Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) amounted to €268.0 million in the first six months of 2018 (H1 2017: €255.2 million). The rise of 5.0 per cent was primarily due to the decrease in the purchase price allocation effects included in EBIT to €73.9 million (H1 2017: €91.6 million). However, currency effects had a countervailing adverse impact on EBIT of €14.3 million. EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) was below the prior-year period at €344.9 million (H1 2017: €362.0 million). The adjusted EBIT margin thus fell to 8.9 per cent (H1 2017: 9.5 per cent). > TABLE 05
EBIT |
05 |
|||||||
in € million |
Q2 2018 |
Q2 2017* |
Change |
Q1 – Q2 2018 |
Q1 – Q2 2017* |
Change |
||
|
||||||||
EBIT |
142.1 |
159.8 |
–11.1% |
268.0 |
255.2 |
5.0% |
||
+ Non-recurring items |
4.0 |
5.6 |
–28.8% |
3.0 |
15.3 |
–80.2% |
||
+ PPA items |
40.9 |
45.0 |
–9.2% |
73.9 |
91.6 |
–19.3% |
||
Adjusted EBIT |
187.0 |
210.4 |
–11.2% |
344.9 |
362.0 |
–4.7% |
||
Earnings before interest, tax, depreciation and amortisation (EBITDA) improved to €716.3 million (H1 2017: €694.5 million). Adjusted EBITDA came to €717.8 million (H1 2017: €709.8 million). This equates to an adjusted EBITDA margin of 18.5 per cent (H1 2017: 18.7 per cent). > TABLE 06
EBITDA |
06 |
|||||||
in € million |
Q2 2018 |
Q2 2017* |
Change |
Q1 – Q2 2018 |
Q1 – Q2 2017* |
Change |
||
|
||||||||
EBITDA |
374.6 |
382.2 |
–2.0% |
716.3 |
694.5 |
3.1% |
||
+ Non-recurring items |
2.4 |
5.6 |
–56.3% |
1.5 |
15.3 |
–90.2% |
||
+ PPA items |
–0.1 |
0.0 |
– |
0.0 |
0.0 |
– |
||
Adjusted EBITDA |
377.0 |
387.7 |
–2.8% |
717.8 |
709.8 |
1.1% |
||
Key influencing factors for earnings
The cost of sales grew at only a slightly slower rate than revenue, rising by 0.9 per cent to €2,870.5 million (H1 2017: €2,845.6 million). As a result, the gross margin increased from 25.2 per cent to 25.9 per cent in the first half of the year. In the reporting period, the cost of sales was particularly mitigated by reduced purchase price allocation effects compared with the first six months of 2017. However, both the cost of sales and earnings were adversely affected by higher material prices, wage cost rises and, increasingly, production inefficiencies caused by the bottlenecks at individual suppliers in the Industrial Trucks & Services segment. Currency effects, mainly from the US dollar, had a noticeable negative impact overall, influencing the KION Group’s EBIT.
The change in the cost of sales and in other functional costs is shown in > TABLE 07.
(Condensed) income statement |
07 |
|||||||
in € million |
Q2 2018 |
Q2 2017* |
Change |
Q1 – Q2 2018 |
Q1 – Q2 2017* |
Change |
||
|
||||||||
Revenue |
2,031.1 |
2,001.3 |
1.5% |
3,874.4 |
3,802.3 |
1.9% |
||
Cost of sales |
–1,518.4 |
–1,499.1 |
–1.3% |
–2,870.5 |
–2,845.6 |
–0.9% |
||
Gross profit |
512.7 |
502.2 |
2.1% |
1,003.9 |
956.7 |
4.9% |
||
Selling expenses and administrative expenses |
–346.0 |
–327.6 |
–5.6% |
–683.4 |
–657.4 |
–4.0% |
||
Research and development costs |
–34.4 |
–31.5 |
–9.0% |
–69.3 |
–65.9 |
–5.1% |
||
Other |
9.8 |
16.8 |
–41.9% |
16.7 |
21.8 |
–23.2% |
||
Earnings before interest and taxes (EBIT) |
142.1 |
159.8 |
–11.1% |
268.0 |
255.2 |
5.0% |
||
Net financial expenses |
–25.1 |
–10.1 |
<–100% |
–53.9 |
–48.4 |
–11.4% |
||
Earnings before taxes |
117.0 |
149.7 |
–21.8% |
214.1 |
206.8 |
3.5% |
||
Income taxes |
–37.7 |
–44.5 |
15.3% |
–66.4 |
–62.1 |
–6.9% |
||
Net income for the period |
79.3 |
105.2 |
–24.6% |
147.7 |
144.7 |
2.1% |
||
Net financial income / expenses
The net financial expenses, representing the balance of financial income and financial expenses, increased from €48.4 million in the first half of 2017 to €53.9 million in the first six months of this year. Current interest expense on financial liabilities decreased due to the corporate actions carried out in 2017, whereas currency effects had improved the level of net financial expenses in the first half of last year.
Income taxes
Income tax expenses rose to €66.4 million (H1 2017: €62.1 million) mainly due to the level of earnings. This resulted in a tax rate of 31.0 per cent (H1 2017: 30.0 per cent).
Net income for the period
The KION Group’s net income for the period after taxes was €147.7 million (H1 2017: €144.7 million). Earnings per share attributable to the shareholders of KION GROUP AG came to €1.26 for the first half of the year (H1 2017: €1.30) based on an average of 117.9 million (H1 2017: 110.7 million) no-par-value shares outstanding.