[12] Financial income

Financial income breaks down as follows:

In 2024, financial income went up by €94.2 million year on year to reach €302.0 million.

The interest income from the lease business relates to the interest portion of lease payments in which KION Group subsidiaries operate as lessors and the arrangements are classified as a finance lease relationship. In such relationships, the KION Group enters into leases with end customers that are based on fixed interest rates. It hedges most of them using interest-rate derivatives. The increase in interest income from the lease business was predominantly due to a rise in lease receivables under finance leases. This increase was also driven by higher interest rates in the customer contracts entered into (details of the countervailing interest expense from the lease business can be found in note [13]).

Foreign currency exchange rate gains predominantly arise in connection with foreign currency positions in internal financing and the related hedging transactions that are not part of a formally documented hedge.

Furthermore, adjustments to the measurement of lease receivables designated as hedged items in fair value hedges resulted in income from fair value hedges of €25.2 million (2023: €38.2 million) owing to falling long-term interest rates. There was also an expense from fair value hedges of €22.6 million (2023: €34.5 million) resulting from the decrease in the fair value of the interest-rate derivatives that are used to hedge the lease portfolio (see note [13]). The rise in short-term market interest rates over the course of the year led to higher realized gains on interest-rate derivatives.