Kion Group Ag · XETR:KGX
Kion — Investor Presentation (June 2020)
21 slides from Kion's investor presentation, Jun 25, 2020
Slide 1: Leasing Business Deep Dive
Leasing Business Deep Dive A resilient and well managed income stream Frankfurt, 25 June 2020
Slide 2: Agenda
Agenda 1. Business Model and Strategy 2. Funding 3. Risk Management 4. Lease Accounting 5. Key takeaways 2 KION GROUP AG | Leasing Business Deep Dive | 25 June 2020
Slide 3: Integrated Business Model within Industrial Trucks and Services
Integrated Business Model within Industrial Trucks and Services Leasing is an important component growing the business • Technology and innovation • Sales support vehicle with New truck sales Financial services leadership benefit for aftermarket and Around half of new • Tailor-made solutions and ser
Slide 4: Leasing and Rental Strategy
Leasing and Rental Strategy Integrated approach to drive profitable growth • Full support of life cycle management (LTR1, STR2, service, used trucks) • Serve customers’ needs • Strong customer focus to optimize • Full integration into Profit & penetration and retention regional sales structures Resi
Slide 5: Rental and Leasing business: Contract and financing structure overview
Rental and Leasing business Contract and financing structure overview Rental Business Leasing Business Direct Business Indirect Business Sale-and-leaseback, ABS, Sale-and-leaseback, self-funded Vendor Financing Lease Facility, self-funded Operating Lease Finance Lease 5 KION GROUP AG | Leasing Busin
Slide 6: Agenda
Agenda 1. Business Model and Strategy 2. Funding 3. Risk Management 4. Lease Accounting 5. Key takeaways 6 KION GROUP AG | Leasing Business Deep Dive | 25 June 2020
Slide 7: Funding Structure of Leasing Business
Funding Structure of Leasing Business Increasing share of direct leasing business supports profitable growth Instrument Balance Sheet Position €m1 Maturity Matched Funding Interest Matched Funding SALB (Sale-and- FY 2019 1.778 leaseback) FY 2018 1.778 297 Indirect Leasing 320 393 Lease Facilities 30
Slide 8: Refinancing of Leasing Business
Refinancing of Leasing Business The majority of KION´s leasing portfolio is matched funded Assets Refinancing structure Liabilities Funding instruments are rolled-forward on a yearly basis Very high share of matched funding which Current Maturity Profile benefits from optimized cost structure
Slide 9: Agenda
Agenda 1. Business Model and Strategy 2. Funding 3. Risk Management 4. Lease Accounting 5. Key takeaways 9 KION GROUP AG | Leasing Business Deep Dive | 25 June 2020
Slide 10: Risk Management Categories
Risk Management Categories All risk categories are actively managed and mitigated • KION's conservative residual value strategy in place since 2001 Residual Value • LTR1 residual values allow for attractive profit margins in our used truck business Risk • KION has never recorded significant aggregat
Slide 11: COVID-19 Crisis
COVID-19 Crisis As of today, no significant impact on profitability of existing portfolio MEASURES • Selective use of contract adaptions to support customers experiencing disruptions Meeting our customers' needs • Utilization of short-term fleets to support increased demand for during this difficult
Slide 12: Agenda
Agenda 1. Business Model and Strategy 2. Funding 3. Risk Management 4. Lease Accounting 5. Key takeaways 12 KION GROUP AG | Leasing Business Deep Dive | 25 June 2020
Slide 13: Lease Accounting – Balance Sheet
Lease Accounting – Balance Sheet Increase in (lease) liabilities resulting from growth of leasing business Overview • Many of KION Group’s balance sheet items are related to leasing business, especially: • Leased assets 1 • Rental assets 1 • Lease receivables • Liabilities from financial services •
Slide 14: Lease Accounting – Balance Sheet
Lease Accounting – Balance Sheet Direct long-term leasing business drives KION’s balance sheet Leasing balances as at Dec 31, 2019 Long-term leasing balances as at Dec 31, 2019 Liabilities from FS1 Long-term rental Liabilities from FS1 Leased assets €2,062.9m Leased assets €1,765.7m €1,361.2m (Opera
Slide 15: Lease Accounting – Balance Sheet
Lease Accounting – Balance Sheet Specific accounts with bigger movements, overall parallel development (in €m) 2019 2018 2017 Change 2018-2019 Change 2017-2019 Sales Industrial Truck & Services (total) 6,410 5,922 5,572 8% 15% thereof New Business (third party) 3,346 3,009 2,829 11% 18% thereof Rent
Slide 16: Lease Accounting – Balance Sheet
Lease Accounting – Balance Sheet Presentation of refinancing transactions A deeper look into the Liabilities from Financial Services1 The liabilities from financial services relate to the financing of the long-term and short-term leasing business, separated into a non- current and a current portion:
Slide 17: Lease Accounting – Income Statement
Lease Accounting – Income Statement Timely recognition of income differs between finance and operating lease Income statement LTR1 (FL) LTR1 (OL) STR2 (OL) Finance lease (FL) vs. operating lease (OL) Revenue category New business Rental business (In-) direct leasing business classified as a financ
Slide 18: Lease Accounting – Cash Flow Statement
Lease Accounting – Cash Flow Statement Leasing business is operating cash flow accretive Understanding the cash flow statement KION’s leasing business is presented as operating cash flow (OCF) 1. Earnings before interest and tax is the basis for the (indirect) calculation of the OCF and already cont
Slide 19: Agenda
Agenda 1. Business Model and Strategy 2. Funding 3. Risk Management 4. Lease Accounting 5. Key takeaways 19 KION GROUP AG | Leasing Business Deep Dive | 25 June 2020
Slide 20: Key takeaways
Leasing Business Deep Dive Key takeaways 1. Leasing business is one important component of the integrated IT&S business model 2. Well managed risk profile with resilient income streams 3. Optimized refinancing structure supports competitive funding costs 4. Leasing operations are EBIT and operating
Slide 21: Disclaimer
Disclaimer This document has been prepared by KION GROUP AG (the “Company”) solely for informational purposes. This disclaimer shall apply in all respects to the entire presentation (including all slides of this document), the oral presentation of the slides by representatives of the Company (or any