the strength
external customers jumped by 15.8 per cent year on year to reach
of the service business meant that order intake increased none-
€2,376.1 million (2018: €2,052.1 million). Double-digit growth rates
theless. In the Supply Chain Solutions segment, the value of order
in both the project business (business solutions) and the service
intake went up by 14.3 per cent, primarily driven by a robust per-
business contributed to this result. At Group level, the share of
formance in the second half of the year. It was also helped by
consolidated revenue attributable to the service business
major customer orders that were secured before the end of the
decreased to 41.5 per cent (2018: 43.1 per cent) owing to the dis-
year. Currency effects had a positive impact on the value of the
proportionately strong growth in new truck business and busi-
KION Group’s overall order intake, raising it by €91.6 million.
ness solutions. Currency effects – particularly the resurgent US
These effects were predominantly due to the US dollar being
dollar – had a positive impact on consolidated revenue, increas-
stronger on average during the year. Partly due to the uptick in
ing it by a total of €84.5 million. > TABLE 009
business at the end of the year, the Group’s order book rose
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
2019
6,403.7
3,345.6
3,058.2
1,600.9
926.2
361.1
169.9
2,376.1
1,780.2
595.9
26.7
8,806.5
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
TABLE 009
Change
8.2%
11.2%
5.2%
5.7%
2.9%
10.2%
2.7%
15.8%
17.6%
10.7%
– 2.1%
10.1%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
68
Revenue by sales region
Earnings and profitability
The KION Group achieved significant revenue growth in each of
EBIT, EBITDA and ROCE
its main sales regions, despite the disparate performance of the
Earnings before interest and tax (EBIT) totalled €716.6 million,
different markets. One of the reasons for the increase of
which was a substantial 11.5 per cent above the figure for the
10.1 per cent in the EMEA region was the growth of unit sales in
previous year (2018: €642.8 million). Gross profit improved by
the Industrial Trucks & Services segment. Much of the growth in
11.2 per cent thanks to the increase in revenue and, in compari-
Western Europe (up by 9.7 per cent) was generated in France,
son, a smaller increase in the cost of sales. The total rise in selling
Germany, Italy and the United Kingdom, while Eastern Europe (up
expenses and administrative expenses was slightly less than the
by 14.6 per cent) saw a sharp rise in Poland. Another reason was
growth of revenue, whereas development costs went up at a
the contribution to the overall growth in the European markets
faster rate than revenue due to the continued strategic expansion
from the Supply Chain Solutions segment, which registered
of the KION Group’s product and solution portfolio. As expected,
strong increases in both Western Europe (up by 21.8 per cent)
the negative purchase price allocation effects fell sharply to
and Eastern Europe (up by 20.8 per cent). In the Americas region
€91.0 million (2018: €126.2 million). By contrast, non-recurring
(North, Central and South America), the KION Group posted a
items increased from €21.0 million in 2018 to €42.9 million in the
rise in revenue of 14.0 per cent – helped by currency effects – and
reporting year due to restructuring and reorganisation-related
thus boosted its strong market position in North America, espe-
measures initiated in the fourth quarter of 2019 in connection with
cially in the Supply Chain Solutions segment. Revenue rose by
implementation of the KION 2027 strategy.
3.1 per cent in the Asia-Pacific region, largely thanks to the posi-
EBIT adjusted for non-recurring items and purchase price
tive business performance of the Supply Chain Solutions seg-
allocation effects (adjusted EBIT) rose by 7.7 per cent to
ment. In the Industrial Trucks & Services segment, however, the
€850.5 million (2018: €789.9 million). The adjusted EBIT margin
revenue generated in the core Chinese market declined slightly
stood at 9.7 per cent, which was slightly lower than the margin
owing to a shift in the sales mix towards entry-level trucks in the
of 9.9 per cent for 2018. This was because the two operating seg-
lower weight categories. Emerging markets accounted for
ments saw disproportionately strong growth in new truck busi-
19.8 per cent of the KION Group’s revenue in the reporting year
ness and business solutions, which tend to have narrower mar-
(2018: 20.3 per cent), while 80.7 per cent of consolidated revenue
gins than the service business. > TABLE 011
(2018: 80.8 per cent) was generated outside Germany. > TABLE 010
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
2019
5,234.3
678.6
93.8
1,680.5
212.5
906.9
8,806.5
2018
4,769.9
592.3
94.5
1,486.3
173.5
879.3
7,995.7
TABLE 010
Change
9.7%
14.6%
– 0.8%
13.1%
22.5%
3.1%
10.1%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
EBIT
in € million
EBIT
+ Non-recurring items
+ PPA items
Adjusted EBIT
Adjusted EBIT margin
69
TABLE 011
Change
11.5%
> 100%
– 27.9%
7.7%
–
2019
716.6
42.9
91.0
850.5
9.7%
2018
642.8
21.0
126.2
789.9
9.9%
Earnings before interest, tax, depreciation and amortisation
Key influencing factors for earnings
(EBITDA) increased to €1,614.6 million (2018: €1,540.6 million).
The cost of sales increased by 9.8 per cent, which was a slightly
Adjusted EBITDA came to €1,657.5 million (2018: €1,555.1 million).
slower rate than the rise in revenue of 10.1 per cent. The fallout
The adjusted EBITDA margin decreased from 19.4 per cent in
from the production inefficiencies that had arisen from bottle-
2018 to 18.8 per cent in 2019. > TABLE 012
necks at suppliers in the Industrial Trucks & Services segment in
2018 disappeared over the course of 2019. Furthermore, the
EBITDA for the long-term lease business, which is derived from
predicted decrease in purchase price allocation effects and,
internal reporting and assumes a minimum rate of return on the
overall, an only moderate increase in material prices meant that
capital employed, amounted to €333.3 million (2018: €321.1 million).
the gross margin improved to 26.5 per cent (2018: 26.2 per cent).
Return on capital employed (ROCE), which is the ratio of
In 2018, the gross margin had been squeezed by temporary
adjusted EBIT to capital employed, was up year on year at
underutilisation of project-related personnel capacity in the
9.7 per cent (2018: 9.3 per cent). The improvement in this KPI was
Supply Chain Solutions segment resulting from delays in the
partly due to the smaller rise in capital employed at the end of
awarding of projects.
2019 relative to the increase in revenue.
EBITDA
in € million
EBITDA
+ Non-recurring items
+ PPA items
Adjusted EBITDA
Adjusted EBITDA margin
2019
1,614.6
42.9
–
1,657.5
18.8%
2018
1,540.6
14.6
– 0.0
1,555.1
19.4%
TABLE 012
Change
4.8%
> 100%
100.0%
6.6%
–
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
70
The 10.2 per cent increase in selling expenses, development
the optimisation of financing across the Group. As a result,
costs and administrative expenses to a total of €1,642.4 million
there was a further decrease in current interest expense on
(2018: €1,490.3 million) was almost on a par with the revenue
financial liabilities.
growth rate. Within this total, selling expenses went up at a much
slower rate in 2019 than in 2018, when there had been significant
Income taxes
expansion of market-specific and customer-specific activities.
Income tax expenses amounted to €176.8 million
(2018:
Development costs rose to €155.3 million (2018: €137.7 million),
€143.7 million), equating to an effective tax rate of 28.4 per cent
reflecting the firm focus on implementing the innovation strategy
(2018: 26.3 per cent). The main positive effects on the tax expense
under KION 2027. Administrative expenses also jumped, by
were reductions in local tax rates, tax breaks for R&D activities in
17.1 per cent, to reach €546.9 million (2018: €467.1 million). This
the US and adjustments to tax provisions for prior years. The
was also due to restructuring and reorganisation-related meas-
lower effective tax rate in 2018 had primarily been due to the pos-
ures initiated as part of this strategy. The change in the cost of
itive impact of an amendment to tax law in Germany (section 8c
sales and in other functional costs is shown in > TABLE 013.
of the German Corporation Tax Act (KStG)).
The ‘other’ item is a net figure and includes not only other
operating income and expenses but also the share of profit (loss)
Net income and appropriation of profit
of equity-accounted investments, which amounted to a profit of
Net income increased to €444.8 million (2018: €401.6 million).
€12.1 million (2018: €12.2 million).
This figure included a net loss attributable to non-controlling inter-
Net financial expenses
ests of €10.0 million (2018: net income of €1.8 million). The net
income attributable to the shareholders of KION GROUP AG was
The net financial expenses, representing the balance of financial
€454.8 million (2018: €399.9 million). Basic earnings per share
income and financial expenses, improved slightly to reach
rose to €3.86 (2018: €3.39) based on 117.9 million (2018: 117.9 mil-
€95.1 million (2018: €97.4 million). This positive trend was primarily
lion) no-par-value shares; this was the weighted average number
a reflection of the continual reduction of financial liabilities and
of shares outstanding during the reporting year. Diluted earnings
(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 tax (EBIT)
Net financial expenses
Earnings before tax
Income taxes
Net income
2019
8,806.5
– 6,474.6
2,331.9
– 1,487.1
– 155.3
27.2
716.6
– 95.1
621.6
– 176.8
444.8
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
TABLE 013
Change
10.1%
– 9.8%
11.2%
– 9.9%
– 12.8%
– 23.3%
11.5%
2.4%
14.0%
– 23.0%
10.7%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
71
per share, which is calculated by adding the potential dilutive
no-par-value shares under the employee share option pro-
Business situation and financial performance
of the segments
gramme, amounted to €3.86 (2018: €3.39) based on a weighted
average number of shares of 117.9 million (2018: 117.9 million).
Industrial Trucks & Services segment
KION GROUP AG’s net profit for 2019 was €156.9 million, of
which €3.5 million will be transferred to other revenue reserves.
Business performance and order intake
The Executive Board and the Supervisory Board will propose to
In terms of order numbers, new truck business in the Industrial
the Annual General Meeting to be held on 12 May 2020 that an
Trucks & Services segment outperformed the global market in all
amount of €153.4 million be appropriated from the distributable
key sales regions. Whereas the global market declined by
profit of €153.5 million for the payment of a dividend of €1.30 per
2.1 per cent, unit sales in the segment, at 213.7 thousand, were
dividend-bearing share. It is also proposed that the remaining
almost level with the high figure reported for 2018 (down by
sum of €0.2 million be carried forward to the next accounting
1.4 per cent). The fall in forklift truck orders was mitigated by a
period. This equates to a proposed dividend payout rate of
moderate rise in unit sales of warehouse trucks, including entry-
around 34 per cent of the net income attributable to the share-
level trucks in the lower weight categories.
holders of KION GROUP AG.
The value of order intake rose by 1.9 per cent to €6,330.5 million
(2018: €6,210.6 million). Higher sales prices and the expanding
service business contributed to this growth. > TABLE 014
Key figures – Industrial Trucks & Services
in € million
Order intake
Total revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
2019
6,330.5
6,410.2
1,381.0
1,409.5
661.7
695.1
22.0%
10.8%
2018
6,210.6
5,922.0
1,332.3
1,340.2
625.2
655.4
22.6%
11.1%
TABLE 014
Change
1.9%
8.2%
3.7%
5.2%
5.8%
6.1%
–
–
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
72
Revenue
Supply Chain Solutions segment
The total revenue of the Industrial Trucks & Services segment
amounted to €6,410.2 million, an increase of 8.2 per cent com-
Business performance and order intake
pared with the previous year (2018: €5,922.0 million). Revenue
Following a significant increase in the previous year, the Supply
from new trucks jumped by 11.2 per cent thanks to the strong
Chain Solutions segment saw a further 14.3 per cent rise in its
order book at the end of 2018 and a small increase in sales prices.
order intake to €2,771.0 million in 2019 (2018: €2,425.2 million).
In the service business, revenue was up by 5.2 per cent year on
The segment secured significant orders from new customers in
year. The aftersales business, which accounted for 52.3 per cent
EMEA and Asia over the course of 2019, and the strong finish to
of service revenue (2018: 52.1 per cent), increased by 5.7 per cent.
the year resulted in an even bigger order book. Currency effects,
In the used truck business, the segment reported a rise of
mainly from the resurgent US dollar, boosted the value of order
10.2 per cent. As a result of the disproportionately strong growth
intake by €87.7 million.
of revenue from new truck business, the share of external seg-
ment revenue contributed by the service business fell to
Revenue
47.8 per cent (2018: 49.1 per cent).
The total revenue of the Supply Chain Solutions segment
Earnings
increased by a substantial 15.7 per cent year on year to reach
€2,378.8 million (2018: €2,055.2 million), thanks in large part to
The sharp rise in revenue had a positive impact on the segment’s
the strong order book at the end of 2018. The rise in segment rev-
adjusted EBIT, which was up by 6.1 per cent year on year at
enue was driven both by the project business (business solutions)
€695.1 million (2018: €655.4 million). The fallout from the bottle-
and by the service business, which reported revenue growth of
necks at suppliers that had continued to have an effect in 2018 no
17.6 per cent and 10.7 per cent respectively. The share of seg-
longer had any significant impact on segment earnings. The
ment revenue generated by the service business stood at
adjusted EBIT margin fell from 11.1 per cent in 2018 to
25.1 per cent (2018: 26.2 per cent). As a result of the growing vol-
10.8 per cent in the year under review. This was due to higher
ume of business in the European and Asian markets, the propor-
development costs for work on innovation and to stronger growth
tion of the segment’s external revenue generated by the North
of new truck business relative to the higher-margin service busi-
American business declined to 64.1 per cent (2018: 65.7 per cent).
ness in the reporting year. Non-recurring items – particularly
relating to restructuring and reorganisation measures initiated in
Earnings
2019 – and purchase price allocation effects amounted to
The segment’s adjusted EBIT jumped by 26.6 per cent to
€33.5 million (2018: €30.2 million). Including these effects, EBIT
€228.1 million (2018: €180.2 million), mainly due to the increase in
grew by 5.8 per cent to €661.7 million (2018: €625.2 million).
revenue. More efficient project execution also helped to improve
Adjusted EBITDA increased to €1,409.5 million (2018:
profitability. In 2018, delays in the awarding of projects by cus-
€1,340.2 million). The adjusted EBITDA margin fell to 22.0 per cent
tomers had led to temporary underutilisation of project-related
(2018: 22.6 per cent). > TABLE 014
personnel capacity. Overall, the adjusted EBIT margin improved
KION GROUP AGAnnual Report 2019 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
73
TABLE 015
Change
14.3%
15.7%
22.2%
24.8%
> 100%
26.6%
–
–
2019
2,771.0
2,378.8
276.3
288.9
129.6
228.1
12.1%
9.6%
2018
2,425.2
2,055.2
226.1
231.5
64.4
180.2
11.3%
8.8%
substantially from 8.8 per cent to 9.6 per cent. After taking into
Revenue and earnings
account non-recurring items and greatly reduced purchase price
Total segment revenue, which came to €334.1 million (2018:
allocation effects, the segment’s EBIT more than doubled to
€299.2 million), mainly resulted from internal IT and logistics services.
reach €129.6 million (2018: €64.4 million).
The segment’s adjusted EBIT was down year on year at
Adjusted EBITDA increased significantly to €288.9 million
€315.1 million (2018: €369.6 million). This was a reflection of lower
(2018: €231.5 million), giving an adjusted EBITDA margin of
intra-group dividend income compared with 2018 and an increase
12.1 per cent (2018: 11.3 per cent). > TABLE 015
in administrative expenses resulting from implementation of the
KION 2027 strategy. Adjusted EBIT excluding intra-group divi-
Corporate Services segment
dend income amounted to minus €72.9 million (2018: minus
Business performance
€45.8 million). Adjusted EBITDA stood at €347.0 million, or minus
€41.1 million if intra-group dividend income is excluded (2018:
The Corporate Services segment comprises holding companies
€398.8 million, or minus €16.6 million). > TABLE 016
and other service companies that provide services such as IT and
logistics across all segments.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
Key figures – Corporate Services
in € million
Order intake
Total revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Net assets
74
TABLE 016
Change
11.6%
11.6%
– 13.2%
– 13.0%
– 15.0%
– 14.7%
2019
334.1
334.1
345.1
347.0
313.2
315.1
2018
299.2
299.2
397.6
398.8
368.5
369.6
The short-term rental fleet was largely stable in 2019. Rental
assets stood at €632.9 million at the end of the year, which was
The condensed consolidated statement of financial position as at
slightly less than at the end of the previous year (2018: €670.5 mil-
31 December 2019 showing current and non-current assets and
lion). Leased assets for direct and indirect leases with end cus-
liabilities together with equity is presented in > TABLE 017.
tomers that are classified as operating leases increased to
Non-current assets
€1,361.2 million (2018: €1,261.8 million). Long-term lease receiva-
bles arising from leases with end customers that are classified as
finance leases also rose, amounting to €1,080.9 million as at
Non-current assets increased to €10,696.4 million as at the
31 December 2019 (2018: €826.2 million).
reporting date (2018: €10,150.6 million). The total carrying amount
The amount of deferred tax assets recognised in the state-
of intangible assets rose to €5,732.5 million (2018: €5,721.6 mil-
ment of financial position was €449.7 million as at the reporting
lion). The goodwill included in this figure was up slightly due to
date (2018: €421.7 million).
currency effects, reaching €3,475.8 million (2018: €3,424.8 mil-
lion). There was an increase in other property, plant and equip-
Current assets
ment to €1,236.3 million (2018: €1,077.8 million). This was due not
only to higher capital expenditure on modernisation and site
Overall, there was a moderate increase in current assets to
expansion but also to additional right-of-use assets related to
€3,068.8 million (2018: €2,818.2 million). The growth of invento-
procurement leases, which stood at €452.7 million at the end of
ries during the year, predominantly in the Industrial Trucks & Ser-
2019 (2018: €390.7 million). Right-of-use assets amounted to
vices segment, was mostly scaled back again in the fourth quarter.
€325.9 million for land and buildings (2018: €276.4 million) –
At the end of the year, the Group’s inventories amounted to
including two major new leases for the rental of buildings – and
€1,085.3 million (2018: €994.8 million). Within this figure, finished
€126.8 million for plant & machinery and office furniture & equip-
goods were up by 16.0 per cent year on year owing to the increase
ment (2018: €114.3 million).
in volume. > TABLE 018
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
(Condensed) statement of financial position
in € million
Non-current assets
Current assets
Total assets
Equity
Non-current liabilities
Current liabilities
Total equity and liabilities
2019
10,696.4
3,068.8
13,765.2
3,558.4
6,277.8
3,929.0
13,765.2
in %
77.7%
22.3%
–
25.9%
45.6%
28.5%
–
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%
–
75
TABLE 017
Change
5.4%
8.9%
6.1%
7.7%
4.6%
7.2%
6.1%
Trade receivables were up slightly at €1,074.2 million (2018:
ing date (2018: €676.1 million). This was due to the increase in
€1,036.4 million). Contract assets mainly related to project busi-
inventories and trade receivables on the back of the larger volume
ness in the Supply Chain Solutions segment and, at €150.2 mil-
of business and to the incremental fulfilment of customer orders
lion, were also higher than at the end of the previous year (2018:
in the project business over their scheduled period. Cash and
€119.3 million).
cash equivalents rose from €175.3 million as at 31 December
The KION Group’s net working capital, which comprises
2018 to €211.2 million as at 31 December 2019.
inventories, trade receivables and contract assets less trade pay-
Current lease receivables from end customers increased to
ables and contract liabilities, rose to €828.9 million at the report-
€340.1 million (2018: €271.2 million).
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
2019
276.6
143.3
638.5
26.9
1,085.3
2018
284.2
132.3
550.6
27.8
994.8
TABLE 018
Change
– 2.7%
8.3%
16.0%
– 3.3%
9.1%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
76
Financial position
seeks to implement proactive risk management by rigorously
pursuing its corporate strategy and to maintain an investment-
Principles and objectives of financial management
grade credit rating in the capital and funding markets by ensuring
a solid funding structure.
The KION Group pursues a conservative financial policy of main-
The KION Group has an investment-grade credit rating that
taining a strong credit profile with reliable access to debt capital
helps it to secure more advantageous funding conditions in the
markets. By pursuing an appropriate financial management strat-
capital markets. Fitch Ratings, for example, awarded a rating of
egy, the KION Group makes sufficient cash and cash equivalents
BBB– with a stable outlook in January 2017 and reaffirmed it in
available at all times to meet the Group companies’ operational
October 2019. Furthermore, the rating agency Standard & Poor’s
and strategic funding requirements. As part of its financial man-
has rated KION GROUP AG at BB+ with a stable outlook since
agement activities, the KION Group aims to continually reduce its
December 2019.
financial liabilities and, to an increasing extent, optimise the
The KION Group has issued guarantees to the banks for all
financing of the long-term lease business. In addition, the
payment obligations and is the borrower in respect of all the pay-
KION Group manages its financial relationships with customers
ment obligations resulting from the promissory notes.
and suppliers and mitigates the financial risk to its enterprise
The KION Group maintains a liquidity reserve in the form of
value and profitability, notably currency risk, interest-rate risk,
agreed and confirmed credit lines and cash in order to ensure
price risk, counterparty risk and country risk. In this way, the
long-term financial flexibility and solvency. In addition, it uses
KION Group creates a stable funding position from which to
derivatives to hedge currency risk. It enters into interest-rate
maintain profitable growth.
swaps in order to hedge interest-rate risk and the risk of changes
The financial resources within the KION Group are provided
in fair value.
on the basis of an internal funding approach. The KION Group
Among other stipulations, the contractual terms of some
collects liquidity surpluses of the Group companies in central or
lending agreements and the promissory notes set out certain
regional cash pools and, where possible, covers subsidiaries’
covenants. In addition, there is a financial covenant that involves
funding requirements with intercompany loans. This funding
ongoing testing of adherence to a defined maximum level of
enables the KION Group to present a united front in the capital
leverage. Non-compliance with the covenants or with the defined
markets and strengthens its hand in negotiations with banks
maximum level of leverage as at a particular reporting date may
and other market participants. The Group occasionally arranges
give lenders a right of termination or lead to an increase in interest
additional credit lines for KION Group companies with local
payments.
banks or leasing companies in order to comply with legal, tax
All covenants were complied with in the past financial year, as
and other regulations.
had been the case in 2018.
The KION Group is a publicly listed corporate group and
therefore ensures that its financial management takes into
Main corporate actions in the reporting period
account the interests of shareholders, promissory note investors
and the banks providing its funding. For the sake of all stakehold-
In April 2019, KION GROUP AG issued a variable-rate promissory
ers, the KION Group makes sure that it maintains an appropriate
note in a nominal amount of €120.5 million. In return, €20.5 million
ratio of internal funding to borrowing. The KION Group’s borrow-
of the fixed-rate tranche of the promissory note from 2018 was
ing is based on a generally long-term approach, with an age
repaid ahead of schedule. The liabilities under the acquisition
structure extending until 2027.
facilities agreement (AFA) were reduced earlier than planned in
Depending on requirements and the market situation, the
2019 by repaying a total of €400.0 million. As at 31 December
KION Group will also avail itself of the funding facilities offered by
2019, the outstanding balance of the AFA, which has a variable
the public capital markets in future. The KION Group therefore
interest rate and matures in October 2021, was thus €200.0 mil-
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
77
lion. The early repayment was funded with cash received from
Financial debt
operating activities, additional borrowing from banks and the
Non-current financial liabilities were reduced to €1,716.8 million
issuance of the aforementioned new promissory note.
as at 31 December 2019 (2018: €1,818.7 million). This figure can
As at the end of the year, KION GROUP AG had issued a total
essentially be broken down into promissory notes with a carrying
volume of €318.0 million under the commercial paper programme
amount of €1,317.3 million (2018: €1,214.3 million) and liabilities to
that it had launched in November 2019. This amount had been
banks of €399.5 million (2018: €604.5 million).
repaid in full by the reporting date.
Over the course of 2019, net cash provided by operating
Between 9 and 20 September 2019, KION GROUP AG repur-
activities was used to lower current financial liabilities to
chased a total of 60,000 shares for use in the KION Employee
€103.7 million as at the reporting date (2018: €226.5 million).
Equity Programme (KEEP). By 31 December 2019, a total of
Net financial debt (non-current and current financial liabilities
67,104 shares had been purchased by staff under KEEP 2019
less cash and cash equivalents) thus amounted to €1,609.3 mil-
(2018: 38,691 shares). The number of shares held in treasury
lion (2018: €1,869.9 million). This equated to 1.0 times adjusted
stood at 130,644 as at the reporting date.
EBITDA in the year under review (2018: 1.2 times).
As at 31 December 2019, the unused portion of the revolving
Analysis of capital structure
credit facility stood at €1,150.0 million (2018: €1,048.2 million).
> TABLE 019
Current and non-current liabilities rose by €543.0 million to
€10,206.8 million as at the reporting date (2018: €9,663.7 million).
The larger volume of business led to a significant increase in lia-
bilities attributable to financing of the long-term lease business.
Non-current liabilities included deferred tax liabilities of €570.9 mil-
lion (2018: €626.7 million).
Industrial net operating debt
in € million
Promissory notes
Liabilities to banks
Other financial liabilities
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
TABLE 019
2018
1,214.3
826.4
4.6
2,045.2
– 175.3
1,869.9
307.1
289.9
597.0
421.2
2019
1,317.3
498.3
4.9
1,820.5
– 211.2
1,609.3
437.2
178.6
615.8
486.1
2,711.2
2,888.1
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
78
Retirement benefit obligation
Liabilities from financial services comprise all liabilities from
The KION Group maintains pension plans in many countries.
financing the lease business and the short-term rental fleet on the
These plans comply with legal requirements applicable to
basis of sale and leaseback sub-leases, as well as the liabilities
standard local practice and thus the situation in the country in
that arise from financing the lease business by means of lease
question. They are either defined benefit pension plans, defined
facilities and the use of securitisations. Furthermore, liabilities
contribution pension plans or multi-employer benefit plans. As at
from financial services arising from the lease business include
31 December 2019, the retirement benefit obligation under defined
residual value obligations resulting from the indirect lease busi-
benefit pension plans amounted to a total of €1,263.4 million,
ness.
which was significantly higher than the figure of €1,043.0 million
Overall,
liabilities
from
financial services
increased to
at the end of 2018 largely owing to lower discount rates. The net
€2,500.2 million as at 31 December 2019 (2018: €1,472.4 million).
obligation under defined benefit pension plans increased year on
Of this total, €2,062.9 million was attributable to financing of the
year to reach €1,211.7 million (2018: €1,009.7 million). Changes in
direct and indirect long-term lease business (2018: €1,165.3 mil-
estimates relating to defined benefit pension entitlements resulted
lion). The total also includes residual value obligations resulting
in a substantial decrease in equity of €115.9 million (including
from the indirect lease business. These obligations fell to
deferred taxes).
€297.2 million (2018: €319.5 million). Lease liabilities decreased by
Contributions to pension plans that are entirely or partly
€308.5 million to €432.1 million as at the reporting date (2018:
funded via funds are paid in as necessary to ensure sufficient
€740.6 million) because new business has been included in liabil-
assets are available and to be able to make future pension
ities from financial services since the start of 2018. Overall, liabili-
payments to pension plan participants. These contributions are
ties from financial services and lease liabilities together totalling
determined by factors such as the funded status, legal and
€2,495.0 million were attributable to financing of the direct and
tax considerations, and local practice. The payments made by
indirect long-term lease business (2018: €1,906.0 million).
the KION Group in 2019 in connection with the main pension
A sum of €437.2 million, representing some of the financing of
plans totalled €22.0 million, comprising €17.8 million for direct
the short-term rental fleet, was recognised under liabilities from
pension payments and €3.6 million for employer contributions
financial services (2018: €307.1 million). The remaining amount of
to plan assets.
€178.6 million (2018: €289.9 million) relating to the financing of
the short-term rental fleet was recognised under other financial
Liabilities from financial services, leases, and rental business
liabilities.
Further expansion of the long-term lease business with end
Other financial liabilities also included liabilities from procure-
customers again led to a higher overall funding requirement
ment leases amounting to €486.1 million (2018: €421.2 million), for
in 2019.
which right-of-use assets were recorded.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
79
Other financial liabilities
Analysis of liquidity
Current and non-current other financial liabilities totalled
€784.9 million as at the reporting date (2018: €813.2 million).
Liquidity management is an important aspect of central financial
Contract liabilities
management in the KION Group. The sources of liquidity are cash
and cash equivalents, cash flow from operating activities and
Contract liabilities, of which a large proportion related to the long-
amounts available under credit facilities. Using cash pools, liquidity
term project business, decreased to €504.9 million (2018:
is managed in such a way that the Group companies can always
€570.1 million). This was mainly due to the incremental fulfilment
access the cash that they need.
of customer orders in the long-term project business over their
Cash and cash equivalents increased by €35.9 million during
scheduled period.
Equity
the reporting year to reach €211.2 million (2018: €175.3 million).
Taking into account the credit facility that was still freely available,
the unrestricted cash and cash equivalents available to the
Consolidated equity rose to €3,558.4 million as at 31 December
KION Group as at the reporting date amounted to €1,357.4 million
2019 (2018: €3,305.1 million), driven in large part by the increase
(2018: €1,219.8 million).
in net income to €444.8 million. Currency translation effects had
Net cash provided by operating activities totalled €846.3 mil-
a positive impact of €76.1 million. Conversely, equity was reduced
lion, which was much higher than the prior-year figure of
by actuarial losses of €115.9 million (after deferred taxes) arising
€765.5 million. This year-on-year improvement in cash flow from
from the measurement of the defined benefit obligation due to the
operating activities was due to the higher level of earnings and a
far lower level of interest rates. KION GROUP AG’s dividend pay-
reduction in spending on the ongoing renewal and expansion of
out of €141.5 million also lowered the level of equity. The equity
the short-term rental fleet. Conversely, the growth of net working
ratio increased to 25.9 per cent as at the reporting date (2018:
capital lowered cash flow from operating activities by €146.8 mil-
25.5 per cent).
lion (2018: by €54.3 million), primarily because of a decline in
advance payments from customers in the project business.
Analysis of capital expenditure
Net cash used for investing activities amounted to €277.9 mil-
lion and was therefore €32.3 million higher than in the previous
The KION Group’s total capital expenditure on property, plant
year (2018: €245.6 million). Within this figure, cash payments for
and equipment and on intangible assets (excluding right-of-use
capital expenditure on production facilities, product develop-
assets from procurement leases) totalled €287.4 million in the
ment and purchased property, plant and equipment rose to
reporting year (2018: €258.5 million).
€287.4 million (2018: €258.5 million).
Spending in the Industrial Trucks & Services segment contin-
ued to be focused on capital expenditure for product develop-
ment and on the expansion and modernisation of production and
technology facilities, including the purchase of a new plant in
Pune, India and the start of construction of a new production site
in Poland. Capital expenditure in the Supply Chain Solutions seg-
ment primarily related to development costs.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
80
Free cash flow – the sum of cash flow from operating activities
(2018: €2,042.6 million). Payments made for interest portions and
and investing activities – increased to €568.4 million (2018:
principal portions under procurement leases totalled €126.5 mil-
€519.9 million).
lion (2018: €114.0 million). Current interest payments decreased
Net cash used for financing activities came to €534.9 million
from €42.9 million in 2018 to €36.7 million in 2019 due to a year-
(2018: €514.5 million), partly due to net repayments of financial
on-year fall in average net debt. The payment of a dividend to the
debt amounting to €226.0 million. One new promissory note was
shareholders of KION GROUP AG in May 2019 resulted in an
issued, whereas a further amount was repaid towards the remain-
outflow of funds of €141.5 million (2018: €116.8 million). The
ing long-term tranches under the AFA. Overall, financial debt
acquisition of employee shares caused a cash outflow of €2.9 mil-
taken on during the reporting period reached €2,940.1 million
lion (2018: €3.6 million). > TABLE 020
(2018: €1,811.7 million); repayments amounted to €3,166.2 million
(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
2019
716.6
846.3
– 277.9
568.4
– 534.9
2.4
35.9
2018
642.8
765.5
– 245.6
519.9
– 514.5
– 3.2
2.2
TABLE 020
Change
11.5%
10.6%
– 13.1%
9.3%
– 4.0%
> 100%
> 100%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
81
KION GROUP AG
Business activities
Business performance in 2019
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
KION GROUP AG is the strategic management holding company
performance of the KION Group’ sections.
in the KION Group. KION GROUP AG holds all the shares in
Dematic Holdings GmbH, Frankfurt am Main, and thus all the
shares in the subsidiaries in the Supply Chain Solutions segment.
Financial performance
Furthermore, KION GROUP AG is the sole shareholder of Linde
Material Handling GmbH, Aschaffenburg, which holds almost all
KION GROUP AG does not have any operating activities itself.
the shares of the companies in the Industrial Trucks & Services
The reported revenue of €47.2 million (2018: €30.5 million) largely
segment.
arose from the performance of services for affiliated companies.
The annual financial statements of KION GROUP AG have
Other operating income fell by €5.0 million to €28.4 million
been prepared in accordance with the provisions in the German
and includes, in particular, gains on the measurement of bank
Commercial Code (HGB) and the German Stock Corporation
accounts and cash pools in foreign currencies.
Act (AktG). The management report has been combined with
The cost of materials is related to the revenue from the
the group management report. The consolidated financial
provision of services and mostly consists of expenses for consul-
statements have been prepared in accordance with International
tancy services.
Financial Reporting Standards (IFRSs) and the additional provi-
Personnel expenses went up by €16.4 million to €53.9 mil-
sions in section 315e (1) HGB. Differences between the account-
lion. This year-on-year increase was due to the higher addition to
ing policies in accordance with HGB and those in accordance
provisions for share-based remuneration and short-term incen-
with IFRSs arise primarily in connection with the accounting
tives, and to the growth in the number of employees and annual
treatment of financial instruments, provisions and deferred taxes.
salary rises.
Other operating expenses rose by €27.6 million to €107.8 mil-
lion, mainly because of higher costs for external services and
consultancy. Other operating expenses also includes foreign
currency exchange rate losses resulting from the measurement
of bank accounts and cash pools in foreign currencies.
Management system, future development
and risk position
As a holding company without any operating activities of its own,
KION GROUP AG is indirectly dependent on the earnings and
economic performance of its subsidiaries. The management
system, expected development and the opportunities and risks
of the KION Group are described in detail in the ‘Management
system’ and ‘Outlook, risk report and opportunity report’ sec-
tions of this combined management report.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
82
The main changes in net financial income/expenses were as
A total net profit of €156.9 million was generated in the year
follows:
under review (2018: €236.3 million). > TABLE 021
– Of the total income from profit-transfer agreements,
€332.1 million related to Linde Material Handling GmbH
Net assets
(2018: €343.4 million).
– Interest expense and similar charges, which amounted to
€52.9 million (2018: €54.9 million), arose mainly from the
At the end of 2019, the total assets of KION GROUP AG had
increased by approximately 1.4 per cent year on year to
external financing of the KION Group via the promissory
€7,680.5 million.
notes and loan agreements and, to a smaller extent, from
The financial assets largely comprise the carrying amounts of
interest charged on intercompany liabilities and the unwind-
the equity investments in Dematic Holdings GmbH (€2,862.2 mil-
ing of the discount on pension provisions.
– Other interest and similar income amounting to €62.4 million
(2018: €61.6 million) for the most part consisted of interest
lion) and Linde Material Handling GmbH (€1,368.4 million).
The receivables mainly consist of loans and cash pool receiv-
ables due from other Group companies and the Company’s
income on intercompany receivables.
entitlement to the transfer of profits from Linde Material Handling
GmbH of €332.1 million (2018: €343.4 million). There are long-
KION GROUP AG incurred tax expenses of €94.6 million as a
term loans to Group companies of €606.1 million.
result of its role as the parent company of the tax group in 2019
After taking into account the dividend payment of €141.5 mil-
(2018: €55.5 million). The tax expenses had been lower in 2018
lion and the €1.7 million decrease in the volume of treasury
because of a positive tax effect of €29.4 million resulting from an
shares, the net profit of €156.9 million meant that equity rose to
amendment to tax law in Germany.
€3,828.6 million (2018: €3,811.6 million). Further disclosures on
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
2019
47.2
28.4
– 0.6
– 53.9
– 107.8
– 0.5
– 87.2
338.7
– 94.6
156.9
2018
30.5
33.5
– 0.7
– 37.5
– 80.2
– 0.4
– 54.9
346.7
– 55.5
236.3
TABLE 021
Change
54.8%
– 15.1%
20.1%
– 43.7%
– 34.5%
– 17.3%
– 58.8%
– 2.3%
– 70.5%
– 33.6%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
83
Net assets
in € million
Assets
Property, plant and equipment
Financial assets
Receivables and other assets
Cash and cash equivalents
Deferred income
Total assets
Equity and liabilities
Equity
Retirement benefit obligation
Tax provisions
Other provisions
Liabilities
Total equity and liabilities
TABLE 022
2019
2018
Change
2.8
4,231.2
3,405.7
40.7
0.0
3.3
4,231.2
3,321.6
18.3
–
7,680.5
7,574.5
3,828.6
3,811.6
47.4
44.3
33.4
3,726.8
7,680.5
39.3
23.2
22.9
3,677.5
7,574.5
– 14.5%
0.0%
2.5%
> 100%
–
1.4%
0.4%
20.4%
90.9%
45.8%
1.3%
1.4%
treasury shares can be found in the notes to the financial state-
Liabilities mainly consist of liabilities to banks of €1,739.5 mil-
ments of KION GROUP AG. The equity ratio was 49.8 per cent as
lion (2018: €1,978.7 million) as well as loan liabilities and cash
at the reporting date (2018: 50.3 per cent).
pool liabilities to other Group companies. The liabilities to
The €39.6 million rise in provisions to €125.1 million was
banks comprise the financing via the promissory notes, the
mainly the result of additions in tax provisions and to the provi-
acquisition facilities agreement (AFA) and other loan liabilities.
sions for share-based remuneration and short-term incentives.
> TABLE 022
Pension provisions include provisions of €10.3 million (2018:
€9.5 million) for former members of the Executive Board of KION
GROUP AG and its legal predecessors. KION GROUP AG rec-
ognised tax provisions of €44.3 million (2018: €23.2 million)
including those in connection with its role as the parent company
of the tax group.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
84
Financial position
The liabilities to banks and the promissory notes are not
hedged. KION GROUP AG has issued guarantees to the banks
By pursuing an appropriate financial management strategy, the
for all of the payment obligations under its liabilities to them and it
KION Group – through KION GROUP AG – makes sufficient cash
is the borrower in respect of all the payment obligations resulting
and cash equivalents available at all times to meet the Group
from the promissory notes.
companies’ operational and strategic funding requirements.
As at 31 December 2019, liabilities to banks amounted to
KION GROUP AG is a publicly listed company and therefore
€1,739.5 million (2018: €1,978.7 million). After deduction of cash
ensures that its financial management takes into account the
and cash equivalents, net debt amounted to €1,698.8 million
interests of shareholders and banks. For the sake of these
(2018: €1,960.4 million).
stakeholders, KION GROUP AG makes sure that it maintains an
appropriate ratio of internal funding to borrowing.
KION GROUP AG has a multi-currency revolving credit facil-
Employees
ity of €1,150.0 million. It has a variable interest rate and, as it cur-
rently stands, can be drawn down until February 2023. As at
The average number of employees at KION GROUP AG was
31 December 2019, the amount drawn down was €0.0 million
249 in 2019 (2018: 217). KION GROUP AG employed 262 people
(2018: €101.8 million). The drawdowns under the revolving credit
as at 31 December 2019 (2018: 230).
facility are classified as short term.
KION GROUP AG also has liabilities to banks from variable-
rate loans in the amount of €400.0 million (2018: €600.0 million)
that mature in October 2021. These include the liabilities under
the AFA, of which €400.0 million was repaid early in 2019 using
cash received from operating activities, additional borrowing and
the issuance of a new promissory note. As at 31 December 2019,
the remaining liability under the AFA amounted to €200.0 million
(2018: €600.0 million).
In April 2019, KION GROUP AG issued a new variable-rate
promissory note in a nominal amount of €120.5 million. In return,
€20.5 million of the fixed-rate tranche of the promissory note from
2018 was repaid ahead of schedule. Promissory notes that
mature between 2022 and 2027, and have variable-rate or fixed
coupons, have been issued in a nominal amount totalling
€1,310.0 million (2018: €1,210.0 million). KION GROUP AG has
entered into a number of interest-rate derivatives in order to
hedge the interest-rate risk resulting from the variable-rate
tranches. Moreover, the risk of a change in the fair value of a
fixed-rate tranche of the promissory note that was issued in
2018 is hedged using an interest-rate swap, thereby creating a
EURIBOR-based variable-rate obligation.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
85
Concluding declaration on the report on
relationships 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, 21 February 2020
The Executive Board
Gordon Riske
Anke Groth
Dr Eike Böhm
Ching Pong Quek
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
86
NON-FINANCIAL PERFORMANCE
INDICATORS
The KION Group’s employer brands are very important in this
regard. Familiarity with the three main employer brands, Linde
Material Handling, STILL and Dematic, remains very high and was
further strengthened during the reporting period. In 2019, STILL
was recognised as a top employer for the eighth year in succes-
The KION Group’s enterprise value is determined not only by
sion by the Top Employers Institute, a certification organisation.
financial KPIs but also by non-financial factors. They are based on
the Company’s relations with its customers and employees, on its
Our shared KION Group values
technological position and on environmental considerations. The
KION Group can only achieve the targets that it has formulated for
The shared values and leadership principles of the KION Group,
itself in the KION 2027 strategy if it is an attractive and responsible
which were developed and introduced in 2017 as part of an inter-
employer that is able to retain competent and committed employ-
national bottom-up and top-down process, were in the spotlight
ees at all sites. It also needs to develop products and solutions
once again in 2019 with the objective of further embedding them
that are closely tailored to customers’ needs and environmental
in the Company. The Operating Units formulated and imple-
requirements now and in the future, and to continually increase
mented a host of measures at local level to facilitate and
the customer benefits provided by its products and services. Fur-
strengthen employees’ identification with the shared values.
thermore, production processes must be designed in such a
Regular communications via the KION intranet played an
way that resources are conserved and emissions are avoided as
important role alongside the local measures in 2019. For exam-
far as possible.
ple, a series of features on employees who embody the values
The KION Group firmly believes that these aspects are
particularly well was expanded, as was a series of regular com-
important to its positioning as a pioneering company in a highly
munications on the 2027 strategy and the values.
competitive environment.
Employees
HR strategy
Headcount
The average number of employees (full-time equivalents (FTEs),
including trainees and apprentices) in the KION Group was
34,002 in 2019 (2018: 32,524 FTEs).
As at 31 December 2019, the KION Group companies
The ultimate objective of the KION Group’s HR strategy is to
employed 34,604 FTEs, 1,476 more than a year earlier. > TABLE 023
provide the best possible support for the targeted implementa-
tion of the KION 2027 strategy. The KION Group’s success in the
implementation of KION 2027 is founded on the capabilities and
commitment of its employees.
To this end, the KION Group draws on a wide range of meas-
ures 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 pro-
gression afforded by working for an international group of compa-
nies play an important role in this and provide a solid basis for
meeting the manifold challenges presented by our workforce, the
various labour markets, demographic change and digitalisation.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
Employees (full-time equivalents) *
31/12/2019
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total
31/12/2018
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total
87
TABLE 023
Total
21,302
3,281
101
3,233
1,219
5,468
849
263
–
–
–
–
1,112
34,604
796
20,647
–
–
–
–
–
2,773
210
2,977
1,225
5,296
796
33,128
Industrial
Trucks & Services
Supply Chain
Solutions
Corporate
Services
18,077
2,821
88
243
504
4,398
26,131
17,641
2,642
206
232
486
4,326
25,533
2,376
197
13
2,990
715
1,070
7,361
2,210
131
4
2,745
739
970
6,799
* Number of employees (full-time equivalents) as at balance sheet date; allocation according to the contractual relationship
Personnel expenses amounted to €2,292.8 million. The main
reason for this increase of 9.2 per cent compared with 2018 was
the rise in average headcount for 2019 and changes to collective
bargaining agreements. > TABLE 024
Personnel expenses
in € million
Wages and salaries
Social security contributions
Post-employment benefit costs and other benefits
Total
2019
1,820.6
398.7
73.5
2,292.8
2018
1,653.4
364.2
82.6
2,100.2
TABLE 024
Change
10.1%
9.5%
– 11.0%
9.2%
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
88
Diversity
them on the path to fulfilling an executive function. Some mem-
bers of this group have already been promoted to a senior
The KION Group sees itself as a global company with strong inter-
management position.
cultural awareness: as at 31 December 2019, people from around
As well as introducing programmes targeted at specific
95 different countries were employed across the KION Group.
groups, the KION Group remains committed to generally offering
One of the ways in which the Company promotes interna-
its employees career opportunities and flexible, family-friendly
tional collaboration between employees is the KION expat
working-time models. The Group companies also collaborate
programme, which gives employees the opportunity to transfer
closely on areas such as talent management and training & devel-
to different countries where the KION Group is represented.
opment programmes. This helps to systematically identify and
The KION Group is taking various steps to tackle the
support staff across the Group who have potential, who are high
challenges of demographic change, for example by providing
performers or who are experts in key functions.
working conditions that are suited to employees’ age-related
The Operating Units STILL, Linde MH and Dematic also
requirements and organising healthy-living programmes so
have academies that run subject-specific and interdisciplinary
that it can continue to benefit from older employees’ experience.
training courses to develop employees’ skills, particularly in
As at 31 December 2019, 26.7 per cent of employees were
sales and service.
over the age of 50 (2018: 26.6 per cent).
The proportion of the KION Group’s total workforce made
Training and professional development
up of women rose to 16.7 per cent in 2019 compared with
16.2 per cent in 2018. To help increase the proportion of man-
The companies in the KION Group currently offer training for
agement positions occupied by women, the Executive Board set
23 professions in Germany. Besides providing dual vocational
targets that are published in the corporate governance report.
training schemes, KION Group companies offer work placements
Going forward, the KION Group intends to fill more management
for students combining vocational training with a degree course
positions internationally in order to better fulfil the continually
in cooperation with various universities. The total number of
growing requirements placed on the Company. The KION Group
trainees and apprentices was 672 as at 31 December 2019
offers flexible working-time models that promote a good work-life
(2018: 601).
balance. In addition, various initiatives were launched in 2019
aimed at increasing diversity in the Company, while the Female
Sharing in the Company’s success
Mentoring Programme that started in 2018 welcomed a second
group of managers.
The KION Group launched the KION Employee Equity Programme
(KEEP) in 2014. Initially limited to Germany, the programme was
Development of specialist workers and executives
then rolled out to more countries. Around 1,850 employees
participated in this share matching programme in 2019, roughly
Further good progress was made in the implementation of the
7 per cent of the total number who are eligible to do so.
new global process introduced in 2017/2018 for performance
Since 2014, the remuneration of the approximately 500 top
management and succession planning. Measures to actively
executives has included a remuneration component running over
manage the performance of executives were strengthened, for
several years that is based on the long-term success of the
example. Succession planning was also stepped up, resulting in
Company and is granted annually.
an increase in the number of candidates earmarked for key
positions. There was an additional focus on identifying young
high-potential candidates who will be put on targeted development
programmes. In 2019, the first group of global high-potential
candidates successfully completed a new training course to set
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
89
Employee commitment
comprehensive minimum HSE standards, which are mandatory
for all sites. Employees can access these via the intranet.
The KION Group’s products and services destined for its cus-
The KION Safety Championship provides additional moti-
tomers are produced by committed employees. That is why all
vation for employees to continually engage with HSE matters.
KION companies aim to ensure a high level of employee commit-
Based on regular reporting from the individual units and defined
ment. Based on the manager survey conducted in 2015 and the
evaluation criteria, a panel of judges awards prizes to those units
action plan derived from it, a package of measures was defined
that have shown special dedication or have suggested the most
and implemented in 2016 as part of the ‘Lift up’ transformation
improvements in an area of HSE.
initiative, in particular to ensure the organisational structure is
HSE managers at the KION Group’s production facilities
firmly embedded and to communicate the KION Group’s strat-
and in its sales and service units have the opportunity to meet
egy more widely. A new manager survey was carried out in 2017
and talk with one another at international conferences that take
which revealed that the action plan derived from the earlier survey
place once a year.
had been successfully implemented and the KION Group was
Numerous activities aimed at improving health, such as fit-
therefore able to improve on the results of the 2015 survey.
ness programmes and advice on nutrition and healthcare, also
The third manager survey conducted in autumn 2019 showed
have a positive effect on health and safety in the Group. The vast
further significant improvements. The large number of completed
majority of employees have access to voluntary health-related
action plans, many the product of team workshops, had a very
activities at their site. The Nilkheim site, for example, launched a
positive impact again, and this was again confirmed by the com-
new exercise programme developed in partnership with sports
parison with other companies.
physicians that is tailored to specific work situations.
At 2.8 per cent on average, the illness rate for 2019 remained
Health and safety in the workplace
at a satisfactory level (2018: 2.8 per cent). The illness rate is the
figure for illness-related or accident-related absences from the
As an employer, the KION Group is responsible for the health
workplace. The lost time injury frequency rate (LTIFR) fell slightly
and safety of its employees. The focus is always on avoiding all
from 10.8 in 2018 to 8.7 last year. The long-term target is for this
accidents and work-related illness wherever possible, as well as
to remain permanently below 8.
on maintaining each employee’s work capacity in the long term.
Further information on this, on the other HSE key perfor-
In 2017, the KION Group updated its corporate policy setting out
mance indicators and on the measures initiated and implemented
its obligations in respect of health, safety and the environment
in 2019 will be included in the KION Group’s separate sustain-
(HSE). These include taking comprehensive precautions to create
ability report, which will be published in April 2020 on the KION
a safe working environment and ensuring employees know how
GROUP AG website.
to avoid risks and accidents.
HSE activities in 2019 continued to centre on an internal
audit programme that covers the KION Group’s production
facilities as well as sales and service. The programme system-
atically documents HSE measures and processes and provides
specific ideas for how they can be developed further. It also takes
into account the requirements of the ongoing certification of all
production facilities and sales and service outlets to ISO 14001,
which is scheduled to be completed by the end of 2021. Last
year, 20 central HSE audits were carried out within the KION
Group. Further progress was also made in the implementation of
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
90
Research and development
Key R&D figures
Strategic focus of research and development
Spending on research and development rose to €237.3 million
in 2019 (2018: €221.7 million), which equates to 2.7 per cent of
Under the KION 2027 strategy, research and development is set
revenue (2018: 2.8 per cent). Total R&D expenditure included
up so as to facilitate the sustained success of the KION Group as
€81.9 million in capitalised development costs (2018: €84.0 mil-
a leading global supplier of integrated, automated supply chain
lion). Alongside this addition to capitalised development costs,
solutions and mobile automation solutions. The innovativeness of
there were amortisation and impairment charges of €82.1 million
the portfolio is being significantly increased by concentrating
(2018: €76.6 million) (see note [16] in the notes to the consolidated
heavily on automation and robotics solutions that are based on a
financial statements). A total of €155.3 million (2018: €137.7 mil-
cross-segment software platform.
lion) was expensed. > TABLE 025
At the same time, R&D will continue to be structured cost-
effectively, including through the use of groupwide synergies
The number of full-time equivalents in R&D teams went up by
and agile processes. This will further reduce the complexity and
3.9 per cent to 1,583 employees compared to 31 December
diversity of products and shorten development times for new
2018.
products. R&D essentially works on a cross-brand and cross-
The KION Group takes comprehensive measures to protect
region basis, which ensures that research findings and techno-
the products it develops against imitations and pursues a dedi-
logical know-how are shared across the Group. Building on this,
cated patent strategy. In 2019, the KION companies applied for a
local product development teams working for the individual brand
total of 81 new patents (2018: 105). As at 31 December 2019, the
companies and regions develop customer-specific solutions.
companies of the KION Group held a total of 2,912 patent appli-
cations and issued patents (2018: 2,923 patent applications and
issued patents).
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
2019
155.3
81.9
237.3
2.7%
2018
137.7
84.0
221.7
2.8%
TABLE 025
Change
12.8%
– 2.5%
7.0%
–
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
91
Focus of R&D in 2019
Energy
from the new Linde 1202 range offer digital networking capability
thanks to a data transmission unit as part of the standard specifi-
cation. This allows information about the trucks’ condition and
The availability of lithium-ion technology was further improved
usage to be analysed by special software that can also be used
during the reporting period. Virtually all new products can, at the
to optimally plan essential maintenance and efficiently calculate
customer’s request, be fitted with the new battery system. This
running costs. Linde also presented a new service manager app
includes the new generation of the Linde N20 C low-lift order
that allows service jobs to be created on a smartphone.
picker, which makes order picking in the 1.2 to 2.5 tonne capacity
As part of the digitalisation of internal processes, the fleet
range more cost effective, and the new RX 60-25/35 electric
management solutions from STILL (neXXt fleet) and Linde (con-
forklift truck range from STILL, which also offers improved
nect:desk) and Dematic’s iQ InSights asset performance man-
hoisting speeds. A trade magazine attested that the RX 60 was
agement platform were migrated to the corporate cloud. This
the first electric forklift truck to offer greater productivity than
means, for example, that software can be activated for customers
comparable IC trucks.
within a matter of minutes and they can be provided with real time
The proportion of industrial trucks equipped with lithium-ion
analyses and visualisations. The KION Product Development
technology rose again, in part because of significant new orders,
Optimisation (KPDO) initiative, meanwhile, is bringing greater effi-
including one for Linde to supply a fleet of energy-efficient pallet
ciency and greater customer focus to the product development
stackers. Having a safe and quality-assured all-in-one system
process and helping to bring products to market more quickly.
comprising the truck, battery and charger is a major plus point.
One of the improvement projects, the IC.IDO virtual reality system
Decentralised chargers enable the batteries to be topped up
for visualising integrated products in three dimensions, has
regularly, which eliminates the need for battery changes.
already been made available to STILL and Linde and is reducing
The fuel cell portfolio was also expanded in 2019. The
the need for physical prototypes. Making greater use of artificial
hydrogen-powered variant of the Linde P250 tow tractor offers
intelligence for products and software solutions is a further
the advantages of extremely short refuelling times and long-
long-term focus in the field of digitalisation.
lasting fuel cells.
Digital
Automation
The new modular automated guided vehicle (AGV) solution
iQ Virtual is a new simulation and emulation platform from
Dematic Compact is one of the ways in which the Mobile Auto-
Dematic that provides a virtual environment to explore new
mation unit accommodates the automated point-to-point transfer
configurations of existing systems. It can be directly integrated
of pallets, skids, racks, tubs and rolls, including pick-up, transport
with the warehouse execution software Dematic iQ Optimize to
and drop-off, for low to mid capacity applications. Its compact
test in advance how efficiently a particular system would run
design makes it suitable for tight spaces and for repetitive mate-
under different operating conditions and in different scenarios.
rial transport tasks in multi-shift operations. The onboard vehicle
The virtual emulation model uses graphical rendering technology
control software is standardised for all vehicle formats to enable
to provide an accurate portrayal of labour productivity and the
fast and easy configuration. Mobile Automation also focused on
automated flow of materials, thus making a significant contri-
developing products for the Industrial Trucks & Services segment
bution to warehousing efficiency with the aid of integrated
that would drive forward the automation and networking of ware-
software control. The innovative iQ Virtual is suitable both for
house and logistics solutions using driverless vehicles.
analysing and optimising the design of new facilities and for
PackMyRide, the world’s first fully automated parcel-loading
optimising facilities that are already in operation.
solution, is revolutionising how parcels are handled prior to the
In addition, significant progress was made in integrating
‘last mile’ stage of delivery. The subsystem collects the parcels
fleet management into a single software platform and in digital
from the existing intralogistics system and transports them into
connectivity. For example, the H20–H35 IC counterbalance trucks
mobile racking units that communicate with automated guided
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
92
vehicle systems. This fully automates the process of loading
Customers
delivery vehicles, which should mean huge time and cost savings
for parcel delivery services and customers from other industries.
The KION Group’s industrial trucks and supply chain solutions
Parcel delivery service DPD has successfully completed a trial of
are deployed in all kinds of industries.
the system.
The Industrial Trucks & Services segment has a very broadly
Dematic’s micro-fulfilment automation system, which was
diversified customer base, ranging from large key accounts with
introduced in the fourth quarter of 2019, is tailored to the require-
global operations to small and medium-sized enterprises that
ments of omnichannel retailers with high throughput rates. Orders
typically order just a few trucks each year.
are put together fully automatically within a maximum of one hour.
The Supply Chain Solutions segment benefits
from
The micro-fulfilment facilities comprise proven technology such
long-standing customer relationships with major players in the
as Dematic’s Multishuttle and goods-to-person picking solutions
e-commerce and logistics sectors. They influence the success of
together with customised Dematic iQ software. The compact
the segment’s new business and service business. Specific
design of the fully automated system means that fulfilment cen-
solutions, such as micro-fulfilment, help Dematic to further
tres can be installed close to the end consumer, which brings
consolidate its position in major customer sectors, including
down delivery times even further.
general merchandise, grocery wholesale and retail, fashion, food
Efficiency gains are also being achieved with the new sub-
and beverage manufacturing, and parcel and courier services.
system for returns management, which runs on Dematic iQ soft-
The KION Group is already a global player in most of these
ware: it accelerates all processing steps from inspection to
sectors and enjoys established relationships with its customers.
repackaging and allows omnichannel retailers and online retailers
It has been able to extend these relationships through joint devel-
to significantly increase the number of returns they are able to
opment projects and other initiatives. These efforts are supported
handle on a daily basis and thus raise customer satisfaction and
by targeted customer retention formats, such as the Dematic
productivity. Pouch sorting systems are also being used more
customer day that was launched in 2019 for small and medium-
and more in e-commerce distribution centres. Thanks to the
sized enterprises and focuses mainly on compact and versatile
newly developed automatic pouch emptier, which uses a durable,
automation solutions as well as aftersales services.
cost-effective and fully automated mechanism to open the bottom
The KION brand companies again exhibited at the sector’s
of the pouch, Dematic has significantly increased the speed at
leading trade fairs in various regions in 2019 in order to consoli-
which its space-saving omnichannel solution operates.
date their standing among customers and partners.
Since 2019, new and updated automation products have
In the EMEA region, the Linde, STILL and Baoli brand
been fitted as standard with the kinds of sensors and communi-
companies, as well as Dematic, presented their most important
cation equipment that will make them suitable for the broad roll-
innovations in the fields of automation, energy and safety at the
out of IoT services and for better pre-emptive maintenance
2019 LogiMAT trade fair in Stuttgart. Dematic also exhibited its
options as a means of further increasing uptime.
comprehensive range of solutions for the optimisation of supply
chains at the Warehouse Tech Middle East 2019 in Dubai.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Report on the economic position
93
The presence of the two operating segments in Asia and
Sustainability
North America was significantly expanded. At CeMAT ASIA, the
flagship intralogistics trade fair for Asia, Linde, Baoli and Dematic
Acting sustainably and responsibly is one of the key principles by
teamed up to exhibit their products and technologies for automa-
which the KION Group operates. The Group’s focus on sustaina-
tion, digitalisation and alternative drive systems. The three brand
bility is reflected in its safe and clean products, in its environmen-
companies also intend to work closely together to make Industry
tally friendly manufacturing processes and in the safe and
4.0 a reality in China. At ProMat 2019 in Chicago, the KION Group
non-discriminatory working environment it provides. The KION
was represented alongside Dematic and KION North America
Group and its Operating Units strive for a balance between envi-
and exhibited numerous new process solutions and technolo-
ronmental, economic and social considerations in their activities.
gies. The market launch of Linde’s product line for warehouse
This is the basis upon which sustainability is enshrined in the
automation marked a significant milestone for KION North Amer-
KION 2027 strategy. The KION Group’s values also have a clear
ica in its efforts to expand its North America business. Dematic,
link to sustainability.
meanwhile, sponsored the Material Handling & Logistics Confer-
The KION Group’s commitment to sustainability has been
ence in Utah, where customers and industry experts engaged
recognised by investors, banks and rating agencies. The KION
in dialogue in a wide range of workshops and lectures on new
Group was added to the FTSE4Good Index Series for the first
trends and applications.
time in June 2019, following an independent assessment. Its cor-
In 2019, the level of appreciation from customers and the
responding FTSE Russel ESG Rating was 3.4. The KION Group
strength in innovation demonstrated by the KION Group’s brand
was also given a rating (B) by the global environmental impact
companies were again recognised in the form of major awards.
charity CDP and an industry-specific Prime Status rating (C+) by
STILL collected yet another IFOY Award, this time for the auto-
ISS ESG. These ratings are supporting the KION Group’s efforts
mated LiftRunner with LTX 50 in the AGV & Intralogistics Robot
to be categorised as a sustainable investment for environmentally
category and for its online portal for intelligent fleet management,
conscious investors.
STILL neXXt fleet. At inter airport Europe 2019, Linde picked up
In addition, the KION Group’s Operating Units further improved
the event’s Excellence Award in the interRAMP category for its
their sustainability profile last year. LMH EMEA, for example,
innovative assistance system Linde Safety Guard. Dematic
received a gold ranking from the rating agency Ecovadis.
received the 2019 German Brand Award in the year that it cele-
The groupwide sustainability report for 2019, which will be
brates its 200th anniversary, and its Imagination Center at the
published in April 2020, contains information on strategy, the
Heusenstamm site won the coveted Red Dot design award.
management approach and structures for sustainability as well
as data on relevant key performance indicators. 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 2019 combined management report.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
94
Outlook, risk report and opportunity report
OUTLOOK
Expected macroeconomic conditions
Forward-looking statements
In its outlook for 2020 published in January 2020, the Interna-
tional Monetary Fund (IMF) predicts a modest increase in the
rate of global growth to 3.3 per cent, which will be driven mainly
by the anticipated rally in the economies of the emerging markets
The forward-looking statements and information given below are
and developing nations. The IMF expects higher growth rates
based on the Company’s current expectations and assessments.
particularly for India, Russia and Central and South America,
Consequently, they involve a number of risks and uncertainties.
whereas growth in China is likely to slow a little. By contrast, the
Many factors, several of which are beyond the control of the KION
pace of expansion in the developed economies – including the
Group, affect the Group’s business activities and profitability as
eurozone – will remain at the low level achieved in 2019. According
well as the earnings of KION GROUP AG. Any unexpected devel-
to the IMF’s prediction, the worldwide volume of trade will grow at
opments in the global economy would result in the KION Group’s
a much faster rate than last year.
and KION GROUP AG’s performance and profits differing signifi-
Initial indications that the manufacturing industry and global
cantly from those forecast below.
trade appear to have turned the corner are positive signals for the
The KION Group does not undertake to update forward-
global economy. They are accompanied by an intensification of
looking statements to reflect subsequently occurring events or
expansionary monetary policy by the central banks, the first
circumstances. Furthermore, the KION Group cannot guarantee
signs of a rapprochement in the US-China trade dispute. The
that future performance and actual profits generated will be
UK’s withdrawal from the EU on 31 January 2020 and the associ-
consistent with the stated assumptions and estimates and can
ated transition phase also supports the assessment of a possible
accept no liability in this regard.
economic recovery.
Actual business performance may deviate from our forecasts
This outlook from the IMF is lower than its previous expecta-
due, among other factors, to the opportunities and risks described
tions, which it primarily attributes to unexpected macroeconomic
here. Performance particularly depends on macroeconomic
difficulties in some emerging markets.
and industry-specific conditions and may be negatively affected
The organisation makes explicit reference to risks that may
by increasing uncertainty or a worsening of the economic and
result, for example, from an escalation in the trade dispute between
political situation.
the US and some of its trading partners or from geopolitical
factors.
Assumptions
Expected sectoral conditions
The forecasts in this section are derived from the KION Group’s
The overall market for industrial trucks and warehouse systems is
multiple-year market, business and financial planning, which is
likely to see further strong growth in 2020 if economic conditions
based on various assumptions. Market planning takes into
stabilise slightly as expected. The ongoing expansion of the
account macroeconomic and industry-specific performance,
supply chain solutions market and a stabilisation of the global
which is described below. Business planning and financial plan-
market for industrial trucks are primed to be the engines of
ning are based on expected market performance, but also draw
growth. Overall, the global material handling market is once again
on other assumptions, such as those relating to changes in the
expected to grow at a much faster rate than global GDP. The
cost of materials, labour costs, sale prices and movements in
KION Group believes that this is primarily because the fundamental
exchange rates.
growth drivers will remain intact, particularly the fragmentation of
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
95
value chains and consumers’ increasing preference for e-com-
merce. Growth at regional level, particularly in the cyclical market
for industrial trucks, will again depend heavily on the economic
Expected business situation and financial
performance of the KION Group
conditions in the main sales markets.
In 2020, the KION Group aims to build on its successful perfor-
Following the market correction in 2019, the KION Group is
mance in 2019 and, based on the forecasts for market growth,
expecting new business with industrial trucks in terms of unit
record a moderate increase in revenue. The KION Group’s
sales to hold steady in 2020, but to be below the long-term
adjusted EBIT for 2020 will be adversely affected by the substan-
growth trend of around 4 per cent. Further geopolitical tensions
tial volume of strategic capital expenditure aimed at further
and global economic uncertainty cannot be ruled out for the year
expanding the business.
2020. The KION Group is in an excellent position from which to
The order intake of the KION Group is expected to be
take advantage of the continued progress that is expected in
between €9,050.0 million and €9,750.0 million. The target figure
the electrification of warehouses. The high number of trucks in
for consolidated revenue is in the range of €8,650.0 million to
operation worldwide provides a sustainable customer base for
€9,250.0 million. The target range for adjusted EBIT is €770.0 mil-
the service business.
lion to €850.0 million. Free cash flow is expected to be in a range
In 2020, demand for supply chain solutions in the form of
between €270.0 million and €370.0 million. The target figure for
warehouse automation is likely to again be underpinned by the
ROCE is in the range of 8.5 per cent to 9.5 per cent.
strong inclination to invest seen in the main customer industries
Order intake in the Industrial Trucks & Services segment is
in connection with omnichannel and e-commerce strategies. In
expected to be between €6,250.0 million and €6,550.0 million.
the medium-term, market growth is expected to be in the high
The target figure for revenue is in the range of €6,150.0 million to
single digits.
€6,450.0 million. The target range for adjusted EBIT is €610.0 mil-
lion to €650.0 million.
Order intake in the Supply Chain Solutions segment is
expected to be between €2,800.0 million and €3,200.0 million.
The target figure for revenue is in the range of €2,500.0 million to
€2,800.0 million. The target range for adjusted EBIT is €240.0 mil-
lion to €280.0 million. > TABLE 026
TABLE 026
KION Group
Industrial Trucks & Services
Supply Chain Solutions
2019
Actual
2020
Outlook
2019
Actual
2020
Outlook
2019
Actual
2020
Outlook
9,111.7 9,050.0 – 9,750.0
6,330.5 6,250.0 – 6,550.0
2,771.0 2,800.0 – 3,200.0
8,806.5 8,650.0 – 9,250.0
6,410.2 6,150.0 – 6,450.0
2,378.8 2,500.0 – 2,800.0
850.5
568.4
770.0 – 850.0
270.0 – 370.0
9.7%
8.5 % – 9.5 %
695.1
610.0 – 650.0
228.1
240.0 – 280.0
–
–
–
–
–
–
–
–
Outlook
in € million
Order intake *
Revenue *
Adjusted EBIT *
Free cash flow
ROCE
* Disclosures for the Industrial Trucks & Services and Supply Chain Solutions segments also include intra-group cross-segment order intake. revenue and effects on EBIT
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
96
Expected financial position of the KION Group
Principles of risk management
Having significantly reduced its net financial debt as at 31 Decem-
The procedures governing the KION Group’s risk management
ber 2019, the KION Group does initially not plan to further reduce
activities are laid down in internal risk guidelines. For certain types
financial liabilities in view of the upcoming capital expenditure.
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
Overall statement on expected performance
with inherent risks. Risk management is organised in such a way
that it directly reflects the structure of the Group itself. Conse-
The KION Group believes it will continue along its path of growth
quently, risk officers supported by risk managers have been
and aims to further improve its market position worldwide in
appointed for each company and each division. A central Group
2020. The higher level of strategic capital expenditure will
risk manager is responsible for the implementation of risk
adversely affect adjusted EBIT and thus profitability in 2020. The
management processes in line with procedures throughout the
outlook for the fiscal year 2020 does not take into account possi-
Group. His or her remit includes the definition and implementation
ble effects from global pandemics or comparable events, as a
of standards to ensure that risks are captured and evaluated.
valid estimate of the resulting effects is not possible due to insuf-
The risk management process is organised on a decentral-
ficient data.
RISK REPORT
Risk strategy
ised basis. Firstly, a groupwide risk catalogue is used to capture
the risks attaching to each company. Each risk must be captured
individually. If the losses caused by a specific risk or the likelihood
of this risk occurring exceed a defined limit, the KION Group’s
Executive Board and its corporate controlling function are notified
immediately. Each risk is documented in an online reporting
system designed specifically for the requirements of risk man-
agement. Risks affecting more than one Group company, such
as market risks and competition risks, are not recorded indi-
The business activities of the KION Group necessarily involve
vidually but are instead evaluated at Group level. Consequently,
risk. Dealing responsibly with risk and managing it in a compre-
such risks are not quantified.
hensive manner is an important element of corporate manage-
The scope of consolidation for risk management purposes is
ment. The overarching aim is to fully harness business opportuni-
the same as the scope of consolidation for the consolidated
ties while ensuring that risk always remains under control. Using
financial statements. The risks reported by the individual compa-
a groupwide risk management system, the KION Group contains
nies are combined to form divisional risk reports as part of a
all identified risks by implementing suitable measures and takes
rigorous reporting process. To this end, minuted risk manage-
appropriate precautions.
ment meetings are held once a quarter. Moreover, material risks
This ensures that the losses expected if these risks arise will
are discussed with the segments at the business review meet-
be largely covered and therefore will not jeopardise the Company’s
ings. The divisional risk reports are then used to compile an
continuation as a going concern. Risk management is embedded
aggregate risk portfolio for the KION Group as a whole. To sup-
in the corporate controlling function and plays an active and
port this, the relevant departments of the holding company
wide-ranging role due to the strategic focus of corporate con-
are consulted each quarter in order to identify and assess risk –
trolling. The Operating Units’ business models, strategic per-
particularly Company-wide, cross-brand risk affecting areas such
spectives and specific plans of action are examined systemati-
as treasury, purchasing, tax, human resources and financial
cally. This ensures that risk management is integrated into the
services. The Executive Board of KION GROUP AG and the
KION Group’s overall planning and reporting process.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
97
Supervisory Board’s Audit Committee are informed of the Group’s
The accounting-based internal control and risk manage-
risk position once a quarter. The Internal Audit department audits
ment system encompasses defined control mechanisms,
the risk management system at regular intervals.
automated and manual reconciliation processes, separation of
Material features of the internal control
and risk management system pertaining
to the (Group) accounting process
Principles
functions, the double-checking principle and adherence to
policies and instructions.
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, recon-
The main objectives of the accounting-related internal control
ciliations and monitoring of the stipulated deadlines and pro-
system are to avoid the risk of material misstatements in financial
cesses. Monthly checklists have been drawn up for the consoli-
reporting, to identify material mismeasurement and to ensure
dation process and are worked through in a standardised manner.
compliance with the applicable regulations and internal instruc-
All postings are managed centrally and documented. A team is
tions. This includes verifying that the consolidated financial state-
responsible for monitoring the system-based controls, which it
ments and combined management report comply with the relevant
supplements with manual checks. The entire accounting process
accounting standards.
contains a number of specific approval stages, for which exten-
sive plausibility checks have been set up. Employees with the
Material processes and controls in the (Group)
relevant expertise provide support on specialist questions and
accounting process
complex issues.
Internal control mechanisms and ongoing analysis of the
For its (Group) accounting process, the KION Group has defined
regulatory framework enable any risks that might jeopardise the
suitable structures and processes within its internal control
compliance of the consolidated financial statements and group
and risk management system and implemented them in the
management report with accounting standards to be identified as
organisation.
soon as possible so that appropriate countermeasures can be
Changes to the law, accounting standards and other pro-
taken. Such risks form part of the KION Group’s aggregate risk
nouncements are continually analysed with regard to their rele-
profile and are classified as operational risk.
vance and effect on the consolidated financial statements and
group management report; the relevant changes are then incor-
porated into the Group’s internal policies and systems.
All consolidated entities must follow the KION Group
IFRS Accounting Manual when preparing their IFRS reporting
packages. This manual contains the recognition, measure-
ment and disclosure rules to be applied in the KION Group’s
accounting in accordance with IFRS. The accounting guide-
lines primarily explain the financial reporting principles spe-
cific to the KION Group’s business. In addition, all companies
must adhere to the schedule defined by head office for the
Group accounting process.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
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The Internal Audit department evaluates governance, risk manage-
Risk matrix
DIAGRAM 005
ment and the control processes by following a systematic and
structured process, thus helping to bring about improvements.
It focuses primarily on the following aspects:
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
H
G
H
I
L
E
V
E
L
K
S
I
R
I
M
U
D
E
M
• Market risk
• Production risk
• Procurement risk
Risk
Aggregate risk
The aggregate risk position was largely unchanged compared
with the prior year. With regard to 2020, the risks in the risk matrix
below will be continually observed and evaluated in terms of their
extent and probability of occurrence. For example, unlike in the
prior year, the KION Group considers there to be a low probability
of the materialisation of procurement risks that would lead to a
negative deviation from the assumptions underlying the forecast.
This is mainly because of the generally improved ability of suppli-
• 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
ers to supply. As things stand at present, there are no indications
The market risks and competition risks described, the risks along
of any risks that could jeopardise the Company’s continuation as
the value chain, the human resources risks and the legal risks
a going concern. > DIAGRAM 005
largely relate to the Industrial Trucks & Services and Supply Chain
Solutions segments. Risks arising from financial services mainly
affect the Industrial Trucks & Services segment, while financial
risks resulting from the Company’s general funding situation
would predominantly impact on the Corporate Services segment.
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
99
Market risks and competition risks
result in particular from any new escalation in the US-China trade
Market risks
dispute, despite the recent rapprochement between the two
countries, and to geopolitical tensions that could potentially
Market risk can arise when the economy as a whole or a par-
weaken growth. In the medium-term, the barriers to trade could
ticular sector does not perform as well as had been anticipated
significantly hamper productivity and even lead to disruption in
in the outlook. Following the decline in the Industrial Trucks &
global supply chains. Financial market risks, for example in the
Services segment in the reporting year, the KION Group expects
form of higher risk premiums for emerging markets, could make it
market growth to stabilise or increase slightly at best, and for
more difficult to finance capital expenditure.
the strong rate of expansion in the market for supply chain
All these factors could have a negative impact on customers’
solutions to continue. These expectations have been factored
willingness to invest and thus on demand for the KION Group’s
into the outlook.
products. However, it is not currently foreseeable whether these
Cyclical fluctuations in macroeconomic activity affect both
market risks will become relevant and then have a material effect
the market for industrial trucks and the market for supply chain
on the business situation and financial performance.
solutions, although the latter has greater immunity to economic
The geopolitical situation is monitored closely. Various meas-
cycles. Customers’ decisions on whether to invest depend to a
ures aimed at making cost structures more flexible – such as the
large degree on the macroeconomic situation and conditions in
consolidation of production facilities, leveraging of cost synergies
their particular sector. In the event of hightened economic uncer-
and the platform strategy – help to contain the earnings risk
tainty, global pandemics or even economic downturns, custom-
arising from reductions in revenue caused by economic condi-
ers tend to postpone their capital expenditure plans. Although
tions. Diversification of the customer base in terms of industry
demand for services is less cyclical than new business with
and region as well as expansion of service activities also play a
industrial trucks, it correlates with the degree of utilisation of the
role in mitigating risk. Moreover, the KION Group closely monitors
trucks and systems, which usually declines during difficult eco-
the market and its competitors so that it can identify market risks
nomic periods.
at an early stage and adjust its production capacities in good
As the KION Group can only adjust its fixed costs to fluctua-
time. Besides global economic growth and other data, the KION
tions in demand to a limited extent, reductions in revenue impact
Group also analyses exchange rates, price stability, the consumer
on earnings. Despite the significant proportion of revenue gener-
and investment climate, foreign trade activity and political stability
ated outside the eurozone (due in part to the strong North Amer-
in its key sales markets, constantly monitoring the possible
ican business of the Supply Chain Solutions segment and the
impact on its financial performance and financial position. Other
expansion of business in China), the bulk of revenue continues to
risks arise as a result of constant changes in the Company’s
be billed in euros. As a result, the market conditions that prevail in
political, legal and social environment. Because it operates in
the eurozone impact significantly on the KION Group’s financial
countries in which the political or legal situation is uncertain, the
performance.
KION Group is exposed to the consequent risk of government
Following the significant slowdown in growth in 2019, a
regulation, changes to customs rules, capital controls, expropria-
moderate economic recovery is expected for 2020. The rate of
tions and social unrest.
expansion is poised to increase more in the emerging markets,
The KION Group mitigates such strategic risks by, for example,
driven in particular by growth in India, Russia and Central and
carrying out in-depth market research, conducting thorough
South America. This base forecast is subject to risks that would
evaluation procedures to assess political and economic condi-
tions and drafting contracts appropriately.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
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100
Competition risks
reasons. It is also possible that a partner will collaborate with
Competition risk describes the risk that growing competitive
competitors if exclusivity agreements are not in place.
pressure will prevent the KION Group from achieving its predicted
margins and market share. The markets in which the KION Group
Risks along the value chain
operates are characterised by strong competition, often price-
driven. Price competition is compounded by some manufacturers
Research and development risks
having cost advantages in production, sometimes due to the
The KION Group’s market position and business performance
currency situation and sometimes because local labour costs are
depend to a large extent on its ability to build on its leading
lower. This mainly affects the Industrial Trucks & Services
technological position in respect of individual products and
segment, where competition is fierce, particularly in the economy
system solutions in order to become the leading supplier of
and volume price segments, and the impact is especially strong
automated supply chain solutions and mobile automation solu-
in emerging markets. Building on their local competitive strength,
tions. This requires the Group to continually develop products
manufacturers in emerging markets, especially China, are also
that meet customer expectations and comply with changing
looking for opportunities to expand. As developments in the
regulatory and technological requirements. To this end, the KION
competitive landscape during the course of the year showed, the
Group must anticipate customers’ needs and changing market
high quality expectations and the service needs of customers in
conditions – including the growing use of digital technologies in
developed markets still present a barrier to growth for many of
value chains – and has to quickly bring new products to market.
these manufacturers but the bar is getting lower. This situation is
If the Company does not succeed in doing this, its technological
likely to intensify competitive pressures in future.
and competitive position could be compromised in 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 prod-
volumes and margins may lead to overcapacity, which would put
ucts or product components will be imitated. There is also a risk
increased pressure on prices. Although the excellent customer
that patent applications will not be successful. The KION Group
benefits provided by its products have enabled the KION Group
mitigates research and development risk by focusing firmly on
to charge appropriate prices until now, it is taking a variety of
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 region-
resources, market access, product range and digitalisation
specific requirements.
expertise. The steps that the KION Group is taking to mitigate
its competition risk also include making its plants more efficient
Procurement risks
and 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 the construction and expansion of production
intermediate products. In particular, capacity bottlenecks on the
facilities, proactive cross-selling by the two operating segments,
part of suppliers could result in the KION Group facing backlogs
strategic partnerships, the creation of joint ventures or acquisition
in the supply of individual raw materials and components. These
of local manufacturers. One of the risks of such alliances and
backlogs can lead to temporary decreases in revenue and
acquisitions is that the expected benefits will materialise only
liquidity as well as to inefficiencies in production. The KION Group
partly or not at all. For example, the organisational integration
obtains some of its key components from a limited number of
of new units can harm financial performance for a variety of
core suppliers. Key components in the Industrial Trucks &
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
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101
Services segment include internal combustion engines, tyres and
limit the risk of potential losses. Quality assurance is a high
high-performance forged and electronic parts.
priority throughout the value chain and reduces possible quality-
The risk of supply bottlenecks – for example in the event of
related risks arising from the products and services provided. The
a shortage of raw materials or financial difficulties at core sup-
KION Group mitigates its quality-related risks significantly by
pliers – cannot be ruled out in future, despite an easing of the
applying rigorous quality standards to its development activities,
situation on the supplier side. The KION Group mitigates this risk
conducting stringent controls throughout the process chain and
by further diversifying its supplier structure in the context of a
maintaining close contact with customers and suppliers.
global procurement organisation.
In addition, the supplier development department, which
Risks arising from customer project business
focuses on improving suppliers’ production processes, helps
In the customer project business, risks can arise from deviations
suppliers to ensure that their processes are cost-efficient and
from the schedule originally agreed with the customer, potentially
offer excellent quality.
leading to revenue and profit being recognised in subsequent
Price changes present another procurement-related risk. In
years or, in isolated cases, contractual penalties having to be
2019, around 19.8 per cent of the cost of materials for new trucks
paid. Another possible risk is that the technology deviates
was directly influenced by changes in commodity prices (2018:
from the promised specifications, which may result in additional
around 25.5 per cent). Moreover, conditions in the commodity
completion costs. The long-term nature of individual projects
markets typically affect component prices after a delay of three to
can lead to cost increases over the term of the project that were
six months. The KION Group endeavours to pass on price
not anticipated in the project costing and cannot be passed
increases to customers but cannot always do so entirely due to
onto the customer.
market pressures.
Production risks
To mitigate these risks in the Supply Chain Solutions segment,
project management includes a comprehensive process of risk
management. This involves detailed evaluation of the risks when
Production risks are largely caused by quality problems, possible
defining the technical aspects of quotations plus financial risk
disruptions to operational procedures or production downtime
provisioning based on the individual project specifications when
at individual sites. They can also materialise as secondary risks
preparing quotations. A multistage approval process based on an
resulting from the aforementioned procurement risks. In such
extensive list of criteria ensures that financial, country-specific,
cases, the KION Group’s closely integrated manufacturing net-
currency-specific and contractual risks are largely avoided.
work presents a heightened risk to its ability to deliver goods on
The potential risks that may arise in the project realisation
time. There is also a risk that structural measures and reorganisa-
phase are analysed in every individual project using detailed
tion projects will not be implemented owing to disruption of
continuous reviews based on the individual items of work that
production or strikes. The process of ramping up new production
make up the project. This keeps potential risks to a minimum.
sites is another potential source of risk. Delays in delivery or a rise
in the number of complaints could harm the KION Group’s posi-
Sales risks
tioning in the price segments and sales markets that it serves
The main sales risks – besides a drop in revenue caused by market
and, as a result, could harm its financial situation.
conditions – result from dependence on individual customers and
To mitigate these risks, the KION Group carries out preven-
sectors. For example, it is possible that customers would post-
tive maintenance, implements fire protection measures, trains
pone or cancel orders during a period of economic difficulty.
its staff and builds a pool of external suppliers. The risks involved
There have not been any significant cancellations in previous
in the process of ramping up new production sites remained
years, however. It is also conceivable that customers would face
insignificant in the reporting year and are minimised by means of
a liquidity shortfall and therefore be unable to fulfil their payment
project management and contractual provisions. The Company
obligations immediately or even at all. Because of its customer
has taken out a commercially appropriate level of insurance to
project business, the Supply Chain Solutions segment generally
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
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102
has a greater dependence on individual sectors and individual
Financial risks
customers than the Industrial Trucks & Services segment.
Nevertheless, the concentration risk for the KION Group overall is
Corporate Treasury is responsible for ensuring that sufficient finan-
still considered to be low. The business is highly diversified from
cial resources are always available for the KION Group. The main
a regional perspective. In addition, the KION Group supplies
types of financial risk managed by Corporate Treasury, including
companies of all sizes. Experience has shown that the KION
risks arising from funding instruments, are liquidity risk, currency
Group’s exposure to the risk of possible payment defaults is low,
risk, interest-rate risk and counterparty risk. Counterparty risk
but this risk can be further mitigated by recovering any collateral.
consists solely of credit risks attaching to financial institutions.
IT risks
A risk management policy issued by Corporate Treasury
stipulates how to deal with the aforementioned risks. Risk arising
A high degree of interconnectedness between sites and with
out of the lending and promissory note conditions that have been
customers and other companies means that the KION Group
agreed was not regarded as material as at 31 December 2019. It
also relies on its IT systems working flawlessly. The KION Group
relates in particular to the restrictions in respect of compliance
undertakes ongoing further development of a reliable, extendable
with financial covenants and upper limits for certain transactions
and flexible IT system environment with the aim of countering
and in respect of the obligation to submit special regular reports.
migration risk when updating software and any IT-related risks
The KION Group complied with all the obligations in this regard in
that may arise from the failure of IT systems and IT infrastructure.
the reporting year.
Internal IT resources are pooled in the cross-segment KION
Some of the Group’s financing takes the form of variable-rate
Group IT function, which has well-established processes for
or fixed-rate financial liabilities. Interest-rate swaps are used to
portfolio management and project planning and control.
hedge the resultant interest-rate risk and the risk of a change in
Independent external reviews are conducted to provide addi-
the liabilities’ fair value.
tional quality assurance. Various technical and organisational
The Company generally refers to credit ratings to manage
measures protect the data of the KION Group and the Group
counterparty risk when depositing funds with a financial insti-
companies against unauthorised access, misuse and loss. These
tution. The KION Group only uses derivatives to hedge underlying
measures include procedures to validate and log access to the
operational and financial transactions; they are not used for
Group’s infrastructure.
speculative purposes. It is exposed to currency risk because of
Further IT risks exist in connection with potential breaches of
the high proportion of its business conducted in currencies other
data privacy laws, including in relation to the processing of
than the euro. In the Industrial Trucks & Services segment, at
personal data and the documentation of such processing. For
least 75 per cent of the currency risk related to the planned oper-
example, serious breaches of the European General Data
ating cash flows based on liquidity planning is normally hedged
Protection Regulation (GDPR) can lead to fines of up to 4 per cent
by currency forwards in accordance with the risk management
of the previous year’s revenue. In the reporting year, the KION
policy. The Supply Chain Solutions segment hedges itself against
Group completed its groupwide project to ensure full compliance
currency risk on a project-by-project basis. Corporate Treasury
with the GDPR’s provisions related to data protection and
rigorously complies with and monitors the strict separation of
documentation. Furthermore, employees were reminded that all
functions between the front, middle and back offices.
of the Group’s stakeholders have privacy rights that must be
Each Group company’s liquidity planning is broken down by
upheld. Given that the KION Group maintains consistently high
currency and incorporated into the KION Group’s financial
compliance standards, the probability of data protection laws
planning and reporting process. Corporate Controlling checks
being breached is regarded as very low. The developments in
the liquidity planning and uses it to determine the funding require-
2019 have confirmed this assessment.
ments of each company. The funding terms and conditions
faced by the lenders themselves (manifested, for example, in the
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
103
payment of liquidity premiums on interbank lending) may result in
The KION Group mitigates its liquidity risk and interest-rate
a future shortage of lines of credit and / or increased financing
risk attaching to financial services by ensuring that most of its
costs for companies. However, the Group currently does not
transactions and funding loans have matching maturities and by
expect any further changes in its lines of credit or any excessive
constantly updating its liquidity planning. Long-term leases are
increases in margins.
primarily arranged on a fixed-interest basis. If they are financed
Goodwill and brand names with an indefinite useful life repre-
using variable-rate instruments, interest-rate derivatives are
sented 32.1 per cent of total assets as at 31 December 2019
entered into in order to hedge the interest-rate risk. Hedging is
(2018: 33.7 per cent). Pursuant to IFRS, these assets are not
carried out at regular intervals and is based either on the carrying
amortised and their measurement depends, above all, on future
amount of the assets or the outstanding cash flows from the
expectations. If these future expectations are not fulfilled,
underlying end customer contracts.
there is a risk that impairment losses will have to be recognised
The credit facilities provided by various banks and an effective
on these assets.
dunning process ensure that the Group has sufficient liquidity.
The individual Group companies directly manage counter-
In order to exclude currency risks, the KION Group generally
party risks involving customers. These counterparty risks did not
finances its lease business in the local currency used in each
change significantly in 2019. Each individual Group company has
market.
established a credit management system for identifying custom-
The counterparty risk inherent in the lease business con-
er-related counterparty risks at an early stage and initiating the
tinues to be insignificant. The Group also mitigates any losses
necessary countermeasures. Analysis of the maturity structure of
from defaults by its receipt of the proceeds from the sale of repos-
receivables is an integral element of monthly reporting.
sessed trucks. Furthermore, receivables management and
credit risk management are refined on an ongoing basis. Besides
Risks arising from financial services
the design of the business processes, this also encompasses
The lease activities of the Industrial Trucks & Services segment
mean that the KION Group may be exposed to residual value
Human resources risks and legal risks
risks from the marketing of trucks that are returned by the lessee
the risk management and control processes.
at the end of a long-term lease and subsequently sold or
The KION Group relies on having highly qualified managers and
re-rented. Residual values in the markets for used trucks are
experts in key roles. If they left, it could have a long-term adverse
therefore constantly monitored and forecast. The KION Group
impact on the Group’s prospects. That is why the KION Group
regularly assesses its aggregate risk position arising from
actively engages in HR work aimed at identifying and developing
financial services.
young professionals with high potential who already work for the
The risks identified are immediately taken into account by
Company and retaining them over the long term, thereby enabling
the Company in the costing of new leases by recognising
succession planning for key roles across the Group. The KION
write-downs or provisions and adjusting the residual values.
Group also positions itself in the external market as an employer
Risk-mitigating factors include the demand for used trucks, which
of choice. This will enable it to make strategic additions to its
stabilises the residual values of the KION Group’s industrial
portfolio of existing staff and, in this way, avert the risk of possibly
trucks. In many cases, the residual values have underlying remar-
losing expertise and thereby becoming less competitive.
keting agreements that transfer any residual-value risk to the
Any restructuring measures necessary to secure the
lease company. This had a positive impact on the financial results
Company’s long-term competitiveness may result in a risk of
in 2019. Groupwide standards to ensure that residual values are
strikes and reactions of other kinds by the workforce. The KION
calculated conservatively, combined with an IT system for residual-
Group is committed to doing all it can to limit the negative impact
value risk management, reduce risk and provide the basis on
on the workforce of such measures and, if job losses are
which to create the transparency required.
necessary, taking steps to ensure they are achieved with the
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Outlook, risk report and opportunity report
104
minimum possible social impact. At sites where codetermination
arrangements provide for the workforce to be involved in
decision-making, the KION Group engages in constructive talks
on these matters with the employee representatives.
OPPORTUNITY REPORT
The legal risks arising from the KION Group’s business are
Principles of opportunity management
typical of those faced by any company operating in this sector.
The Group companies are a party in a number of pending law-
Opportunity management, like risk management, forms a central
suits in various countries. The individual companies cannot
part of the Company’s day-to-day management. In 2019, the
assume with any degree of certainty that they will win any of the
aggregate opportunity position was largely unchanged com-
lawsuits or that the existing risk provision in the form of insurance
pared with the previous year. Individual areas of opportunity
or provisions will be sufficient in each individual case. However,
are identified within the framework of the strategy process.
the KION Group is not expecting any of these existing legal
Opportunities are determined and managed on a decentralised
proceedings to have a material impact on its financial position or
basis in line with the Group strategy.
financial performance. These lawsuits relate, among other things,
There are monthly reports on the opportunity situation as
to liability risks, especially as a result of legal action brought by
part of the regular Group reporting process. As a result, the KION
third parties because, for example, the Company’s products
Group is in a position to ascertain at an early stage whether
were allegedly faulty or the Company allegedly failed to comply
market trends, competitive trends or events within the Group
with contractual obligations. Further legal risk may arise as a
require individual areas of opportunity to be re-evaluated. This
result of the environmental restoration of decommissioned sites,
may lead to reallocation of the budgets earmarked for the realisa-
for example because of work required due to contamination.
tion of opportunities. Such decisions are made on the basis of the
Any damage to the environment may lead to legal disputes and
potential of the opportunity, drawing on previous experience.
give rise to reputational risk.
There is no management system for the evaluation of opportu-
The Company has taken measures to prevent it from
nities comparable to the system for risk management.
incurring financial losses as a result of these risks. Although legal
disputes with third parties have been insignificant both currently
and in the past, the Company has a centralised reporting system
Categorisation of opportunities
to record and assist pending lawsuits. In addition to the high qual-
ity and safety standards applicable to all users of the Company’s
‘Opportunities’ are understood as positive deviations from the
products, with which it complies when it develops and manufac-
expectations set out in the outlook relating to the economic
tures the products, it has also taken out the usual types of insur-
situation and the KION Group’s business situation. Opportunities
ance to cover any third-party claims. In addition, interdisciplinary
are divided into three categories:
teams work on the avoidance of risks arising from inadequate
contractual arrangements. A further objective of this cooperation
across functions is to ensure compliance with mandatory 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
– 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
Group companies.
restructuring or cost-cutting measures.
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Outlook, risk report and opportunity report
105
Opportunity situation
Strategic opportunities
Market opportunities
The positive impact of the strategic activities under the KION
2027 strategy is already appropriately reflected in the expecta-
The economy as a whole may perform better than expected in
tions regarding the KION Group’s financial performance in 2020.
2020. In addition, circumstances may occur in the wider market at
Nevertheless, the individual activities could create positive effects
any time – such as quality problems at competitors or the effects
that exceed expectations. There is also a possibility that new
of consolidation – that increase demand for products from the
strategic opportunities that were not part of the planning may
KION Group brands. New, unforeseen regulatory initiatives could
arise over the course of the year, for example in the form of
be launched, for example the tightening of health and safety
acquisitions and strategic partnerships.
regulations or emissions standards, that would push up demand
The KION Group’s medium- to long-term strategic oppor-
for products offered by the KION Group brands. Average prices
tunities in the Industrial Trucks & Services segment arise, in
for procuring commodities over the year may be cheaper than
particular, from:
anticipated. Moreover, a weakening of the euro could bring posi-
tive currency effects that have not been factored into the planning.
Medium- to long-term market opportunities are presented, in
particular, by:
– 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
– growing demand for intralogistics products, solutions and
services as a consequence of globalisation, industrialisation
and fragmentation of supply chains as well as efficiency
increases that are needed due to limited warehouse space
and changing consumer requirements
– high demand for replacement investments, especially in
– the trend towards outsourcing of service functions for
developed markets
industrial 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, including in regard to lithium-ion technology
– growing demand for automation solutions and fleet manage-
ment solutions, including networked automated guided
solutions
– a greater presence in the economy and volume price
segments, particularly as a result of the systematic imple-
mentation of the segment-wide platform strategy
– stronger involvement in the electrification of warehousing and
logistics processes, including by ensuring availability of
lithium-ion technology across the entire product range and
expanding market share in the lightweight warehouse
truck sector
– further strengthening of its market-leading position in the
EMEA region and achievement of a stronger position in the
APAC and Americas regions, 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 ser-
vices, at every stage of the product lifecycle, taking advan-
tage of the high number of trucks in use and the installed
vehicle systems and industry-specific system solutions, in
base of supply chain solutions
connection with the rapidly expanding e-commerce sector
and the implementation of Industry 4.0 projects
– the advancing digitalisation and automation of production
and supply chains through the use of robotics solutions
and their integration into the respective software application
environment
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106
The KION Group’s medium- to long-term strategic opportunities
The following may lead to an increase in profitability in the
in the Supply Chain Solutions segment arise, in particular, from:
medium term:
– further expansion of its position in the market for intralogistics
solutions based on the growing acceptance of automation
– Ongoing efficiency increases in the production network,
including through the integration of additional sites, may
boost sales and improve the gross margin.
– Effective use and centralised coordination of global develop-
– Activities to improve operational excellence and lower costs
ment capacities may create synergies and economies of scale.
may help the KION Group to achieve future growth with a
disproportionately small rise in costs.
concepts
– the development and establishment in the market of solutions
for systems and subsystems that meet specific customer
requirements in specific industries, for example to allow
automated and rapid fulfilment in close proximity to end
customers
– further strengthening of its market-leading position in
– expansion of the market position in the EMEA regions, particu-
automated guided vehicle systems (AGV) and
larly central and eastern Europe, and APAC by sharing sales
and production structures with Industrial Trucks & Services
Business-performance opportunities
Business-performance opportunities arise firstly from ongoing
activities to modernise and streamline the KION Group’s produc-
tion 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 oper-
ational excellence in logistics, technology & product development
and production and at lowering material and quality costs, for
example by reducing the complexity of the product range.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
107
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 2019. It is divided
> TABLE 027
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
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 2019, the Company held 130,644 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)
International 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 subject to report pursuant to the WpHG or
As far as the Company is aware, only Weichai Power (Luxem-
other 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 2019 and its shareholding was
4. Shares with special rights that confer
45.0 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 2019 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
108
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 them-
resolution or in issue on the date the authorisation is exercised,
selves.
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
means of an offer to all shareholders. It may also sell the shares in
Members of the Company’s Executive Board are appointed and
return for a non-cash consideration, in particular in connection
removed in accordance with the provisions of sections 84 and 85
with the acquisition of a business, parts of a business or equity
AktG and section 31 MitbestG. Pursuant to article 6 (1) of the
investments. In addition, the treasury shares may be offered to
Company’s articles of association, the Executive Board must
employees of the Company or of an affiliated company as part of
have a minimum of two members. The Supervisory Board deter-
an employee share ownership programme. The treasury shares
mines the number of Executive Board members. Pursuant to
can also be retired. Share buyback for trading purposes is pro-
section 84 AktG and section 6 (3) of the Company’s articles of
hibited. The authorisation may be exercised on one or more
association, the Supervisory Board may appoint a Chief Execu-
occasions, for the entire amount or for partial amounts, in pursuit
tive Officer and a deputy.
of one or more aims, by the Company, by a Group company or by
Section 179 (1) sentence 1 AktG requires that amendments
third parties for the account of the Company or the account of a
to the articles of association be passed by resolution of the
Group company. At the discretion of the Executive Board, the
Annual General Meeting. In accordance with article 23 of the arti-
shares may be purchased through the stock exchange, by way of
cles of association in conjunction with section 179 (2) sentence
a public purchase offer made to all shareholders or by way of a
2 AktG, resolutions at the Annual General Meeting on amend-
public invitation to shareholders to tender their shares.
ments to the articles of association are passed by simple majority
In 2019, the Company again made use of this authorisation,
of the votes cast and by simple majority of the share capital
purchasing 60,000 shares in the period 9 to 20 September 2019.
represented in the voting unless a greater majority is specified as
From these newly acquired shares plus those that were already in
a mandatory requirement under statutory provisions. The option
treasury, a total of 67,104 shares were used during the reporting
to stipulate a larger majority than a simple majority in any other
year as part of KEEP 2019 and 14,136 bonus shares were used as
cases has not been exercised in the articles of association.
part of KEEP 2016 for the employees of the Company and certain
The Supervisory Board is authorised in article 10 (3) of the
Group companies. In February 2020, a further 7,338 treasury
articles of association to amend the articles of association
shares will be used for US participants’ own investments under
provided that such amendments relate solely to the wording.
KEEP 2019.
– On the basis of a resolution of the Company’s Annual General
Meeting on 11 May 2017, the Executive Board was author-
ised, subject to the consent of the Supervisory Board, to
increase the Company’s share capital by up to €10.88 million
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
109
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 entered in
on the basis of the 2017 Authorised Capital. Consequently, con-
the commercial register at the Wiesbaden local court (HRB
ditional capital of up to €1.579 million is available on the basis of
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 mil-
lion by issuing 9.3 million new no-par-value bearer shares in the
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
Company. This equates to an 8.55 per cent rise in the Company’s
In the event of a change of control resulting from a takeover bid,
share capital in existence on the effective date and at the time of
certain consequences are set out in the following significant con-
use of the 2017 Authorised Capital. The capital increase took
tracts (still in force on 31 December 2019) concluded between
effect when its implementation was entered in the commercial
Group companies of KION GROUP AG and third parties:
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 the
– Senior facilities agreement dated 28 October 2015, con-
cluded between KION GROUP AG and, among others, 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.
In the event that a person, companies affiliated with this person,
– On the basis of a resolution of the Annual General Meeting on
11 May 2017, the Executive Board was also authorised, in the
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,
– Acquisition facilities agreement dated 4 July 2016, concluded
between KION GROUP AG and, among others, the London
and to grant conversion rights and / or warrants to – and / or
branch of UniCredit Bank AG
to impose mandatory conversion requirements or option
obligations on – the holders / beneficial owners of debt
instruments to acquire up to 10.88 million new shares of
KION GROUP AG with a pro-rata amount of the share
capital of up to €10.88 million (‘2017 Authorisation’). The
2017 Conditional Capital of €10.88 million was created to
service the debt instruments. The 2017 Authorisation has not
been used so far.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Disclosures relevant to acquisitions
110
The provisions in this agreement that apply in the event of a
9. Compensation agreements that the
change of control are identical to those in the senior facilities
agreement dated 28 October 2015.
– Promissory note agreements (seven tranches with different
coupons and different maturities) dated 13 February 2017 / 29
Company has signed with the Executive
Board members or employees and that will
be triggered in the event of a takeover bid
No such agreements have been concluded between the Com-
March 2017, concluded between KION GROUP AG and
pany and its current Executive Board members or employees.
Landesbank Baden-Württemberg; the latter subsequently
passed them on to its investors
– 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
– Promissory note agreement dated 10 April 2019, concluded
between KION GROUP AG and Landesbank Hessen-
Thüringen; the latter subsequently passed part of it on to its
investors
The provisions in these promissory note 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 2019 COMBINED MANAGEMENT REPORT
Remuneration report
111
Remuneration report
In accordance with statutory requirements and the recommen-
As recommended by the Executive Committee, the Super-
dations of the German Corporate Governance Code (DCGK) as
visory Board approved the remuneration system by adopting
amended on 7 February 2017, this remuneration report explains
resolutions at its meetings on 29 June 2016 and 28 Septem-
the main features and structure of the remuneration system used
ber 2016, taking account of the requirements of stock company
for the Executive Board and Supervisory Board of KION GROUP
law and the DCGK.
AG and also discloses the remuneration of the individual mem-
The remuneration system described below for the members
bers of the Executive Board and Supervisory Board for the work
of the Executive Board of KION GROUP AG has applied since 1 Jan-
that they carried out on behalf of the Company and its subsidiar-
uary 2017 and was approved by the Annual General Meeting of
ies in 2019. The report also reflects the requirements of German
KION GROUP AG on 11 May 2017 with a majority of 71.68 per cent.
accounting standard (GAS) 17 and the German Commercial
The Supervisory Board acknowledged these voting results from
Code (HGB).
the 2017 Annual General Meeting and believes that it therefore
KION GROUP AG considers that transparency and clarity
has an ongoing duty to review the remuneration system.
surrounding both the remuneration system itself and the remuner-
ation of the individual members of the Executive Board and Super-
1) Essential features of the Executive Board
visory Board are fundamental to good corporate governance.
remuneration system
Because the act implementing the second Shareholder
Rights’ Directive (‘ARUG II’) and the recommendations of the new
The Supervisory Board based the level of remuneration for the
German Corporate Governance Code come into force on 1 Jan-
members of our Executive Board on benchmark analyses of
uary 2020, the Supervisory Board will be approving a new remu-
executive board pay in the MDAX. These analyses were con-
neration system for the members of the Executive Board of KION
ducted on behalf of the Supervisory Board by a consultancy that
GROUP AG in 2020. This will incorporate feedback from investors
is independent of KION.
on the current remuneration system. The Supervisory Board put
The Supervisory Board’s decision on changing the remuner-
together a task force to deal with this matter in 2019. The new
ation system was guided by KION GROUP AG’s positioning in the
remuneration system will be finalised during the course of 2020
top quartile of the MDAX on the basis of its size, market position
and presented to the 2021 Annual General Meeting for approval.
and total assets.
This is in accordance with the rules regarding first-time application
The remuneration of the Executive Board of KION GROUP
of ARUG II and the obligation to declare compliance with the new
AG is determined in accordance with the requirements of the
recommendations of the German Corporate Governance Code at
German Stock Corporation Act and the DCGK and is focused on
the time the next declaration of conformity is due to be issued.
the Company’s long-term growth. It is determined so as to reflect
EXECUTIVE BOARD REMUNERATION
I. Remuneration system
the size and complexity of the KION Group, its business and
financial situation, its performance and future prospects, the
normal amount and structure of executive board remuneration in
comparable companies and the internal salary structure. The
Supervisory Board also takes into account the relationship
between the Executive Board remuneration and the remuneration
paid to senior managers and the German workforce of the Com-
pany as a whole, including changes over the course of time. To
The Supervisory Board of KION GROUP AG is responsible for set-
this end, the Supervisory Board has decided how the relevant
ting and regularly reviewing the total pay of the individual members
benchmarks are to be defined. Other criteria used to determine
of the Executive Board. According to the rules of procedure for the
remuneration are the individual responsibilities and personal per-
Supervisory Board, the Executive Committee prepares all Super-
formance of each member of the Executive Board. The financial
visory Board resolutions pertaining to remuneration.
and individual targets used in the Executive Board remuneration
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
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112
system are in line with the business strategy. The Supervisory
2) Upper limits on total remuneration
Board regularly reviews the structure and appropriateness of
Executive Board remuneration.
In accordance with the DCGK, remuneration is subject to upper
In doing so, the Supervisory Board focuses on the sustainabil-
limits on the amounts payable, both overall and in terms of the
ity of the Company’s long-term performance and has therefore
variable components. The upper limit on the total cash remuner-
given a high weighting to the multiple-year variable remuneration
ation to be paid, consisting of the fixed annual salary plus the
components. The granting of a long-term incentive in the form of
one-year and multiple-year variable remuneration, equals roughly
performance shares with a three-year term means that this com-
1.7 times the target remuneration (2018: 1.7 times) – excluding the
ponent is linked to the share price and incentivises Executive Board
non-performance-related non-cash remuneration and other
members to ensure the Company performs well over the long term.
benefits paid in that financial year. Both the one-year and the
The total remuneration of the Executive Board comprises a
multiple-year variable remuneration are capped at 200 per cent of
non-performance-related salary, non-performance-related non-
the target value. The specific figures are shown in > TABLE 032.
cash benefits, non-performance-related pension entitlements
and performance-related (variable) remuneration. The system
specifically allows for both positive and negative developments.
3) Overview of the structure and parameters of Executive
Board remuneration
Structure and parameters of Executive Board remuneration
TABLE 028
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
performance
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
compared 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 a
Both the one-year and the multiple-year components are
non-performance-related fixed annual salary and performance-
linked to key performance indicators used by the KION Group to
related (variable) remuneration, has a heavy emphasis on perfor-
measure its success. The KPIs relevant to one-year variable
mance. If the targets set by the Supervisory Board are completely
remuneration are adjusted earnings before interest and tax (EBIT)
missed, only the fixed salary is paid. The cash remuneration is
and free cash flow. The relevant KPIs for multiple-year variable
structured as follows in the event that the target value / maximum
remuneration are return on capital employed (ROCE) and relative
value is reached:
Target value:
total shareholder return (TSR).
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
in which the Executive Board service contract ends. The Super-
fixed annual salary is paid at the end of each month in twelve
equal instalments, the last payment being made for the full month
visory 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
with benefits at a typical market level.
66%
34%
80%
20%
TARGET REMUNERATION
MAXIMUM REMUNERATION
FIXED SALARY
VARIABLE (STI + LTI)
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114
2) Additional special benefits
statutory guaranteed return rate for the life insurance industry
Additional special benefits have been agreed for Mr Quek
(applicable maximum interest rate for the calculation of the
because he has been sent from Singapore to China on foreign
actuarial reserves of life insurers pursuant to section 2 (1) of the
assignment.
German Regulation on the Principles Underlying the Calculation
Under this arrangement, Mr Quek’s remuneration is struc-
of the Premium Reserve (DeckRV)) until an insured event occurs.
tured as if he were liable for taxes and social security contribu-
If higher interest is generated by investing the pension account, it
tions in Singapore. KION GROUP AG pays the taxes and social
will be credited to the pension account when an insured event
security contributions that Mr Quek incurs in China and Germany
occurs (surplus). The standard retirement age for the statutory
over and above the taxes that would theoretically apply in Singa-
pension applies. Executive Board members are entitled to early
pore. In 2019, this additional amount totalled €496 thousand
payment of the pension no earlier than their 62nd birthday. In the
(2018: €420 thousand). The additional benefits also agreed with
event of invalidity or death while the Executive Board member has
Mr Quek include the cost of trips home to Singapore for him and
an active service contract, the contributions that would have been
his family, a company car, rental payments in Xiamen, China,
made until the age of 60 are added to the pension account,
and private health insurance. In 2019, the additional benefits for
although only a maximum of ten annual contributions will be
Mr Quek amounted to a total of €135 thousand (2018: €136 thou-
added. When an insured event occurs, the pension is paid as a
sand). These additional benefits will be granted for as long as Mr
lump sum or, following a written request, in ten annual instalments.
Quek’s designated place of work is Xiamen or until his service
contract with KION GROUP AG ends.
B. Performance-related remuneration
3) Pension entitlements
1) One-year variable remuneration (short-term incentive)
KION GROUP AG grants its Executive Board members direct
The one-year variable remuneration is a remuneration compo-
entitlement to a company pension plan consisting of retirement,
nent linked to the profitability and productivity of the KION Group
invalidity and surviving dependants’ benefits.
in the relevant financial year. This is the same as the arrangement
The Chief Executive Officer has a defined benefit entitlement
in our remuneration system for senior managers. Its amount is
that was granted in his original service contract and was trans-
determined by the achievement of the following targets:
ferred to his Executive Board service contract when the Com-
pany changed its legal form. The amount of the entitlement is
dependent on the number of years of service and amounts to a
maximum of 50 per cent of the most recent fixed annual salary
awarded in the original service contract after the end of the tenth
– Adjusted earnings before interest and tax (adjusted EBIT),
– Free cash flow, weighting of 50 per cent
weighting of 50 per cent
year of service.
The target values for the financial components are derived from
The present value of the previous defined benefit plan for the
the annual budget and specified in target agreements between
ordinary members of the Executive Board was transferred as a
the Supervisory Board and Executive Board.
starting contribution for a new defined contribution pension plan
No bonus is paid if target achievement is 70 per cent or less
when the Company changed its legal form. The new plan is struc-
(lower target limit). In cases where the targets are significantly
tured as a cash balance plan and is also applied to new Executive
exceeded (upper target limit of 130 per cent), the bonus can be
Board members.
doubled at most (payment cap of 200 per cent). > DIAGRAM 007
Fixed annual contributions of €250 thousand for Ms Groth,
€150 thousand for Ms Schneeberger and Dr Böhm and
If the targets derived from the annual budget are achieved in full,
€124.5 thousand for Mr Quek are paid into their pension accounts
target achievement is 100 per cent. The target achievement levels
for the duration of the member’s period of service on the Executive
for the weighted targets (adjusted EBIT and free cash flow) are
Board. Interest is paid on the pension account at the prevailing
added together to give the total target achievement.
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The individual performance of the Executive Board members
1 a) Bonus curve for the short-term incentive
is assessed by the Supervisory Board, which applies a discre-
tionary performance multiple with a factor of between 0.7 and 1.3.
STI bonus entitlement
DIAGRAM 007
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-
ment in the Company’s management culture. There are also
agreements relating to special operational and, in particular,
strategic 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,
calculated 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 per-
formance. 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
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
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.
Upper target limit
Target value
Lower target limit
0
20
30
40
50
60
70
80
90
100 110 120 130
140
KPI results
KION GROUP AGAnnual Report 2019
116
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)
Frankfurt Stock Exchange (or a successor system that replaces
For the members of the Executive Board, multiple-year variable
it) over the last 60 trading days prior to the start of the perfor-
remuneration has been agreed in the form of a performance
mance period.
share plan. A very similar plan is in place for the Group’s senior
At the end of the performance period, the preliminary number
managers. The basis of measurement has been defined as the
of performance shares is adjusted depending on achievement of
total shareholder return (TSR) for KION shares compared with the
the two targets (relative TSR and ROCE) to give the final number
MDAX and return on capital employed (ROCE). Each has a
of performance shares.
weighting of 50 per cent. The annual tranches promised under
In respect of the ROCE target, there is no entitlement if target
the plan have a term (performance period) of three years and are
achievement is 70 per cent or less. If the target is significantly
paid at the end of the term, provided the defined targets have
exceeded (target achievement of 130 per cent or more), the enti-
been achieved.
tlement is capped at 200 per cent. Regarding the relative TSR
At the start of a performance period, a conditional entitle-
target, there is no entitlement if KION shares underperform the
ment to a certain target number of performance shares is granted.
MDAX. If the KION shares outperform this index by 20 per cent or
This preliminary number is calculated by dividing the allocation
more, the entitlement is capped at 200 per cent. If KION shares
value set out (in euros) in the service contract for the particular
outperform the MDAX by 6.67 per cent and the ROCE targets
Executive Board member by the share price on the relevant date
defined each year on the basis of the budget are achieved, total
at the start of the performance period. This share price, which is
target achievement will be 100 per cent.
calculated to two decimal places, is determined from the average
The amount paid for each tranche is determined by the final
Xetra closing price of KION shares (closing auction prices) on the
number of performance shares multiplied by the price of KION
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shares (average price over the preceding 60 trading days) at the
management culture. For the LTI too, there are also agreements
end of the performance period.
relating to special operational and, in particular, strategic projects
Executive Board members’ individual performance is also
that are very important to the Company’s long-term development.
taken into account in the multiple-year variable remuneration. At
Depending on achievement of these targets, the Supervisory
the start of the performance period, the Supervisory Board
Board can apply a discretionary factor to make a final adjustment
defines targets for the three-year period. For the performance
to the calculation of the amount to be paid out at the end of the
share plan, the criteria used to assess individual performance
performance period by plus or minus 30 per cent, although the
are – as for the one-year variable remuneration – growth of mar-
maximum payment may not exceed 200 per cent of the allocation
ket share, successful innovations and the Organizational Health
value. > DIAGRAMS 009 – 010.
Index (OHI), which measures the improvement in the Company’s
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
performance share plan on the date of granting must be dis-
closed. > TABLES 029 – 031
0%
Underperformance
70% of budgeted figure
The total expense in 2019 amounted to €4,084 thousand (2018:
income of €1,763 thousand).
50%
Outperformance of 0% 85% of budgeted figure
100%
Outperformance of
6.67%
Budgeted figure
200%
Outperformance of 20% 130% of budgeted figure
2017 performance share plan
TABLE 029
Contractual
allocation 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
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
29,712
18,570
15,413
18,570
82,265
€53.85
€53.85
€53.85
€53.85
Expense for
share-based
remuneration
in 2018 2
Expense for
share-based
remuneration
in 2019 2
– €179 thousand
€324 thousand
– €112 thousand
€203 thousand
– €149 thousand
€159 thousand
€0 thousand
€0 thousand
– €440 thousand
€686 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 29 per cent in 2019 (2018: 53 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.
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2018 performance share plan
TABLE 030
Contractual
allocation value of
the performance
share plan on the
date of grant
€1,600 thousand
€1,000 thousand
€861 thousand
€830 thousand
Gordon Riske
Dr Eike Böhm
Anke Groth 3
Ching Pong Quek
Susanna Schneeberger 4
€750 thousand
Total
€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
Expense for
share-based
remuneration
in 2018 2
Expense for
share-based
remuneration
in 2019 2
€185 thousand
€441 thousand
€116 thousand
€275 thousand
€68 thousand
€242 thousand
€147 thousand
€272 thousand
€29 thousand
€216 thousand
€544 thousand
€1,446 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 29 per cent in 2019 (2018: 53 per cent) as part of a tax equalisation agreement.
3 The contractual allocation 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 contractual allocation 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).
2019 performance share plan
Contractual
allocation value of the
performance share plan
on the date of grant
€1,600 thousand
€1,000 thousand
€1,000 thousand
€830 thousand
€1,000 thousand
€5,430 thousand
Number of
performance
shares granted 1
Fair value per
performance share
on date of grant
32,868
20,542
20,542
17,050
20,542
111,544
€48.68
€48.68
€48.68
€48.68
€48.68
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
Total
TABLE 031
Expense for
share-based
remuneration
in 2019 2
€551 thousand
€344 thousand
€344 thousand
€369 thousand
€344 thousand
€1,952 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 29 per cent as part of a tax equalisation agreement.
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3) Termination benefits
Board member will receive 80 per cent of his fixed salary, but only
In line with the DCGK, all Executive Board service contracts
up to a point at which the service contract is terminated.
provide for a severance payment equivalent to no more than two
If an Executive Board member ceases to be employed by the
years’ annual remuneration payable in the event of the contract
Company as a result of death, the Executive Board member’s
being terminated prematurely without good cause. The amount
family will be entitled to the fixed monthly remuneration for the
of annual remuneration is defined as fixed salary plus the variable
month in which the service contract ends and for the three sub-
remuneration elements, assuming 100 per cent target achieve-
sequent months, but only up to the point at which the service
ment and excluding non-cash benefits and other additional ben-
contract would otherwise have come to an end.
efits, for the last full financial year before the end of the Executive
Board service contract. If the Executive Board service contract
4) Share ownership guidelines
was due to end within two years, the severance payment is
In connection with the updated remuneration system for Executive
calculated pro rata. If a service contract is terminated for good
Board members that has been in force since 1 January 2017, the
cause for which the Executive Board member concerned is
Supervisory Board decided to introduce share ownership guide-
responsible, no payments are made to the Executive Board
lines, under which all Executive Board members are required to
member in question. The Company does not have any commit-
hold shares worth 100 per cent of their basic remuneration. They
ments for the payment of benefits in the event of a premature termi-
have to build up their shareholding to this percentage and hold the
nation of Executive Board contracts following a change 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
pays the Executive Board member compensation for the duration
first four years, they are permitted to increase their shareholding
of the non-compete agreement amounting to 100 per cent of his
incrementally: they must hold 25 per cent of the full number of
final fixed salary. Other income of the Executive Board member is
shares 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 2019 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 obli-
exception of remuneration for work as a member of a supervisory
gation to purchase additional shares if the share price falls. There
or advisory board or a board of directors) will be offset against
is only an obligation to purchase additional shares if there is a
these transitional benefits.
change to the fixed annual remuneration in the member’s
If an Executive Board member suffers temporary incapacity,
Executive Board service contract or if a capital reduction, capital
he will receive his full fixed salary for a maximum period of six
increase or stock split takes place.
months plus the one-year variable remuneration. In the event of
temporary incapacity for a further six months, the Executive
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III. Remuneration for members of the
Executive Board in 2019
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 addi-
tional benefits and – in the case of variable remuneration compo-
nents – the maximum and minimum remuneration achievable
are shown. > TABLE 032
Secondly, > TABLE 033 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 2019 was €14,025 thousand (minimum: €5,826 thousand,
maximum: €22,224 thousand) (2018: €13,148 thousand). Of this
amount, €4,276 thousand (2018: €3,628 thousand) was attribut-
able to fixed non-performance-related remuneration compo-
nents, €8,199 thousand (minimum: €0 thousand, maximum:
€16,398 thousand) (2018: €7,722 thousand) to variable one-year
and multiple-year performance-related remuneration compo-
nents, €272 thousand (2018: €841 thousand) to non-perfor-
mance-related non-cash remuneration and other benefits and
€1,277 thousand (2018: €957 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, maximum: 200 per cent for target achieve-
ment 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 con-
tractual allocation value).
The additional benefits were measured at the value calcu-
lated for tax purposes. > TABLE 032
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Remuneration report
122
Benefits granted in 2019
TABLE 032
Gordon Riske
Dr Eike Böhm
CEO of KION GROUP AG
CTO of KION GROUP AG
2018
2019
2019
(min.)
2019
(max.)
2018
2019
2019
(min.)
2019
(max.)
Fixed remuneration
1,400
1,400
1,400
1,400
650
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 2018 – 31 Dec 2020)
Performance share plan
(1 Jan 2019 – 31 Dec 2021)
34
34
34
34
1,434
1,434
1,434
1,434
15
665
17
667
17
667
800
800
1,600
1,600
0
0
1,600
400
400
3,200
1,000
1,000
0
0
17
667
800
2,000
1,600
1,000
1,600
0
3,200
1,000
0
2,000
Total
3,834
3,834
1,434
6,234
2,065
2,067
Pension expense 7
631
620
620
620
147
144
Total remuneration
4,464
4,454
2,054
6,854
2,212
2,211
667
144
811
3,467
144
3,611
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)
663
1,156
Minus the pension expense
– 631
– 620
331
578
– 147
– 144
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
170
1
– 33
3,866
4,190
1,997
2,212
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 29 per cent (2018: 58 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 29 per cent (2018: 53 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 035).
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Remuneration report
123
Benefits granted in 2019
TABLE 032
Anke Groth
Ching Pong Quek
CFO of KION GROUP AG
from 1 June 2018
Chief Asia Pacific Officer
of KION GROUP AG
2018
2019
2019
(min.)
2019
(max.)
2018
2019
2019
(min.)
2019
(max.)
Fixed remuneration
467
800
800
800
749
776
776
776
€ 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 2018 – 31 Dec 2020)
Performance share plan
(1 Jan 2019 – 31 Dec 2021)
Total
Pension expense 7
320
787
13
813
13
813
13
813
136
885
135
911
135
911
292
500
861
1,000
0
0
1,000
525
428
2,000
1,270
1,071
0
0
135
911
857
2,141
861
1,270
1,000
0
2,000
1,071
0
2,141
1,939
2,313
247
813
247
3,813
2,679
2,410
247
120
118
911
118
3,909
118
Total remuneration
1,939
2,560
1,060
4,060
2,800
2,528
1,029
4,027
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
– 500
– 525
– 428
242
723
– 247
435
619
– 120
– 118
40
– 81
1,889
2,536
2,630
2,520
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 29 per cent (2018: 58 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 29 per cent (2018: 53 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 035).
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Remuneration report
124
Benefits granted in 2019
TABLE 032
Susanna Schneeberger
Dr Thomas Toepfer
CDO of KION GROUP AG
from 1 October 2018
CFO of KION GROUP AG
until 31 March 2018
2018
2019
2019
(min.)
2019
(max.)
2018
2019
2019
(min.)
2019
(max.)
Fixed remuneration
163
650
650
650
200
€ 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 2018 – 31 Dec 2020)
Performance share plan
(1 Jan 2019 – 31 Dec 2021)
Total
Pension expense 7
332
494
73
723
73
723
73
723
5
205
100
400
750
1,000
0
0
800
125
2,000
0
750
1,000
0
2,000
1,344
2,123
148
723
148
870
3,523
148
3,670
330
59
389
Total remuneration
1,344
2,270
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
– 400
83
0
578
– 148
1,327
2,301
– 125
104
– 59
2
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 29 per cent (2018: 58 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 29 per cent (2018: 53 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 035).
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Remuneration report
125
2) Allocation pursuant to the DCGK
the Supervisory Board in line with the individual performance of
The total remuneration allocated to / earned by Executive Board
the Executive Board member. This adjustment may vary by plus
members for 2019 was €11,303 thousand (2018: €9,320 thou-
or minus 30 per cent of the variable remuneration. Ms Schnee-
sand). Of this amount, €4,276 thousand (2018: €3,628 thousand)
berger’s performance multiple was set at 1.0 for year 2019, i.e.
was attributable to fixed non-performance-related remuneration
there was no individual adjustment. For the multiple-year variable
components, €5,477 thousand (2018: €3,894 thousand) to varia-
remuneration, a payment from the 2017 tranche of the perfor-
ble one-year and multiple-year performance-related remunera-
mance share plan will be made in spring 2020 on the basis of the
tion components, €272 thousand (2018: €841 thousand) to
achievement of the long-term targets that were defined in 2017 at
non-performance-related non-cash remuneration and other ben-
the start of the performance period. The value shown for 2019 is
efits and €1,277 thousand (2018: €957 thousand) to the pension
also calculated on the basis of a preliminary total target achieve-
expense in accordance with IFRS. The figure shown for one-year
ment rate of about 46 per cent and is subject to the perfor-
variable remuneration is derived from a preliminary total target
mance-based adjustment made by the Supervisory Board (using
achievement rate of about 113 per cent based on the budgeted
a discretionary performance multiple) for individual Executive
figure. This target achievement rate was calculated using prelimi-
Board members. Under the terms of the plan at the grant date,
nary earnings figures at the beginning of 2020 and equates to a
this performance-based adjustment may vary by plus or minus
payout of around 145 per cent of the target value for one-year
30 per cent.
variable remuneration. The preliminary variable remuneration for
The additional benefits were measured at the value calcu-
each Executive Board member is also subject to adjustment by
lated for tax purposes. > TABLE 033
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Remuneration report
126
Allocation in 2019
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
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration
Performance share plan 3
(1 Jan 2016 – 31 Dec 2018)
Performance share plan
(1 Jan 2017 – 31 Dec 2019)
Total
Pension expense 4
Total remuneration
Gordon Riske
Dr Eike Böhm
CEO of KION GROUP AG
CTO of KION GROUP AG
2018
1,400
34
1,434
2019
1,400
34
1,434
663
1,156
1,002
1,002
3,098
631
3,729
795
795
3,385
620
4,005
2018
650
15
665
298
557
557
1,519
147
1,667
2019
650
17
667
578
497
497
1,742
144
1,886
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 2018 is the actual amount paid out, which may differ from the estimated value listed in the 2018 consolidated financial
statements. The discretionary performance multiple for Ms Schneeberger has already been set to 1.0 for 2019.
3 The figure shown for multiple-year variable remuneration is for the actual amount paid out, which may differ from the estimated value listed in the 2018 consolidated financial statements.
4 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 035).
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Remuneration report
127
Allocation in 2019
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
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration
Performance share plan 3
(1 Jan 2016 – 31 Dec 2018)
Performance share plan
(1 Jan 2017 – 31 Dec 2019)
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
2018
467
320
787
242
0
1,028
1,028
2019
800
13
813
723
0
1,536
247
1,783
2018
749
136
885
354
593
593
1,832
120
1,952
2019
776
135
911
619
532
532
2,062
118
2,180
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 2018 is the actual amount paid out, which may differ from the estimated value listed in the 2018 consolidated financial
statements. The discretionary performance multiple for Ms Schneeberger has already been set to 1.0 for 2019.
3 The figure shown for multiple-year variable remuneration is for the actual amount paid out, which may differ from the estimated value listed in the 2018 consolidated financial statements.
4 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 035).
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Remuneration report
128
Allocation in 2019
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
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration
Performance share plan 3
(1 Jan 2016 – 31 Dec 2018)
Performance share plan
(1 Jan 2017 – 31 Dec 2019)
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
2018
163
332
494
83
0
577
577
2019
650
73
723
578
0
1,301
148
1,448
2018
200
5
205
104
0
309
59
368
2019
–
–
–
–
–
–
–
–
–
–
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 2018 is the actual amount paid out, which may differ from the estimated value listed in the 2018 consolidated financial
statements. The discretionary performance multiple for Ms Schneeberger has already been set to 1.0 for 2019.
3 The figure shown for multiple-year variable remuneration is for the actual amount paid out, which may differ from the estimated value listed in the 2018 consolidated financial statements.
4 Service cost in accordance with IFRS (the service cost in accordance with the HGB is shown in table 035).
KION GROUP AGAnnual Report 2019
COMBINED MANAGEMENT REPORT
Remuneration report
129
In its meeting on 19 December 2019, the Supervisory Board
€4,461 thousand was attributable to non- performance-related
authorised the chairman of the Supervisory Board to hold talks
remuneration components, €87 thousand to a performance-re-
with Ms Susanna Schneeberger regarding the early termination
lated component with no long-term incentive, €118 thousand to
of her appointment as a member of the Executive Board of KION
a performance-related component with a long-term incentive
GROUP AG, the termination of her Executive Board service
(a pro rata amount for the 2018 and 2019 tranches in accord-
contract including the conclusion of a termination agreement,
ance with the rules of the performance share plan as at
and regarding the appropriate arrangements required in accord-
31 December 2019), €73 thousand to the pro rata allocation of
ance with the law and her contract. As a result of the talks, mutual
this component for 2020 and €33 thousand to pension
agreement was reached with Ms Schneeberger that she would
expenses.
step down on 12 January 2020 and that her Executive Board
The table below shows the pension contributions (additions
service contract would be terminated on 31 March 2020.
to the plan) attributable to each individual Executive Board
Of
the
total amount of €4,771
thousand paid
to
member and their separate present values in accordance with
Ms Schneeberger resulting from the termination agreement,
IFRS and HGB > TABLES 034 – 035.
Pension entitlements under IFRS
TABLE 034
€ thousand
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
Dr Thomas Toepfer 1
Service cost
2019
Service cost
2018
Present value (DBO)
31 Dec 2019
Present value (DBO)
31 Dec 2018
620
144
247
118
148
631
147
120
59
8,621
733
430
951
209
6,897
502
148
670
38
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 035
€ thousand
Gordon Riske
Dr Eike Böhm
Anke Groth
Ching Pong Quek
Susanna Schneeberger
Dr Thomas Toepfer 1
Service cost
2019
Service cost
2018
Present value (DBO)
31 Dec 2019
Present value (DBO)
31 Dec 2018
520
136
216
128
125
482
134
129
65
6,702
733
419
951
193
5,714
469
129
615
32
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.
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Remuneration report
130
The total remuneration paid to former members of the Executive
or one of its committees does not hold their position for a full
Board in 2019 amounted to €262 thousand (2018: €258 thou-
financial year.
sand). Provisions for defined benefit obligations to former
The members of the Supervisory Board receive an attend-
members of the Executive Board or their surviving dependants
ance fee of €1,500 per day for meetings of the Supervisory Board
amounting to €11,672 thousand (2018: €10,463 thousand) were
and its committees, although they only receive this amount once
recognised in accordance with IAS 19.
if they attend more than one meeting on the same day.
In the year under review, no advances were made to mem-
The Company reimburses each member for any VAT incurred
bers of the Executive Board, and there were no loans.
in connection with his or her remuneration.
SUPERVISORY BOARD
REMUNERATION
Remuneration system
In the interests of the Company, a D&O insurance policy with-
out an excess has been taken out for the members of the Super-
visory Board. The Company pays the premiums for this.
Remuneration paid to members of the
Supervisory Board in 2019
The total remuneration paid to the Supervisory Board in 2019 was
The Supervisory Board’s remuneration is defined in article 18 of
€1,469 thousand (2018: €1,455 thousand). Of this amount,
KION GROUP AG’s articles of association. Members of the
€1,063 thousand (2018: €1,050 thousand) was attributable to
Supervisory Board receive fixed remuneration plus reimburse-
fixed remuneration for activities carried out by the Supervisory
ment of out-of-pocket expenses. The fixed annual remuneration
Board. The remuneration paid for committee work (including
of an ordinary member amounts to €55,000. The chairman of the
attendance fees) totalled €406 thousand (2018: €406 thousand).
Supervisory Board receives three times the amount of an ordi-
The following table shows the breakdown of remuneration paid to
nary member, i.e. €165,000, and his deputy receives two times
each Supervisory Board member for 2019. > TABLE 036
the amount of an ordinary member, i.e. €110,000.
Additional remuneration is paid for being a member or chair-
In 2019, no company in the KION Group paid or granted any
man of a committee, although this does not apply in the case of
remuneration or other benefits to members of the Supervisory
the Nomination Committee or the Mediation Committee pursuant
Board for services provided as individuals, such as consulting or
to section 27 (3) of the German Codetermination Act (MitbestG).
brokerage activities. Nor were any advances or loans granted to
The annual remuneration for members of the Executive Commit-
members of the Supervisory Board.
tee is usually €8,000, while the chairman of the Executive
Committee receives double this amount, i.e. €16,000. 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 paid pro rata in the amount of one twelfth of the annual
amount for each full or partial month that they were a member.
The same formula is applied if the chair of the Supervisory Board
KION GROUP AGAnnual Report 2019 COMBINED MANAGEMENT REPORT
Remuneration report
131
Remuneration of the Supervisory Board of KION GROUP AG in 2019 (net)
TABLE 036
Dr Feldmann, John (until 9 May 2019)
€68,750.00
€12,916.67
Fixed
remuneration
Committee remu-
neration (fixed)
Attendance fee
Total
€9,000.00
€7,500.00
€90,666.67
€62,500.00
€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
€55,000.00
€55,000.00
€55,000.00
€55,000.00
€53,000.00
€19,500.00
€127,500.00
Behrendt, Birgit
Dr Dibelius, Alexander
Jiang, Kui*
Dr Reuter, Christina
Ring, Hans Peter
Tan, Xuguang* (from 9 May 2019)
€36,666.67
€1,500.00
€38,166.67
Dr Macht, Michael
Xu, Ping*
Pancarci, Özcan
Casper, Stefan
Kunz, Olaf
Fahrendorf, Martin
Schädler, Alexandra
Wenzel, Claudia
Dr Schepp, Frank
Milla, Jörg
Total
€132,916.67
€20,666.67
€15,000.00
€168,583.33
€55,000.00
€7,500.00
€62,500.00
€110,000.00
€8,000.00
€18,000.00
€136,000.00
€55,000.00
€55,000.00
€55,000.00
€12,000.00
€67,000.00
€8,000.00
€16,500.00
€79,500.00
€12,000.00
€67,000.00
€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
€23,000.00
€24,000.00
€102,000.00
€1,063,333.33
€179,583.33
€226,500.00
€1,469,416.67
* 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:
€67,915.14
€3,704.46
€10,418.80
€82,038.40
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Contents
133
CONSOLIDATED
FINANCIAL STATEMENTS
134
CONSOLIDATED INCOME STATEMENT
135
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
136
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
138
CONSOLIDATED STATEMENT OF CASH FLOWS
140
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
142
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
142
160
170
203
Basis of presentation
Notes to the consolidated income statement
Notes to the consolidated statement of financial position
Other disclosures
242
INDEPENDENT AUDITORS’ REPORT
250
RESPONSIBILITY STATEMENT
KION GROUP AGAnnual Report 2019 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 tax
Financial income
Financial expenses
Net financial expenses
Earnings before tax
Income taxes
Current taxes
Deferred taxes
Net income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
Earnings per share
Average number of shares (in million)
Basic earnings per share (in €)
Diluted earnings per share (in €)
Note
[7]
[8]
[8]
[8]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
2019
8,806.5
– 6,474.6
2,331.9
– 940.2
– 155.3
– 546.9
69.5
– 54.5
12.1
716.6
105.5
– 200.6
– 95.1
621.6
– 176.8
– 212.8
36.0
444.8
454.8
– 10.0
117.9
3.86
3.86
134
TABLE 037
2018
7,995.7
– 5,898.1
2,097.6
– 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
117.9
3.39
3.39
KION GROUP AGAnnual Report 2019 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
Changes in unrealised gains / losses from equity-accounted investments
Other comprehensive loss (income)
Total comprehensive income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
Note
[28]
[22]
[41]
2019
444.8
– 117.8
– 115.9
– 168.1
52.3
– 1.9
– 0.0
69.4
76.1
76.1
0.0
– 6.3
– 15.1
7.2
1.5
– 0.3
– 48.4
396.4
405.9
– 9.4
135
TABLE 038
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
0.3
16.8
418.4
416.9
1.5
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
136
Consolidated statement of financial position
Consolidated statement of financial position – Assets
TABLE 039
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
Total assets
Note
31/12/2019
31/12/2018
[16]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[14]
[24]
[21]
[33]
[25]
[14]
[22]
[23]
[26]
3,475.8
2,256.6
1,361.2
632.9
1,236.3
84.5
1,080.9
44.6
73.8
449.7
3,424.8
2,296.8
1,261.8
670.5
1,077.8
82.3
826.2
29.8
58.9
421.7
10,696.4
10,150.6
1,085.3
340.1
150.2
1,074.2
24.9
74.1
108.8
211.2
994.8
271.2
119.3
1,036.4
31.5
83.4
106.2
175.3
3,068.8
2,818.2
13,765.2
12,968.8
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
137
Consolidated statement of financial position – Equity and liabilities
TABLE 040
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
Total equity and liabilities
Note
31/12/2019
31/12/2018
118.0
3,034.7
975.2
– 560.3
– 9.2
3,558.4
1,263.4
1,716.8
1,566.9
243.8
113.8
500.9
301.2
570.9
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
6,277.8
5,999.1
103.7
933.2
188.3
504.9
975.9
88.7
140.6
284.0
709.6
226.5
548.0
251.3
570.1
904.2
74.4
127.2
288.6
674.2
3,929.0
3,664.6
13,765.2
12,968.8
[27]
[28]
[29]
[30]
[31]
[32]
[35]
[36]
[14]
[29]
[30]
[31]
[33]
[34]
[14]
[32]
[35]
[36]
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows
in € million
Earnings before interest and tax
Note
Amortisation, depreciation and impairment charges of non-current assets
[8]
Non-cash reversals of deferred revenue from leases
Other non-cash income (–) / expenses (+)
Gains (–) / losses (+) on disposal of non-current assets
[9], [10]
2019
716.6
898.0
– 212.5
27.0
– 3.6
138
TABLE 041
2018
642.8
897.9
– 238.7
29.2
– 1.2
Change in leased assets (excluding depreciation)
and receivables / liabilities from lease business
Change in rental assets (excluding depreciation)
and liabilities from rental business
Change in net working capital *
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]
– 122.1
– 137.5
[18], [35]
[24], [25], [33], [34]
[28]
[32]
[38]
[38]
[38]
– 146.6
– 146.8
– 22.0
22.5
27.3
– 191.6
846.3
– 287.4
3.6
12.2
– 10.0
3.8
– 277.9
– 188.5
– 54.3
– 37.3
– 19.0
65.4
– 193.2
765.5
– 258.5
5.1
14.2
– 1.6
– 4.7
– 245.6
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
Consolidated statement of cash flows
(continued)
in € million
Capital increase from issuing of employee shares
Acquisition of treasury shares
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Cash receipts / payments for changes in ownership
interests in subsidiaries without change of control
Financing costs paid
Proceeds from borrowings
Repayment of borrowings
Interest received
Interest paid
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
* Net Working Capital comprises inventories, contract assets, trade receivables less contract liabilities and trade payables
139
TABLE 041
2018
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
2.2
173.2
175.3
Note
[27]
[38]
[27]
[38]
[38]
[38]
[38]
[38]
[38]
[38]
2019
3.7
– 2.9
– 141.5
– 3.1
0.0
– 3.8
2,940.1
– 3,166.2
3.1
– 36.7
– 126.5
– 1.1
– 534.9
2.4
35.9
175.3
211.2
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
140
Consolidated statement of changes in equity
Consolidated statement of changes in equity
in € million
Balance as at 01/01/2018
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
Balance as at 01/01/2019
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
Other changes
Balance as at 31/12/2019
Note
Subscribed
capital
117.9
Capital
reserves
3,034.0
0.0
0.0
– 0.1
0.1
– 3.5
2.6
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
– 254.7
– 283.3
1.8
8.4
– 0.6
3,002.5
35.8
35.8
– 0.2
– 0.2
– 12.2
– 12.2
– 6.4
– 6.4
0.2
0.2
Retained
earnings
379.0
399.9
399.9
– 116.8
TABLE 042
Total
3,006.9
401.6
16.8
418.4
– 116.8
– 2.8
– 3.6
2.7
0.2
3,305.1
3,305.1
444.8
– 48.4
396.4
– 141.5
– 3.1
– 2.9
4.6
– 0.2
399.9
17.0
416.9
– 116.8
0.0
– 3.6
2.7
0.0
454.8
– 48.9
405.9
– 141.5
0.0
– 2.9
4.6
– 0.2
4.4
1.8
– 0.3
1.5
0.0
– 2.8
0.0
0.0
0.2
3.3
3.3
– 10.0
0.6
– 9.4
0.0
– 3.1
0.0
0.0
0.0
– 218.9
– 283.5
– 10.4
– 0.4
3,301.7
75.5
75.5
– 115.8
– 115.8
– 6.3
– 6.3
– 0.3
– 0.3
1.9
1.9
– 1.9
– 1.9
– 143.5
– 399.3
– 16.8
0.0
– 0.8
3,567.5
– 9.2
3,558.4
117.9
3,033.1
662.1
– 218.9
– 283.5
– 10.4
– 0.4
3,301.7
117.9
3,033.1
0.0
0.0
– 0.1
0.1
– 2.9
4.5
118.0
3,034.7
662.1
454.8
454.8
– 141.5
– 0.2
975.2
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
KION GROUP AGAnnual Report 2019 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
Accumulated other comprehensive income (loss)
Cumulative
translation
adjustment
Gains / losses
on defined
benefit
obligation
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
– 254.7
– 283.3
1.8
8.4
– 0.6
3,002.5
35.8
35.8
– 0.2
– 0.2
– 12.2
– 12.2
– 6.4
– 6.4
0.2
0.2
399.9
17.0
416.9
– 116.8
0.0
– 3.6
2.7
0.0
117.9
3,033.1
662.1
– 218.9
– 283.5
– 10.4
117.9
3,033.1
– 218.9
– 283.5
– 10.4
75.5
75.5
– 115.8
– 115.8
– 6.3
– 6.3
1.9
1.9
– 1.9
– 1.9
– 0.4
3,301.7
– 0.4
3,301.7
– 0.3
– 0.3
454.8
– 48.9
405.9
– 141.5
0.0
– 2.9
4.6
– 0.2
4.4
1.8
– 0.3
1.5
0.0
– 2.8
0.0
0.0
0.2
3.3
3.3
– 10.0
0.6
– 9.4
0.0
– 3.1
0.0
0.0
0.0
141
TABLE 042
Total
3,006.9
401.6
16.8
418.4
– 116.8
– 2.8
– 3.6
2.7
0.2
3,305.1
3,305.1
444.8
– 48.4
396.4
– 141.5
– 3.1
– 2.9
4.6
– 0.2
118.0
3,034.7
– 143.5
– 399.3
– 16.8
0.0
– 0.8
3,567.5
– 9.2
3,558.4
Consolidated statement of changes in equity
in € million
Balance as at 01/01/2018
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
Balance as at 01/01/2019
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
Other changes
Balance as at 31/12/2019
Note
Subscribed
capital
117.9
Capital
reserves
3,034.0
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
0.0
0.0
– 0.1
0.1
– 3.5
2.6
0.0
0.0
– 0.1
0.1
– 2.9
4.5
Retained
earnings
379.0
399.9
399.9
– 116.8
662.1
454.8
454.8
– 141.5
– 0.2
975.2
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
142
Notes to the consolidated financial statements
Basis of presentation
[1] GENERAL INFORMATION ON THE
[2] BASIS OF PREPARATION
COMPANY
The consolidated financial statements of the KION Group for the
KION GROUP AG, whose registered office is at Thea-Rasche-
financial year ended 31 December 2019 have been prepared in
Strasse 8, 60549 Frankfurt am Main, is entered in the commercial
accordance with section 315e of the German Commercial Code
register at the Frankfurt am Main local court under reference
(HGB) in conjunction with the International Financial Reporting
HRB 112163.
Standards (IFRSs) of the International Accounting Standards
Shandong Heavy Industry Group Co., Ltd., Jinan, People’s
Board (IASB) applicable as at the reporting date as well as the
Republic of China, is the company that prepares the global con-
associated interpretations (IFRICs) of the IFRS Interpretations
solidated financial statements for the largest number of affiliated
Committee (IFRS IC) as adopted by the European Union in
companies. These consolidated financial statements are not
accordance with Regulation (EC) No. 1606/2002 of the European
publicly available.
Parliament and of the Council concerning the application of inter-
Weichai Power Co., Ltd., Weifang, People’s Republic of
national accounting standards. All of the IFRSs and IFRICs that
China, is the company that prepares the global consolidated
had been enacted by the reporting date and that were required to
financial statements for the smallest number of affiliated compa-
be applied in the 2019 financial year have been applied in prepar-
nies. These are available in English on the websites of the Hong
ing the consolidated financial statements.
Kong Stock Exchange (www.hkexnews.hk) and the company
In order to improve the clarity of presentation, certain items
(www.weichaipower.com).
are aggregated in the statement of financial position and the
The KION Group is a global leader in industrial trucks, related
income statement. The items concerned are disclosed and
services and supply chain solutions. In 2019, the Group and its
explained separately in the notes. Assets and liabilities are broken
highly skilled employees generated revenue of €8,806.5 million
down into current and non-current items in accordance with IAS
(2018: €7,995.7 million).
1.60. The consolidated income statement is prepared in accord-
The consolidated financial statements and the combined
ance with the cost of sales (function-of-expense) method.
group management report and management report of the Com-
The consolidated financial statements are prepared in euros,
pany were prepared by the Executive Board of KION GROUP AG
which is the Group’s presentation currency. All amounts are dis-
on 21 February 2020.
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. The compara-
tive figures for the prior year were determined on the same basis.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
143
Financial reporting standards to be adopted
for the first time in the current financial year
[3] PRINCIPLES OF CONSOLIDATION
The following financial reporting standards were adopted for the
first time in 2019:
– Amendments to IFRS 9 ‘Financial Instruments’: amendments
relating to the classification of particular prepayable financial
assets
– Amendments to IAS 19 ‘Employee Benefits’: amendments in
connection with the remeasurement of net defined benefit
Acquisitions are accounted for using the acquisition method. In
accordance with IFRS 3, the identifiable assets and the liabilities
assumed on the acquisition date are recognised separately from
goodwill, irrespective of the extent of any non-controlling inter-
ests. The identifiable assets acquired and the liabilities assumed
are measured at their fair value.
The amount recognised as goodwill is calculated as the
liabilities resulting from plan amendments, curtailments or
amount by which the acquisition cost, the amount of non-con-
settlements
– Amendments to IAS 28 ‘Investments in Associates and Joint
Ventures’: clarification relating to the accounting treatment of
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
long-term interests that form part of the net investment in an
the fair value of the acquiree’s net assets, the negative goodwill is
entity accounted for under the equity method
– IFRIC 23 ‘Uncertainty over Income Tax Treatments’
– Annual Improvements to IFRSs (2015–2017).
recognised in profit or loss. KION GROUP AG recognises
non-controlling interests at the proportionate value of the net
assets attributable to them excluding goodwill.
In the case of business combinations in stages, previously
The initial application of these standards and interpretations has
held equity interests are recognised at their fair value at the acqui-
had no significant effect on the presentation of the financial posi-
sition date. The difference between the carrying amount of the
tion and financial performance of the KION Group.
interests and the fair value is recognised in profit or loss.
Financial reporting standards released
but not yet adopted
For the purpose of impairment testing, goodwill is allocated
to cash-generating units that are likely to benefit from the busi-
ness combination.
Contingent consideration elements are included at fair value
at the date of acquisition when determining the purchase consid-
The standards and interpretations that had been issued by the
eration. Contingent consideration elements may consist of equity
IASB as at 31 December 2019 but were not yet required to be
instruments or financial liabilities, depending on the structure.
adopted in 2019 will probably be applied by the subsidiaries in the
On first-time consolidation of an acquisition, all identifiable
basis of consolidation, and by KION GROUP AG, only from the
assets and liabilities are recognised at their fair value at the acqui-
time when they are required to be applied. The initial application
sition date. The fair values of identifiable assets are determined
of these financial reporting standards and interpretations is
using appropriate valuation techniques. These measurements
expected to have no significant effect on the presentation of the
are based, for example, on estimates of future cash flows,
financial position and financial performance of the KION Group.
expected growth rates, exchange rates, discount rates and useful
lives. In the event of material changes to assumptions or circum-
stances, estimates must be reassessed and this can lead to the
recognition of an impairment loss for the asset concerned.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
144
The consolidated financial statements include all of the parent
company’s material subsidiaries. Intragroup balances, transac-
tions, income and expenses, and gains and losses on intercom-
pany transactions are eliminated in full. Deferred taxes are
[4] BASIS OF CONSOLIDATION
recognised on temporary differences arising from consolidation
KION GROUP AG’s equity investments consist of subsidiaries,
transactions.
joint ventures, associates and financial investments.
Transactions with non-controlling interests are treated as
In addition to KION GROUP AG, the consolidated financial
transactions with the Group’s equity providers. Differences
statements of the KION Group include, using the acquisition
between the consideration paid for the acquisition of a non-
method, all material subsidiaries over which KION GROUP AG
controlling interest and the relevant proportion of the carrying
exercises control. KION GROUP AG controls a subsidiary if it has
amount of the subsidiary’s net assets are recognised in equity.
decision-making power over the main activities of the entity and
Gains and losses arising from the disposal of interests are also
can use this power to affect the amount of the variable returns to
recognised in equity, provided there is no change in control.
which it is exposed as a result of the equity investment. Subsidi-
Associates and joint ventures that are of material impor-
aries acquired in the course of the financial year are consolidated
tance to the presentation of the financial position and financial
from the date on which control is obtained. Companies sold in the
performance of the KION Group are accounted for using the
course of the financial year are deconsolidated from the date on
equity method.
which control is lost.
Associates are equity investments whose financial and oper-
ating policies may be significantly influenced, either directly or
indirectly, by companies in the KION Group. Significant influence
is assumed when companies in the KION Group hold between
20 per cent and 50 per cent of the voting rights.
Joint ventures are equity investments that are jointly man-
aged by companies in the KION Group together with one or more
partners, and these parties have rights to the net assets of the
joint venture.
Equity investments over which KION Group companies are
unable to exercise control or a significant influence, or that are not
jointly controlled by them, are classified as financial investments.
The number of equity investments broken down by category
is shown in > TABLE 043.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
145
Shareholdings by categories
TABLE 043
Consolidated subsidiaries
Domestic
Foreign
Equity-accounted associates and joint ventures
Domestic
Foreign
Non-consolidated subsidiaries and
other investments
Domestic
Foreign
01/01/2019
Additions
Disposals
31/12/2019
134
26
108
9
5
4
58
15
43
4
1
3
–
–
–
3
–
3
5
1
4
–
–
–
8
1
7
133
26
107
9
5
4
53
14
39
A total of 26 (2018: 26) German and 107 (2018: 108) foreign
In 2019, 53 (2018: 58) companies of minor importance were
subsidiaries were fully consolidated in addition to KION GROUP AG
recognised at amortised cost or at fair value through other com-
as at 31 December 2019.
prehensive income. The non-consolidated subsidiaries and other
In addition, seven associates and two joint ventures were
equity investments (joint ventures and associates that are not
consolidated and accounted for using the equity method as
accounted for using the equity method, plus financial invest-
at 31 December 2019, which was the same number as at
ments) are of minor importance to the presentation of the financial
31 December 2018. In each case, the last available annual finan-
position and financial performance of the KION Group, both
cial statements were used as the basis for measurement.
individually and as a whole.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
146
Where other requirements are met, the fully consolidated compa-
For 2019, the UK subsidiaries listed in > TABLE 045 exercised
nies listed in > TABLE 044 are exempt from the obligation to dis-
the exemption in section 479A of the UK Companies Act 2006,
close annual financial statements and to prepare notes to the
which releases them from the obligation to have their separate
financial statements and management reports in accordance
financial statements audited. These subsidiaries are all held
with sections 264 (3) and 264b of the German Commercial Code
indirectly by KION GROUP AG.
(HGB) on account of their inclusion in the consolidated financial
A detailed overview of all the direct and indirect sharehold-
statements. In the case of STILL Financial Services GmbH, it
ings of KION GROUP AG is shown in the list of shareholdings
has been decided solely not to disclose the annual financial
(see note [48]).
statements.
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
Linde Material Handling Rental Services 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 044
Head office
Stuhr
Dinklage
Frankfurt am Main
Geisa
Frankfurt am Main
Frankfurt am Main
Reutlingen
Haan
Aschaffenburg
Aschaffenburg
Aschaffenburg
Aschaffenburg
Wörth an der Isar
Essen
Hamburg
Hamburg
Unterschleißheim
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
UK subsidiaries exempt from local audit
Subsidiary
Linde Holdings 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.
147
TABLE 045
Head office
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Exeter
Basingstoke
[5] CURRENCY TRANSLATION
The financial statements of foreign equity-accounted invest-
ments are also translated using the method described above.
Transactions of the consolidated entities in foreign currencies
are translated into the relevant company’s functional currency at
Financial statements in foreign currencies are translated in
the rate prevailing on the transaction date. On the reporting date,
accordance with the functional currency concept. The functional
monetary items are translated at the closing rate and non-mone-
currency is the currency of the primary economic environment in
tary items at the rate prevailing on the transaction date. Currency
which a KION Group entity operates. The modified closing-rate
translation differences are taken to income and recognised in
method is used for currency translation.
other income/expenses or in financial income/expenses.
The assets and liabilities of foreign subsidiaries, including
The translation rates used for currencies that are material to
goodwill, are translated at the middle spot exchange rate, i.e. at
the financial statements are listed in > TABLE 046.
the average of the bid or offer rates on the reporting date. Income
and expenses are translated at the average rate. With the excep-
tion of income and expenses recognised as other comprehensive
income, equity is recognised at historical rates. The resulting
translation differences are not taken to income and are recog-
nised in accumulated other comprehensive income until sub-
sidiaries are disposed of.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
Major foreign currency rates in €
Australia (AUD)
Brazil (BRL)
China (CNY)
United Kingdom (GBP)
USA (USD)
Source: Bloomberg
Average rate
Closing rate
2019
1.6103
4.4154
7.7338
0.8772
1.1194
2018
1.5801
4.3073
7.8066
0.8848
1.1809
2019
1.5971
4.5124
7.8149
0.8459
1.1213
148
TABLE 046
2018
1.6268
4.4465
7.8669
0.8990
1.1467
[6] ACCOUNTING POLICIES
Assumptions and estimates
The impact of a change to an estimate is recognised prospec-
tively when it becomes known and assumptions are adjusted
accordingly.
Revenue recognition
The preparation of the IFRS consolidated financial statements
requires the use of assumptions and estimates for certain line
Revenue is the fair value of the consideration received for the sale
items that affect recognition and measurement in the consoli-
of goods and services and rental and lease income (excluding
dated statement of financial position and consolidated income
VAT) after deduction of trade discounts and rebates. In addition to
statement. The actual amounts realised may differ from esti-
the contractually agreed consideration, the transaction price may
mates. Assumptions and estimates are applied in particular:
also include variable elements such as rebates, volume dis-
– in assessing the need for and the amount of impairment
losses on intangible assets, property, plant and equipment,
and inventories
lease terms
– 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 obliga-
– 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
tions and other provisions
revenue is recognised over a period of time.
counts, trade discounts, bonuses and penalties. Revenue is rec-
ognised when control over the goods or services passes to the
customer. The point in time when the risks and rewards incidental
to ownership of the goods sold are substantially transferred to the
customer is determined by the underlying contract and the deliv-
ery terms specified therein or by international trade rules. Pay-
ment terms vary in accordance with the customary conditions in
the respective countries. Other criteria may arise, depending on
each individual transaction, as described below:
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
149
Sale of goods
ual value obligation as deferred income and subsequently recog-
nise the revenue in instalments over the term of the lease. If risks
Revenue from the sale of goods is recognised at the point in time
and rewards relating to the industrial truck are substantially trans-
when the KION Group delivers goods to a customer, the risks and
ferred to the vendor partner, entities in the KION Group immedi-
rewards incidental to the ownership of the goods sold are sub-
ately recognise the portion of the consideration received that
stantially transferred to the customer and the flow of benefits to
exceeds the residual value obligation as revenue.
the Group is considered to be sufficiently probable. If a customer
is expected to accept goods but has yet to do so, the corre-
Project business contracts
sponding revenue is only recognised when the goods are
accepted. Shipping services are not usually treated as separate
Revenue from the project business is recognised over time
performance obligations. In addition to the contractually agreed
according to the stage of completion (percentage-of-completion
consideration, the transaction price for key-account customers
method). The percentage of completion is the proportion of con-
may also include variable elements such as rebates, volume
tract costs incurred up to the reporting date compared to the total
discounts, trade discounts, bonuses and penalties. The revenue
estimated contract costs as at the reporting date (cost-to-cost
from these sales is recognised in the amount of the price speci-
method) and reflects the continual transfer of control over the pro-
fied in the contract less the estimated price reductions.
ject to the customer. If it is probable that the total contract costs
Rendering of services
will exceed the contract revenue, the expected loss is immedi-
ately recognised as an expense in the financial year in which the
loss becomes apparent. If the contract costs incurred plus the
Revenue from the rendering of services is recognised on a
profit and loss recognised exceed the progress billings, the
straight-line basis over the period of performance or in accord-
excess is recognised as a contract asset. If the progress billings
ance with the proportion of the overall service rendered by the
exceed the capitalised costs plus the recognised profit and loss,
reporting date. By contrast, revenue from long-term service
the excess is recognised as a liability under contract liabilities.
agreements is recognised on the basis of the average term of
If the outcome of a project business contract cannot be reli-
the service agreements and in line with progressive costs
ably estimated, the likely achievable revenue is recognised only
(constant margin).
Leases / short-term rentals
up to the amount of the costs incurred. Contract costs are recog-
nised as an expense in the period in which they are incurred. Var-
iations in the contract work, claims and incentive payments are
factored into the project costing if they are likely to result in reve-
Revenue from direct lease business is recognised in the amount
nue and the amount of revenue can be reliably estimated. If the
of the sale value of the leased asset if classified as a finance lease
calculated percentage of completion as at the reporting date
and in the amount of the lease payments if classified as an oper-
changes as a result, the difference between the revenue already
ating lease. If industrial trucks are first sold to and then immedi-
recognised up to that point and the revenue calculated on the
ately leased back from a financing partner in order to finance
basis of the new estimate of the percentage of completion is rec-
leases, no selling margin in connection with the financing is rec-
ognised in profit or loss.
ognised as the financing partner usually does not obtain control
Project business contracts are accounted for using the per-
over the industrial truck.
centage-of-completion method based on management esti-
In the indirect lease business, industrial trucks are sold to
mates of the contract costs incurred. If estimates change, or if
vendor partners that enter into long-term leases with end cus-
there are differences between planned and actual costs, this is
tomers. As the vendor partner usually does not obtain control
directly reflected in the profit or loss from project business con-
over the industrial truck, entities in the KION Group initially treat
tracts. The Operating Units continually review the cost estimates
the portion of the consideration received that exceeds the resid-
and adjust them as appropriate.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
150
Cost of sales
Goodwill
The cost of sales comprises the cost of goods and services sold
Goodwill has an indefinite useful life and is therefore not amor-
and includes directly attributable material and labour costs as
tised. Instead, it is tested for impairment in accordance with
well as directly attributable overheads. Cost of sales also includes
IAS 36 at least once a year, and more frequently if there are indi-
additions to warranty provisions, which are recognised in the
cations that the asset might be impaired.
amount of the estimated cost at the date on which the related
Goodwill is tested for impairment annually at the level of the
product is sold.
Financial income and expenses
cash-generating units (CGUs) to which goodwill is allocated.
The cash-generating units identified for the purposes of test-
ing goodwill and brand names for impairment equate to the LMH
EMEA, STILL EMEA, KION APAC and KION Americas Operating
Units in the Industrial Trucks & Services segment and to the
Financial income and expenses mainly consist of interest expense
Dematic Operating Unit in the Supply Chain Solutions segment.
on financial liabilities, interest income from financial receivables,
The recoverable amount of a CGU is determined by calculat-
interest income and interest expense from leases, interest income
ing its value in use on the basis of the discounted cash flow
and interest expense from financial services, interest expense
method. The cash flows forecast for the next five years are
from procurement leases, foreign currency exchange rate gains
included in the calculation for the impairment test. The financial
and losses on financing activities and the net interest cost of the
forecasts are based on assumptions relating to the development
defined benefit obligation. Interest income and expenses are
of the global economy, commodity prices and exchange rates.
recognised in profit and loss in accordance with the effective
Cash flows beyond the five-year planning horizon were extrapo-
interest method.
lated for the LMH EMEA, STILL EMEA, KION APAC and KION
Americas CGUs using a growth rate of 1.0 per cent (2018:
0.8 per cent). The growth rate used for Dematic was 1.3 per cent
(2018: 1.3 per cent).
CGU cash flows are discounted using a weighted average
cost of capital (WACC) that reflects current market assessments
of the specific risks to individual CGUs.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
151
> TABLE 047 shows the significant parameters for impairment
carrying amount of items classified as other intangible assets with
testing broken down by Operating Unit. Any material changes
a finite useful life. The carrying amount of an asset is compared
to these and other factors might result in the recognition of
with its recoverable amount. If the reasons for recognising impair-
impairment losses. Further information on goodwill can be
ment losses in prior periods no longer apply, the relevant impair-
found in note [16].
ment losses are reversed, but subject to a limit such that the car-
The impairment test carried out in the fourth quarter of 2019
rying amount of the asset is no higher than its amortised cost.
did not reveal any need to recognise impairment losses for the
Development costs are capitalised if the capitalisation criteria
goodwill allocated to the LMH EMEA, STILL EMEA, KION APAC,
in IAS 38 are met. Capitalised development costs include all costs
KION Americas and Dematic CGUs. Using sensitivity analysis, it
and overheads directly attributable to the development process.
was determined that no impairment losses need to be recognised
Once they have been initially capitalised, these costs and other
for goodwill, even if key assumptions vary within realistic limits, in
internally generated intangible assets – particularly internally gen-
particular variations in WACC of plus or minus 100 basis points.
erated software – are carried at cost less accumulated amortisa-
Other intangible assets
tion and accumulated impairment losses. All non-qualifying
development costs are expensed as incurred and reported in the
consolidated income statement under research and development
costs together with research costs.
Other purchased intangible assets with a finite useful life are car-
Amortisation of intangible assets with a finite useful life is rec-
ried at historical cost less all accumulated amortisation and
ognised on a straight-line basis and predominantly reported
impairment losses. If events or market developments suggest
under cost of sales. The impairment losses on intangible assets
impairment has occurred, impairment tests are carried out on the
are reported under other expenses.
Significant parameters for impairment testing
TABLE 047
in %
Industrial Trucks & Services
LMH EMEA
STILL EMEA
KION Americas
KION APAC
Supply Chain Solutions
Dematic
Long-term growth rate
WACC after tax
2019
1.0%
1.0%
1.0%
1.0%
1.3%
2018
0.8%
0.8%
0.8%
0.8%
1.3%
2019
7.5%
7.6%
8.3%
7.9%
8.3%
2018
7.3%
7.4%
8.2%
7.7%
8.6%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
152
The useful lives shown in > TABLE 048 are applied in determining
als are classified as operating leases, again in accordance with
the carrying amounts of other intangible assets.
IFRS 16, and recognised as leased assets or rental assets.
Other intangible assets with an indefinite useful life are car-
If an entity in the Industrial Trucks & Services segment enters
ried at cost and currently comprise only brand names. Brand
into a finance lease as the lessor, the future lease payments to be
names are not amortised because they have been established in
made by the customer are recognised as lease receivables at an
the market for a number of years and there is no foreseeable end
amount equal to the net investment in the lease. These are meas-
to their useful life. In accordance with IAS 36, they are tested for
ured using the simplified impairment approach in accordance
impairment at least once a year, and more frequently if there are
with IFRS 9. Interest income is spread over the term of the lease
indications that the asset might be impaired.
in order to ensure a constant return on the outstanding net invest-
The impairment test applies an income-oriented method in
ment in the lease.
which fundamentally the same assumptions are used as in the
The classification of leases requires estimates to be made
impairment test for goodwill. Assessments of indefinite useful life
regarding the transferred and retained risks and rewards in con-
are carried out in every period.
nection with ownership of the industrial truck. When defining the
Leases / short-term rentals
lease term, management also takes into consideration all facts
and circumstances that offer an economic incentive to exercise
extension options or to not exercise cancellation options. Further
information on leases can be found in notes [17] Leased assets,
KION Group entities in the Industrial Trucks & Services segment
[18] Rental assets and [19] Other property, plant and equipment.
conduct lease and short-term rental business in which they lease
or rent industrial trucks and related items of equipment to their
Leases
customers in order to promote sales.
Entities in the KION Group enter into leases as lessors and as
If the beneficial ownership of leased assets remains with a
lessees. Where they act as lessors, the leases are classified as
KION Group entity as the lessor under an operating lease, the
finance leases, in accordance with IFRS 16, if substantially all of
assets are reported as leased assets in the statement of financial
the risks and rewards incidental to ownership of the leased asset
position. The leased assets are carried at cost and depreciated
are transferred to the lessee. All other leases and short-term rent-
on a straight-line basis over the term of the underlying leases until
Useful life of other intangible assets
Customer relationships / client base
Technology
Development costs
Patents and licences
Software
TABLE 048
Years
4 – 15
10 – 15
5 – 7
3 – 15
2 – 10
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
153
the residual value is reached. To finance leases, industrial trucks
Short-term rentals
are generally sold to leasing companies (financing partners) and
immediately leased back (head lease) before being sub-leased to
Entities in the KION Group rent industrial trucks directly to end
external end customers (described below as ‘sale and leaseback
customers under short-term rental agreements. Short-term
sub-leases’).
rental agreements usually have a term ranging from a few
The following applies to leases entered into from 1 January 2018
hours to a year.
onwards: The financing partner usually does not obtain control
The following applies to short-term rental agreements entered
over the industrial truck and it is recognised as a leased asset in
into from 1 January 2018 onwards: The financing partner usually
the statement of financial position or, if the risks and rewards have
does not obtain control over the industrial truck and it is recog-
been transferred to the end customer, as a lease receivable. The
nised as a rental asset in the statement of financial position. It is
industrial truck recognised as a leased asset is carried at cost,
carried at cost and usually depreciated on a straight-line basis
while the lease receivable is recognised at an amount equal to
over the normal useful life of between five and eight years,
the net investment in the lease. In both cases, the liabilities for
depending on the product group. The liabilities for financing this
financing are recognised under liabilities from financial services.
part of the short-term rental fleet are reported under liabilities
In accordance with the transitional provisions of IFRS 16, the
from financial services.
sale and leaseback sub-lease portfolio in existence as at 31 Decem-
In accordance with the transitional provisions of IFRS 16,
ber 2017 was not reassessed with regard to the transfer of control
the sale and leaseback sub-lease portfolio in existence as at
to the financing partner in the head lease. In sale and leaseback
31 December 2017 was not reassessed with regard to the trans-
sub-leases, risks and rewards incidental to the head lease are, in
fer of control to the financing partner in the head lease. In the case
general, substantially borne by entities in the KION Group. The
of sale and leaseback sub-lease transactions, risks and rewards
corresponding assets are therefore reported as leased assets
incidental to the head lease are usually substantially borne by
within non-current assets and measured at amortised cost.
entities in the KION Group, so the industrial trucks are reported as
However, if risks and rewards incidental to the head lease are
rental assets and measured at amortised cost. The liabilities for
substantially transferred to the end customer in the sub-lease, a
financing this part of the short-term rental fleet are reported under
corresponding lease receivable is recognised. In both cases, the
other financial liabilities.
funding items for these long-term customer leases, which are
funded for terms that match those of the leases, are recognised
as lease liabilities.
Other property, plant and equipment
In the indirect lease business, industrial trucks are sold to
leasing companies that enter into long-term leases with end cus-
Property, plant and equipment is carried at cost less depreciation
tomers (vendor partners). As the vendor partner usually does not
and impairment losses. The cost of internally generated machin-
obtain control over the industrial truck, it is recognised as a leased
ery and equipment includes all costs directly attributable to the
asset in the statement of financial position of the KION Group
production process and an appropriate portion of production
entities and carried at cost. If the KION Group provides a residual
overheads.
value guarantee, an amount equivalent to the residual value
Depreciation of property, plant and equipment is recognised
obligation is recognised under liabilities from financial services.
on a straight-line basis and reported under functional costs. The
useful lives and depreciation methods are reviewed annually and
adjusted to reflect changes in conditions.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
154
The ranges of useful life below are applied in determining the car-
At the end of the lease term, the leased assets are returned
rying amounts of items of property, plant and equipment.
or purchased, or the contract is extended; the latter is accounted
> TABLE 049
for as a modification or remeasurement.
If there are certain indications of impairment of the property,
KION Group companies also lease property, plant and equip-
plant and equipment, the assets are tested for impairment by
ment for their own use through leases, which are recognised as
comparing the residual carrying amount of the assets with their
right-of-use assets under other property, plant and equipment.
recoverable amount. If the residual carrying amount is greater
As a rule, the leases are entered into for defined periods, although
than the recoverable amount, an impairment loss is recognised
they may contain extension and / or termination options.
for an asset. The impairment losses on property, plant and equip-
The right-of-use assets are depreciated over the shorter of
ment are reported under other expenses.
their useful life or the term of the lease, unless title to the leased
If an impairment test for an item of property, plant and equip-
assets passes to the lessee when the lease expires, in which case
ment is performed at the level of a cash-generating unit to which
the right-of-use asset is depreciated over the useful life of the
goodwill is allocated and results in the recognition of an impair-
leased asset.
ment loss, first the goodwill and, subsequently, the assets must
When liabilities from procurement leases are initially meas-
be written down in proportion to their relative carrying amounts. If
ured, the lease payments not yet made are discounted at an inter-
the reason for an impairment loss recognised in prior years no
est rate implicit in the lease. If this cannot be readily defined, a
longer applies, the relevant pro-rata impairment losses are
term-specific and currency-specific incremental borrowing rate of
reversed, but subject to a limit such that the carrying amount of
interest is essentially determined and used for the calculation.
the asset is no higher than its amortised cost. This does not apply
Lease instalments for procurement leases with a term of no
to goodwill.
more than twelve months and for procurement leases relating to
low-value assets are immediately recognised as an expense
under functional costs.
Useful life of other property, plant and equipment
Buildings
Plant and machinery
Office furniture and equipment
TABLE 049
Years
10 – 50
3 – 15
2 – 15
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
155
Equity-accounted investments
Financial assets
In accordance with the equity method, associates and joint ven-
In accordance with IFRS 9, the KION Group categorises financial
tures are measured as the proportion of the interest in the equity
assets as debt instruments measured at amortised cost (AC cat-
of the investee. They are initially carried at cost. Subsequently, the
egory), debt instruments recognised at fair value through profit or
carrying amount of the equity investment is adjusted in line with
loss (FVPL category) or equity instruments recognised at fair
any changes to the KION Group’s interest in the net assets of the
value through other comprehensive income (FVOCI category).
investee. The KION Group’s interest in the profit or loss generated
Debt instruments are measured at amortised cost if they are held as
after acquisition is recognised in income. Other changes in the
part of a business model whose objective is to collect the contractual
equity of associates and joint ventures are recognised in other
cash flows, and these cash flows consist solely of payments of
comprehensive income in the consolidated financial statements
principal and interest on the principal amount outstanding.
in proportion to the Group’s interest in the associate or joint venture.
Cash and cash equivalents, financial receivables, sundry
If the Group’s interest in the losses made by an associate or
financial assets and the majority of trade receivables are assigned
joint venture exceeds the carrying amount of the proportionate
to the AC category. Derivative financial instruments with a positive
equity attributable to the Group, no additional losses are recog-
fair value that are not part of a formally documented hedge,
nised. Any goodwill arising from the acquisition of an associate or
certain trade receivables and other financial investments are
joint venture is included in the carrying amount of the investment
assigned to the FVPL category. Financial investments are
in the associate or joint venture.
assigned to the FVOCI category.
If there is evidence that an associate or joint venture may be
Upon initial recognition, financial assets in the AC category
impaired, the carrying amount of the equity investment in ques-
are carried at fair value including directly attributable transaction
tion is tested for impairment. The carrying amount of the asset
costs. In subsequent periods they are measured at amortised
is compared with its recoverable amount. If the carrying amount
cost using the effective interest method. Low-interest or non-
is greater than the recoverable amount, an impairment loss is
interest-bearing receivables due in more than one year are carried
recognised for the equity investment.
at their present value.
Financial instruments
In line with the impairment approach for debt instruments in
the AC category, both upon initial recognition and subsequently
the KION Group recognises expected credit losses in profit or
loss by recognising valuation allowances. These valuation allow-
Recognition of financial instruments at fair value
ances amount to the twelve-month expected losses, provided no
significant increase in credit risk (for example as a result of mate-
In accordance with IFRS 9, certain financial instruments are rec-
rial changes to external or internal credit ratings) is observable at
ognised at fair value. Fair value is determined regularly using suit-
the reporting date. Otherwise, lifetime expected losses are recog-
able valuation methods, where possible on the basis of observa-
nised. The expected losses are calculated using the probability of
ble inputs. If no observable inputs are available, unobservable
default, the exposure at default and, taking into account any col-
inputs are used.
lateral, the estimated loss given default. The calculation draws on
observable historical loss data, information on current conditions
and the economic outlook. A default is defined as the occurrence
of a loss event, such as a borrower being in considerable financial
difficulties or a contract being breached. Financial assets are
impaired if there are no reasonable prospects of recovering the
underlying cash flows in full or partly. The recoverability is
assessed on the basis of different indicators (for example, the
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
156
opening of insolvency proceedings over the borrower’s assets)
Financial liabilities
that take the relevant country-specific factors into account. The
reversal of an impairment loss must not result in a carrying
In accordance with IFRS 9, the KION Group differentiates
amount greater than the amortised cost that would have arisen if
between financial liabilities that are not held for trading and are
the impairment loss had not been recognised.
thus recognised at amortised cost using the effective interest
Upon measurement of trade receivables subsequent to initial
method (AC category) and financial liabilities that are held for
recognition, the KION Group applies the simplified impairment
trading and recognised at fair value through profit or loss
approach of IFRS 9 and thus recognises lifetime losses. To deter-
(FVPL category).
mine the lifetime losses, for purposes of the valuation allowance
Financial liabilities, liabilities from financial services, trade
average loss rates are calculated on a collective basis in accord-
payables and other financial liabilities (except derivative financial
ance with the past due status of the receivables. The loss rates
instruments with a negative fair value that are not part of a for-
are calculated on the basis of observable historical loss data, tak-
mally documented hedge) are assigned to the AC category.
ing into account current conditions and the economic outlook (for
Derivative financial instruments with a negative fair value that are
example on the basis of expected probability of default for signif-
not part of a formally documented hedge are assigned to the
icant countries). The amount of the valuation allowance recog-
FVPL category.
nised is adjusted in profit or loss if there is a change in the
Upon initial recognition, financial liabilities in the AC category
estimate for the underlying inputs and thus in the losses to be
are carried at fair value, including (where applicable) directly
recognised.
attributable transaction costs. Low-interest or non-interest-bear-
Financial assets assigned to the FVPL category are initially
ing liabilities due in more than one year are carried at their present
recognised at fair value; directly attributable transaction costs
value. Subsequently, financial liabilities are recognised at amor-
have to be taken directly to profit or loss. In subsequent periods,
tised cost using the effective interest method.
financial assets in the FVPL category are recognised at fair value
Financial liabilities assigned to the FVPL category are initially
through profit or loss.
recognised at fair value; directly attributable transaction costs
Equity instruments in the FVOCI category are recognised at
have to be taken directly to profit or loss. In subsequent periods,
fair value through other comprehensive income. Upon initial rec-
financial liabilities in the FVPL category are recognised at fair
ognition at fair value, directly attributable transaction costs are
value through profit or loss.
included. Accumulated gains and losses in other comprehensive
income are not reclassified to profit or loss upon derecognition of
these financial assets but instead remain in equity.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
157
Hedge accounting
Income taxes
Derivative financial instruments that are part of a formally docu-
In the consolidated financial statements, current and deferred
mented hedge with a hedged item are not assigned to any of the
taxes are recognised on the basis of the tax laws of the jurisdic-
IFRS 9 measurement categories and are therefore recognised in
tions involved. Deferred taxes are recognised in other compre-
accordance with the hedge accounting rules described below.
hensive income if they relate to transactions also recognised in
In the case of cash flow hedges for hedging currency risk and
other comprehensive income.
interest-rate risk, derivatives are used to hedge future cash flow
Deferred tax assets and liabilities are recognised in accord-
risks from existing hedged items, planned transactions and firm
ance with the liability method for all temporary differences
obligations not reported in the statement of financial position. The
between the IFRS carrying amounts and the tax base, as well as
effective portion of changes in the fair value of derivatives is ini-
for temporary consolidation measures.
tially recognised in equity in the hedge reserve (other comprehen-
Deferred tax assets also include tax refund claims that arise
sive income). The amounts previously recognised in the hedge
from the expected utilisation of existing tax loss carryforwards
reserve are subsequently reclassified to the income statement
and interest carryforwards in subsequent years and whose utili-
when the gain or loss on the corresponding hedged item is rec-
sation is reasonably certain according to current forecasts. On
ognised. The ineffective portion of the changes in fair value is rec-
the basis of this estimate, deferred tax assets have been recog-
ognised immediately in the income statement.
nised on some loss carryforwards and interest carryforwards.
In addition, the KION Group uses an interest-rate swap to
Deferred taxes are determined on the basis of the tax rates
hedge the fair value of a fixed-rate financial liability. The effective
that will apply at the recovery date, or have been announced, in
portion of changes in the fair value of the interest-rate swap is
accordance with the current legal situation in each country con-
recognised in financial income/expenses. These are offset by
cerned. Deferred tax assets are offset against deferred tax liabili-
gains and losses on the change in the fair value of the hedged
ties to the extent that they have the same maturity and relate to
financial liability, which result in an adjustment in profit or loss
the same taxation authority.
of the carrying amount of the hedged item. The ineffective portion
Significant estimates are involved in calculating income
of the hedge is also recognised immediately in net financial
taxes. These estimates may change on the basis of new informa-
income / expenses.
tion and experience (see also note [14]). Deferred tax assets on
The critical-terms-match method is used to measure the pro-
tax loss carryforwards and interest carryforwards are recognised
spective effectiveness of the hedges. Ineffective portions can
on the basis of an estimate of the future recoverability of the tax
arise if the critical terms of the hedged item and hedge no longer
benefit, i.e. an assumption as to whether sufficient taxable income
match; this is determined using the dollar-offset method.
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 to the estimates made
when the corresponding deferred tax assets were recognised.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
158
Inventories
Retirement benefit obligation
Inventories are carried at the lower of cost and net realisable
The retirement benefit obligation is calculated in accordance with
value. The acquisition costs of raw materials and merchandise
the projected unit credit method, taking account of future
are calculated on the basis of an average. The cost of finished
increases in remuneration and pensions. Pension provisions are
goods and work in progress includes direct costs and an appro-
reduced by the fair value of the plan assets used to cover the
priate portion of the material and production overheads and
Group’s benefit obligations.
production-related depreciation directly attributable to the pro-
Remeasurements, including deferred taxes, are recognised in
duction process. Administrative costs and social insurance /
other comprehensive income. The service cost and the net interest
employee benefits are included to the extent that they are attrib-
cost of defined benefit plans are recognised in profit or loss.
utable to the production process. The amount recognised is an
Defined benefit pension entitlements are calculated on the
average value or a value determined in accordance with the FIFO
basis of actuarial parameters, although the fair value for certain
method (FIFO = first in first out).
plan assets is derived from inputs that are not observable in the
Net realisable value is the selling price that can be realised
market. As differences due to remeasurements are taken to other
less the estimated costs of completion and the estimated distri-
comprehensive income, any change in these assumptions would
bution costs necessary to make the sale.
not affect the net profit for the current period. Further information
Write-downs are recognised for inventory risks resulting from
on sensitivity analysis in relation to the impact of the discount rate
duration of storage, impaired recoverability or other reasons. If
and details of measurement can be found in the information on
the reasons for the recognition of the write-downs no longer
the retirement benefit obligation in note [28].
apply, they are reversed, but subject to a limit such that the
carrying amount of the asset is no higher than its cost.
Contract balances
Liabilities from financial services
Liabilities from financial services comprise all liabilities from
financing the lease business and financing the short-term rental
Contract assets mainly relate to work performed in the project
fleet on the basis of sale and leaseback sub-leases from 1 Janu-
business that has not yet been billed. Contract assets are meas-
ary 2018 onwards, as well as all liabilities that arise from financing
ured using the simplified impairment approach in accordance
the direct lease business by means of lease facilities and the use
with IFRS 9. The average loss rates calculated for trade receiva-
of securitisations. Furthermore, liabilities from financial services
bles are used as an approximation of the expected losses from
arising from the lease business include residual value obligations
contract assets.
resulting from the indirect lease business.
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 lia-
bilities, as are advances received from customers. Further infor-
mation on contract balances can be found in note [33].
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
159
Other provisions
The recognition and measurement of other provisions are
based on an estimate of the probability of the future outflow of
Other provisions are recognised when the Group has a legal or
resources, supplemented by past experience and the circum-
constructive obligation to a third party as the result of a past event
stances known to the Group at the reporting date. Accordingly,
that is likely to lead to a future outflow of resources and that can
the actual outflow of resources for a given event may be different
be reliably estimated. Where there is a range of possible out-
to the amount recognised in other provisions. Further details can
comes and each individual point within the range has an equal
be found in note [32].
probability of occurring, the provision is recognised in the amount
of the mean of the individual points. Measurement is at full
cost. Provisions for identifiable risks and uncertain liabilities are
Share-based payments
recognised in the amount that represents the best estimate of the
cost required to settle the obligations. Recourse claims are not
IFRS 2 distinguishes between equity-settled and cash-settled
taken into account. The settlement amount also includes cost
share-based payment transactions.
increases identifiable as at the reporting date. Provisions with a
Equity-settled share-based payment transactions are recog-
maturity of more than twelve months are discounted using the
nised at their fair value at the date of grant. The fair value of the
standard market interest rate. The discount rate is a before-tax
obligation is recognised as an expense under functional costs
interest rate that reflects current market expectations for the time
over the vesting period and offset against capital reserves.
value of money and the specific risks inherent in the liability. The
The portion of the fair value of cash-settled share-based pay-
interest cost from unwinding the discount is recognised in
ments that is attributable to service provided up to the valuation
interest expenses.
date is recognised as an expense under functional costs and is
Warranty provisions are recognised on the basis of past or
also reported as a liability. The fair value is recalculated on each
estimated future claim statistics. The corresponding expense is
reporting date until the end of the performance period. Any
recognised in cost of sales at the date on which the revenue is
change in the fair value of the obligation must be recognised
recognised. Individual provisions are recognised for claims that
(pro rata) under expenses.
are known to the Group.
Provisions for onerous contracts and other business obliga-
tions are measured on the basis of the contractual obligations
that are currently still to be fulfilled.
A restructuring provision is recognised when a KION Group
entity has prepared a detailed, formal restructuring plan and this
plan has raised the valid expectation in those affected that the
entity will carry out the restructuring by starting to implement that
plan or announcing its main features to those affected by it. The
measurement of a restructuring provision only includes the direct
expenditures arising from the restructuring and not associated
with the ongoing activities of the entity concerned.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
160
Notes to the consolidated income statement
[7] REVENUE
> TABLE 050 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 050
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 lease business
(in both cases where classified as finance lease)
Aftersales
Supply of spare parts
Individual orders for repairs and maintenance work
(Full) service contracts
Rental business
Direct long-term rental business and indirect lease business
(in both cases where classified as operating lease)
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
Supply of spare parts
Various business models, currently categorised as not material to
the financial performance of the KION Group in the SCS segment
Corporate Services
Services
Over a period of time
Over a period of time
At a point in time
Mainly over a
period of time
Mainly at a point
in time
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
161
> TABLES 051 – 052 show revenue from contracts with customers,
broken down by sales region, product category, timing of revenue
recognition and segment.
Disaggregation of revenue with third parties
TABLE 051
2019
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
4,652.9
641.2
76.5
157.2
203.5
672.4
6,403.7
3,345.6
3,058.2
1,600.9
926.2
361.1
169.9
559.4
32.7
17.2
1,523.3
9.0
234.4
2,376.1
1,780.2
595.9
6,403.7
2,376.1
22.0
4.6
0.1
–
–
0.0
26.7
26.7
26.7
20.8
5.9
Total
5,234.3
678.6
93.8
1,680.5
212.5
906.9
8,806.5
3,345.6
3,058.2
1,600.9
926.2
361.1
169.9
1,780.2
595.9
26.7
8,806.5
5,234.6
3,571.9
Timing of revenue recognition
Products and services transferred at a point in time
Products and services transferred over a period of time
4,951.6
1,452.1
262.2
2,113.9
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
162
Disaggregation of revenue with third parties
TABLE 052
2018
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
4,287.5
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
–
–
0.6
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 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
163
> TABLE 053 shows the revenue that is expected as a result of per-
The total cost of materials recognised in the consolidated
formance obligations in existence at the reporting date. This con-
income statement went up by €360.2 million to €4,051.6 million in
sists only of revenue from contracts with customers as defined by
2019 (2018: €3,691.4 million).
IFRS 15. In the Supply Chain Solutions segment, this revenue is
The total personnel expenses recognised increased by
generated by the project and service business. In the Industrial
€192.6 million to €2,292.8 million (2018: €2,100.2 million). These
Trucks & Services segment, it is generated through aftersales
personnel expenses included wages and salaries of €1,820.6 mil-
(full-)service contracts with an expected original term of more
lion (2018: €1,653.4 million), social security contributions of
than one year.
[8] COST OF SALES AND OTHER
FUNCTIONAL COSTS
€398.7 million (2018: €364.2 million) and expenses for pensions
of €73.5 million (2018: €82.6 million). The interest cost from the
unwinding of the discount on estimated pension obligations is not
recognised under personnel expenses and is instead reported
under financial expenses as a component of interest cost of the
defined benefit obligation. Pension expenses essentially com-
prised the pension entitlements of €41.5 million vested in 2019
(2018: €41.4 million) and unrecognised past service income of
The cost of sales amounted to €6,474.6 million in the reporting
€1.3 million (2018: cost of €1.4 million) arising from plan amend-
year (2018: €5,898.1 million). The main components of the cost of
ments and curtailments.
sales are the cost of inventories recognised in profit or loss (cost
Impairment losses and depreciation expenses on property,
of materials), production-related personnel expenses, deprecia-
plant and equipment together with impairment losses and
tion expenses on property, plant and equipment, amortisation
amortisation expenses on intangible assets came to a total of
expenses on intangible assets in connection with purchase price
€898.0 million in the reporting year (2018: €897.9 million).
allocations, and amortisation expenses on capitalised develop-
Research and development costs totalling €155.3 million
ment costs.
(2018: €137.7 million) were expensed.
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 more than three years
TABLE 053
2018
2,728.9
1,837.9
506.8
179.6
204.6
2019
3,238.1
2,003.4
631.8
235.1
367.7
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
164
[9] OTHER INCOME
[10] OTHER EXPENSES
The breakdown of other income is as follows: > TABLE 054
The breakdown of other expenses is as follows: > TABLE 055
In 2019, other income fell by €17.0 million year on year.
In 2019, other expenses fell by €8.8 million year on year.
The decrease was predominantly attributable to the reduc-
The decrease was predominantly attributable to the reduc-
tion in foreign currency exchange rate gains. These gains are
tion in foreign currency exchange rate losses. These losses are
attributable to exchange rate gains arising in the course of the
attributable to exchange rate losses arising in the course of the
Group companies’ operating activities and to gains on hedges
Group companies’ operating activities and to losses on hedges
that were entered into in order to hedge currency risk arising
that were entered into in order to hedge currency risk arising
from the operating business and are not part of a formally
from the operating business and are not part of a formally
documented hedge (details of the countervailing losses can be
documented hedge (details of the countervailing gains can be
found in note [10]).
found in note [9]).
Sundry income included, among other items, income from
non-consolidated subsidiaries and other equity investments
amounting to €2.0 million (2018: €2.3 million).
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
TABLE 054
2018
44.2
2.4
2.3
1.2
36.4
86.5
2019
32.1
1.9
6.0
0.8
28.6
69.5
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
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
165
TABLE 055
2018
50.0
1.1
6.4
5.7
63.3
2019
37.9
2.4
6.9
7.4
54.5
[11] SHARE OF PROFIT (LOSS) OF
EQUITY-ACCOUNTED INVEST-
MENTS
In 2019, financial income rose by €5.6 million year on year.
The increase mainly resulted from higher interest income
from leases (details of the countervailing interest expenses can be
found in note [13]). The interest income from leases relates to the
interest portion of lease payments in financial services transac-
tions in which KION Group entities operate as lessors (in the case
The share of profit (loss) of equity-accounted investments in the
of leases classified as finance leases).
reporting year amounted to a profit of €12.1 million (2018:
Foreign currency exchange rate gains predominantly arise in
€12.2 million). Further details on equity-accounted investments
connection with foreign currency positions in internal financing
can be found in note [20].
and the related hedging transactions that are not part of a for-
mally documented hedge.
[12] FINANCIAL INCOME
Financial income breaks down as shown in > TABLE 056.
Financial income
in € million
Interest income from leases
Foreign currency exchange rate gains (financing)
Other interest and similar income
Total financial income
TABLE 056
2018
43.8
48.9
7.1
99.9
2019
51.9
47.9
5.7
105.5
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
166
[13] FINANCIAL EXPENSES
[14] INCOME TAXES
Financial expenses break down as follows: > TABLE 057
The income tax expense of €176.8 million (2018: €143.7 million)
consisted of €212.8 million in current tax expense (2018:
In 2019, financial expenses rose by €3.3 million year on year.
€166.5 million) and €36.0 million in deferred tax income (2018:
Interest expense from loans decreased due to the corporate
€22.9 million).
actions carried out in 2019 and 2018, whereas the interest
The current corporate income tax rate in Germany is
expense from promissory notes increased.
15.0 per cent plus a solidarity surcharge (5.5 per cent of corpo-
Interest expense from leases, which totalled €57.4 million
rate income tax). Taking into account the average trade tax rate of
(2018: €51.3 million), was attributable both to liabilities from
14.9 per cent (2018: 14.9 per cent), the combined nominal tax rate
financing the direct and indirect lease business and to liabilities
for entities in Germany was 30.7 per cent (2018: 30.8 per cent).
from financing the short-term rental fleet. Leases entered into
The income tax rates for foreign companies used in the calcula-
with customers in connection with these financing transactions
tion of deferred taxes were between 9.0 per cent and
that constitute operating leases resulted in interest expense of
34.0 per cent, as had also been the case in 2018.
€23.3 million (2018: €18.9 million). The income from correspond-
No deferred taxes have been recognised on temporary
ing customer leases is a component of the rental and lease
differences of €195.1 million (2018: €235.5 million) between the
payments received and is therefore reported within revenue
net assets reported in the consolidated financial statements for
rather than as interest income.
the Group companies and the tax base for the shares in these
Foreign currency exchange rate expenses predominantly
Group companies (outside basis differences) because the
arise in connection with foreign currency positions in internal
KION Group is in a position to manage the timing of the reversal
financing and the related hedging transactions that are not part of
of temporary differences and there are no plans to dispose of
a formally documented hedge.
equity investments in the foreseeable future.
Deferred tax assets are allocated to the following items in the
statement of financial position: > TABLE 058
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
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
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
167
TABLE 057
2018
22.9
16.3
51.3
16.9
19.4
4.5
55.2
10.7
197.3
TABLE 058
2018
137.7
141.8
238.7
609.6
186.9
21.4
– 914.4
421.7
2019
15.4
17.6
57.4
15.3
19.9
3.6
56.1
15.4
200.6
2019
200.6
179.3
309.4
653.0
138.1
10.9
– 1,041.7
449.7
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
168
Deferred tax liabilities are allocated to the following items in the
lion (2018: €7.8 million). Deferred taxes are recognised on tax loss
statement of financial position: > TABLE 059
carryforwards and interest carryforwards to the extent that suffi-
cient future taxable income is expected to be generated against
The deferred tax liabilities essentially related to purchase
which the losses can be utilised. The total amount of unrecog-
price allocations in the acquisition of the KION Group and
nised deferred tax assets relating to loss carryforwards is there-
Dematic, particularly for intangible assets and property, plant
fore €173.0 million (2018: €137.4 million), of which €140.9 million
and equipment.
(2018: €111.2 million) concerns tax losses that can be carried
The change in deferred taxes included currency effects of
forward indefinitely.
€6.1 million that were recognised in other comprehensive income
The KION Group’s corporation-tax loss carryforwards in Ger-
(loss) under cumulative translation adjustment, resulting in a
many as at 31 December 2019 amounted to €137.4 million (2018:
decrease in equity (2018: €7.0 million).
€115.2 million), while trade-tax loss carryforwards stood at
In 2019, the parent company and the consolidated subsidiar-
€117.1 million (2018: €95.9 million). There were also foreign tax
ies that reported losses for 2019 or 2018 recognised net deferred
loss carryforwards totalling €498.6 million (2018: €454.4 million).
tax assets on temporary differences and on loss carryforwards
The interest that can be carried forward indefinitely in
totalling €12.8 million (2018: €21.1 million). These assets were
Germany as at 31 December 2019 amounted to €283.9 million
considered to be unimpaired because these companies are
(2018: €283.9 million).
expected to generate taxable income in future.
The table below shows the reconciliation of expected income
No deferred tax assets have been recognised on tax loss
tax expenses to effective income tax expenses. The Group rec-
carryforwards of €714.9 million (2018: €580.7 million) – of which
onciliation is an aggregation of the individual company-specific
€128.9 million (2018: €103.1 million) can only be carried forward
reconciliations prepared in accordance with relevant local tax
on a restricted basis – or on interest carryforwards of €283.9 mil-
rates, taking into account consolidation effects recognised in
lion (2018: €283.9 million). Furthermore, no deferred tax assets
income. > TABLE 060
have been recognised on other temporary differences of €0.2 mil-
Deferred tax liabilities
in € million
Intangible assets and property, plant and equipment
Other assets
Provisions
Liabilities
Deferred income
Offsetting
Total deferred tax liabilities
TABLE 059
2018
1,071.0
326.1
19.4
110.7
13.9
– 914.4
626.7
2019
1,027.8
368.8
13.8
186.5
15.7
– 1,041.7
570.9
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
Income taxes
in € million
Earnings before tax
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
169
TABLE 060
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
2019
621.6
– 191.0
– 2.7
7.0
– 13.7
– 0.3
– 7.6
18.2
10.3
5.7
– 2.2
– 0.6
Effective income taxes (current and deferred taxes)
– 176.8
– 143.7
[15] EARNINGS PER SHARE
Diluted earnings per share (€3.86; 2018: €3.39) is calcu-
lated by adding the potential dilutive no-par-value shares that
employees can obtain for free under the employee share
option programme (KEEP) to the weighted average number of
Basic earnings per share (€3.86; 2018: €3.39) is calculated by
shares outstanding during the reporting period. The calcula-
dividing the net income accruing to the KION GROUP AG share-
tion of diluted earnings per share was based on a weighted
holders by the weighted average number of shares outstanding
average of 117.9 million no-par-value shares issued (2018:
during the reporting period (2019: 117.9 million no-par-value
117.9 million no-par-value shares).
shares; 2018: 117.9 million no-par-value shares). The net income
accruing to the shareholders of KION GROUP AG was €454.8 mil-
lion (2018: €399.9 million). > TABLE 037
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
170
Notes to the consolidated statement of financial position
[16] GOODWILL AND OTHER
INTANGIBLE ASSETS
Goodwill is broken down by Operating Unit as follows: > TABLE 061
Goodwill broken down by Operating Unit
in € million
Industrial Trucks & Services
LMH EMEA
STILL EMEA
KION Americas
KION APAC
Supply Chain Solutions
Dematic
Total goodwill
TABLE 061
2018
1,500.7
817.2
549.2
21.3
112.9
1,924.2
1,924.2
3,424.8
2019
1,502.9
818.5
549.0
21.8
113.6
1,972.9
1,972.9
3,475.8
The change in goodwill in 2019 resulted from currency effects.
carrying amount of €7.8 million (2018: €7.8 million). These assets
The KION Group intends to retain and further strengthen its
are not amortised as they have an indefinite useful life. The brand
most important brand names on a long-term basis. Brand names
names allocated to the Supply Chain Solutions segment were
worth €466.3 million are assigned to the LMH EMEA CGU (2018:
worth €350.2 million as at the reporting date (2018: €350.6 mil-
€466.2 million) and brand names worth €110.4 million to the
lion) and essentially had an indefinite useful life. > TABLE 062
STILL EMEA CGU (2018: €114.6 million). As at 31 December
2019, the brand names allocated to the KION APAC CGU had a
KION GROUP AGAnnual Report 2019 171
TABLE 062
Total
5,716.5
0.3
78.9
110.7
– 0.2
– 182.8
– 1.7
–
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
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
Balance as at 01/01/2019
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Balance as at 31/12/2019
Gross carrying amount as at
31/12/2019
Accumulated amortisation
3,382.5
0.2
42.1
–
–
–
–
–
3,424.8
3,424.8
–
3,424.8
–
51.0
–
–
–
–
3,475.8
3,475.8
–
944.6
–
– 0.2
–
–
– 0.1
–
–
944.3
954.9
– 10.6
944.3
–
– 0.0
–
–
– 0.2
– 4.2
939.8
946.4
– 6.6
670.3
–
16.1
84.0
– 0.2
– 76.6
–
– 4.0
719.0
0.1
21.0
26.7
– 0.0
– 106.1
– 1.7
4.0
689.7
662.9
5,721.6
992.4
– 302.7
689.7
–
9.9
81.9
– 0.0
– 82.1
– 1.5
1,000.1
– 337.3
662.9
0.0
14.5
26.7
– 9.6
– 75.5
–
6,372.2
– 650.6
5,721.6
0.0
75.4
108.6
– 9.6
– 157.9
– 5.7
697.9
619.0
5,732.5
1,042.6
– 344.7
999.9
– 381.0
6,464.8
– 732.3
The total carrying amount for technology and development assets
Sundry intangible assets relate in particular to customer
as at 31 December 2019 was €697.9 million (2018: €689.7 mil-
relationships amounting to €541.3 million (2018: €575.7 million).
lion). Development costs of €81.9 million were capitalised in the
reporting year (2018: €84.0 million).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
[17] LEASED ASSETS
The changes in leased assets in 2019 and 2018 were as follows:
> TABLE 063
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
172
TABLE 063
2018
1,246.3
–
– 9.7
514.9
– 189.4
– 306.3
– 0.4
6.4
1,261.8
1,978.2
– 716.4
2019
1,261.8
7.3
12.8
587.1
– 184.4
– 323.3
–
–
1,361.2
2,040.7
– 679.5
Leased assets are attributable exclusively to the Industrial Trucks
the issuance of notes (securitisation). Furthermore, leased assets
& Services segment and relate to industrial trucks in the amount
include assets in connection with the indirect lease business
of €1,361.2 million (2018: €1,261.8 million) that are provided for
worth €553.1 million (2018: €639.5 million).
use to external customers under operating leases in the direct
Leased assets resulted in future lease payments expected to
lease business or as part of the indirect lease business.
be paid by customers under operating leases amounting to
Leased assets include assets provided to customers with a
€810.1 million (2018: €599.3 million).
carrying amount of €413.7 million (2018: €405.4 million) that are
The maturity structure of these expected future payments in
financed by means of sale and leaseback sub-lease transactions
the lease business is shown in > TABLE 064.
with leasing companies. They also include assets provided to
customers with a carrying amount of €387.4 million (2018:
€151.7 million) that are financed by means of lease facilities and
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
173
Expected future payments from lease business
TABLE 064
in € million
Payments from lease 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
[18] RENTAL ASSETS
The changes in rental assets in 2019 and 2018 were as follows:
> TABLE 065
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
2019
810.1
260.2
214.9
163.1
108.6
51.8
11.5
2019
670.5
3.8
5.5
381.1
– 222.5
– 205.4
–
–
632.9
1,104.7
– 471.8
2018
599.3
200.5
153.5
115.6
76.8
42.6
10.3
TABLE 065
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 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
174
Rental assets, which amounted to €632.9 million (2018:
€670.5 million), are allocated solely to the Industrial Trucks & Ser-
vices segment and comprise assets in the short-term rental fleet.
Rental assets include assets with a carrying amount of
€554.5 million (2018: €590.7 million) that are financed by means
[19] OTHER PROPERTY, PLANT
AND EQUIPMENT
of sale and leaseback sub-lease transactions with leasing com-
The changes in the carrying amounts of other property, plant and
panies.
equipment are shown in > TABLE 066.
Other property, plant and equipment
in € million
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
Balance as at 01/01/2019
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Impairment
Reclassification
Balance as at 31/12/2019
Gross carrying amount as at 31/12/2019
Accumulated depreciation
Land and buildings
Plant & machinery
and office furniture
& equipment
Advances paid and
assets under
construction
601.7
–
– 3.8
96.0
– 1.3
– 80.4
– 0.7
14.1
625.5
1,224.2
– 598.7
625.5
4.8
6.4
135.2
– 12.3
– 73.6
– 0.1
15.6
701.6
1,354.3
– 652.7
346.5
0.0
– 0.5
149.1
– 2.6
– 125.9
– 0.6
16.0
382.0
1,225.2
– 843.2
382.0
1.0
2.6
157.3
– 7.5
– 130.9
– 1.1
37.9
441.3
1,329.8
– 888.5
46.7
–
0.1
54.2
– 0.7
–
–
– 30.0
70.3
70.3
–
70.3
–
0.2
76.6
– 0.1
–
–
– 53.6
93.5
93.5
–
TABLE 066
Total
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
1,077.8
5.8
9.2
369.0
– 19.9
– 204.5
– 1.2
–
1,236.3
2,777.6
– 1,541.3
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
175
Land and buildings in the amount of €18.3 million (2018:
The expense recognised in 2019 for procurement leases with
€18.3 million) were largely pledged as collateral for accrued
a term of up to twelve months came to €20.4 million (2018:
retirement benefits under partial retirement agreements.
€13.0 million); the expense for procurement leases that relate to
Other property, plant and equipment included a figure of
low-value assets was €10.0 million (2018: €5.1 million).
€452.7 million for right-of-use assets related to procurement
There were also obligations arising from short-term procure-
leases (2018: €390.7 million). Of this figure, €325.9 million was
ment leases that already existed as at 31 December 2019 but will
attributable to land and buildings (2018: €276.4 million) and
be recognised as expenses in 2020 in an amount of €1.9 million
€126.8 million to plant & machinery and office furniture & equip-
(2018: €3.2 million) and nominal obligations of €44.4 million result-
ment (2018: €114.3 million). The increase in right-of-use assets
ing from procurement leases that already exist but have not yet
attributable to land and buildings was primarily due to the start of
started.
two property leases. > TABLE 067
Other property, plant and equipment: thereof right-of-use assets
TABLE 067
in € million
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
Balance as at 01/01/2019
Currency translation adjustments
Additions
Disposals
Depreciation
Other
Balance as at 31/12/2019
Gross carrying amount as at 31/12/2019
Accumulated depreciation
Land and buildings
Plant & machinery
and office furniture
& equipment
247.6
– 0.6
81.5
– 0.4
– 51.0
– 0.7
276.4
483.6
– 207.2
276.4
3.5
107.2
– 11.8
– 53.9
4.5
325.9
568.0
– 242.2
99.8
– 0.8
69.6
– 0.3
– 53.8
– 0.2
114.3
214.6
– 100.2
114.3
0.8
73.6
– 3.8
– 58.4
0.2
126.8
243.3
– 116.5
Total
347.4
– 1.4
151.1
– 0.7
– 104.9
– 0.9
390.7
698.2
– 307.5
390.7
4.3
180.8
– 15.5
– 112.3
4.8
452.7
811.4
– 358.7
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
176
[20] EQUITY-ACCOUNTED
INVESTMENTS
GmbH & Co. KG, Aschaffenburg, the shares (45.0 per cent) in
Linde Leasing GmbH, Wiesbaden, the shares (45.0 per cent) in
Linde High Lift Chile S.A., Santiago de Chile, Chile, and the
shares (50.0 per cent) in JULI Motorenwerk s.r.o, Moravany,
Czech Republic. The associates and joint ventures can be seen in
The KION Group reported equity-accounted investments with a
the list of shareholdings (see note [48]). Their financial information
total carrying amount of €84.5 million as at 31 December 2019
is summarised below. > TABLES 068 – 069
(2018: €82.3 million).
The carrying amount of the equity-accounted investments
The amounts in the tables are based on the share held by the
mainly resulted from the shares (10.0 per cent) in Linde Hydraulics
KION Group in the relevant associate or joint venture.
Summarised financial information associates
in € million
Total carrying amount
Profit (+) / loss (–) from continuing operations
Other comprehensive income
Total comprehensive income
Summarised financial information joint ventures
in € million
Total carrying amount
Profit (+) / loss (–) from continuing operations
Other comprehensive income
Total comprehensive income
TABLE 068
2018
46.6
6.6
1.0
7.6
TABLE 069
2018
35.7
5.6
0.1
5.7
2019
49.6
6.8
0.2
7.0
2019
34.9
5.4
– 0.1
5.2
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
177
[21] LEASE RECEIVABLES
Lease receivables are financed by means of sale and lease-
back sub-lease transactions with leasing companies in an amount
of €705.1 million (2018: €764.5 million) and by means of lease facil-
ities and the issuance of notes (securitisation) in an amount of
The lease receivables of €1,421.0 million (2018: €1,097.3 million)
€628.3 million (2018: €246.0 million).
are based on the data shown in > TABLE 070.
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
TABLE 070
2018
1,069.5
311.5
256.9
208.2
152.2
89.5
51.2
2019
1,380.9
375.3
328.3
270.8
207.7
128.5
70.2
Plus unguaranteed residual values
176.9
135.7
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
17.6
19.4
24.9
35.0
38.0
42.0
13.0
16.1
20.9
26.8
31.7
27.2
Less unearned financial income
136.9
107.8
Present value of outstanding lease payments
1,421.0
1,097.3
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
[22] OTHER FINANCIAL ASSETS
The breakdown of other financial assets is shown in > TABLE 071.
Other financial assets
in € million
Financial investments
Financial receivables
Other financial investments
Derivative financial instruments
Sundry financial assets
Other non-current financial assets
Derivative financial instruments
Financial receivables
Sundry financial assets
Other current financial assets
178
TABLE 071
2018
5.2
1.1
21.0
1.0
1.4
29.8
8.9
34.7
39.8
83.4
2019
14.4
0.9
24.2
2.6
2.6
44.6
9.4
23.1
41.6
74.1
Total other financial assets
118.7
113.2
Financial investments essentially comprise the equity investment,
Other financial investments comprise long-term investments
acquired in 2019, in Zhejiang EP Equipment Co., Ltd. and the
that are held in order to cover the defined benefit obligation and
equity investment in Balyo SA. These equity investments, which
do not qualify as plan assets.
have been assigned to the FVOCI category under IFRS 9 owing to
Derivative financial instruments comprise currency forwards
the strategic partnerships with the companies, are recognised at
and interest-rate swaps with a positive fair value that are used to
fair value through other comprehensive income without recycling
reduce currency risk and interest-rate risk. Some of these
to profit or loss upon disposal.
derivative financial instruments are part of a formally documented
Financial receivables largely relate to loans to non-
hedge with a hedged item and are recognised in accordance with
consolidated subsidiaries.
the hedge accounting rules (see note [41]).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
179
[23] OTHER ASSETS
[24] INVENTORIES
The breakdown of other assets is as follows: > TABLE 072
The reported inventories break down as follows: > TABLE 073
Pension assets relate to asset surpluses from two defined benefit
The year-on-year rise in inventories was largely attributable to the
plans (2018: two) in the United Kingdom, in which plan assets
volume-related increase in finished goods and in work in progress.
exceed the present value of the defined benefit obligation (see
There was a small countervailing decrease in materials and
note [28]).
supplies.
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 072
2018
25.6
33.3
58.9
49.0
57.2
106.2
2019
22.2
51.7
73.8
55.0
53.8
108.8
182.7
165.1
TABLE 073
2018
284.2
132.3
550.6
27.8
994.8
2019
276.6
143.3
638.5
26.9
1,085.3
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
180
In 2019, write-downs of €26.6 million were recognised on
The change in valuation allowances for trade receivables is
inventories (2018: €25.3 million). Reversals of write-downs were
presented in > TABLE 075. The average loss rates used for the
recognised in an amount of €8.8 million (2018: €6.5 million)
recognition of valuation allowances for expected losses vary
because the reasons for the write-downs no longer existed.
depending on the Operating Unit and the period by which the
receivable is past due. They currently range from 0.0 per cent to
3.6 per cent (2018: 0.0 per cent to 4.0 per cent).
[25] TRADE RECEIVABLES
The trade receivables break down as follows: > TABLE 074
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
TABLE 074
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
2019
1,070.8
980.3
26.5
22.8
41.1
4.8
40.8
– 42.2
– 1.6
– 1.3
– 2.4
– 36.9
1,074.2
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
181
Change in valuation allowances for trade receivables
TABLE 075
in € million
Valuation allowances as at 01/01/
Additions
Reversals
Utilisations
Currency translation adjustments
Valuation allowances as at 31/12/
[26] CASH AND CASH EQUIVALENTS
The change in cash and cash equivalents is shown in the consol-
idated statement of cash flows. Further information can be found
in note [38]. > TABLE 076
Cash and cash equivalents
in € million
Balances with banks, cash and cheques
Pledged cash
Total cash and cash equivalents
2019
37.8
11.6
– 2.0
– 5.1
– 0.0
42.2
2018
36.3
10.4
– 3.3
– 5.1
– 0.5
37.8
TABLE 076
2018
171.6
3.7
175.3
2019
207.4
3.8
211.2
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
182
[27] EQUITY
programme can be found in note [45]. In February 2020, a further
7,338 no-par-value shares were issued for participants’ own
investments under KEEP 2019.
Subscribed capital and capital reserves
Retained earnings
As at 31 December 2019, the Company’s share capital amounted
to €118.1 million, which was unchanged on 31 December 2018
The changes in retained earnings are shown in the consolidated
and was fully paid up. It was divided into 118.1 million no- par-
statement of changes in equity in > TABLE 042. The retained
value shares.
earnings comprise the net income (loss) for the financial year and
The Annual General Meeting on 11 May 2017 voted to create
past contributions to earnings by the consolidated entities,
new authorised capital that will enable the KION Group to continue
provided they have not been distributed.
to meet its funding needs quickly and flexibly. Subject to the con-
The distribution of a dividend of €1.20 per share (2018:
sent of the Supervisory Board, the Executive Board is authorised
€0.99 per share) to the shareholders of KION GROUP AG resulted
until 10 May 2022 to increase the Company’s share capital by up
in an outflow of funds of €141.5 million in May 2019 (2018:
to €10.879 million by way of an issue of up to 10,879,000 new
€116.8 million).
no-par-value bearer shares (2017 Authorised Capital).
With the consent of the Supervisory Board, the Executive
Board of KION GROUP AG decided on 22 May 2017 to utilise
Appropriation of profit
some of the authorised capital created by the 2017 Annual
General Meeting. The share capital was increased against cash
KION GROUP AG’s net profit for 2019 was €156.9 million, of
contributions by issuing 9.3 million new no-par-value bearer
which €3.5 million will be transferred to other revenue reserves.
shares. The gross proceeds from the capital increase came to
The Executive Board and the Supervisory Board will propose to
€602.9 million. An amount of €593.6 million was paid into the
the Annual General Meeting to be held on 12 May 2020 that an
capital reserves.
amount of €153.4 million be appropriated from the distributable
The total number of shares outstanding as at 31 December
profit of €153.5 million for the payment of a dividend of €1.30 per
2019 was 117,959,356 no-par-value shares (2018: 117,924,442
dividend-bearing share. It is also proposed that the remaining
no-par-value shares). Between 9 September 2019 and 20 Sep-
sum of €0.2 million be carried forward to the next accounting
tember 2019, a further 60,000 treasury shares (KEEP 2018:
period. This equates to a dividend payout rate of 33.7 per cent of
66,000 treasury shares) were repurchased via the stock exchange
net income.
at an average price of €48.80 (2018: €54.17) in order to provide
the shares for employees’ own investments and the free shares
under the KEEP 2019 employee share option programme. The
total cost was €2.9 million (2018: €3.6 million). In February 2019,
a further 13,674 no-par-value shares were issued for employees’
own investments under KEEP 2018. Due to the issue of 14,136
bonus shares under KEEP 2016 (KEEP 2015: 22,580 bonus
shares) and 67,104 no-par-value shares (2018: 38,691 no-par-
value shares) under KEEP 2019, KION GROUP AG held 130,644
treasury shares at the reporting date (2018: 165,558). These
treasury shares are not dividend- bearing and do not confer any
voting rights. Further details on the KEEP employee share option
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
183
Accumulated other comprehensive income
(loss) and non-controlling interests
Defined benefit plans
The KION Group currently grants pensions to almost all employ-
The overall composition of, and changes in, equity are shown in
ees in Germany and a number of foreign employees. These
the consolidated statement of changes in equity in > TABLE 042.
pensions consist of fixed benefit entitlements and are therefore
The currency translation adjustment contains the exchange
reported as defined benefit plans in accordance with IFRS. As at
differences arising from the financial statements prepared in a
31 December 2019, the KION Group had set up defined benefit
foreign currency of foreign subsidiaries, associates and joint
plans in 15 countries (2018: 13). For all of the significant defined
ventures.
benefit plans within the Group, the benefits granted to employees
The gains / losses on the defined benefit obligation are the
are determined on the basis of their individual income, i.e. either
result of remeasuring defined benefit pension obligations (see
directly or by way of intermediate benefit arrangements. The larg-
also note [28]).
est of the KION Group’s defined benefit plans – together account-
The gains / losses on hedge reserves are the effective portion
ing for 92.9 per cent of the global defined benefit obligation (2018:
of the changes in the fair value of hedging instruments in formally
92.7 per cent) – are in Germany, the United Kingdom and the US.
documented hedges. The gains / losses on financial investments
relate to the remeasurement of the equity investments in Zhejiang
Germany
EP Equipment Co., Ltd. and Balyo SA at fair value (FVOCI
In Germany, the pension benefits granted comprise Company-
category under IFRS 9).
funded pension entitlements and employees’ payment of part of
The gains / losses from equity-accounted investments contain
their salary into the pension scheme. The contributions to the
the share of other comprehensive income (loss) from associates
new pension plans are invested in investment funds under
and joint ventures accounted for under the equity method.
contractual trust arrangements (CTAs); resulting returns on plan
[28] RETIREMENT BENEFIT
OBLIGATION
Defined contribution plans
assets are passed on to the pension beneficiaries when an
insured event occurs. Members of the Executive Board (see also
note [46]) and other executives are predominantly covered by
individual pension plans. The amount of the benefits paid to
executives depends on the type of entitlement. A very small
proportion of pension benefits are granted in the form of final-
salary-linked benefit obligations. The overwhelming majority of
the existing pension entitlements are a combination of a defined
benefit obligation and a defined contribution component.
In the case of defined contribution pension plans, the Group pays
Beside the securities-linked pension entitlements, some of
contributions to government or private pension insurance provid-
the KION Group’s pension obligations in Germany under closed
ers based on statutory or contractual provisions, or on a voluntary
plans are financed by way of CTAs. The assets transferred to the
basis. The total expense arising from defined contribution plans
trustee qualify as plan assets within the meaning of IAS 19. The
amounted to €134.5 million in 2019 (2018: €93.3 million). Of
trustees are required to follow a defined investment strategy and
this total, contributions paid by employers into government-run
investment guidelines. There are no statutory minimum funding
schemes came to €105.9 million (2018: €76.7 million).
requirements. In the event of the Company’s insolvency, the
company pension scheme in Germany is to a large extent
protected by law by the insolvency protection scheme (Pensions-
Sicherungs-Verein Versicherungsverein auf Gegenseitigkeit, PSVaG).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
184
United Kingdom
Two of the plans are subject to statutory minimum funding
In the United Kingdom, defined benefit pension obligations
provisions that each specify a certain coverage ratio and provide
predominantly relate to two plans. The defined benefits include
for annual payments to maintain the required ratio. In 2019, a
not only a life-long retirement pension but also surviving
one-off sum of €0.9 million was paid (2018: €17.8 million).
dependants’ benefits. The amount of the pension depends on
employees’ length of service and final salary.
Other countries
The two plans are closed to new employees. Each plan is
Furthermore, significant asset volumes are invested in external
monitored by its own board of trustees, which oversees the running
pension funds with restricted access in Switzerland and the
of the plan as well as its funded status and the investment strategy.
Netherlands. Decisions on additions to plan assets take into
The members of the board of trustees comprise people appointed
account the change in plan assets and pension obligations. They
by the company involved and selected plan beneficiaries.
also take into account the statutory minimum coverage require-
Under UK law, the board of trustees is obliged to have a
ments and the amounts deductible under local tax rules.
valuation of the plan carried out at least every three years. In
connection with the periodic valuation of the pension plans for the
employees of the KION Group’s UK companies, the companies
Measurement assumptions
and the respective trustees of the pension funds agreed on a
valuation in March 2019 that will ensure payments are made to
The defined benefit obligation is calculated on the basis of the
the beneficiaries of the plans in accordance with the relevant
weighted-average assumptions as at the reporting date shown in
requirements. On the basis of this current valuation, the KION
> TABLE 077.
Group will not have to make any top-up payments to the plan
The assumed discount rate is determined on the basis of the
assets. In addition, KION GROUP AG has given default guaran-
yield as at the reporting date on AA-rated, fixed-interest senior
tees to the trustees of four pension plans, under which, if any of
corporate bonds with maturities that match the expected maturi-
the companies concerned default, KION GROUP AG will assume
ties of the pension obligations.
all obligations of these companies up to a maximum guaranteed
Future increases in salaries are estimated on an annual basis
amount. As at 31 December 2019, the guaranteed amount
taking into account factors such as inflation and the overall
totalled €107.5 million (2018: €79.1 million).
economic situation.
United States
The biometric mortality rates used in the calculation are
based on published country-specific statistics and empirical
The KION Group maintains three main defined benefit pension
values. Since 2018, the Heubeck ‘Richttafeln 2018 G’ mortality
plans in the US. The defined benefits include not only a life-long
tables have been used as the biometric basis in Germany. The
retirement pension but also surviving dependants’ benefits.
S2PA tables (standard mortality tables for self-administered
Unionised employees receive pension entitlements on the
pension schemes (SAPS) based on normal health) are applied to
basis of fixed amounts for each month of service. Salaried employ-
the two defined benefit plans in the United Kingdom. In the US,
ees receive benefits that generally depend on their period of
calculations use the modified RP-2014 mortality tables with the
service and on their average final salary fixed on the date the plan
generational projection from the Mortality Improvement Scale
concerned was frozen. These defined benefit plans have been
MP-2016.
frozen for some time now in relation to future periods of service.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
185
Assumptions underlying provisions for pensions and other post-employment benefits
TABLE 077
Germany
UK
USA
Other
Discount rate
Salary increase rate
Pension increase rate
2019
1.15%
2.75%
1.75%
2018
1.90%
2.75%
1.75%
2019
1.85%
4.12%
3.20%
2018
2.65%
4.12%
3.37%
2019
3.30%
2018
4.25%
–
–
–
–
2019
0.73%
1.75%
0.25%
2018
1.43%
1.74%
0.26%
The actuarial assumptions not listed in > TABLE 077, such as
The significant weighted-average assumptions shown in
employee turnover and invalidity, are determined in accordance
> TABLE 078 were applied to the calculation of the net interest cost
with recognised forecasts in each country, taking into account
and the cost of benefits earned in the current year (current ser-
the circumstances and forecasts in the companies concerned.
vice cost).
Assumptions underlying pensions expenses
TABLE 078
Germany
UK
USA
Other
Discount rate
Salary increase rate
Pension increase rate
2019
1.90%
2.75%
1.75%
2018
1.95%
2.75%
1.75%
2019
2.65%
4.12%
3.37%
2018
2.35%
4.12%
3.37%
2019
4.25%
2018
3.60%
–
–
–
–
2019
1.43%
1.74%
0.26%
2018
1.41%
1.49%
0.27%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
186
Statement of financial position
The change in the present value of the defined benefit obligation
(DBO) is shown in > TABLE 079.
Changes in defined benefit obligation
TABLE 079
Germany
UK
USA
Other
Total
in € million
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
1,061.2 1,001.4
389.1
428.9
202.7
210.0
130.2
124.2 1,783.3
1,764.4
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
–
–
–
–
–
–
24.9
– 4.6
37.1
36.7
–
20.3
3.8
–
18.8
3.7
– 16.4
– 15.9
0.9
–
10.3
–
–
0.9
1.4
9.9
–
–
–
4.6
– 0.7
–
8.8
–
–
–
9.3
0.2
–
7.6
–
–
Pension benefits paid by funds
Liability transfer out to third parties
– 2.0
– 0.8
– 1.6
– 17.9
– 19.9
– 8.7
– 7.6
– 0.2
–
–
–
–
Actuarial gains (–) and losses (+)
arising from
changes in demographic assumptions
0.0
changes in financial assumptions
experience adjustments
193.2
– 6.3
0.5
15.1
–
– 10.6
– 0.3
– 0.6
36.2
– 18.7
26.4
– 17.2
2.9
– 16.2
1.9
1.4
1.0
–
2.2
4.2
– 1.3
1.8
1.1
– 1.4
– 6.0
4.9
– 1.5
13.7
1.6
–
2.0
3.6
–
1.7
1.0
–
31.7
41.5
– 1.3
41.2
4.9
–
6.7
41.4
1.4
38.0
4.7
– 1.5
– 17.8
– 17.5
– 2.7
– 34.6
– 31.9
1.9
4.1
1.7
0.0
– 1.8
– 10.7
– 0.7
269.4
– 21.4
0.7
– 19.4
6.6
Present value of defined benefit
obligation as at 31/12/
thereof unfunded
thereof funded
1,290.1 1,061.2
427.4
389.1
234.1
202.7
149.6
130.2 2,101.2
1,783.3
559.0
459.5
0.0
0.0
6.9
7.2
41.9
39.0
607.8
505.7
731.1
601.7
427.4
389.1
227.2
195.5
107.7
91.3 1,493.4
1,277.6
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
187
The DBO in the other countries was predominantly attributable to
The payments expected for 2020 amount to €26.9 million (in
subsidiaries in Switzerland (€65.6 million; 31 December 2018:
2018: €22.2 million for 2019), which includes direct payments of
€54.7 million) and the Netherlands (€41.4 million; 31 December
pension benefits amounting to €21.1 million (in 2018: €19.8 million
2018: €35.9 million).
for 2019) that are not covered by corresponding reimbursements
The change in the fair value of plan assets is shown in
from plan assets.
> TABLE 080.
The reconciliation of funded status and net defined benefit
Employees in Germany paid a total of €3.8 million from their
obligation to the amounts reported in the consolidated statement
salaries (2018: €3.7 million) into the KION pension plan in 2019.
of financial position as at 31 December is shown in > TABLE 081.
Changes in plan assets
TABLE 080
Germany
UK
USA
Other
Total
in € million
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Fair value of plan assets as at 01/01/
100.7
93.8
419.1
448.7
171.7
165.0
82.0
78.4
773.5
785.9
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
–
–
2.0
3.8
0.7
– 2.0
– 0.1
11.8
–
–
1.8
3.7
0.8
–
27.4
11.1
–
0.9
–
– 5.0
10.4
–
0.3
–
3.9
8.0
–
0.7
– 1.6
– 17.9
– 19.9
– 8.7
– 0.0
–
–
–
–
7.7
6.1
–
17.6
– 7.6
–
2.3
35.1
– 15.2
25.6
– 17.0
–
1.9
1.1
1.1
1.4
–
1.7
0.9
1.0
1.1
–
33.1
22.2
4.9
3.6
–
4.4
19.2
4.7
19.7
– 6.0
– 2.7
– 34.6
– 31.9
4.8
9.6
1.8
4.7
1.8
– 0.4
82.1
– 30.4
Fair value of plan assets as at 31/12/
116.9
100.7
475.7
419.1
201.3
171.7
95.7
82.0
889.5
773.5
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
188
Funded status and net defined benefit obligation
TABLE 081
in € million
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
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
– 731.1 – 601.7 – 427.4 – 389.1 – 227.2 – 195.5 – 107.7
– 91.3 – 1,493.4 – 1,277.6
116.9
100.7
475.7
419.1
201.3
171.7
95.7
82.0
889.5
773.5
– 614.3 – 501.1
48.3
30.0
– 25.9
– 23.7
– 12.1
– 9.3
– 603.9
– 504.1
– 559.0 – 459.5
– 0.0
– 0.0
– 6.9
– 7.2
– 41.9
– 39.0
– 607.8
– 505.7
– 1,173.2 – 960.5
48.3
30.0
– 32.9
– 30.9
– 54.0
– 48.2 – 1,211.7 – 1,009.7
‘retirement benefit obligation’
– 1,173.2 – 960.5
– 3.3
– 3.3
– 32.9
– 30.9
– 54.0
– 48.2 – 1,263.4 – 1,043.0
Reported as
‘Other non-current assets’
–
– 0.0
51.7
33.3
–
–
–
–
51.7
33.3
Overall, the funding ratio (ratio of plan assets to the present value
Income statement
of the defined benefit obligation) in the KION Group was
42.3 per cent (2018: 43.4 per cent).
The breakdown of the net cost of the defined benefit obligation
The changes in the retirement benefit obligations reported in
(expenses less income) recognised in the income statement for
the statement of financial position are shown in > TABLE 082.
2019 is shown in > TABLE 083.
Statement of cash flows
The KION Group’s net financial expenses include a net
interest cost of €19.0 million (2018: €18.8 million). All other
components of pension expenses are recognised under func-
tional costs.
For the main pension entitlements in the KION Group, a sum of
The actual total comprehensive income on plan assets
€17.8 million (2018: €17.5 million) was paid directly by the Company
(including remeasurement) in 2019 was €104.3 million (2018:
and a sum of €34.6 million (2018: €31.9 million) was paid from
minus €11.2 million).
plan assets in the reporting year. Cash contributions to plan
assets in 2019 amounted to €3.6 million (2018: €19.7 million).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
189
Changes in retirement benefit obligation
TABLE 082
in € million
Balance as at 01/01/
Group changes
Exchange differences
Total service cost
Net interest expense
Pension benefits directly
paid by company
Germany
UK
USA
Other
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
30.9
45.0
48.2
45.8 1,043.0 1,002.7
960.5
907.5
–
–
37.1
18.3
–
–
36.7
17.0
3.3
–
0.2
0.0
0.1
4.4
–
– 0.0
0.1
0.1
–
0.7
– 0.7
0.8
–
1.6
0.2
1.5
– 16.4
– 15.9
–
–
–
–
–
0.4
3.0
0.8
– 1.4
– 1.4
0.2
4.2
–
0.3
3.6
0.7
–
1.3
39.4
19.9
–
1.9
40.6
19.3
– 1.5
– 17.8
– 17.5
– 1.1
– 3.4
– 19.8
0.1
0.5
– 0.6
181.6
– 0.2
15.9
Employer contributions to plan assets
Liability transfer out to third parties
Remeasurements
Balance as at 31/12/
– 0.7
– 0.7
175.1
– 0.8
– 0.2
16.2
1,173.2
960.5
–
0.4
3.3
– 0.7
– 0.3
– 0.7
– 17.6
–
– 1.0
–
1.9
–
0.2
3.3
32.9
30.9
54.0
48.2 1,263.4 1,043.0
Cost of defined benefit obligation
TABLE 083
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
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
37.1
36.7
0.9
–
0.9
10.3
0.9
1.4
2.3
9.9
– 0.7
0.2
4.2
–
– 0.7
8.8
–
– 1.3
0.2
7.6
3.0
1.8
3.6
–
3.6
1.7
41.5
– 1.3
40.3
41.2
41.4
1.4
42.8
38.0
–
36.7
18.8
– 1.8
– 11.1
– 10.4
– 8.0
– 6.1
– 1.1
– 0.9
– 22.2
– 19.2
17.0
53.7
– 0.8
– 0.5
0.1
1.8
0.8
0.0
1.5
1.7
0.8
3.8
0.7
4.4
19.0
59.3
18.8
61.5
–
37.1
20.3
– 2.0
18.3
55.4
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
190
Other comprehensive income (loss)
The gains and losses on the remeasurement of plan assets
are attributable entirely to experience adjustments. The changes
The breakdown of the remeasurement of the defined benefit
in estimates relating to defined benefit pension entitlements
obligation recognised in the consolidated statement of compre-
resulted in a €115.9 million decrease in equity as at 31 Decem-
hensive income in 2019 is presented in > TABLE 084.
ber 2019 after deduction of deferred taxes (2018: €0.2 million).
The components of the remeasurements of the defined
benefit obligations are listed in > TABLE 079.
Accumulated other comprehensive income (loss)
TABLE 084
Germany
UK
USA
Other
Total
in € million
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Accumulated other comprehensive
income / loss as at 01/01/
– 350.2
– 334.0
– 32.6
– 45.1
Exchange differences
–
–
– 1.5
0.4
8.1
0.2
7.9
0.4
– 24.8
– 24.0
– 399.4
– 395.1
– 0.4
– 0.3
– 1.7
0.4
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/
– 186.9
– 18.5
– 20.0
27.4
– 27.5
16.8
– 13.8
– 0.1
– 248.1
25.6
11.8
2.3
35.1
– 15.2
25.6
– 17.0
9.6
– 0.4
82.1
– 30.4
– 525.3
– 350.2
– 19.0
– 32.6
6.4
8.1
– 29.3
– 24.8
– 567.2
– 399.4
Composition of plan assets
The plan assets of the main pension plans consist of the following
components: > TABLE 085
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
191
Fair value of plan assets
TABLE 085
Germany
UK
USA
Other
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
in € million
Shares
Fixed-income securities
Real estate
Insurance policies
Other
41.5
19.9
6.0
–
27.0
27.9
7.2
–
47.8
34.8
401.0
332.0
–
–
–
–
89.8
94.9
–
–
76.9
80.8
–
–
49.5
38.6
26.9
52.3
16.5
14.1
Total plan assets
116.9
100.7
475.7
419.1
201.3
171.7
thereof total assets that do
not have a quoted price in
active markets
Insurance policies
Other
Sensitivity analysis
19.2
14.3
12.7
15.8
–
–
–
–
19.2
14.3
12.7
15.8
–
–
–
–
–
–
The sensitivity analysis shown in > TABLE 086 is not representative
of an actual change in the present value of the defined benefit
obligation because variations in the significant assumptions are
unlikely to occur in isolation as, to some extent, the assumptions
are interrelated.
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
12.2
14.0
8.9
41.6
19.0
95.7
56.9
41.6
15.3
10.3
12.6
7.8
35.9
15.4
82.0
48.0
35.9
12.1
191.3
149.0
529.8
453.3
14.9
41.6
15.0
35.9
111.8
120.4
889.5
773.5
88.7
41.6
47.2
78.0
35.9
42.1
TABLE 086
2018
– 280.2
377.0
17.7
– 17.9
39.5
– 37.9
63.7
2019
– 356.9
486.8
21.9
– 21.8
49.4
– 44.6
88.6
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
192
Future pension benefit payments
fixed-interest senior corporate bonds. If the actual return on plan
assets falls below the discount rates applied, the net obligation
The pension benefit payments shown in > TABLE 087 are forecast
arising out of the pension plans increases. The amount of the net
for the next ten years for the defined benefit pension entitlements
obligation is also particularly affected by the discount rates, and
in existence as at 31 December 2019. The expected pension
the low level of interest rates – especially in the eurozone – is
benefits break down into future benefits to be paid directly by the
resulting in a comparatively large net obligation.
employer (for 2020: €21.1 million) and future benefits to be paid
The plan assets are predominantly invested in corporate
from existing plan assets (for 2020: €33.1 million).
bonds and inflation-linked UK government bonds, particularly in
As at the reporting date, the average duration of the defined
the United Kingdom. The market risk attaching to plan assets –
benefit obligation, weighted on the basis of the present value of
above all in the case of equities – is mitigated by defining an invest-
the defined benefit obligation, was 23.3 years in Germany (2018:
ment strategy and investment guidelines and constantly monitor-
21.5 years), 15.2 years in the United Kingdom (2018: 14.3 years),
ing the assets’ performance. Moreover, a downward trend in
13.9 years in the US (2018: 12.9 years) and 16.2 years in the other
financial markets could have a significant effect on minimum fund-
countries (2018: 15.7 years).
ing requirements, some of which apply outside Germany.
Risks
The KION Group also bears the full risk of possible future pen-
sion adjustments resulting from changes in longevity and inflation.
Payroll-based contributions to the KION pension plan made
by employees in Germany are invested in fund units. If the actual
The funding ratio, the defined benefit obligation and the associ-
returns on these fund units fall below the minimum rate of return
ated costs depend on the performance of financial markets. The
that has been guaranteed to participating employees, the KION
return on plan assets is assumed to equal the discount rate,
Group’s personnel expenses rise.
which is determined on the basis of the yield earned on AA-rated,
Expected payments for pension benefits
in € million
Germany
2020
2021
2022
2023
2024
2025 to 2029
26.5
23.3
25.8
29.2
29.7
173.4
UK
17.2
17.2
17.6
18.1
18.1
90.9
USA
5.8
10.7
11.0
11.4
11.5
61.1
Other
4.8
4.4
4.1
5.1
5.0
30.0
TABLE 087
Total
54.2
55.5
58.6
63.7
64.4
355.4
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
193
[29] FINANCIAL LIABILITIES
Promissory notes
In April 2019, KION GROUP AG issued a further promissory note
in a nominal amount of €120.5 million. In return, €20.5 million of
As at 31 December 2019, financial liabilities essentially comprised
the fixed-rate tranche of the promissory note from 2018 was
promissory notes and interest-bearing liabilities to banks. The
repaid ahead of schedule. As at 31 December 2019, the total
changes in financial liabilities as at 31 December 2019 are shown
nominal amount of the issued promissory notes was €1,310.0 mil-
in > TABLE 088.
lion (2018: €1,210.0 million). The promissory notes maturing in
2022, 2024, 2025 and 2027 have fixed and variable interest rates
Maturity structure of financial liabilities
in € million
Promissory notes
due within one year
due in one to five years
due in more than five years
Liabilities to banks
due within one year
due in one to five years
due in more than five years
Other financial liabilities
due within one year
due in one to five years
due in more than five years
TABLE 088
2018
1,214.3
–
744.5
469.8
826.4
221.9
604.5
–
4.6
4.6
–
–
2019
1,317.3
–
981.0
336.3
498.3
98.8
399.5
–
4.9
4.9
–
–
Total current financial liabilities
Total non-current financial liabilities
103.7
1,716.8
226.5
1,818.7
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
194
(EURIBOR + margin), while the promissory note maturing in 2026
The liabilities to banks are not collateralised. KION GROUP AG
has a variable interest rate (EURIBOR + margin). An overview of
has issued guarantees to the banks for all of the payment
the nominal amounts of the promissory notes issued by KION
obligations.
GROUP AG can be found in > TABLE 089.
KION GROUP AG has entered into interest-rate derivatives in
Other financial liabilities
order to hedge the interest-rate risk resulting from the variable-rate
and fixed-rate tranches (see note [41]).
In November 2019, KION GROUP AG launched a commercial
The promissory notes are not collateralised. KION GROUP AG
paper programme with a maximum programme volume of
is the borrower in respect of all the payment obligations resulting
€500.0 million. No commercial paper had been issued as at
from the promissory notes.
31 December 2019, and hence the other financial liabilities
Liabilities to banks
related to immaterial items.
Covenants
Liabilities to banks decreased by €328.0 million year on year,
mainly due to €400.0 million of the outstanding liability under
Among other stipulations, the contractual terms of the liabilities to
the acquisition facilities agreement (AFA) being repaid. There
banks and promissory notes set out certain covenants. In addi-
was a countervailing increase as a result of a fixed-rate loan of
tion, there is a financial covenant that involves ongoing monitoring
€200.0 million being taken out that will mature in 2021.
of adherence to a defined maximum level of leverage. Non-
KION GROUP AG has a revolving credit facility of €1,150.0 mil-
compliance with the covenants or with the defined maximum
lion. It has a variable interest rate (EURIBOR + margin) and can be
level of leverage as at a particular reporting date may give lenders
drawn down until February 2023. The drawdowns under the
a right of termination or lead to an increase in interest payments.
revolving credit facility are generally classified as short term. As at
All covenants were complied with in the past financial year, as
31 December 2019, there were no drawdowns from the revolving
was also the case in 2018.
credit facility (2018: €101.8 million).
Promissory note
in € million
Promissory note (10-year term)
Promissory note (7-year term)
Promissory note (7-year term)
Promissory note (7-year term)
Promissory note (5-year term)
Maturity date
April 2027
April 2026
June 2025
April 2024
May 2022
2019
27.5
120.5
179.5
236.5
746.0
TABLE 089
2018
27.5
–
200.0
236.5
746.0
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
195
[30] LIABILITIES FROM FINANCIAL
SERVICES
back sub-lease transactions entered into with leasing companies
since 1 January 2018 in an amount of €729.6 million (2018:
€440.2 million). They also include residual value obligations of
€297.2 million (2018: €319.5 million) resulting from the indirect
lease business.
The liabilities from financial services relate to the financing of the
Furthermore, liabilities from financial services include liabilities
long-term lease business and residual value obligations arising
from lease facilities in an amount of €392.9 million (2018:
from the indirect lease business in an amount of €2,062.9 million
€307.3 million), liabilities from the issuance of notes (securitisation)
(2018: €1,165.3 million) and to the financing of industrial trucks for
in an amount of €530.2 million (2018: €98.3 million) – of which
the short-term rental fleet in an amount of €437.2 million (2018:
€285.9 million was issued through K-Lift S.A., Luxembourg (2018:
€307.1 million). > TABLE 090
€98.3 million) – and other liabilities from financial services in an
amount of €113.0 million (2018: €0.0 million).
Liabilities from financial services arising from the lease business
The maturities of the liabilities from financial services are
encompass liabilities from financing by means of sale and lease-
shown in > TABLE 091.
Liabilities from financial services
TABLE 090
in € million
Non-current liabilities from financial services
thereof from lease business
thereof from short-term rental fleet financing
thereof from lease facilities
thereof from asset-backed securities
Current liabilities from financial services
thereof from lease business
thereof from short-term rental fleet financing
thereof from lease facilities
thereof from asset-backed securities
thereof other
2019
1,566.9
806.4
339.8
4.3
416.4
933.2
220.4
97.4
388.6
113.8
113.0
2018
924.4
601.9
244.6
–
77.9
548.0
157.7
62.5
307.3
20.4
–
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
Maturity analysis of liabilities from financial services
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
196
TABLE 091
2018
1,539.9
589.7
244.8
240.9
209.2
172.7
82.5
2019
2,572.8
966.2
449.1
418.8
369.7
251.8
117.2
[31] LEASE LIABILITIES
The amounts recognised as lease liabilities are based on the
maturities of future lease payments (gross) shown in > TABLE 092.
Lease liabilities amounting to €432.1 million (2018: €740.6 million)
related solely to finance lease obligations arising from sale and
leaseback sub-lease transactions entered into up to 31 Decem-
ber 2017 for the financing of long-term leases with end custom-
[32] OTHER PROVISIONS
ers. On the opposite side of the statement of financial position,
Other provisions relate to the following items: > TABLE 093
there were lease receivables worth €316.0 million (2018:
€514.3 million) and leased assets under sale and leaseback sub-
lease transactions of €166.1 million (2018: €268.6 million).
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
TABLE 092
2018
801.6
291.5
217.5
158.9
94.4
30.0
9.4
2019
455.5
200.5
143.0
82.0
22.9
5.7
1.4
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
197
Other provisions
TABLE 093
in € million
Balance as at 01/01/2019
thereof non-current
thereof current
Group changes
Additions
Utilisations
Reversals
Additions to accrued interest
Currency translation adjustments
Other adjustments
Balance as at 31/12/2019
thereof non-current
thereof current
Provisions
for product
warranties
Provisions for
personnel
Other
obligations
Total other
provisions
81.0
23.5
57.5
0.3
45.7
– 31.7
– 16.7
0.0
0.9
2.3
81.8
18.9
62.9
80.0
52.5
27.5
–
57.6
– 28.6
– 1.8
2.0
0.5
4.3
114.0
73.8
40.2
65.2
22.9
42.2
0.0
25.4
– 21.1
– 9.8
0.1
0.7
– 1.8
58.6
21.1
37.5
226.2
98.9
127.2
0.3
128.8
– 81.4
– 28.3
2.1
2.0
4.8
254.4
113.8
140.6
The provisions for product warranties include contractual and
social plans. The provisions for partial retirement obligations are
statutory obligations arising from the sale of industrial trucks,
recognised on the basis of individual contractual arrangements
spare parts and automation solutions. It is expected that the bulk
and agreements under collective bargaining law. In 2019, the
of the cash payments will be incurred within the next two years
KION Group recognised provisions for restructuring of €11.6 mil-
after the reporting date.
lion, predominantly in connection with the plans to consolidate
The provisions
for personnel comprise provisions
for
finance functions at one location from 2020 onwards.
long-service awards, partial retirement obligations, share-based
Other obligations include provisions for onerous contracts
remuneration obligations, severance pay, and obligations under
and litigation.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
198
[33] CONTRACT BALANCES
[35] OTHER FINANCIAL LIABILITIES
Contract assets stood at €150.2 million (2018: €119.3 million);
Other financial liabilities comprise the following items: > TABLE 094
most of this amount, €143.6 million (2018: €114.7 million), was
attributable to project business contracts. Of the contract assets
Liabilities from short-term rental fleet financing relate to the
recognised as at 1 January 2019, €91.5 million was billed in 2019
financing of the short-term rental fleet by means of sale-and-
(2018: €88.1 million). By contrast, contract assets rose by
leaseback sub-lease transactions entered into up to 31 Decem-
€178.7 million year on year (2018: €213.8 million) as a result of
ber 2017 in the amount of €178.6 million (2018: €289.9 million).
goods and services already provided that will be billed only once
The amounts recognised as liabilities from short-term rental fleet
the contractually agreed project milestones have been reached.
financing and from procurement leases are based on the maturi-
Of the contract liabilities, €416.8 million was attributable to
ties shown in > TABLE 095. The increase in liabilities from procure-
project business contracts with a net debit balance due to
ment leases was primarily due to the start of two property leases.
customers (2018: €498.7 million) and €88.1 million to prepay-
Derivative financial instruments comprise currency forwards
ments received from customers (2018: €71.4 million). They relate
and interest-rate swaps with a negative fair value that are used
to services that are still to be provided but for which prepayments
to reduce currency risk and interest-rate risk. Some of these
from customers have been received. Contract liabilities are rec-
derivative financial instruments are part of a formally documented
ognised as revenue as soon as the contractual goods and ser-
hedge with a hedged item and are recognised in accordance with
vices have been provided. The revenue recognised in the report-
the hedge accounting rules (see note [41]).
ing period that was included in the contract liability balance at the
beginning of the period amounted to €468.7 million (2018:
€292.6 million). Prepayments received from customers came to
€549.6 million (2018: €558.3 million).
[34] TRADE PAYABLES
As at 31 December 2019, trade payables of €975.9 million (2018:
€904.2 million) included liabilities to non-consolidated subsidiaries,
equity-accounted investments and other equity investments of
€33.5 million (2018: €23.7 million).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
199
Other financial liabilities
TABLE 094
in € million
Liabilities from short-term rental fleet financing
Liabilities from procurement leases
Derivative financial instruments
Sundry 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 financial liabilities
Other current financial liabilities
2019
101.7
380.6
11.4
7.1
500.9
76.9
105.5
12.8
4.4
84.4
284.0
2018
185.0
327.1
7.9
4.7
524.6
104.9
94.2
6.4
15.2
67.9
288.6
Total other financial liabilities
784.9
813.2
Maturity analysis of procurement leases and short-term rental fleet
TABLE 095
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
Procurement leases
Financing short-term rental fleet
2019
551.5
117.6
92.9
75.3
54.8
39.8
171.1
2018
464.1
105.8
79.7
57.5
45.7
34.0
141.3
2019
185.7
80.9
53.0
35.9
12.1
2.9
0.8
2018
315.0
122.8
86.6
53.8
34.4
12.2
5.2
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
200
[36] OTHER LIABILITIES
Other liabilities comprise the following items: > TABLE 096
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
Deferred income included deferred gains on disposals of
€448.8 million (2018: €627.4 million) resulting from indirect and
direct sales lease business.
Personnel liabilities primarily consist of liabilities for one-year
variable remuneration, outstanding annual leave, flexitime and
overtime credit, and wages and salaries not yet paid.
TABLE 096
2018
473.5
473.5
250.0
266.8
51.6
105.8
674.2
2019
301.2
301.2
252.7
296.0
53.7
107.2
709.6
1,010.9
1,147.6
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
201
[37] CONTINGENT LIABILITIES AND
OTHER FINANCIAL COMMITMENTS
Contingent liabilities
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 contingent liabilities include guarantees and indemnities to
the existing risk provision in the form of insurance or provisions
external parties. In addition, guarantees and indemnities of
will be sufficient in each individual case. However, the KION
€2.3 million related to contingent liabilities assumed jointly
Group believes it is unlikely that these ongoing lawsuits will require
with another shareholder of a joint venture (2018: €2.3 million).
funds to be utilised that exceed the provisions recognised.
> TABLE 097
Contingent liabilities
in € million
Guarantees and indemnities
TABLE 097
2018
89.5
2019
114.9
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
202
Other financial commitments
Sundry other financial commitments included future payment
obligations to an associate amounting to €1.3 million (2018:
€1.3 million). > TABLE 098
Other financial commitments
in € million
Commitments under long-term licence and support agreements
Capital expenditure commitments in fixed assets
Sundry other financial commitments
Total other financial commitments
TABLE 098
2018
99.7
59.0
1.3
160.0
2019
121.1
66.8
1.5
189.4
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
203
Other disclosures
[38] CONSOLIDATED STATEMENT OF
CASH FLOWS
expenditure on production facilities, product development and
purchased property, plant and equipment rose to €287.4 million
(2018: €258.5 million).
Free cash flow – the sum of cash flow from operating activi-
ties and investing activities – increased to €568.4 million (2018:
The consolidated statement of cash flows shows the changes in
€519.9 million).
cash and cash equivalents in the KION Group resulting from cash
Net cash used for financing activities came to €534.9 million
inflows and outflows in the year under review, broken down into
(2018: €514.5 million), partly due to net repayments of financial
cash flow from operating, investing and financing activities. The
debt amounting to €226.0 million. One new promissory note was
effects on cash from changes in exchange rates are shown sep-
issued, whereas a further amount was repaid towards the remain-
arately. Cash flow from operating activities is presented using the
ing long-term tranches under the AFA. Overall, financial debt
indirect method.
taken on during the reporting period reached €2,940.1 million
Net cash provided by operating activities totalled €846.3 mil-
(2018: €1,811.7 million); repayments amounted to €3,166.2 million
lion, which was much higher than the prior-year figure of
(2018: €2,042.6 million). Payments made for interest portions and
€765.5 million. This year-on-year improvement in cash flow from
principal portions under procurement leases totalled €126.5 mil-
operating activities was due to the higher level of earnings and a
lion (2018: €114.0 million). Current interest payments decreased
reduction in spending on the ongoing renewal and expansion of
from €42.9 million in 2018 to €36.7 million in 2019 due to a year-
the short-term rental fleet. Conversely, the growth of net working
on-year fall in average net debt. The payment of a dividend to the
capital lowered cash flow from operating activities by €146.8 mil-
shareholders of KION GROUP AG in May 2019 resulted in an out-
lion (2018: by €54.3 million), primarily because of a decline in
flow of funds of €141.5 million (2018: €116.8 million). The acquisi-
advance payments from customers in the project business.
tion of employee shares caused a cash outflow of €2.9 million
Net cash used for investing activities amounted to €277.9 mil-
(2018: €3.6 million).
lion, which was a higher amount than in the previous year (2018:
Additional information for 2019 on the changes to liabilities
€245.6 million). Within this figure, cash payments for capital
arising from financing activities can be found in > TABLES 099 – 100.
Reconciliation of liabilities arising from financing activities 2019
TABLE 099
in € million
Non-current financial liabilities
Current financial liabilities
Liabilities from accrued interest
Derivative financial instruments for hedging purposes
Liabilities from procurement leases
Total liabilities from financing activities
01/01/2019
Cash flows
1,818.7
226.5
15.2
7.3
421.2
2,489.0
– 100.0
– 126.0
– 34.2
– 2.5
– 126.5
– 389.2
Non-cash changes
Foreign
exchange
movement
Other
changes
31/12/2019
0.0
– 4.5
– 0.0
–
4.7
0.2
– 1.9
7.7
23.3
4.9
186.7
220.7
1,716.8
103.7
4.4
9.7
486.1
2,320.7
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
204
Reconciliation of liabilities arising from financing activities 2018
TABLE 100
in € million
Non-current financial liabilities
Current financial liabilities
Liabilities from accrued interest
Derivative financial instruments for hedging purposes
Liabilities from procurement leases
Total liabilities from financing activities
01/01/2018
Cash flows
2,024.8
243.9
14.5
1.9
369.1
2,654.2
– 200.0
– 30.9
– 39.4
– 3.5
– 114.0
– 387.8
Non-cash changes
Foreign
exchange
movement
Other
changes
31/12/2018
8.0
– 7.9
– 0.0
–
– 1.6
– 1.5
– 14.1
21.5
40.2
8.9
167.7
224.1
1,818.7
226.5
15.2
7.3
421.2
2,489.0
Positive currency effects increased cash and cash equivalents by
€2.4 million (2018: decrease of €3.2 million due to negative
effects). Overall, cash and cash equivalents went up from
€175.3 million as at 31 December 2018 to €211.2 million as at
31 December 2019.
[39] INFORMATION ON FINANCIAL
INSTRUMENTS
The measurement categories used in accordance with IFRS 9 are
presented below in > TABLES 101 – 102. In line with IFRS 7, the
tables show the carrying amounts and fair values of the financial
assets and liabilities. Derivative financial instruments that are part
of a formally documented hedge are not assigned to any of the
IFRS 9 measurement categories. The lease receivables, lease lia-
bilities, liabilities from procurement leases and liabilities from
short-term rental fleet financing fall within the scope of IFRS 16
and are therefore also not assigned to any of the IFRS 9 measure-
ment categories.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
205
Carrying amounts and fair values broken down by class 2019
TABLE 101
Classes
in € million
Financial assets
Lease receivables *
Trade receivables
Other financial assets
thereof financial investments
thereof financial receivables
thereof other financial investments
thereof sundry financial assets
thereof derivative financial instruments
Cash and cash equivalents
Financial liabilities
Financial liabilities
thereof promissory notes
thereof liabilities to banks
thereof other financial liabilities
Liabilities from financial services
Lease liabilities *
Trade payables
Other financial liabilities
thereof liabilities from procurement leases *
thereof liabilities from short-term rental fleet financing *
thereof sundry financial liabilities and
liabilities from accrued interest
thereof derivative financial instruments
* as defined by IFRS 16
Categories
Carrying
amount
FVPL
AC
FVOCI
Fair value
1,421.0
1,074.2
118.7
14.4
23.9
24.2
44.3
12.0
211.2
1,820.5
1,317.3
498.3
4.9
2,500.2
432.1
975.9
784.9
486.1
178.6
96.0
24,3
4.8
1,069.4
14.4
24.2
7.2
23.9
44.3
211.2
1,317.3
498.3
4.9
2,500.2
975.9
96.0
5,3
1,427.4
1,074.2
118.7
14.4
23.9
24.2
44.3
12.0
211.2
1,827.7
1,323.9
498.9
4.9
2,515.4
435.3
975.9
794.7
494.6
179.9
96.0
24,3
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
206
Carrying amounts and fair values broken down by class 2018
TABLE 102
Classes
in € million
Financial assets
Lease receivables *
Trade receivables
Other financial assets
thereof financial investments
thereof financial receivables
thereof other financial investments
thereof sundry financial assets
thereof derivative financial instruments
Cash and cash equivalents
Financial liabilities
Financial liabilities
thereof promissory notes
thereof liabilities to banks
thereof other financial liabilities
Liabilities from financial services
Lease liabilities *
Trade payables
Other financial liabilities
thereof liabilities from procurement leases *
thereof liabilities from short-term rental fleet financing *
thereof sundry financial liabilities and
liabilities from accrued interest
thereof derivative financial instruments
* as defined by IFRS 16
Categories
Carrying
amount
FVPL
AC
FVOCI
Fair value
1,097.3
1,036.4
113.2
5.2
35.9
21.0
41.2
9.9
175.3
2,045.2
1,214.3
826.4
4.6
1,472.4
740.6
904.2
813.2
421.2
289.9
87.8
14.3
15.6
1,020.9
5.2
21.0
6.5
35.9
41.2
175.3
1,214.3
826.4
4.6
1,472.4
904.2
87.8
2.5
1,102.0
1,036.4
113.2
5.2
35.9
21.0
41.2
9.9
175.3
2,055.6
1,222.0
829.1
4.6
1,477.0
743.0
904.2
822.1
429.2
290.8
87.8
14.3
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
207
The net gains and losses on financial instruments in 2019 are bro-
Fair value measurement
ken down by IFRS 9 category as shown in > TABLE 103. Net gains
and losses on financial instruments do not include gains / losses
The majority of the cash and cash equivalents, financial receiva-
arising on hedging transactions that are part of a formally docu-
bles, trade receivables and trade payables recognised at amor-
mented hedge (see note [41]).
tised cost, sundry financial assets and liabilities, and liabilities
The net gains and losses include interest income of €4.2 mil-
from accrued interest have short remaining terms to maturity. The
lion (2018: €6.2 million) and interest expenses of €70.5 million
carrying amounts of these financial instruments are roughly equal
(2018: €57.7 million) that result from financial instruments meas-
to their fair values.
ured at amortised cost (AC category) and are recognised within
The fair value of promissory notes, liabilities to banks and
financial income/expenses. In 2019, the measurement at fair
liabilities from financial services corresponds to the present value
value of equity instruments (FVOCI category) led to a loss of
of the outstanding payments, taking account of the current yield
€1.9 million that was recognised in other comprehensive income
curve and the Group’s own default risk. This fair value, calculated
(2018: €6.4 million). Currency translation gains and losses, divi-
for the purposes of disclosure in the notes to the financial state-
dends, valuation allowances for expected and incurred losses,
ments, is classified as Level 2 of the fair value hierarchy.
the marking-to-market of derivatives that are not part of a formally
The fair value of lease receivables, lease liabilities, liabilities
documented hedge and other measurement effects are also
from short-term rental fleet financing and liabilities from procure-
included in the net gains and losses.
ment leases corresponds to the present value of the net lease
payments, taking account of the current market interest rate for
similar leases.
Net gains and losses on financial instruments broken down by category
TABLE 103
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)
2019
– 7.7
– 1.9
– 15.7
– 69.6
2018
– 1.9
– 6.4
– 16.9
– 58.1
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
208
The following tables show the assignment of fair values to the
individual levels as defined by IFRS 13 for financial instruments
measured at fair value. > TABLES 104 – 105
Financial instruments measured at fair value 2019
TABLE 104
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
Level 3
3.2
11.2
24.2
4.8
12.0
24.3
2019
55.3
14.4
24.2
4.8
12.0
24.3
24.3
Financial instruments measured at fair value 2018
TABLE 105
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
Level 3
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
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
209
Level 1 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 objec-
using the transaction price achievable in an active market. The
tives include the optimisation of the capital structure, the reduc-
biggest influence on the transaction price is the default risk of
tion of liabilities and ongoing Group cash flow planning and man-
the counterparty.
agement. Close cooperation between local units and Corporate
Interest-rate swaps and currency forwards are also classified
Treasury 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 using appropriate valuation methods on the basis of
capital management.
the observable market information at the reporting date. The
Net financial debt – defined as the difference between finan-
default risk for the Group and for the counterparty is taken into
cial liabilities and cash and cash equivalents – is a key perfor-
account on the basis of gross figures. The fair value of inter-
mance measure used in liquidity planning at Group level and
est-rate swaps is calculated as the present value of the future
amounted to €1,609.3 million as at 31 December 2019 (2018:
cash flows. Both contractually agreed payments and forward
€1,869.9 million).
interest rates are used to calculate the cash flows, which are then
discounted on the basis of a yield curve that is observable in the
market. The fair value of the currency forwards is calculated by
Default risk
the system using the discounting method based on forward
rates on the reporting date. In order to eliminate default risk to the
In certain operating and finance activities, the KION Group is sub-
greatest possible extent, the KION Group only enters into
ject to credit risk, i.e. the risk that partners will fail to meet their
derivatives with investment-grade counterparties.
contractual obligations. This risk is defined as the risk that a
Level 3 essentially comprises the financial investment in
counterparty will default, and hence is limited to a maximum of
Zhejiang EP Equipment Co., Ltd. The fair value is determined
the carrying amount of the assets relating to the counterparty
using appropriate valuation methods that draw on observable
involved. Default risk is limited by diversifying business partners
inputs to the greatest possible extent. If no observable inputs are
based on certain credit ratings. The Group only enters into trans-
available, unobservable inputs are used.
actions with business partners and banks holding a good credit
rating and subject to fixed limits. The potential default risk attach-
ing to financial assets is also mitigated by secured forms of lend-
ing such as reservation of title, credit insurance and guarantees,
and potential netting agreements.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
210
Counterparty risks involving our customers are managed by the
almost the same as their fair value. The maximum downside risk
individual Group companies. To reflect the default risk, valuation
arising on the transferred financial assets that are to be fully
allowances are recognised for defaults that have occurred and for
derecognised amounted to €4.7 million as at 31 December 2019
expected defaults (see note [25]). Valuation allowances are based
(2018: €19.9 million).
on the credit risk associated with the receivables, the level of
The following tables show all of the contractually agreed
expected loss in the event of a default and, taking account of any
undiscounted payments under recognised financial liabilities as
collateral, the estimated loss given default. This risk is assessed
at 31 December 2019 and 2018, including derivative financial
mainly using factors such as customer credit rating and failure
instruments with negative fair values. > TABLES 106 – 107
to adhere to payment terms.
Financial transactions are only entered into with selected
business partners that have an investment-grade credit rating.
Risks arising from financial services
The KION Group’s default risk remains insignificant.
Liquidity risk
The lease activities of the Industrial Trucks & Services segment
mean that the KION Group may be exposed to residual value
risks from the marketing of trucks that are returned by the lessee
at the end of a long-term lease and subsequently sold or
Based on the definition in IFRS 7, a liquidity risk arises if an entity
re-rented. Residual values in the markets for used trucks are
is unable to meet its financial liabilities. The KION Group main-
therefore constantly monitored and forecast. The KION Group
tains a liquidity reserve in the form of a revolving credit facility and
regularly assesses its aggregate risk position arising from
cash in order to ensure financial flexibility and solvency. Taking
financial services.
into account the credit facility that was still freely available,
The risks identified are immediately taken into account by the
the unrestricted cash and cash equivalents available to the
Company in the costing of new leases by recognising write-
KION Group as at the reporting date amounted to €1,357.4 million
downs or provisions and adjusting the residual values. Risk-miti-
(2018: €1,219.8 million). The age structure of financial liabilities
gating factors include the demand for used trucks, which stabi-
is reviewed and optimised continually.
lises the residual values of the KION Group’s industrial trucks. In
KION GROUP AG has an investment-grade credit rating,
many cases, the residual values have underlying remarketing
helping it to secure more advantageous funding conditions in
agreements that transfer any residual-value risk to the leasing
the capital markets. In January 2017, Fitch Ratings gave KION
company. This had a positive impact on the financial results in
GROUP AG an investment-grade long-term issuer rating of BBB–
2019. Groupwide standards to ensure that residual values are cal-
with a stable outlook. This rating was reaffirmed in October 2019.
culated conservatively, combined with an IT system for residual-
The rating awarded by the rating agency Standard & Poor’s for
value risk management, reduce risk and provide the basis on
KION GROUP AG has been BB+ with a stable outlook since
which to create the transparency required.
December 2019.
The KION Group mitigates its liquidity risk and interest-rate
In 2019, the KION Group sold financial assets with a total
risk attaching to financial services by ensuring that most of its
value of €116.5 million (2018: €152.3 million) in factoring transac-
transactions and funding loans have matching maturities and by
tions. In some cases, the KION Group retains insignificant rights
constantly updating its liquidity planning. Long-term leases are
and obligations in connection with fully derecognised financial
primarily arranged on a fixed-interest basis. If they are financed
assets, primarily the provision of limited reserves for defaults. The
using variable-rate instruments, interest-rate derivatives are
recognised assets that serve as reserves for defaults and are
entered into in order to hedge the interest-rate risk. Hedging is
reported under other current financial assets stood at €0.7 million
carried out at regular intervals and is based either on the carrying
as at 31 December 2019 (2018: €3.1 million). The short remaining
amount of the assets or the outstanding cash flows from the
term of these financial assets means their carrying amount was
underlying end customer contracts.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
211
Liquidity analysis of financial liabilities and derivatives 2019
TABLE 106
in € million
Primary financial liabilities
Promissory notes
Liabilities to banks
Other financial liabilities
Liabilities from financial services
Lease liabilities
Trade payables
Other financial liabilities (excluding derivatives)
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2019
Cash flow
2020
Cash flow
2021 – 2024
Cash flow
from 2025
1,317.3
498.3
4.9
2,500.2
432.1
975.9
760.7
24.3
– 15.4
– 103.0
– 4.9
– 966.2
– 200.5
– 975.9
– 282.8
– 1,021.1
– 401.9
–
– 1,489.4
– 253.6
–
– 373.9
– 341.3
–
–
– 117.2
– 1.4
–
– 171.9
409.5
– 426.8
89.2
– 97.7
–
–
Liquidity analysis of financial liabilities and derivatives 2018
TABLE 107
in € million
Primary financial liabilities
Promissory notes
Liabilities to banks
Other financial liabilities
Liabilities from financial services
Lease liabilities
Trade payables
Other financial liabilities (excluding derivatives)
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
1,214.3
826.4
4.6
1,472.4
740.6
904.2
798.9
14.3
– 14.5
– 233.3
– 4.6
– 589.7
– 291.5
– 904.2
– 316.4
– 798.8
– 646.0
–
– 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 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
212
The lease facilities provided by various banks and an effective
The main hedging instruments employed are foreign-currency
dunning process ensure that the Group has sufficient liquidity.
forwards, provided that there are no country-specific restrictions
In order to exclude currency risk, the KION Group generally
on their use.
finances its lease business in the local currency used in each
In the Industrial Trucks & Services segment, hedges are
market.
entered into at individual company level for highly probable future
The counterparty risk inherent in the lease business contin-
transactions on the basis of rolling 15-month forecasts, as well as
ues to be insignificant. The Group also mitigates any losses from
for firm obligations not reported in the statement of financial posi-
defaults by its receipt of the proceeds from the sale of repos-
tion. Currency risk arising from customer-specific project busi-
sessed trucks. Furthermore, receivables management and credit
ness contracts in the Supply Chain Solutions segment is hedged
risk management are refined on an ongoing basis. This involves
on a project-specific basis at individual company level. Some of
not only the design of the business processes, but also the risk
these hedges are classified as cash flow hedges for accounting
management and control processes.
purposes in accordance with IFRS 9 (see note [41]).
In addition, foreign-currency forwards are employed to hedge
the currency risks arising in the course of internal financing.
> TABLE 108 shows an overview of the foreign-currency forwards
entered into by the KION Group.
Currency risk
In accordance with the Corporate Treasury guideline, the KION
Group hedges currency risk both locally at the level of the individ-
ual companies and centrally via KION GROUP AG using pre-
scribed hedging ratios.
Foreign-currency forwards
Fair value
Notional amount
in € million
2019
2018
Foreign-currency forwards (assets)
Foreign-currency forwards (liabilities)
Cash flow hedge
Held for trading
Cash flow hedge
Held for trading
2.5
6.7
9.5
3.4
2.4
6.5
4.6
1.9
2019
116.0
509.1
250.4
144.9
TABLE 108
2018
180.4
332.1
211.8
112.8
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
213
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.
in calculating currency sensitivity if the financial instruments are
The 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 variable-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 presentation currency, i.e. currency
swaps in order to hedge interest-rate risk arising on the varia-
translation risks, are not included.
ble-rate financial liabilities. These hedges are often accounted for
Currency risk relevant to currency sensitivity in the KION
as cash flow hedges in accordance with IFRS 9. An interest-rate
Group arises mainly in connection with derivative financial instru-
swap has also been entered into to hedge the risk of a change in
ments, trade receivables and trade payables. It is assumed that
the fair value of a fixed-rate financial liability. This is accounted for
the portfolio of financial instruments as at the reporting date is
as a fair value hedge (see note [41]). > TABLE 110 provides an
representative of the portfolio over the whole of the year. The
overview of the interest-rate derivatives used by the KION Group.
sensitivity analysis for the relevant currencies (after tax) is shown
in > TABLE 109.
Foreign-currency sensitivity
TABLE 109
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%
2019
2018
0.1
1.1
0.2
20.5
– 0.1
– 1.3
– 0.3
– 9.4
9.8
4.6
7.6
6.3
– 12.0
– 5.6
– 11.9
– 2.9
in € million
GBP
USD
in € million
GBP
USD
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
Interest-rate swaps
Fair value
Notional amount
in € million
2019
2018
Interest-rate swaps (assets)
Interest-rate swaps (liabilities)
Fair value hedge
Held for trading
Cash flow hedge
Held for trading
2.4
0.5
9.7
1.9
1.0
–
7.3
0.6
2019
79.5
557.9
760.0
229.7
214
TABLE 110
2018
100.0
–
760.0
90.0
The shift in the relevant yield curves was simulated to assess
On account of the short-term nature of the Group’s payment
interest-rate risk. The cumulative effect after tax resulted from
terms, reclassifications to the income statement of fair value
variable-rate exposures and is shown in > TABLE 111.
changes previously recognised in equity in the hedge reserve and
[41] HEDGE ACCOUNTING
Hedging currency risk
the recognition of the corresponding cash flows generally take
place in the same reporting period. A foreign-currency receivable
or liability is recognised when goods are despatched or received.
Until the corresponding payment is received, changes in the fair
value of the derivative are recognised in the income statement
such that they largely offset the effect of the measurement of the
foreign-currency receivable or liability at the reporting date.
The currency forwards used as hedges will mature in 2021 at
In accordance with the Corporate Treasury guideline, the KION
the latest. In total, foreign-currency cash flows of €366.4 million
Group applies cash flow hedge accounting in hedging the cur-
(2018: €392.1 million) were hedged and designated as hedged
rency risks arising from highly probable future transactions and
items, of which €343.2 million is expected by 31 December 2020
firm obligations not reported in the statement of financial position
(2018: €372.4 million expected by 31 December 2019). The
in various currencies. Foreign-currency forwards with settlement
remaining cash flows designated as hedged items, which amount
dates in the same month as the expected cash flows from the
to €23.1 million (2018: €19.7 million), fall due in the period up to
Group’s operating activities are used as hedges. The critical
31 December 2021 (2018: 31 December 2020).
terms of the hedging instruments and the hedged items are
therefore matched. The hedge ratio for these hedges is 1:1.
Because the hedges are highly effective, the change in the fair
value of the cash flows from the hedged items corresponds to the
change in the fair value of the hedging instruments.
The main currency hedges relate to pound sterling and the
US dollar. The currency forwards in existence as at 31 December
2019 were entered into at average hedging rates of £0.8950 to €1
(2018: £0.8984 to €1) and US$ 1.1445 to €1 (2018: US$ 1.2077 to €1).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
215
Interest-rate sensitivity
TABLE 111
in € million
Net income
Other comprehensive loss (income)
+ 50 bps
– 50 bps
+ 50 bps
– 50 bps
2019
4.0
4.4
2019
– 4.3
– 0.5
2018
– 0.6
7.3
2018
– 0.4
– 2.5
Hedging of interest-rate risk
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
The KION Group has issued variable-rate and fixed-rate promis-
mature in 2025 is hedged using an interest-rate swap, thereby
sory notes as part of its financing (see note [29]). The KION Group
creating a EURIBOR-based variable-rate obligation. The carrying
uses cash flow hedge accounting in connection with the hedging
amount of the hedged promissory note tranche (€79.5 million),
of interest-rate risk. It also uses a fair value hedge to hedge the
which is recognised under financial liabilities, included an adjust-
risk of a change in the fair value of fixed-rate promissory notes.
ment of €9.3 million as at 31 December 2019 (2018: €6.8 million)
The hedge ratio used in both cases is 1:1. The critical terms of the
that was attributable to the change in fair value resulting from the
hedging instruments and the hedged items are matched. The
hedged risk.
interest-rate swaps used as hedges reflect the maturity profile of
the hedged items and will mature in 2025. Because the hedges
are highly effective, the change in the fair value of the cash flows
Change in the hedge reserve
from the hedged items (cash flow hedge) and the change in the
fair value of the hedged items (fair value hedge), corresponds to
The change in the hedge reserves within accumulated other
the change in the fair value of the hedging instruments.
comprehensive income (loss) is presented in > TABLE 112.
Interest-rate risks arising on the variable-rate tranches of the
promissory note are hedged by entering into a number of inter-
est-rate swaps, thereby transforming the variable interest-rate
exposure into fixed-rate obligations. In 2019, the weighted, hedged
risk-free fixed interest rate remained unchanged year on year at
0.5 per cent. In total, variable cash flows of €0.1 million (2018:
€4.1 million) were hedged and designated as hedged items, all of
which are cash flows expected in 2021 to 2024.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
216
Reconciliation of hedge reserves resulting from hedges of currency and interest-rate risks
TABLE 112
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
in € million
Balance as at 01/01/2019
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 31/12/2019
[42] SEGMENT REPORT
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
Currency risk
Interest-rate risk
– 2.2
– 11.9
3.4
3.8
0.6
– 6.3
– 8.3
– 3.2
–
–
1.0
– 10.5
Total
1.8
– 16.0
– 0.2
– 1.1
5.1
– 10.4
Total
– 10.4
– 15.1
3.4
3.8
1.5
– 16.8
vices segment covers key steps of the value chain: product devel-
opment, manufacturing, sales and service, truck rental and used
trucks, fleet management and financial services that support the
core industrial truck business. The segment operates a mul-
The Executive Board, as the chief operating decision-maker
ti-brand strategy involving the three international brands Linde,
(CODM), manages the KION Group on the basis of the follow-
STILL and Baoli plus the two local brands Fenwick and OM Voltas.
ing segments: Industrial Trucks & Services, Supply Chain
Solutions and Corporate Services. The segments have been
Supply Chain Solutions
defined in accordance with the KION Group’s organisational
The Supply Chain Solutions segment, with its Dematic Operating
and strategic focus.
Description of the segments
Industrial Trucks & Services
Unit, is a strategic partner to customers in a variety of industries,
supplying them with integrated technology and software solu-
tions with which to optimise their supply chains. Manual and
automated solutions are provided for all functions along custom-
ers’ supply chains, from goods inward and multishuttle ware-
house systems to picking and value-added packing. This seg-
So that it can fully cater to the needs of material handling custom-
ment is primarily involved in customer-specific, longer-term
ers worldwide, the business model of the Industrial Trucks & Ser-
project business operated under the leadership of the Dematic
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
217
brand. With global resources, eleven production facilities world-
Segment management
wide and regional teams of experts, Dematic is able to plan and
deliver logistics solutions with varying degrees of complexity any-
The KPIs used to manage the segments are order intake, revenue
where in the world.
Corporate Services
and adjusted EBIT. Segment reporting therefore includes a rec-
onciliation of externally reported consolidated earnings before
interest and tax (EBIT) – including effects from purchase price
The Corporate Services segment comprises holding companies
allocations and non-recurring items – to the adjusted EBIT for the
and service companies that provide services such as IT and
segments (‘adjusted EBIT’). Intra-group transactions are generally
logistics across all segments. The bulk of the total revenue in this
conducted on an arm’s-length basis. Segment reports are pre-
segment is generated by internal IT and logistics services.
pared in accordance with the same accounting policies as the
consolidated financial statements, as described in note [6].
> TABLES 113 – 114 show information on the KION Group’s
operating segments for 2019 and 2018.
Segment report 2019
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before tax
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
6,403.7
6.5
6,410.2
605.0
– 56.6
661.7
28.4
5.1
695.1
10,564.2
7,718.8
220.1
104.7
6,330.5
26,131
2,376.1
2.7
2,378.8
112.9
– 16.7
129.6
12.6
86.0
228.1
5,201.1
2,237.6
50.2
37.4
2,771.0
7,361
26.7
307.3
334.1
291.5
– 21.7
313.2
1.9
–
315.1
2,048.8
4,300.6
17.1
17.0
334.1
1,112
–
– 316.5
– 316.5
– 387.8
–
– 387.8
–
–
– 387.8
– 4,048.9
– 4,050.3
–
–
– 323.8
−
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 113
Total
8,806.5
–
8,806.5
621.6
– 95.1
716.6
42.9
91.0
850.5
13,765.2
10,206.8
287.4
159.1
9,111.7
34,604
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
Segment report 2018
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before tax
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
218
TABLE 114
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
External revenue by region is presented in > TABLES 051 – 052.
Net financial income and expenses, including all interest
In 2019, revenue came to €1,700.5 million in Germany (2018:
income and expenses, are described in notes [12] and [13].
€1,533.2 million), €1,604.6 million in the US (2018: €1,422.5 mil-
The non-recurring items mainly comprised restructuring and
lion) and €1,056.6 million in France (2018: €951.7 million).
reorganisation-related measures initiated in the fourth quarter of
2019 and came to a total of €42.9 million (2018: €21.0 million).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
219
The effects from purchase price allocations comprised write-
Capital expenditure in Germany came to €156.6 million in 2019
downs and other expenses in relation to the hidden reserves and
(2018: €156.3 million).
charges identified as part of the acquisition processes.
Depreciation/amortisation relates to intangible assets with
Capital expenditure includes additions to intangible assets
finite useful lives and property, plant and equipment.
and property, plant and equipment (excluding right-of-use assets
The regional breakdown of non-current assets excluding
related to procurement leases) and is shown in > TABLE 115.
financial instruments, deferred tax assets and post-employment
Leased assets and rental assets are described in note [17] and [18].
benefits is shown in > TABLE 116.
Capital expenditure broken down by company location*
TABLE 115
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)
2019
189.6
24.1
0.0
37.3
1.3
35.2
2018
190.2
14.6
0.1
34.6
1.6
17.3
287.4
258.5
TABLE 116
2018
5,295.7
344.1
5.0
2,422.4
98.7
565.8
8,731.8
2019
5,374.9
438.7
2.4
2,441.8
103.5
601.6
8,962.8
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
220
As at 31 December 2019, non-current assets attributable to
The related parties that are solely or jointly controlled by the
Germany amounted to €3,387.9 million (2018: €3,395.7 million)
KION Group or over which significant influence can be exercised
and to the US €2,356.8 million (2018: €2,341.1 million).
are included in the list of shareholdings as at 31 December 2019
[43] EMPLOYEES
(see note [48]).
Another related party is Weichai Power Co., Ltd., Weifang,
People’s Republic of China, which indirectly held a 45.0 per cent
stake in KION GROUP AG via Weichai Power (Luxembourg)
Holding S.à r.l., Luxembourg (‘Weichai Power’) as at 31 Decem-
ber 2019 (2018: 45.0 per cent). The distribution of a dividend of
The KION Group employed an average of 34,002 full-time equiv-
€1.20 per share (2018: €0.99 per share) to Weichai Power resulted
alents (including trainees and apprentices) in the reporting year
in an outflow of funds from KION GROUP AG of €63.8 million
(2018: 32,524). The number of employees (with part-time staff
(2018: €50.6 million).
included on a pro rata basis) is shown by region in > TABLE 117.
The revenue that the KION Group generated in 2019 and
The KION Group employed an average of 606 trainees and
2018 from selling goods and services to related parties, and vice
apprentices in 2019 (2018: 547).
versa, is shown in > TABLES 118 – 119 along with the associated
receivables and liabilities as at the reporting date. The receivables
include a loan that the KION Group has granted to Linde Hydrau-
lics GmbH & Co. KG, Aschaffenburg. This involved a maximum
commitment of €9.3 million (2018: €9.3 million), from which the
KION Group had a loan receivable of €8.0 million as at 31 Decem-
ber 2019 (2018: €8.0 million) with a variable interest rate.
[44] RELATED PARTY DISCLOSURES
In addition to the subsidiaries included in the consolidated finan-
cial statements, the KION Group has direct or indirect business
relationships with a number of non-consolidated subsidiaries,
associates, joint ventures and other related parties in the course
of its ordinary business activities.
Employees (average)
Western Europe
Eastern Europe
Middle East and Africa
North America
Central and South America
Asia-Pacific
Total employees
TABLE 117
2018
20,116
2,658
239
3,029
1,246
5,236
2019
21,051
3,058
144
3,116
1,261
5,372
34,002
32,524
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
Related party disclosures 2019
in € million
Non-consolidated subsidiaries
Associates (equity-accounted)
Joint ventures (equity-accounted)
Other related parties *
Total
Receivables
Liabilities
Sales of goods
and services
18.8
21.7
2.0
25.0
67.5
15.6
11.9
99.9
9.1
136.5
28.9
181.8
57.0
39.2
306.9
* ‘Other related parties’ include, among others, transactions with Weichai Power and its affiliated companies
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
221
TABLE 118
Purchases of
goods and
services
43.1
142.3
81.9
45.3
312.6
TABLE 119
Purchases of
goods and
services
22.1
133.1
78.6
11.5
245.3
* ‘Other related parties’ include, among others, transactions with Weichai Power and its affiliated companies
The members of the Executive Board and Supervisory Board
Assets Supervision and Administration Commission of Shandong
of KION GROUP AG are also related parties. Details of the remu-
People’s Government of the People’s Republic of China, Jinan,
neration of the Executive Board and Supervisory Board can be
People’s Republic of China. This Commission acts on behalf of
found 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 Shan-
Republic of China, which itself is owned by the State-owned
dong Heavy Industry Group Co., Ltd.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
222
[45] VARIABLE REMUNERATION
KEEP employee equity programme
another free matching share (bonus share) for each share pack-
age. 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 2019, the KION Group will
On 20 September 2019, the Executive Board of KION GROUP AG
bear the cost of one KION share (free share) in each of the first
decided to launch a further share option programme for employ-
seven share packages that an employee takes up.
ees (KEEP 2019) in the countries that had been included in the
The right to obtain a bonus share lapses if participants sell
previous year. To be eligible to participate in KEEP 2019, employ-
their own investment in KION shares or cease to work for the
ees needed, at the start of the offer phase, to have had a perma-
KION Group. The change in the number of bonus shares granted
nent, uninterrupted employment contract with a participating
is shown in > TABLE 120.
KION Group company for at least one year. Currently, KION
In 2019, 3,785 free shares were issued to employees as part
GROUP AG plus 19 German (2018: 19) and 60 foreign (2018: 62)
of their starter packages (2018: 4,225 free shares).
subsidiaries are eligible to take part in KEEP. Each year, the Exec-
The free shares to be issued are measured at their fair value
utive Board of KION GROUP AG decides whether there will be an
on the day on which employees obtain the right to acquire shares
offer made under the employee share option programme that
as their own investment. The fair value on the grant date is deter-
year and which companies will participate.
mined on the basis of Monte Carlo simulation. The measurement
KEEP is a share matching plan. Participating employees
parameters used are shown in > TABLE 121.
acquire KION shares for their own investment purposes. Each set
As at 31 December 2019, the fair value of a bonus share for
of three KION shares represents a share package. Once the
KEEP 2019 was €55.16 (KEEP 2018: €42.03; KEEP 2017: €62.02).
three-year holding period has expired, employees are entitled to
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 120
2018
50,166
17,455
– 22,580
– 1,386
43,655
2019
43,655
24,794
– 14,136
– 537
53,776
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
223
Significant measurement parameters for the KION GROUP AG Share Matching Programme
TABLE 121
Measurement parameters
Expected dividend
Price of the KION share as at grant date
KEEP 2019
KEEP 2018
KEEP 2017
€1.30
€58.82
€0.99
€44.59
€0.88
€64.62
The fair value of the bonus shares to be granted is recognised
The performance period for the 2019 tranche ends on
as an expense and paid into capital reserves over the three-year
31 December 2021 (2018 tranche: 31 December 2020). The 2017
holding period. The holding period for KEEP 2016 ended on
tranche expired on 31 December 2019 and will be paid out in the
5 October 2019 and the bonus shares were issued to the eligible
first quarter of 2020.
employees at no cost.
At the beginning of the performance period on 1 January 2019
In 2019, an expense totalling €0.9 million was recognised
(2018 tranche: 1 January 2018; 2017 tranche: 1 January 2017),
under the relevant functional costs for free shares and bonus
the managers were allocated a total of 274,460 phantom shares
shares in connection with the employee share option programme
for this tranche (2018 tranche: 188,531 phantom shares; 2017
(2018: €1.0 million). Of this amount, €0.3 million related to
tranche: 171,573 phantom shares). The allocation was based on
KEEP 2019, €0.2 million to KEEP 2018 (2018: €0.3 million),
a particular percentage of each manager’s individual gross annual
€0.2 million to KEEP 2017 (2018: €0.2 million) and €0.2 million to
remuneration at the time of grant. At the end of the performance
KEEP 2016 (2018: €0.2 million). In 2018, there had also been an
period, the number of the phantom shares is amended depend-
amount of €0.2 million relating to KEEP 2015.
ing on the degree to which the relevant targets are achieved. The
KION performance share plan (PSP)
for managers
resulting final number of 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 KION Group has the right to adjust the amount payable at
the end of the performance period in the event of exceptional
The 2019 tranche of the long-term, variable remuneration compo-
occurrences or developments. The maximum amount payable is
nent for the managers in the KION Group (LTI 2019) was granted
limited to 200.0 per cent of the value of the shares allotted to an
with effect from 1 January 2019 and has a term of three years.
individual at the grant date.
The remuneration component measured over the long term is
The pro-rata expense calculation based on the fair value of
based in equal parts on the total shareholder return (TSR) of KION
the phantom shares on each valuation date is carried out using
GROUP AG shares compared with the performance of the MDAX
Monte Carlo simulation. The measurement parameters shown
index as a measure of market performance, and with return on
in > TABLE 122 were used to value the phantom shares on the
capital employed (ROCE) as an internal measure. It also depends
reporting date.
on the performance of KION GROUP AG shares during the rele-
vant period.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
224
Significant measurement parameters of the KION Performance Share Plans
TABLE 122
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 31/12/2019
Tranche 2019
Tranche 2018
35.0%
15.0%
– 0.65%
€1.30
€61.74
35.0%
15.0%
– 0.71%
€1.30
€61.74
€28,440.98
€28,440.98
€48.68
€69.85
€23,511.95
€26,396.86
Taking account of the remaining term of two years (2019 tranche)
The total carrying amount for liabilities in connection with
and one year (2018 tranche), the historic volatility of KION shares
share-based remuneration was €12.5 million as at 31 December
was used to determine the volatility on which the valuation is
2019 (2018: €7.7 million). Of this amount, €3.7 million related to
based. As at 31 December 2019, the fair value of one phantom
the 2017 tranche (2018: €2.4 million), €4.4 million to the 2018
share was €40.99 for the 2018 tranche (2018: €24.25) and €50.27
tranche (2018: €1.4 million) and €4.4 million to the 2019 tranche.
for the 2019 tranche. On that date, the total fair value was €6.6 mil-
In 2018, there had also been an amount of €3.8 million relating to
lion for the 2018 tranche based on 161,350 phantom shares
the 2016 tranche. In 2019, a pro-rata expense for twelve months
(2018: €4.3 million) and €13.1 million for the 2019 tranche based
of €1.3 million for the 2017 tranche (2018: income of €1.4 million),
on 261,476 phantom shares. The amount of €3.7 million that is
a pro-rata expense for twelve months of €3.0 million for the 2018
expected to be paid out for the 2017 tranche (2018: €3.8 million
tranche (2018: €1.4 million) and a pro-rata expense for twelve
for the 2016 tranche) is calculated on the basis of a preliminary
months of €4.4 million for the 2019 tranche were recognised
total target achievement rate. In March 2019, a payment from the
under the relevant functional costs. Furthermore, income of
2016 tranche was made on the basis of the achievement of the
€4.0 million for the 2016 tranche had been recognised under the
long-term targets that were defined in 2016 at the start of the
relevant functional costs in 2018.
performance period.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
225
KION performance share plan (PSP)
for the Executive Board
The pro-rata expense calculation based on the fair value of
the phantom shares on each valuation date is carried out using
Monte Carlo simulation. The measurement parameters shown in
The members of the Executive Board have been promised a mul-
> TABLE 122 were used to value the phantom shares on the
tiple-year variable remuneration component in the form of a per-
reporting date.
formance share plan with a three-year term in each case. The
Taking account of the remaining term of two years (2019
remuneration component measured over the long term is based
tranche) and one year (2018 tranche), the historic volatility of KION
in equal parts on the total shareholder return (TSR) of KION
shares was used to determine the volatility on which the valuation
GROUP AG shares compared with the performance of the MDAX
is based. As at 31 December 2019, the fair value of one phantom
index as a measure of market performance, and with return on
share was €40.99 for the 2018 tranche (2018: €24.25) and €50.27
capital employed (ROCE) as an internal measure. It also depends
for the 2019 tranche. On that date, the total fair value was €3.0 mil-
on the performance of KION GROUP AG shares during the
lion for the 2018 tranche based on 72,170 phantom shares (2018:
relevant period.
€1.8 million) and €5.6 million for the 2019 tranche based on
The performance period for the 2019 tranche ends on
111,544 phantom shares. The amount of €1.8 million that is
31 December 2021 (2018 tranche: 31 December 2020). The 2017
expected to be paid out for the 2017 tranche (2018: €2.1 million
tranche expired on 31 December 2019 and will be paid out in the
for the 2016 tranche) is calculated on the basis of a preliminary
first quarter of 2020. At the beginning of the performance period
total target achievement rate. In March 2019, a payment from the
on 1 January 2019 (2018 tranche: 1 January 2018; 2017 tranche:
2016 tranche was made on the basis of the achievement of the
1 January 2017), the Executive Board members were allocated a
long-term targets that were defined in 2016 at the start of the
total of 111,544 phantom shares for this tranche (2018 tranche:
performance period.
72,170 phantom shares; 2017 tranche: 63,695 phantom shares)
The total carrying amount for liabilities in connection with
on the basis of the starting price of KION shares (60-day average).
share-based remuneration was €5.8 million as at 31 December
The shares were allocated on the basis of an allocation value in euros
2019 (2018: €3.8 million). Of this amount, €1.8 million related to
specified in each Executive Board member’s service contract.
the 2017 tranche (2018: €1.1 million), €2.0 million to the 2018
At the end of the performance period, the number of the
tranche (2018: €0.5 million) and €2.0 million to the 2019 tranche.
phantom shares is amended depending on the degree to which
In 2018, there had also been an amount of €2.1 million relating to
the relevant targets are achieved. The resulting final number of
the 2016 tranche. In 2019, a pro-rata expense for twelve months
phantom shares multiplied by the smoothed price of KION
of €0.7 million for the 2017 tranche (2018: income of €0.4 million),
GROUP AG shares at the end of the performance period deter-
a pro-rata expense for twelve months of €1.4 million for the 2018
mines the amount of cash actually paid. The Supervisory Board
tranche (2018: €0.5 million) and a pro-rata expense for twelve
can also use a discretionary personal performance multiplier to
months of €2.0 million for the 2019 tranche were recognised
adjust the final payment at the end of the performance period by
under the relevant functional costs. Furthermore, income of
+ / – 30.0 per cent. The maximum amount payable is limited to
€1.9 million for the 2016 tranche had been recognised under the
200.0 per cent of the value of the shares allotted to an individual
relevant functional costs in 2018.
at the grant date.
The total carrying amount for liabilities in connection with
share-based remuneration was €18.3 million as at 31 December
2019 (2018: €11.4 million). In 2019, a total expense of €13.7 million
for twelve months was recognised for share-based remuneration
(2018: total income of €4.8 million).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
226
[46] REMUNERATION OF THE EXECU-
TIVE BOARD AND SUPERVISORY
BOARD
Executive Board
Remuneration
The remuneration paid to the Executive Board comprises a fixed
salary and non-cash benefits, pension entitlements and perfor-
mance-related components. The variable performance-related
components comprise an annually recurring component linked to
business performance and a multi-year performance-related
component in the form of the KION performance share plan (see
also note [45]). The pension entitlements consist of retirement,
Responsibilities
invalidity and surviving dependants’ benefits.
The responsibilities of the members of the Executive Board are
The total remuneration of the members of the Executive
disclosed in the corporate governance report (see pages 35 bis 36).
Board pursuant to IFRS is shown in > TABLE 123.
Remuneration of the Executive Board (IFRS)
TABLE 123
in € million
Non-performance-related components
Performance-related components
Termination benefits
Total short-term remuneration
Share-based payments
Post-employment benefits
Total long-term remuneration
Total remuneration (IFRS)
2019
4.5
3.6
4.8
12.9
4.1
1.3
5.4
18.3
2018
4.5
2.1
–
6.5
– 1.8
1.0
– 0.8
5.7
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
227
Under section 314 of the German Commercial Code (HGB),
Supervisory Board
disclosure of the expense for share-based payments is not
required. Rather, the payments must be included in the Executive
The total remuneration paid to the members of the Supervisory
Board members’ remuneration for the year in which they are paid
Board for the performance of their tasks at the parent company
on the basis of the fair value at the individual grant dates. The fair
and subsidiaries in 2019 amounted to €1.5 million (2018: €1.5 mil-
value of the share-based payments at their individual grant dates,
lion). There were no loans or advances to members of the Super-
including tax equalisation, amounted to €5.7 million (2018:
visory Board in 2019. Members of the Supervisory Board also
€5.5 million). Furthermore, disclosure of the current service cost
received short-term employee benefits of €0.8 million for employee
(€1.3 million; 2018: €1.0 million) is not required, nor is disclosure of
services (2018: €0.7 million).
the termination benefits (€4.8 million). On this basis, the total
Further details of Supervisory Board remuneration, including
remuneration of the members of the Executive Board pursuant to
the individual amounts for each member, can be found in the
section 314 HGB came to €13.8 million (2018: €12.0 million).
remuneration report within the combined management report
As in the previous year, no loans or advances were made to
(see pages 130 to 131).
members of the Executive Board in 2019. The present value of the
The total remuneration of the members of the Executive
defined benefit obligation in respect of Executive Board members
Board and Supervisory Board came to €19.8 million (2018:
as at 31 December 2019 was €10.9 million (2018: €8.3 million).
€7.2 million).
The total remuneration paid to former members of the Exec-
utive Board in 2019 amounted to €0.3 million (2018: €0.3 million).
Pension entitlements of former members of the Executive Board
or their surviving dependants amounting to €11.7 million
(2018: €10.5 million) were recognised in accordance with IFRS.
Further details of Executive Board remuneration, including
the individual amounts for each member, can be found in the
remuneration report within the combined management report
(see pages 111 to 130).
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
228
[47] MEMBERS OF THE EXECUTIVE
BOARD AND SUPERVISORY
BOARD
Executive Board
Chairman 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
Chairman of the Board of Directors of Linde Material Handling
(Malaysia) Sdn. Bhd., Petaling Jaya, Malaysia
Chairman of the Board of Directors of Linde Material Handling
(Thailand) Co., Ltd., Pathum Thani, Thailand
Gordon Riske
Member of the Board of Directors of Linde Material Handling Pty.
Chief Executive Officer (CEO) (since 14 March 2008)
Ltd., Huntingwood, Australia
Member of the Board of Directors of Lansing Bagnall (Aust.) Pty.
Chairman of the Board of Directors of Linde (China) Forklift
Ltd., Huntingwood, Australia
Truck Co., Ltd., Xiamen, People’s Republic of China
Member of the Advisory Board of Fujian JULI Motor Co., Ltd.,
Non-Executive Director of Weichai Power Co., Ltd.,
Putian, People’s Republic of China
Weifang, People’s Republic of China
Chairman of the APAC Advisory Board of Euro Asia Consulting
Member of the Executive Board of the non-profit Hertie Foundation,
Co., Ltd., Shanghai, People’s Republic of China
Frankfurt am Main
Anke Groth
Member of the Board of Directors of Zhejiang EP Equipment
Co., Ltd., Hangzhou, People’s Republic of China
(since 11 July 2019)
Member of the Executive Board / CFO (since 1 June 2018)
Dr Eike Böhm
Susanna Schneeberger
Member of the Executive Board / CDO
Member of the Executive Board / CTO (since 1 August 2015)
(from 1 October 2018 to 12 January 2020)
Member of the Advisory Board of JULI Motorenwerk s.r.o.,
Member of the Supervisory Board of Concentric AB, Linköping,
Moravany, Czech Republic (until 12 September 2019)
Sweden
Member of the Board of Directors of Linde (China) Forklift Truck
Member of the Supervisory Board of Hempel A/S, Kongens,
Co., Ltd., Xiamen, People’s Republic of China
Lyngby, Denmark
Member of the Supervisory Board of e.GO Mobile AG, Aachen
Ching Pong Quek
Member of the Executive Board / Chief Asia Pacific Officer
(since 11 January 2013)
Chairman of the Board of Directors of KION South Asia Pte Ltd.,
Singapore, Singapore
Chairman of the Board of Directors of KION Asia Ltd.,
Hong Kong, People’s Republic of China
Chairman of the Board of Directors of KION Baoli Forklift Co.,
Ltd., Jiangsu, People’s Republic of China
Chairman of the Board of Directors of KION India Pvte. Ltd.,
Pune, India
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
229
Supervisory Board
Birgit A. Behrendt (since 1 January 2015)
Member of the Supervisory Board and Management Consultant
Dr Michael Macht (since 9 October 2018)
Vice President of Joint Ventures, Alliances and Commercial
Chairman of the Supervisory Board (since 9 May 2019)
Affairs at Ford of Europe GmbH, Cologne
Corporate Officer of the Ford Motor Company, Dearborn
Shareholder and member of the Supervisory Board of
(Michigan), USA (until 31 March 2019)
Endurance Capital Aktiengesellschaft, Munich
Member of the Executive Board of Ford of Europe GmbH,
Member of the Supervisory Board of Ferretti S.p.A., Cattolica,
Cologne (until 31 March 2019)
Italy (until 1 August 2019)
Member of the Supervisory Board of Ford Werke GmbH,
Member of the Supervisory Board of Linde & Wiemann
Cologne
SE & Co. KG, Dillenburg
Member of the Supervisory Board of Ford Deutschland Holding
Chairman of the Advisory Board of Schweizer Group GmbH &
GmbH, Cologne
Co. KG, Hattenhofen (until 1 February 2019)
Member of the Board of Directors of Ford Sollers Holding LLC,
Non-Executive Director of Weichai Power Co., Ltd., Weifang,
Chelny, Russia (until 31 March 2019)
People’s Republic of China
Member of the Audit Committee of Ford Sollers Holding LLC,
Dr John Feldmann
Chelny, Russia (until 31 March 2019)
Member of the Board of Directors of Ford Otosan
(from 28 September 2011 to 9 May 2019)
(Ford Otomotiv Sanayi A.S.), Istanbul, Turkey (until 31 May 2019)
Chairman of the Supervisory Board
Member of the Advisory Board of Getrag Ford Transmission
Former member of the Board of Executive Directors of BASF SE,
Ludwigshafen am Rhein
Stefan Casper 1 (since 11 May 2017)
Member of the Supervisory Board of HORNBACH Baumarkt
Chairman of the Works Council of KION Warehouse Systems
GmbH, Cologne (until 31 March 2019)
AG, Bornheim
GmbH, Reutlingen
Chairman of the Supervisory Board of HORNBACH Holding
AG & Co. KGaA, Neustadt an der Weinstrasse
Dr Alexander Dibelius (since 12 March 2007)
Member of the Supervisory Board of HORNBACH Management
Managing Partner at CVC Capital Partners (Deutschland) GmbH,
AG, Annweiler am Trifels
Frankfurt am Main
Özcan Pancarci 1 (since 12 June 2013)
Grenchen, Switzerland
Deputy Chairman of the Supervisory Board
Member of the Board of Directors of CVC Capital Partners
Deputy Chairman of the Board of Directors of Breitling S.A.,
(Luxembourg) SARL, Luxembourg
Chairman of the Plants I and II Works Council, Linde Material
Chairman of the Supervisory Board of Diebold Nixdorf AG,
Handling GmbH, Aschaffenburg
Paderborn
Chairman of the Group Works Council of the KION Group
Chairman of the Supervisory Board of Diebold Nixdorf International
Deputy Chairman of the Supervisory Board of Linde Material
GmbH, Paderborn
Handling GmbH, Aschaffenburg
Member of the Board of Directors of Diebold Nixdorf Inc.,
Ohio, USA
Member of the Supervisory Board of DKV MOBILITY SERVICES
HOLDING GmbH & Co. KG, Ratingen (since July 2019)
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
230
Member of the Supervisory Board of Douglas GmbH,
Member of the Board of Directors of Sinotruk Jinan Power Co.,
Düsseldorf
Ltd, Jinan, People’s Republic of China
Member of the Supervisory Board of Douglas Holding AG,
Member of the Board of Directors of Ballard Power Systems
Düsseldorf
Inc., Burnaby, Canada
Member of the Supervisory Board of ironSource Mobile Ltd.,
Chairman of the Board of Directors of Weichai Ballard Hy-Energy
Tel Aviv, Israel (since 1 November 2019)
Technologies Co., Ltd., Weifang, People’s Republic of China
Member of the Supervisory Board of Kirk Beauty Investments
Non-Executive Director of Weichai Power Co., Ltd., Weifang,
SA, Luxembourg
People’s Republic of China
Member of the Advisory Board of Messer Industries Europe
GmbH, Bad Soden
Olaf Kunz 1 (since 1 September 2014)
Member of the Advisory Board of Messer Industries US Inc.,
Head of Collective Bargaining at IG Metall District Office for the
Bridgewater (New Jersey), USA
Coast, Hamburg
Member of the Shareholders’ Committee of Tipico Group Ltd.,
Member of the Supervisory Board of STILL GmbH, Hamburg
Malta
Martin Fahrendorf 1 (since 10 May 2018)
Chairman of the Works Council of STILL GmbH, Hamburg
Chairman of the Works Council of Dematic GmbH and Dematic
Deputy Chairman of the Supervisory Board of STILL GmbH,
Services GmbH, Heusenstamm
Hamburg
Jörg Milla 1 (since 16 November 2015)
Jiang Kui (since 27 December 2012)
Dr Christina Reuter (since 12 May 2016)
President of Shandong Heavy Industry Group Co., Ltd.,
Head of Central Manufacturing Engineering & Operational
Jinan, People’s Republic of China
Excellence for Space Equipment Operations at Airbus Defence
Chairman of the Board of Directors of Dezhou Degong
and Space GmbH, Taufkirchen
Machinery Co., Ltd., Dezhou, People’s Republic of China
(since 30 November 2019)
Hans Peter Ring (since 9 June 2013)
Chairman of the Board of Directors of Shandong Degong
Management Consultant, Munich
Machinery Co., Ltd., Dezhou, 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
Member of the Board of Directors of Ferretti S.p.A.,
Holding B.V., Papendrecht, Netherlands
Cattolica, Italy
Member of the Executive Board of Hydraulics Drive Technology
Alexandra Schädler 1 (since 2 October 2013)
Beteiligungs GmbH, Aschaffenburg
Trade Union Secretary on the National Executive of IG Metall,
Member of the Supervisory Board of Linde Hydraulics
Frankfurt am Main
Verwaltungs GmbH, Aschaffenburg
Member of the Supervisory Board of Linde Material Handling
Member of the Board of Directors of PSI, Delaware, USA
GmbH, Aschaffenburg
Member of the Board of Directors of Shantui Construction
Member of the Supervisory Board of Opel Automobile GmbH,
Machinery Co., Ltd. Jining, People’s Republic of China
Rüsselsheim
Member of the Board of Directors of Sinotruk (BVI) Limited,
British Virgin Islands
Member of the Board of Directors of Sinotruk (Hong Kong)
Limited, Hong Kong, People’s Republic of China
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
231
Dr Frank Schepp 2 (since 11 May 2017)
Vice President of Quality at KION GROUP AG,
Frankfurt am Main (based in Aschaffenburg)
Tan Xuguang (since 9 May 2019)
Chairman of the Board of Directors and President of Shandong
Heavy Industry Group Co., Ltd., Jinan, People’s Republic of China
Chairman of the Board of Directors of China National Heavy
Duty Truck Group Co., Ltd., Jinan, People’s Republic of China
Chairman of the Board of Directors of Ferretti International
Holding S.p.A., Milan, Italy
Chairman of the Board of Directors of Ferretti S.p.A.,
Cattolica, Italy
Chairman of the Board of Directors of Weichai Holding Group
Co., Ltd., Weifang, People’s Republic of China
Chairman of the Board of Directors and Chief Executive Officer
of Weichai Power Co., Ltd., Weifang, People’s Republic of China
Claudia Wenzel 1 (since 1 November 2016)
Full-time works council member, HQ and plant 2 at Linde
Material Handling GmbH, Aschaffenburg
Xu Ping (since 1 January 2015)
Partner and Member of the Management Committee at King &
Wood Mallesons, Beijing, People’s Republic of China
Member of the Board of Directors of Ferretti International
Holding S.p.A., Milan, Italy
1 Employee representatives
2 Executive representatives
KION GROUP AGAnnual Report 2019 Other disclosures
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
232
[48] LIST OF THE SHAREHOLDINGS
OF KION GROUP AG,
FRANKFURT AM MAIN
The shareholdings of the KION Group as at 31 December 2019
are listed below. > TABLE 124
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
1 KION GROUP AG
Frankfurt am Main Germany
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
Consolidated subsidiaries
Domestic
2 BlackForxx GmbH
3 Dematic GmbH
4 Dematic Holdings GmbH
5 Dematic Logistics GmbH
6 Dematic Services GmbH
7 Eisengießerei Dinklage GmbH
8 Eisenwerk Weilbach GmbH
9 Fahrzeugbau GmbH Geisa
Stuhr
Germany
Heusenstamm
Germany
Frankfurt am Main Germany
23 100.00% 100.00%
53 100.00% 100.00%
1 100.00% 100.00%
Bielefeld
Germany
53 100.00% 100.00%
Heusenstamm
Germany
Dinklage
Germany
Frankfurt am Main Germany
Geisa
Germany
3 100.00% 100.00%
23 100.00% 100.00%
14 100.00% 100.00%
23 100.00% 100.00%
14 100.00% 100.00%
1 100.00% 100.00%
23 100.00% 100.00%
14 100.00% 100.00%
1 100.00% 100.00%
10 KION Financial Services GmbH
Frankfurt am Main Germany
11 KION Information Management Services GmbH
Frankfurt am Main Germany
12 KION Warehouse Systems GmbH
Reutlingen
13 Klaus Pahlke GmbH & Co. Fördertechnik KG
Haan
Germany
Germany
14 Linde Material Handling GmbH
Aschaffenburg
Germany
15 Linde Material Handling Rental Services GmbH
Aschaffenburg
Germany
14 100.00% 100.00%
16 LMH Immobilien GmbH & Co. KG
Aschaffenburg
Germany
14 & 17
99.64% 99.64%
17 LMH Immobilien Holding GmbH & Co. KG
Aschaffenburg
Germany
18 LMH Immobilien Holding Verwaltungs-GmbH
Aschaffenburg
Germany
14
94.00% 94.00%
14 100.00% 100.00%
19 LMH Immobilien Verwaltungs-GmbH
Aschaffenburg
Germany
14 100.00% 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
Germany
Germany
14 100.00% 100.00%
10 100.00% 100.00%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
233
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
23 STILL Gesellschaft mit beschränkter Haftung
Hamburg
Germany
14 100.00% 100.00%
24 Urban-Transporte Gesellschaft
mit beschränkter Haftung
Unterschleißheim Germany
14 100.00% 100.00%
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.
Belrose
Belrose
30 Linde Material Handling Pty. Ltd.
Huntingwood
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.
35 STILL DANMARK A/S
36 BARTHELEMY MANUTENTION SAS
37 Bastide Manutention SAS
38 Bretagne Manutention SAS
39 Dematic SAS
Zwijndrecht
Wijnegem
Indaiatuba /
São Paulo
Indaiatuba /
São Paulo
Kolding
Vitrolles
Bruguières
Pacé
Bussy-Saint-
Georges
Germany
Germany
Germany
Australia
Australia
Australia
Belgium
Belgium
Brazil
Brazil
Denmark
France
France
France
France
40 FENWICK FINANCIAL SERVICES SAS
Elancourt
France
41 FENWICK-LINDE OPERATIONS SAS
Cenon-sur-Vienne France
42 FENWICK-LINDE SAS
43 KION France SERVICES SAS
Elancourt
Elancourt
44 LOIRE OCEAN MANUTENTION SAS
Saint-Herblain
France
France
France
45 Manuchar SAS
Gond-Pontouvre
France
46 Société Angoumoisine de Manutention
Champniers
France
(SAMA) SAS
47 SM Rental SAS
Roissy-Charles-
de-Gaulle
France
48 STILL Location Services SAS
Marne-la-Vallée
France
49 STILL SAS
50 URBAN LOGISTIQUE SAS
51 Dematic Ltd.
Marne-la-Vallée
France
Elancourt
Banbury
France
UK
27
27
14
74.00% 74.00%
74.00% 74.00%
74.00% 74.00%
53 100.00% 100.00%
28 100.00% 100.00%
14 100.00% 100.00%
53 & 3 100.00% 100.00%
23 & 84 100.00% 100.00%
78 & 3 100.00% 100.00%
23 100.00% 100.00%
23 100.00% 100.00%
42
80.00% 80.00%
42 100.00% 100.00%
42 100.00% 100.00%
53 100.00% 100.00%
43 100.00% 100.00%
42 100.00% 100.00%
43 100.00% 100.00%
14 100.00% 100.00%
42
71.18% 71.18%
42 100.00% 100.00%
49 100.00% 100.00%
42 100.00% 100.00%
43 100.00% 100.00%
43 100.00% 100.00%
24 100.00% 100.00%
53 100.00% 100.00%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
234
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
52 Dematic Group Ltd.
53 Dematic Holdings UK Ltd.
54 KION FINANCIAL SERVICES Ltd.
55 Linde Creighton Ltd.
56 Linde Holdings Ltd.
57 Linde Jewsbury’s Ltd.
58 Linde Material Handling (UK) Ltd.
59 Linde Material Handling East Ltd.
60 Linde Material Handling Scotland Ltd.
61 Linde Material Handling South East Ltd.
Banbury
Banbury
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
62 Linde MH UK Ltd. (formerly: Linde Castle Ltd.)
Basingstoke
63 Linde Severnside Ltd.
64 Linde Sterling Ltd.
65 Mirror Bidco Ltd.
66 STILL Materials Handling Ltd.
67 Superlift UK Ltd.
68 KION India Pvt. Ltd.
69 Linde Material Handling (Ireland) Ltd.
70 Baoli EMEA S.p.A.
71 Dematic S.r.l.
72 Emhilia Material Handling S.p.A.
73 KION Rental Services S.p.A.
74 Linde Material Handling Italia S.p.A.
75 STILL S.p.A.
76 Dematic Ltd.
77 K-LIFT S.A.
Basingstoke
Basingstoke
Banbury
Exeter
Basingstoke
Pune
Ballymount
(Dublin)
Lainate
Cernusco sul
Naviglio
Modena
Milan
Buguggiate
Lainate
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
India
Ireland
Italy
Italy
Italy
Italy
Italy
Italy
78 100.00% 100.00%
78 100.00% 100.00%
67 100.00% 100.00%
58 100.00% 100.00%
67 100.00% 100.00%
58 100.00% 100.00%
56 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
4 100.00% 100.00%
67 100.00% 100.00%
14 100.00% 100.00%
105 100.00% 100.00%
56 100.00% 100.00%
23 100.00% 100.00%
53 100.00% 100.00%
74 100.00% 100.00%
70 & 74 & 75 100.00% 100.00%
14 100.00% 100.00%
14 & 70 100.00% 100.00%
Mississauga
Canada
53 100.00% 100.00%
Luxembourg
Luxembourg
–
–
–
[1]
78 Dematic Group S.à r.l.
Senningerberg
Luxembourg
4 100.00% 100.00%
79 Dematic (Malaysia) Sdn. Bhd.
Petaling Jaya
Malaysia
103 100.00% 100.00%
80 Dematic Logistics de Mexico S. de R.L. de C.V. Monterrey
81 DMTC Technology Services, S. de. R.L. de C.V. Monterrey
82 Dematic Trading de Mexico S. de. R.L. de C.V.
Monterrey
Mexico
Mexico
Mexico
51 & 109 100.00% 100.00%
51 & 109 100.00% 100.00%
51 & 109 100.00% 100.00%
83 Dematic B.V.
84 STILL Intern Transport B.V.
s’Hertogenbosch Netherlands
6 100.00% 100.00%
Hendrik-Ido-
Ambacht
Netherlands
23 100.00% 100.00%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
235
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
85 STILL Norge AS
86 AUSTRO OM PIMESPO Fördertechnik GmbH
87 Linde Material Handling Austria GmbH
88 STILL Gesellschaft m.b.H.
89 Dematic Poland Sp. z o.o.
90 KION Polska Sp. z o.o.
91 Linde Material Handling Polska Sp. z o.o.
92 STILL POLSKA Sp. z o.o.
Registered office Country
Heimdal
Linz
Linz
Norway
Austria
Austria
Wiener Neudorf
Austria
Poznań
Szczecin
Warsaw
Gadki
Poland
Poland
Poland
Poland
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
23 100.00% 100.00%
75 100.00% 100.00%
14 & 86 100.00% 100.00%
23 100.00% 100.00%
3 100.00% 100.00%
14 100.00%
–
[2]
14 100.00% 100.00%
23 100.00% 100.00%
93 STILL MATERIAL HANDLING ROMANIA SRL
Giurgiu
Romania
14 & 23 100.00% 100.00%
94 OOO “Linde Material Handling Rus”
95 OOO “STILL Forklifttrucks”
96 Linde Material Handling AB
Moscow
Moscow
Örebro
97 Linde Material Handling Financial Services AB
Örebro
98 Nordtruck AB
99 STILL Sverige AB
100 Dematic Suisse Sagl
101 Linde Material Handling Schweiz AG
102 STILL AG
103 Dematic S.E.A. Pte. Ltd.
104 KION South Asia Pte. Ltd.
Örnsköldsvik
Malmö
Lugano
Dietlikon
Otelfingen
Singapore
Singapore
105 Linde Material Handling Asia Pacific Pte. Ltd.
Singapore
106 Linde Material Handling Slovenská republika s.r.o. Trenčin
107 STILL SR, spol. s.r.o.
108 Linde Viličar d.o.o.
109 Dematic Logistic Systems S.A.U.
110 Islavista Spain S.A.U.
111 KION Rental Services S.A.U.
112 Linde Material Handling Ibérica, S.A.U.
113 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
14 & 8 100.00% 100.00%
14 & 23 100.00% 100.00%
14 100.00% 100.00%
96 100.00% 100.00%
96 100.00% 100.00%
23 100.00% 100.00%
53 100.00% 100.00%
14 100.00% 100.00%
23 100.00% 100.00%
53 100.00% 100.00%
14 100.00% 100.00%
14 100.00% 100.00%
14 & 117 100.00% 100.00%
23 & 120 100.00% 100.00%
14 100.00% 100.00%
53 100.00% 100.00%
14 100.00% 100.00%
110 100.00% 100.00%
110 100.00% 100.00%
110 100.00% 100.00%
114 Linde Material Handling (Pty) Ltd.
Linbro Park
South Africa
14 100.00% 100.00%
115 Linde Material Handling (Thailand) Co., Ltd.
Pathum Thani
Thailand
105 100.00% 100.00%
116 KION Supply Chain Solutions Czech, s.r.o.
Český Krumlov
Czech Republic
52 100.00% 100.00%
117 Linde Material Handling Česká republika s.r.o.
Prague
Czech Republic
14 & 23 100.00% 100.00%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
236
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
118 Linde Material Handling Parts Distribution CZ
Český Krumlov
Czech Republic
14 100.00% 100.00%
s.r.o.
119 Linde Pohony s.r.o.
120 STILL ČR spol. s.r.o.
121 STILL Regional Service Center, s.r.o.
Český Krumlov
Czech Republic
14 100.00% 100.00%
Prague
Prague
Czech Republic
14 & 23 100.00% 100.00%
Czech Republic
23 100.00% 100.00%
122 Urban Transporte spol. s.r.o.
Moravany
Czech Republic
24 100.00% 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
14 100.00% 100.00%
125 STILL Kft.
126 Dematic Corp.
Környe
Hungary
23 100.00% 100.00%
Grand Rapids
United States
65 100.00% 100.00%
127 KION North America Corp.
Summerville
United States
14 100.00% 100.00%
128 Dematic International Trading Ltd.
Shanghai
129 Dematic Logistics Systems Ltd.
Suzhou
130 Egemin Asia Pacific Automation Ltd.
131 KION ASIA (HONG KONG) Ltd.
Causeway Bay –
Hong Kong
Kwai Chung –
Hong Kong
132 KION Baoli (Jiangsu) Forklift Co., Ltd.
Jiangjiang
133 Linde Material Handling Hong Kong Ltd.
Kwai Chung –
Hong Kong
134 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
78 100.00% 100.00%
78 100.00% 100.00%
31 100.00% 100.00%
14 100.00% 100.00%
131 100.00% 100.00%
14 100.00% 100.00%
14 100.00% 100.00%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
237
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
Non-consolidated subsidiaries
Domestic
135 Comnovo GmbH
Dortmund
Germany
14 100.00% 100.00%
136 KION IoT Systems GmbH
Frankfurt am Main Germany
1 100.00% 100.00%
137 Klaus Pahlke Betriebsführungs-GmbH
Haan
138 OM Deutschland GmbH
Neuhausen a. d.
Fildern
Germany
Germany
14 100.00% 100.00%
75 100.00% 100.00%
[R]
139 proplan Transport- und Lagersysteme GmbH
Aschaffenburg
Germany
1 100.00% 100.00%
140 Schrader Industriefahrzeuge Verwaltung GmbH
Essen
141 Trainingscenter für Sicherheit
Bremen
und Transport GmbH
142 Willenbrock Fördertechnik Beteiligungs-GmbH
Bremen
143 Willenbrock Fördertechnik Beteiligungs-GmbH
Hannover
Foreign
144 Lansing Bagnall (Aust.) Pty. Ltd.
Huntingwood
145 NDC Automation Pty. Ltd.
146 NDC Manage Pty. Ltd.
147 SCI Champ Lagarde
148 Castle Lift Trucks Ltd.
149 Creighton Materials Handling Ltd.
150 D.B.S. Brand Factors Ltd.
151 Fork Truck Rentals Ltd.
152 Fork Truck Training Ltd.
153 Lancashire (Fork Truck) Services Ltd.
154 Lansing Linde Ltd.
155 Lansing Linde Trifik Ltd.
Belrose
Belrose
Elancourt
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
156 Linde Castle Ltd. (formerly: Trifik Services Ltd.)
Basingstoke
157 Linde Heavy Truck Division Ltd.
158 McLEMAN FORK LIFT SERVICES LTD.
159 Regentruck Ltd.
160 Stephensons Enterprise Fork Trucks Ltd.
161 Sterling Mechanical Handling Ltd.
162 Urban Logistics (UK) Ltd.
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Germany
Germany
Germany
Germany
Australia
Australia
Australia
France
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
14 100.00% 100.00%
27
74.00% 74.00%
27
27
74.00% 74.00%
74.00% 74.00%
58 & 14 100.00% 100.00%
29 100.00% 100.00%
29 100.00% 100.00%
42 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
64 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
64 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
58 100.00% 100.00%
55 100.00% 100.00%
58 100.00% 100.00%
64 100.00% 100.00%
58 100.00% 100.00%
24 100.00% 100.00%
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
238
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
163 Handling & Storage Equipment (Ireland) Ltd.
164 QUALIFT S.p.A.
165 URBAN LOGISTICA S.R.L.
166 WHO Real Estate UAB
Ballymount
(Dublin)
Verona
Lainate
Vilnius
Ireland
Italy
Italy
Lithuania
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
69 100.00% 100.00%
[R]
74 100.00% 100.00%
24 100.00% 100.00%
27
74.00% 74.00%
167 Linde Material Handling (Malaysia) Sdn. Bhd.
Petaling Jaya
Malaysia
105 100.00% 100.00%
168 Linde Viljuškari d.o.o.
169 IBER-MICAR S.L.U.
Vrčin
Gavà
Serbia
Spain
87 100.00% 100.00%
14 100.00% 100.00%
170 Dematic Thailand Co. Ltd.
Bangkok
Thailand
103 & 191
73.89% 73.89%
171 Baoli Material Handling Europe s.r.o.
172 Použitý Vozík CZ, s.r.o.
173 TOV “Linde Material Handling Ukraine”
Prague
Prague
Kiev
Czech Republic
132 100.00% 100.00%
Czech Republic
117 100.00% 100.00%
Ukraine
14 & 8 100.00% 100.00%
Associates (equity-accounted investments)
Domestic
174 Carl Beutlhauser Kommunal- und Fördertechnik
Hagelstadt
Germany
14
25.00% 25.00%
GmbH & Co. KG
175 Hans Joachim Jetschke Industriefahrzeuge
Hamburg
Germany
14
21.00% 21.00%
(GmbH & Co.) KG
176 Linde Hydraulics GmbH & Co. KG
Aschaffenburg
Germany
177 Pelzer Fördertechnik GmbH
Kerpen
Germany
Foreign
178 Linde High Lift Chile S.A.
179 Labrosse Equipement SAS
180 Normandie Manutention SAS
Santiago de Chile Chile
Saint-Péray
Saint-Etienne-du-
Rouvray
France
France
14
14
14
42
42
10.00% 10.00%
24.96% 24.96%
45.00% 45.00%
34.00% 34.00%
34.00% 34.00%
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
239
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
Joint Ventures (equity-accounted investments)
Domestic
181 Linde Leasing GmbH
Wiesbaden
Germany
14
45.00% 45.00%
Foreign
182 JULI Motorenwerk s.r.o.
Moravany
Czech Republic
14 & 23
50.00% 50.00%
Associates (at cost)
Domestic
183 JETSCHKE GmbH
Hamburg
Germany
184 Linde Hydraulics Verwaltungs GmbH
Aschaffenburg
Germany
185 MV Fördertechnik GmbH
186 Supralift Beteiligungs- und
Kommunikationsgesellschaft mbH
187 Supralift GmbH & Co. KG
Foreign
188 Chadwick Materials Handling Ltd.
189 Bari Servizi Industriali S.c.a.r.l.
190 Carretillas Elevadoras Sudeste S.A.
191 Dematic Holding (Thailand) Co., Ltd.
192 Motorové závody JULI CZ s.r.o.
193 DEMATIC ELECTROMECHANICAL
SYSTEMS MIDDLE EAST L.L.C.
Blankenhain
Frankfurt am
Main
Hofheim am
Taunus
Corsham
Modugno
Murcia
Bangkok
Moravany
Dubai
Germany
Germany
14
14
14
14
21.00% 21.00%
10.00% 10.00%
25.00% 25.00%
50.00% 50.00%
Germany
14
50.00% 50.00%
UK
Italy
Spain
Thailand
Czech Republic
United Arab
Emirates
58
75
112
103
14
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 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
240
List of shareholdings as at 31 December 2019 (continued)
TABLE 124
No. Name
Registered office Country
Parent
company
Share-
holding
2019
Share-
holding
2018
Note
Financial investments
Foreign
194 Balyo SA
195 TPZ Linde Viličari Hrvatska d.o.o.
196 Zhejiang EP Equipment Co., Ltd.
[1] Consolidated in accordance with IFRS 10 as structured entity
[2] Addition during 2019
[3] No material influence
[R] Dormant company
Ivry-sur-Seine
Zagreb
Hangzhou
France
Croatia
People’s
Republic of
China
14
14
6.35%
6.48%
20.00% 20.00%
[3]
[3]
134
4.99%
–
[2], [3]
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other disclosures
241
[49] AUDITORS’ FEES
[51] INFORMATION ON PREPARATION
AND APPROVAL
The fees recognised as an expense and paid to the auditors of
the consolidated financial statements (Deloitte GmbH Wirtschaft-
The Executive Board of KION GROUP AG prepared the consoli-
sprüfungsgesellschaft, Munich, Frankfurt am Main branch office)
dated financial statements on 21 February 2020 and approved
in 2019 amounted to €2.2 million (2018: €2.3 million) for the audit
them for forwarding to the Supervisory Board. The Supervisory
of the financial statements, €0.1 million (2018: €0.1 million) for
Board has the task of examining and deciding whether to approve
other attestation services, €0.0 million (2018: €0.0 million) for
the consolidated financial statements.
tax consultancy services and €0.0 million (2018: €0.0 million)
for other services.
Frankfurt am Main, 21 February 2020
[50] EVENTS AFTER
THE REPORTING DATE
The Executive Board
On 3 January 2020, the KION Group signed an agreement with
Gordon Riske
Anke Groth
Weichai Power Co., Ltd., Weifang, People’s Republic of China, to
jointly establish a factory for the production of Linde counterbal-
ance trucks in China. The name of the company is KION (Jinan)
Forklift Co., Ltd., Jinan, People’s Republic of China. The capital
expenditure at the new site is likely to amount to around
€100.0 million up to 2022.
Dr Eike Böhm
Ching Pong Quek
Since the start of the year, KION GROUP AG and BMZ Hold-
ing GmbH have been operating the joint venture KION Battery
Systems GmbH, Karlstein am Main, with the aim of developing
and manufacturing lithium-ion batteries for industrial trucks.
In January 2020, KION GROUP AG repaid all of the remaining
liability of €200.0 million under the acquisition facilities agreement
(AFA) earlier than planned.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
242
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 and 315d German Commercial Code
GROUP AG, Frankfurt am Main/Germany, and its subsidiaries
(HGB) included in the combined management report.
(the Group) which comprise the consolidated statement of finan-
cial position as at 31 December 2019, and the consolidated state-
Pursuant to Section 322 (3) Sentence 1 German Commercial
ment of profit or loss and other comprehensive income, the con-
Code (HGB), we declare that our audit has not led to any reserva-
solidated statement of changes in equity and the consolidated
tions relating to the legal compliance of the consolidated financial
statement of cash flows for the financial year from 1 January to
statements and of the combined management report.
31 December 2019, and the notes to the consolidated financial
statements, including a summary of significant accounting poli-
Basis for audit opinions
cies. In addition, we have audited the combined management
We conducted our audit of the consolidated financial statements
report for the parent and the group of KION GROUP AG, Frank-
and of the combined management report in accordance with
furt am Main/Germany, for the financial year from 1 January to
Section 317 HGB and the EU Audit Regulation (No. 537/2014;
31 December 2019. In accordance with the German legal require-
referred to subsequently as ‘EU Audit Regulation’) and in compli-
ments, we have not audited the content of the consolidated
ance with German Generally Accepted Standards for Financial
corporate governance statement pursuant to Sections 289f,
Statement Audits promulgated by the Institut der Wirtschafts-
315d German Commercial Code (HGB) included in the combined
prüfer (IDW). Our responsibilities under those requirements and
management report.
principles are further described in the ‘Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements and of the
In our opinion, on the basis of the knowledge obtained in the audit,
Combined Management Report’ section of our auditor’s report.
– the accompanying consolidated financial statements com-
ply, in all material respects, with the IFRSs, as adopted by the
We are independent of the group entities in accordance with the
requirements of European law and German commercial and pro-
fessional law, and we have fulfilled our other German professional
EU, and the additional requirements of German commercial
responsibilities in accordance with these requirements. In addi-
law pursuant to Section 315e (1) German Commercial Code
tion, in accordance with Article 10 (2) point (f) of the EU Audit Reg-
(HGB) and, in compliance with these requirements, give a
ulation, we declare that we have not provided non-audit services
true and fair view of the assets, liabilities, and financial
prohibited under Article 5 (1) of the EU Audit Regulation. We
position of the Group as at 31 December 2018, and of its
believe that the audit evidence we have obtained is sufficient and
financial performance for the financial year from 1 January to
appropriate to provide a basis for our audit opinions on the con-
31 December 2019, and
solidated financial statements and on the combined manage-
ment report.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
243
for an impairment. The impairment test is conducted at the
Key audit matters in the audit of the consolidated
level of the operating entities, which represent the cash-gen-
financial statements
erating units, by determining the corresponding realisable
Key audit matters are those matters that, in our professional
amount and comparing that realisable amount with the corre-
judgement, were of most significance in our audit of the consoli-
sponding carrying value. The realisable amount is determined
dated financial statements for the financial year from 1 January to
using the discounted cash flow method on the basis of KION
31 December 2019. These matters were addressed in the context
GROUP AG’s budget consisting of the operative three-years
of our audit of the consolidated financial statements as a whole
plan (2020 budget and 2021 to 2022 medium-term budget) as
and in forming our audit opinion thereon; we do not provide a
well as of a projection concerning two further years, which is
separate audit opinion on these matters.
adjusted using assumptions about long-term growth rates.
The result of this measurement highly depends on the execu-
In the following we present the key audit matters we have deter-
tive directors’ estimation of the anticipated cash flows of the
mined in the course of our audit:
corresponding operating entity as well as the discount rate
used (weighted average cost of capital – WACC) and, there-
1. Recoverability of the goodwill and brand names with indefinite
fore, is subject to great uncertainty. Therefore and due to the
useful life as recognised in the consolidated statement of
underlying complexity of the valuation models applied, this
financial position
2. Recognition of leases as regards sales
matter was of particular significance in the scope of our audit.
3. Realisation of revenue regarding the project business in the
For information provided by the Parent on the goodwill and
Supply Chain Solutions segment
brand names with indefinite useful life, please refer to notes [6]
Our presentation of these key audit matters has been structured
as follows:
and [16] to the consolidated financial statements.
b. During our audit, we, among other things, obtained an under-
standing of the method applied in the impairment test, the
a) description (including reference to corresponding information
budget process of KION as well as the definition of the
in the consolidated financial statements)
cash-generating units and assessed the determination of the
b) auditor’s response
WACC. In this context, we considered the Group’s adherence
to the budget process over the past years.
1. Recoverability of the goodwill and brand names with indefinite
useful life as recognised in the consolidated statement of
Regarding the impairment test, we examined the appropriate-
financial position
ness of the expected future cash flows mainly by comparing
a. As at 31 December 2019, the carrying amount of the goodwill
the information with the operative budget (2020) approved by
and brand names with indefinite useful life in the consolidated
the supervisory board and with the medium-term budget
financial statements is mEUR 3,475.8 (25.3% of the Group’s
(2021 to 2022) approved by the executive directors and by
total assets) and mEUR 939.3 (6.8% of the Group’s total
examining the key measurement assumptions and parame-
assets), respectively. The goodwill and brand names with
ters for plausibility based on expectations about macroeco-
indefinite useful life are tested by the executive directors for
nomic and industry-specific trends. As a significant portion of
impairment each year. This impairment test is conducted
the value in use has been determined based on projected
regardless of whether there are external or internal indicators
cash flows for the period following the five-year budget (period
KION GROUP AGAnnual Report 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
244
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
Group-wide, consistent lease application 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 IFRS are complete and cor-
ments, we finally conducted sensitivity analyses with regard to
rect. The determination of the criteria and parameters in the
both the growth expectations of the future cash flows from the
application is subject to the executive directors’ judgement.
operating entities and the applied discount rate.
The classification and entry routines of the lease application
are updated, programmed and managed centrally in Germany
2. Recognition of leases as regards sales
while the contract input is performed locally in the operating or
a. To a great extent, KION uses leases as a sales instrument in
the Group’s own financial services entities.
the segment Industrial Trucks & Services. The corresponding
agreements comprise contracts, under which the KION enti-
Due to the high transaction volume in connection with the var-
ties qualify as contract parties, and those, under which the
ious contract types, any errors in this area may considerably
lease object was sold to external finance partners. The follow-
affect the consolidated financial statements. For this reason,
ing three contract types are primarily used:
the assessment of the accounting for leases was of particular
– Single step lease: The lease object is directly leased to the
– Sale and leaseback sublease: The lease object is sold to
consumer;
a 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.
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.
b. As part of our audit, we first updated our understanding of the
process including our understanding of the existing contract
types as well as the company’s internal controls regarding
leases.
As at 31 December 2019, the carrying value of the receivables
and assets under the lease agreements is mEUR 1,421.0
In the light of our understanding of the organisational compo-
(10.3 per cent of total assets) and mEUR 1,994.1 (14.5 per cent
sition and the overall process, the audit on the one hand
of total assets), respectively.
focused on the lease applications used and on the other hand
on the completeness and accuracy of the data input in the
Single-step leases are classified as finance leases or operat-
individual component areas.
ing leases within the meaning of IFRS 16. For sale and lease
back sublease contracts concluded until and including
With respect to the lease applications used, we examined the
31 December 2017, an asset and a lease liability is accounted
appropriateness, implementation and, where required, effec-
for taking advantage of the right of continuance specified in
tiveness of certain IT controls in line with our audit strategy.
IFRS 16. For sale and lease back sublease contracts con-
As part of this examination, we consulted internal IT specialists.
cluded after 31 December 2017, the transaction is classified
as a finance lease. Accordingly, a liability related to financial
KION GROUP AGAnnual Report 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
245
In a next step, we obtained an understanding of whether the
3. Realisation of revenue regarding the project business in the
automated entry and classification routines used in the lease
Supply Chain Solutions segment
application comply with the relevant IFRS. To this end, we first
a. The revenue in the Supply Chain Solutions segment amounts
examined the KION IFRS Accounting Manual, which repre-
to mEUR 2,376.1 in the financial year 2019 (prior year: mEUR
sents the basis for routine programming, for conformity with
2,052.1). This accounts for 27.0 per cent (prior year: 25.7 per
the IFRS. In addition, we assessed whether the entry and clas-
cent) of the Group’s total revenue.
sification routines have been appropriate. Therefore, we
examined the agreements on the basis of judgemental selec-
A significant portion of the revenue generated in the Supply
tions or by applying sampling methods. However, we made
Chain Solutions segment (mEUR 1,780.2; prior year: mEUR
sure that all contract types were subject to our examination.
1,514.0) relates to the project business (74.9 per cent of the
Based on the data inputs, we assessed for each selected con-
segment’s total revenue). Revenue for the project business-
tract whether the results of the lease application comply with
related customer contracts is recognised in line with the corre-
the relevant IFRS.
sponding period unless there is an alternative possibility of use
and right to the services already rendered. The revenue to be
We examined the data inputs made in the financial year in the
realised is determined based on the percentage of completion
individual component areas for accuracy directly in the oper-
method. The percentage of completion is determined based
ating entities on a sample basis in the form of mathematical
on the proportion of the contract costs that have already been
and statistical methods and extrapolated any identified devia-
incurred to the total contract costs estimated as at the report-
tions to the corresponding basic population. In this context,
ing date.
apart from the accuracy, we audited the appropriate cut-off
and completeness of the data inputs on the basis of the original
The revenue highly depends on estimations subject to the
contracts. Where required, we received confirmations of third
legal representatives’ judgement, in particular with regard to
parties to assess the completeness of the entered contracts.
the total contract costs and the resulting percentage of com-
pletion. Also taking into account the high amount of revenue
related to the project business in the consolidated financial
statements, we considered this matter to be of particular
significance in the scope of our audit.
For information on revenue realisation related to the project
business in the Supply Chain Solutions segment, please refer
to the notes [6] and [7] to the consolidated financial statements.
KION GROUP AGAnnual Report 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
246
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 2020.
Group. We examined the appropriateness of the internal
controls’ design and implementation regarding the estimation
The executive directors and supervisory board are responsible
of the percentage of completion and continued review of
for the declaration related to the German Corporate Governance
contract costs.
Code in accordance with Section 161 German Stock Corporation
Act (AktG), which is part of the corporate governance statement
Considering this, we selected projects based on risk consid-
included in the combined management report. The supervisory
erations. First, we assessed – based on the individual basis of
board is responsible for the report of the supervisory board
the contracts – whether the projects meet the requirements
included in the annual report. In addition, the executive directors
for revenue recognition according to the percentage of com-
are responsible for the other information.
pletion method. Subsequently, we assessed the estimation
made for the individual contracts. To this end, we examined
Our audit opinions on the consolidated financial statements and
the current cost reports and project calculations taking into
on the combined management report do not cover the other
account the customer contracts with respect to the percent-
information, and consequently we do not express an audit opin-
age of completion of the selected projects. To this end, we
ion or any other form of assurance conclusion thereon.
additionally consulted the employees responsible for the rele-
vant projects on matters such as the current project phase,
In connection with our audit of the consolidated financial state-
any risks including fines and changes to original assumptions
ments, our responsibility is to read the other information and, in
and requested explanations for unexpected project develop-
doing so, to consider whether the other information
ments, which were compared with supplementary evidence.
In addition, we have convinced ourselves, where required, of
the project progress on site and have taken into account the
adherence to the budget planning based on retrospective
analyses of selected projects.
– 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.
Other information
Responsibilities of the legal representatives and the supervisory
The executive directors and/or the supervisory board are respon-
board for the consolidated financial statements and the com-
sible for the other information. The other information comprises
bined management report
the following documents obtained up to the date of this auditor’s
The executive directors are responsible for the preparation of the
report:
– the corporate governance statement included in the com-
– the executive directors’ confirmation regarding the consoli-
bined management report
dated financial statements and the combined management
consolidated financial statements that comply, in all material
respects, with IFRS as adopted by the EU and the additional
requirements of German commercial law pursuant to Section
315e (1) HGB, and that the consolidated financial statements, in
compliance with these requirements, give a true and fair view of
the assets, liabilities, financial position and financial performance
report pursuant to Section 297 (2) sentence 4 and Section
of the Group. In addition, the executive directors are responsible
315 (1) sentence 5 HGB, respectively, respectively
– all the remaining parts of the annual report, with the excep-
tion of the audited consolidated financial statements and
for such internal control as they have determined necessary to
enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
combined management report and our auditor’s report.
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
247
In preparing the consolidated financial statements, the executive
Reasonable assurance is a high level of assurance, but is not a
directors are responsible for assessing the Group’s ability to con-
guarantee that an audit conducted in accordance with Section
tinue as a going concern. They also have the responsibility for
317 German Commercial Code (HGB) and the EU Audit Regula-
disclosing, as applicable, matters related to going concern. In
tion and in compliance with German Generally Accepted Stand-
addition, they are responsible for financial reporting based on the
ards for Financial Statement Audits promulgated by the Institut
going concern basis of accounting unless there is an intention to
der Wirtschaftsprüfer (IDW) will always detect a material misstate-
liquidate the Group or to cease operations, or there is no realistic
ment. Misstatements can arise from fraud or error and are con-
alternative but to do so.
sidered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
Furthermore, the executive directors are responsible for the
users taken on the basis of these consolidated financial state-
preparation of the combined management report that as a whole
ments and this combined management report.
provides an appropriate view of the Group’s position and is, in all
material respects, consistent with the consolidated financial
We exercise professional judgement and maintain professional
statements, complies with German legal requirements, and
appropriately presents the opportunities and risks of future
development. In addition, the executive directors are responsible
scepticism throughout the audit. We also
– identify and assess the risks of material misstatement of the
consolidated financial statements and of the combined man-
for such arrangements and measures (systems) as they have
agement report, whether due to fraud or error, design and
considered necessary to enable the preparation of a combined
perform audit procedures responsive to those risks, and
management report that is in accordance with the applicable
obtain audit evidence that is sufficient and appropriate to
German legal requirements, and to be able to provide sufficient
provide a basis for our audit opinions. The risk of not detect-
appropriate evidence for the assertions in the combined man-
ing a material misstatement resulting from fraud is higher
agement 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 controls.
– 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
management report in order to design audit procedures that
financial 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-
priate view of the Group’s position and, in all material respects, is
consistent with the consolidated financial statements and the
knowledge obtained in the audit, complies with the German legal
systems.
– evaluate the appropriateness of accounting policies used by
the executive directors and the reasonableness of estimates
made by the executive directors and related disclosures.
– conclude on the appropriateness of the executive directors’
use of the going concern basis of accounting and, based on
requirements and appropriately presents the opportunities and
the audit evidence obtained, whether a material uncertainty
risks of future development, as well as to issue an auditor’s report
exists related to events or conditions that may cast significant
that includes our audit opinions on the consolidated financial
doubt on the Group’s ability to continue as a going concern.
statements and on the combined management report.
If we conclude that a material uncertainty exists, we are
required to draw attention in the auditor’s report to the related
disclosures in the consolidated financial statements and in
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
248
the combined management report or, if such disclosures are
We communicate with those charged with governance regarding,
inadequate, to modify our respective audit opinions. Our
among other matters, the planned scope and timing of the audit
conclusions are based on the audit evidence obtained up to
and significant audit findings, including any significant deficien-
the date of our auditor’s report. However, future events or
cies in internal control that we identify during our audit.
conditions may cause the Group to cease to be able to con-
tinue as a going concern.
– evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
We also provide those charged with governance with a statement
that we have complied with the relevant independence require-
ments, and communicate with them all relationships and other
and whether the consolidated financial statements present
matters that may reasonably be thought to bear on our independ-
the underlying transactions and events in a manner that the
ence, and where applicable, the related safeguards.
consolidated financial statements give a true and fair view of
the assets, liabilities, financial position and financial perfor-
From the matters communicated with those charged with
mance of the Group in compliance with IFRSs, as adopted by
governance, we determine those matters that were of most
the EU, and with the additional requirements of German
significance in the audit of the consolidated financial statements
commercial law pursuant to Section 315e (1) German Com-
of the current period and are therefore the key audit matters. We
mercial Code (HGB).
– obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express audit opinions on the consoli-
dated financial statements and on the combined manage-
ment report. We are responsible for the direction, supervision
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 executive directors as a basis for the prospective
information, and evaluate the proper derivation of the pro-
spective 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 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent auditors’ report
249
Other legal and regulatory requirements
German public auditor responsible
for the engagement
Other information pursuant to Article 10 EU Audit Regulation
We were elected as group auditor by the general meeting on
The German Public Auditor responsible for the engagement is
9 May 2019. We were engaged by the supervisory board on
Kirsten Gräbner-Vogel.
14 May 2019 and 27 June/23 July 2019. We have been the group
auditor of KION GROUP AG, Frankfurt am Main/Germany, which
Frankfurt am Main / Germany, 21 February 2020
was named KION Holding 1 GmbH until 12 June 2013, without
interruption since the financial year 2007. Since the financial year
Deloitte GmbH
2013, the Company has been a public interest entity within the
Wirtschaftsprüfungsgesellschaft
meaning of Section 319a (1) Sentence 1 HGB.
We declare that the audit opinions expressed in this auditor’s
Signed:
Signed:
report are consistent with the additional report to the audit
Kirsten Gräbner-Vogel
Stefan Dorissen
committee pursuant to Article 11 of the EU Audit Regulation
Wirtschaftsprüferin
Wirtschaftsprüfer
(long-form audit report).
[German Public Auditor]
[German Public Auditor]
KION GROUP AGAnnual Report 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Responsibility statement
250
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, 21 February 2020
The Executive Board
Gordon Riske
Anke Groth
Dr Eike Böhm
Ching Pong Quek
KION GROUP AGAnnual Report 2019 ADDITIONAL INFORMATION
Contents
253
ADDITIONAL
INFORMATION
254
QUARTERLY INFORMATION
255
MULTI-YEAR OVERVIEW
256
DISCLAIMER
257
FINANCIAL CALENDAR
257
CONTACT
KION GROUP AGAnnual Report 2019 ADDITIONAL INFORMATION
Quarterly information
254
Quarterly information
Quarterly information
TABLE 125
in € million
Order intake
Q4
Q3
Q2
Q1
2019
2018
2019
2018
2019
2018
2019
2018
2,577.3
2,287.4
2,337.6
2,060.3
2,078.6
2,424.0
2,118.3
1,885.0
thereof Industrial Trucks & Services
1,753.0
1,724.2
1,493.8
1,454.8
1,573.2
1,546.5
1,510.5
1,485.2
thereof Supply Chain Solutions
823.4
556.3
838.6
598.5
506.0
874.2
602.9
396.3
Total revenue
2,282.3
2,225.5
2,160.0
1,895.9
2,280.7
2,031.1
2,083.4
1,843.3
thereof Industrial Trucks & Services
1,710.6
1,685.8
1,552.8
1,417.9
1,638.2
1,449.6
1,508.6
1,368.8
thereof Supply Chain Solutions
Adjusted EBITDA
thereof Industrial Trucks & Services
thereof Supply Chain Solutions
567.3
433.4
382.0
68.2
533.0
457.2
395.2
65.4
600.6
420.1
348.2
80.5
472.7
380.1
326.0
56.1
642.0
425.0
355.3
78.2
578.8
377.0
318.0
64.0
568.8
378.9
324.0
62.1
470.7
340.9
301.0
46.1
Adjusted EBITDA margin
19.0%
20.5%
19.4%
20.0%
18.6%
18.6%
18.2%
18.5%
thereof Industrial Trucks & Services
22.3%
23.4%
22.4%
23.0%
21.7%
21.9%
21.5%
22.0%
thereof Supply Chain Solutions
12.0%
12.3%
13.4%
11.9%
12.2%
11.1%
10.9%
EBIT
thereof Industrial Trucks & Services
thereof Supply Chain Solutions
Adjusted EBIT
thereof Industrial Trucks & Services
thereof Supply Chain Solutions
162.5
166.0
23.0
225.8
198.8
52.0
206.2
195.7
22.2
252.3
213.8
49.9
194.9
169.4
42.7
217.1
169.8
64.4
168.6
156.2
20.9
192.7
157.4
43.8
Adjusted EBIT margin
9.9%
11.3%
10.1%
10.2%
200.6
177.8
39.0
225.2
177.7
63.6
9.9%
142.1
136.1
19.4
187.0
148.2
51.5
9.2%
thereof Industrial Trucks & Services
11.6%
12.7%
10.9%
11.1%
10.8%
10.2%
thereof Supply Chain Solutions
9.2%
9.4%
10.7%
9.3%
9.9%
8.9%
158.7
148.5
24.8
182.4
148.8
48.2
8.8%
9.9%
8.5%
9.8%
125.8
137.1
1.9
157.9
135.9
35.0
8.6%
9.9%
7.4%
KION GROUP AGAnnual Report 2019 ADDITIONAL INFORMATION
Multi-year overview
Multi-year overview
KION Group multi-year overview
in € million
Order intake
Revenue
Order book ¹
Financial performance
EBITDA
Adjusted EBITDA 2
Adjusted EBITDA margin 2
EBIT
Adjusted EBIT 2
Adjusted EBIT margin 2
2019
9,111.7
8,806.5
3,631.7
1,614.6
1,657.5
18.8%
716.6
850.5
9.7%
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%
2016
5,833.1
5,587.2
2,396.6
889.5
931.6
16.7%
434.8
537.3
9.6%
255
TABLE 126
2015
5,215.6
5,097.9
864.0
824.2
850.0
16.7%
422.8
482.9
9.5%
Net income
444.8
401.6
422.5
246.1
221.1
Financial position ¹
Total assets
Equity
Net financial debt
ROCE 3
Cash flow
Free cash flow 4
Capital expenditure 5
13,765.2
12,968.8
12,337.7
11,297.0
3,558.4
1,609.3
9.7%
3,305.1
1,869.9
9.3%
2,992.3
2,095.5
9.3%
2,495.7
2,903.4
6.9%
6,440.2
1,848.7
573.5
11.9%
568.4
287.4
519.9
258.5
474.3
218.3
– 1,850.0
166.7
332.7
142.6
Employees 6
34,604
33,128
31,608
30,544
23,506
1 Figures as at balance sheet date 31/12/
2 Adjusted for PPA items and non-recurring items
3 ROCE is defined as the proportion of adjusted EBIT to capital employed
4 Free cash flow is defined as cash flow from operating activities plus cash flow from investing activities
5 Capital expenditure including capitalised development costs, excluding right-of-use assets
6 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 2019 ADDITIONAL INFORMATION
Disclaimer
256
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 2019 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 2019 ADDITIONAL INFORMATION
Financial calendar / Contact
257
FINANCIAL CALENDAR
CONTACT
3 March 2020
Contacts for the media
Contacts for investors
Publication of 2019 annual report,
financial statements press conference
Michael Hauger
Antje Kelbert
and conference call for analysts
Senior Vice President
Senior Manager Investor Relations
5 March 2020
Capital Markets Day
Corporate Communications
Phone +49 69 201 107 346
Phone +49 69 201 107 655
antje.kelbert@kiongroup.com
michael.hauger@kiongroup.com
28 April 2020
Frank Grodzki
Dana Unger
Quarterly statement for the period
Senior Director External Communications
Senior Manager Investor Relations
ended 31 March 2020 (Q1 2020),
Phone +49 69 201 107 496
Phone +49 69 201 107 371
conference call for analysts
frank.grodzki@kiongroup.com
dana.unger@kiongroup.com
12 May 2020
Annual General Meeting
30 July 2020
Interim report for the period ended
30 June 2020 (Q2 2020), conference
call for analysts
29 October 2020
Quarterly statement for the period
ended 30 September 2020 (Q3 2020),
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 2019 KION GROUP AG
Corporate Communications
Thea-Rasche-Straße 8
60549 Frankfurt am Mainn | Germany
Phone: +49 69 201 100
Fax: +49 69 201 107 690
info@kiongroup.com
www.kiongroup.com