40. Hedge accounting

Hedging currency risk

The KION Group applies cash flow hedge accounting in hedging the exchange rate risks arising (in various currencies) from highly probable future transactions and firm commitments not reported in the statement of financial position. Foreign-currency forwards with settlement dates in the same month as the expected cash flows from the Group’s operating activities are used as hedges. The critical terms of the hedging instruments and the hedged items are therefore matched with each other. The hedge ratio, which is derived from the volume of hedged items and the hedging instruments used, is 1:1 for these hedges. 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 spot and forward elements are designated as the hedging instrument, whereas the cross-currency basis spread is recognized as an undesignated element.

The main currency hedges relate to pound sterling and the US dollar. The foreign-currency forwards in existence as at December 31, 2025 were entered into at average hedging rates of £0.8717 to €1 (2024: £0.8605 to €1) and US$ 1.1464 to €1 (2024: US$ 1.1060 to €1).

On account of the short-term nature of the Group’s payment terms, reclassifications to the income statement – or to the hedged inventory items in the statement of financial position – of fair value changes previously recognized in equity in the hedge reserve and the recognition of the corresponding cash flows generally take place in the same reporting period. A foreign-currency receivable or liability is recognized when goods are dispatched or received. Until the corresponding payment is received, changes in the fair value of the derivative are recognized 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 foreign-currency forwards used as hedges will mature in 2027 at the latest. In total, foreign-currency cash flows of €565.3 million (2024: €526.5 million) were hedged and designated as hedged items, of which €454.2 million is expected by December 31, 2026 (2024: €478.9 million expected by December 31, 2025). The remaining cash flows designated as hedged items, which amounted to €111.2 million (2024: €47.6 million), fall due in more than one year’s time.

The following table provides an overview of the foreign-currency forwards entered into by the KION Group. They are recognized under other financial assets and other financial liabilities in the consolidated statement of financial position.

The table below shows the change in the effectiveness of the foreign-currency forwards used for hedging purposes in 2025.

Hedging interest-rate risk

The KION Group uses portions of amortizing payer interest-rate swaps in the same currency to hedge the risk of a change in the fair value of certain lease receivables. These hedges are accounted for as portfolio fair value hedges in accordance with IAS 39. The portfolio fair value hedge is ended and redesignated monthly due to the fast-changing and open lease portfolio. In addition, the KION Group began using cash flow hedge accounting in accordance with IFRS 9 in 2025 in connection with the financing of the lease business. In this context, contracted and highly probable future payments from variable-rate liabilities are designated as hedged items. Portions of amortizing payer interest-rate swaps in the same currency that had not been accounted for as portfolio fair value hedges and that, prior to the reporting year, had been recognized as stand-alone derivatives are also designated as hedges. The interest-rate swaps used as hedges reflect the notional amount and the maturity profile of the hedged leasing and finance business and will mature in 2034. The interest-rate swaps held as at December 31, 2025 that were designated as cash flow hedges were entered into with an average fixed interest rate of 2.30 percent for the euro currency area and 3.62 percent for the pound sterling currency area.

The following table provides an overview of the interest-rate derivatives used by the KION Group. They are recognized under other financial assets and other financial liabilities in the consolidated statement of financial position.

The table below shows the change in the interest-rate derivatives used for hedging purposes in 2025. Furthermore, the gain/loss on the undesignated portion of interest-rate derivatives used to hedge leases in 2025 amounted to a net loss of €1.8 million (2024: net loss of €12.5 million). The loss that had arisen in 2024 was due to the fact that operating leases could not be designated as hedged items under portfolio fair value hedge accounting in accordance with IAS 39. The loss was significantly reduced in the reporting year as a result of introducing cash flow hedge accounting in accordance with IFRS 9 for the corresponding lease financing.

Change in the hedge reserves

The change in the hedge reserves within accumulated other comprehensive income (loss) is presented in the following tables.