KION GROUP AG Leasing Business Deep Dive
Update 2022
Frankfurt, November 2022
Agenda
- Business Model and Strategy
- Funding
- Risk Management
- Lease Accounting & Reporting
- Key takeaways
2 KION GROUP AG | Leasing Business Deep Dive | Update 2022
Integrated Business Model within Industrial Trucks and Services Leasing is an important component growing the business
New truck sales | • | Technology and innovation |
leadership | ||
• Tailor-made solutions and | ||
customer options | ||
• | Optimized total cost | |
of ownership | ||
• Multiple brands for multiple | ||
segments / markets |
Ongoing customer relationship (e.g. short-term rental) triggers new truck sales
Financial services | • Sales support vehicle with | |||||
Around half of new | benefit for aftermarket and | |||||
service activities | ||||||
truck | ||||||
• Integrated within regular sales | ||||||
sales carry leasing | ||||||
contracts | process | |||||
• Long-term customer | ||||||
relationships | ||||||
PRODUCTS | Many customer and most | |||||
leasing contracts linked to | ||||||
SERVICES | ||||||
service contracts | ||||||
Short-term rental & used trucks
- Rental offering to match customers' capacity needs
-
Integrated in industrial segments Linde MH and
STILL - Used truck sales from lease contracts
Service solutions & aftersales
After duration of
leasing, trucks
are used in rental fleet or sold as used trucks
- Proximity with global service network
- Service contracts
- Proprietary spare parts
- Solutions approach including fleet data management, automation and intralogistics services
3 KION GROUP AG | Leasing Business Deep Dive | Update 2022
Leasing and Rental Strategy
Integrated approach to drive profitable growth
- Full support of life cycle management
- Serve customers' needs
- Full integration into regional sales structures
- Central steering body for
setting guard railing
• Separated captives in bigger markets
- Asset focused credit risk approach
- Conservative residual value setting
- Close management of break clauses
1. Long-term rental 2. Short-term rental
Profit &
Resilience
Operating Profitable
Model growth
Risk
Management
(LTR1, STR2, service, used trucks)
• Strong customer focus to optimized penetration and retention
- Active asset management
Funding
• Optimized structure to offer competitive funding
• Diversified funding-partner portfolio for stable access to market
- Matched funding (currency, interest rate, maturity)
4 KION GROUP AG | Leasing Business Deep Dive | Update 2022
Lease Accounting - KION's Leasing and Rental Business
Contract and financing structure overview
Rental business (Short-Term) | Leasing business (Long-Term) | ||||||||||||||||||||||||||||||||
Direct business | Indirect business | ||||||||||||||||||||||||||||||||
Refinancing | KION | Customer | |||||||||||||||||||||||||||||||
partner | Sale | Lease | |||||||||||||||||||||||||||||||
Financial | Lease | KION | contract | Vendor | contract | Customer | |||||||||||||||||||||||||||
partner | |||||||||||||||||||||||||||||||||
liability | contract | ||||||||||||||||||||||||||||||||
Vendor partner returns | |||||||||||||||||||||||||||||||||
KION | Lease contract | Customer | truck after contract expires | ||||||||||||||||||||||||||||||
customer returns truck | |||||||||||||||||||||||||||||||||
after contract expires | |||||||||||||||||||||||||||||||||
Sale & Leaseback, | Sale & Leaseback, ABS, | Vendor financing | |||||||||||||||||||||||||||||||
RCF1, self-funded | RCF1, self-funded | ||||||||||||||||||||||||||||||||
Operating Lease (OL) - Sales over lease term; accounted for as leased / rental asset)
Finance Lease (FL) - Sales at point in time; accounted for as lease receivable)
1. RCF leasing replaced lease facility and includes Credit Enhancement, LTR and STR from Q2 2022
5 KION GROUP AG | Leasing Business Deep Dive | Update 2022
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Kion Group AG published this content on 18 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 November 2022 16:58:08 UTC.
