5.1.3 Income statement of the KION Group for 2011

The growth in order intake also boosted the KION Group's revenue, which rose by approximately 24 per cent from €3,534 million in 2010 to €4,368 million in the reporting year.

The LMH segment was once again the key revenue driver, generating 65 per cent of the KION Group's total revenue. This segment raised its revenue by almost 27 per cent year on year from €2,254 million to an impressive €2,856 million. STILL increased its revenue by 17 per cent from €1,420 million to €1,666 million over the same period. The 'Other' segment, which comprises the activities attributable to Voltas Material Handling – the KION Group's Indian company – as well as cross-segment services and IT services, contributed revenue of €223 million in 2011 prior to consolidation; in 2010 it contributed €160 million.

The revenue generated by the KION Group in Germany rose by more than 30 per cent year on year to €1,175 million; it therefore grew even more strongly than the revenue earned outside Germany, which increased by 21 per cent year on year. Of the KION Group's total volume of business, 73 per cent was transacted outside Germany, generating revenue of €3,194 million. The revenue earned outside Germany in 2010 amounted to €2,634 million and accounted for 75 per cent of total revenue.

The KION Group achieved its highest percentage revenue growth in Asia, where revenue rose by 44 per cent – or €133 million – year on year. The strongest year-on-year revenue growth in absolute terms came from the Company's European markets outside Germany, which increased their revenue by €346 million. Germany also generated encouraging revenue growth of €275 million.

The revenue generated by the KION Group from new trucks grew by 33 per cent from €1,776 million in 2010 to €2,364 million in the reporting year. This encouraging trend was largely driven by the significant market growth rates achieved in Germany, France, China and Brazil. The Company's business in new trucks was boosted by the continued rise in demand for counterbalance trucks. Its other product categories were also buoyed by the benign market environment and the generally more pronounced global demand for industrial trucks.

Service business grew by a total of around 12 per cent from €1,639 million in 2010 to €1,831 million in the reporting year. Aftersales business accounted for the largest share of service revenue, raising its revenue by approximately 10 per cent year on year to €1,066 million (2010: €971 million). Very similar growth rates were achieved by the rental business, which advanced from €402 million in 2010 to €441 million in the reporting year. The KION Group also earned revenue of €219 million from used trucks in 2011 compared with €187 million in the previous year. Revenue in the 'Other' category – which includes advisory services, IT solutions and warehouse technology systems – jumped by 34 per cent from €79 million in 2010 to €106 million in 2011. In percentage terms, the strongest growth was achieved by the hydraulic components business, which increased its revenue by 44 per cent year on year.

Whereas the KION Group's revenue for 2011 rose by 24 per cent year on year, its cost of sales grew by only 21 per cent over the same period. In absolute terms, the cost of sales increased from €2,684 million in 2010 to €3,256 million in 2011. Consequently, the KION Group's gross profit for 2011 came to €1,112 million, which constituted a year-on-year increase of 31 per cent. The gross margin in relation to revenue improved accordingly by 1.4 percentage points year on year to 25.5 per cent. The main reasons for this performance were further efficiency gains in production, higher overall capacity utilisation, and improvements in gross operating revenue across all product categories.

Other functional costs also rose only modestly during the reporting year. Selling expenses grew by only 8 per cent year on year despite the sharp rise in revenue. Research and development costs increased by just under 16 per cent owing to the large number of new development projects and product innovations; administrative expenses grew by 14 per cent, which was also less than the percentage rise in revenue.

The sharp rise in revenue coupled with the only modest increases in functional costs and the cost of sales owing to the Company's successful cost management policies once again enabled the KION Group's earnings before interest and tax (EBIT) to improve significantly by €178 million to €213 million in the reporting year. EBIT for 2010 had amounted to only €35 million.

The KION Group's EBIT (adjusted for non-recurring items and KION acquisition items) also showed a highly impressive year-on-year improvement in 2011, advancing from €139 million in 2010 to €365 million in 2011. This presentation of adjusted EBIT included the profit from equity-accounted investments, other net investment income and other net financial income/expenses totalling €7 million (2010: €4 million). These investments relate almost exclusively to investments in dealers in the material-handling segment.

KION acquisition items and non-recurring items amounted to €151 million in the reporting year (2010: €105 million), €115 million of which was attributable to non-recurring items compared with €76 million in 2010. A significant proportion of these items related to restructuring costs in connection with the plans to relocate production facilities in France and Italy.

The KION Group's adjusted EBIT for 2011 was boosted by LMH's EBIT contribution of €283 million, which was twice as high as the figure of €139 million that it had reported for 2010. STILL also delivered an impressive earnings performance, with a five-fold increase in EBIT (net of KION acquisition items and non-recurring items) from €20 million in 2010 to €102 million in the reporting year. These considerable earnings improvements are essentially attributable to the optimised utilisation of capacities at the brand companies and to the KIARA performance enhancement programme that was successfully continued in 2011.

Net finance costs rose by €6 million year on year to €272 million in 2011. They included a net interest expense for the senior facilities agreement (SFA) of €117 million (2010: €129 million) and, for the first time, a net interest expense for the corporate bond of €25 million.

Even though its business performance was encouraging, the KION Group still incurred a net loss of €93 million owing to non-recurring items although this was a significant improvement compared with 2010. This was achieved despite a tax expense of €34 million (2010: tax income of €35 million). The KION Group had reported a net loss of €197 million for 2010.