[4] Basis of consolidation

KION GROUP AG’s equity investments consist of subsidiaries, associates and joint ventures, and financial investments.

In addition to KION GROUP AG, the consolidated financial statements of the KION Group include, using the acquisition method, all material subsidiaries over which KION GROUP AG has control. KION GROUP AG controls a subsidiary if it has decision-making authority over the main activities of the entity and can use this authority to affect the amount of the variable returns to which it is exposed as a result of the equity investment. Material subsidiaries acquired in the course of the financial year are consolidated from the date on which control is obtained. In addition, equity investments previously classified as immaterial (non-consolidated subsidiaries) are included in the basis of consolidation as soon as the materiality criteria defined for the KION Group are satisfied. Companies sold in the course of the financial year are deconsolidated from the date on which control is lost.

Associates are equity investments whose financial and operating 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 percent and 50 percent of the voting rights.

Joint ventures are equity investments where the joint venture is jointly managed 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.

A total of 26 (2023: 25) German and 104 (2023: 107) foreign subsidiaries were fully consolidated in addition to KION GROUP AG as at December 31, 2024.

In addition, eight associates (December 31, 2023: eight) and three joint ventures (December 31, 2023: three) were consolidated and accounted for using the equity method as at December 31, 2024. The last available annual financial statements or interim financial statements were generally used as the basis for measurement.

As at December 31, 2024, 51 (December 31, 2023: 47) companies were recognized at amortized cost or at fair value through other comprehensive income. The non-consolidated subsidiaries recognized at amortized cost and the associates and joint ventures that are not accounted for using the equity method were of minor importance to the presentation of the financial position and financial performance of the KION Group, both individually and as a whole.

The following table shows the number of equity investments broken down by category:

Where other requirements were met, the fully consolidated companies listed below were exempt from the obligation to disclose annual financial statements and to prepare notes to the (consolidated) financial statements and (group) management reports in accordance with sections 264 (3), 264b, and 291 (2) HGB on account of their inclusion in the consolidated financial statements.

A detailed overview of all the direct and indirect shareholdings of KION GROUP AG can be found in note [48] List of shareholdings.

Acquisitions

Pelzer Fördertechnik GmbH

On October 31, 2024, the remaining 75.04 percent of the shares were acquired in the German dealer Pelzer Fördertechnik GmbH, whose registered office is in Kerpen, Germany. KION GROUP AG’s equity interest in Pelzer Fördertechnik GmbH therefore rose from 24.96 percent to 100.00 percent. The acquiree is a wholesaler and service provider in the field of material handling and warehouse technology. Its product portfolio ranges from the sale of new and used trucks to rental business and (full-)service contracts. By acquiring Pelzer Fördertechnik GmbH, the KION Group is strengthening Linde Material Handling’s dealer network.

The purchase consideration for the remaining shares is expected to be €28.2 million. The equity-accounted carrying amount of the investment in Pelzer Fördertechnik GmbH immediately prior to the acquisition date came to €7.4 million.

Goodwill constitutes the strategic synergies that the KION Group expects to derive from this business combination. The goodwill of €8.4 million arising from this acquisition is not tax deductible. The derived goodwill was assigned to the KION ITS EMEA group of cash-generating units.

In the two months to December 31, 2024, Pelzer Fördertechnik GmbH contributed €8.8 million to consolidated revenue. If the business combination had taken place with effect from January 1, 2024, this would have led to an increase in consolidated revenue of €43.6 million. The acquisition did not have a material impact on net income in the two months to December 31, 2024. Nor would it have had a material impact on the net income for 2024 as a whole.

The line item ‘Acquisition of subsidiaries/other businesses (net of cash acquired)’ in the consolidated statement of cash flows contains a net cash outflow of €23.1 million for 2024 for the acquisition of the remaining shares.

Other acquisitions

On August 1, 2024, the KION Group acquired 51.00 percent of the shares in Sociedad Gallega de Carretillas, S.A. (SOGACSA), whose registered office is in Nigrán, Spain. The acquiree is a wholesaler and service provider in the field of material handling and warehouse technology. By acquiring Sociedad Gallega de Carretillas, S.A., the KION Group is strengthening Linde Material Handling’s dealer network. The purchase consideration for the acquired shares was €9.9 million. Non-controlling interests were recognized at the proportionate value of the net assets attributable to them excluding goodwill.

Purchase price allocations in connection with the acquisitions

The following table shows the breakdown of the amounts recognized for the assets acquired and liabilities assumed (including the resulting goodwill) and the consideration transferred in connection with the acquisitions:

The fair values of the assets acquired and liabilities assumed that relate to the lease and short-term rental business and the deferred tax assets and liabilities recognized thereon in connection with the two acquisitions have been measured on a provisional basis owing to the proximity of the transaction to the reporting date and because of the detailed information required for the measurement. If, within a year after the acquisition date, new information about facts and circumstances that existed as at the acquisition date is obtained that would have led to the above amounts being corrected, the accounting for the acquisition will be adjusted.