Thomas Toepfer

KION Group AG is repaying secured corporate bonds with a total volume of EUR525 million (USD725 million) in its continuing effort to improve its funding structure.

"This step will lower our interest payments and give us greater flexibility with which to pursue implementing our growth strategy," says KION chief financial officer Thomas Toepfer.

The group expects to save over EUR20 million (USD27.7 million) per year in interest payments. Under the terms and conditions of the bonds, early repayment charges of around EUR15 million (USD20.7 million) must be paid.

This amount, along with the reversal of the capitalised borrowing costs of around EUR8 million (USD11 million), will be recognised as one-off financial expenses in the second quarter. Once the bonds have been repaid, the company's long-term borrowing will comprise the fixed-rate corporate bond with a volume of EUR450 million (USD622 million) and a maturity date of 2020, the revolving credit facility of EUR1.045 billion (USD1.445 billion) expiring in 2018, and the further bank loan of EUR200 million (USD277 million) maturing in 2019.

Having substantially reduced its net financial debt to EUR979 million (USD1.354 billion) as at 31 December 2013 in connection with the IPO (Forkliftaction.com News #622), the group's aim for this year and the medium term is to continue to steadily reduce its levels of debt and leverage.

"We expect to be able to bring down our net debt using cash flow from operating activities and we will thereby continuously improve our capital and funding structure," Toepfer says.

The group's 2013 order intake of approximately 142,800 trucks was slightly higher than the previous year's 141,700 units. The total value of order intake was roughly the same as in 2012 at EUR4.489 billion/USD6.212 billion (2012: EUR4.590 billion/USD6.346 billion, excluding the sale of the hydraulics business).

Currency effects of almost EUR74 million had a negative impact on the figures. KION's operating profit rose by 2% to its highestever level of EUR416.5 million (USD575.9 million).

The KION Group - comprising the six brands of Linde, STILL, Fenwick, OM STILL, Baoli and Voltas - is the largest manufacturer of industrial trucks in western and eastern Europe. It is present in more than 100 countries. In 2013 the KION Group employed more than 22,000 people and generated revenue of EUR4.49 billion (USD6.214 billion).