Financial position of the Group

Analysis of liquidity

Cash flow from operating activities deteriorated to a net cash outflow of minus €34.5 million in the first three quarters of 2026 (Q1–Q3 2025: net cash inflow of €676.9 million). This figure was weighed down significantly by the repayment of liabilities from the lease business using funds obtained from the corporate bond issued by KION GROUP AG in March 2026. Taking into account this inflow of funds (less the issue discount and transaction costs) on an appropriate adjusted basis, cash flow from operating activities amounted to a net cash inflow of €460.2 million table ‘Free cash flow’. There was also a material negative impact from the accumulation of net working capital during the year as a result of milestone payments in the project business that are still outstanding. Most of these payments are expected to be received in the fourth quarter of 2026. Cash flow from operating activities also included cash payments in connection with the implementation of the efficiency program, the bulk of which were not being made until the current year; such payments amounted to €70.3 million in the reporting period.

There was an increase in net cash used for investing activities to minus €339.1 million in the first nine months of 2026 (Q1–Q3 2025: minus €284.1 million). This rise was attributable to higher cash payments of minus €97.7 million (Q1–Q3 2025: minus €29.4 million) for M&A activities, which are primarily aimed at the strategic expansion of the portfolio of product solutions for warehouse automation and supply chain robotics. By contrast, cash payments for capital expenditure on property, plant and equipment and on intangible assets declined from the elevated level seen in prior years to minus €249.2 million (Q1–Q3 2025: minus €264.2 million). Of this figure, minus €73.5 million was attributable to capitalized development costs (Q1–Q3 2025: minus €98.6 million) and minus €175.7 million to other non-current assets (Q1–Q3 2025: minus €165.6 million).

The Group’s free cash flow, the definition of which was changed at the start of 2026, came to €121.1 million in the first three quarters of this year (Q1–Q3 2025: €392.8 million) table ‘Free cash flow’.

Free cash flow was previously defined as cash flow from operating activities plus cash flow from investing activities. Starting in 2026, it also takes into account cash flow from additions to, and repayments of, financial instruments (including related interest payments and borrowing costs) that are used solely to finance the lease business and short-term rental business. The changed definition was necessary because, for the first time, funds from the Company’s general funding are being used to finance the lease business and short-term rental business. If this change were not made, cash flows that, from an economic perspective, should be assigned to the lease business and short-term rental business would not be recognized within free cash flow because of their inclusion in cash flow from financing activities. Changing the definition ensures that these cash flows are assigned correctly from an economic perspective and maintains this key figure’s comparability over time. The changed definition increased free cash flow for the reporting period by €494.7 million as a result of including the funds obtained from the corporate bond (less the issue discount and transaction costs) to finance the lease business.

Net cash provided by financing activities amounted to €288.7 million in the reporting period (Q1–Q3 2025: net cash used of minus €825.6 million). The main item within this figure was the corporate bond that was issued in March 2026 with a total volume of €500.0 million. Material cash outflows were attributable to the dividend of minus €81.3 million distributed to KION GROUP AG’s shareholders (Q1–Q3 2025: minus €107.5 million) and payments made for interest portions and principal portions under procurement leases, which totaled minus €152.7 million (Q1–Q3 2025: minus €163.5 million).

Cash and cash equivalents declined to €398.6 million as at September 30, 2026 (December 31, 2025: €474.9 million).

Taking into account the credit facility of €1,385.7 million that was freely available and, as at the reporting date, entirely unutilized (December 31, 2025: €1,385.7 million), the unrestricted cash and cash equivalents available to the Group as at September 30, 2026 amounted to €1,783.5 million (December 31, 2025: €1,859.9 million).

Analysis of capital structure

Net financial debt (non-current and current financial liabilities less cash and cash equivalents) rose to €1,196.0 million as at September 30, 2026 due to the corporate bond issued during the reporting period (December 31, 2025: €584.0 million). This equates to 0.6 times adjusted EBITDA on an annualized basis (December 31, 2025: 0.3 times).

With effect from 2026, KION has changed the definition of its alternative performance measure ‘industrial net operating debt’ (INOD). Previously, INOD was defined as the total of net financial debt, liabilities from the short-term rental business, and liabilities from procurement leases. Starting in 2026, funds are deducted from this total that, although they are used solely to finance the lease business and short-term rental business, are recognized within financial liabilities in the statement of financial position because they are part of the Company’s general funding. Changing the definition was necessary because funds from a corporate bond without a specified purpose were used for the first time in 2026 to finance the lease business. Whereas the lease business was previously financed using specifically designated and directly assignable financial instruments, the funds obtained from the corporate bond are recognized within financial liabilities in the statement of financial position. If the definition were not changed, these funds, which should be assigned to the lease business from an economic perspective, would be fully included in industrial net operating debt even though the underlying lease business is not assigned to the industrial business. The changed definition therefore helps to present the financing in accordance with its economic categorization and thus to ensure that this key figure remains meaningful and provides comparability over time.

To reconcile the net financial debt with the industrial net operating debt (INOD) of €2,248.3 million as at September 30, 2026 (December 31, 2025: €2,158.3 million), the liabilities from the short-term rental business of €753.2 million (December 31, 2025: €810.2 million) and the liabilities from procurement leases of €793.8 million (December 31, 2025: €764.1 million) are firstly added to net financial debt. Secondly (in accordance with the changed definition), the funds of €494.7 million obtained from the corporate bond (less the issue discount and transaction costs) to finance the lease business are now deducted in order to calculate the industrial debt. It was not necessary to restate the comparative figures for prior-year periods because the lease business was previously financed solely from financial instruments that could be directly assigned to the lease business, which meant there was no discrepancy between the presentation in the statement of financial position and the assignment from an economic perspective. Leverage on industrial net operating debt (INOD) stood at 1.2 times adjusted EBITDA on an annualized basis (December 31, 2025: 1.2 times).

Consolidated equity rose to €6,562.8 million as at September 30, 2026 (December 31, 2025: €6,123.0 million). This gave an equity ratio of 34.0 percent (December 31, 2025: 33.5 percent). The rise in equity was attributable to the net income for the reporting period of €309.1 million and amounts recognized in other comprehensive income comprising currency translation gains of €135.2 million and actuarial gains and losses arising from the measurement of pensions (after deferred taxes), which amounted to a net gain of €70.0 million.