Condensed income statement of the KION Group | ||||||
€ million |
Q2 |
Q2 |
Change |
Q1-Q2 |
Q1-Q2 |
Change |
|
|
|
|
|
|
|
Revenue |
1,166 |
1,096 |
6.4% |
2,311 |
2,113 |
9.4% |
Cost of sales |
-838 |
-796 |
-5.3% |
-1,663 |
-1,539 |
-8.1% |
Gross profit |
328 |
300 |
9.3% |
648 |
574 |
12.9% |
Selling expenses |
-138 |
-131 |
-5.2% |
-275 |
-260 |
-5.4% |
Research and development costs |
-29 |
-29 |
0.7% |
-62 |
-57 |
-9.7% |
Administrative expenses |
-76 |
-71 |
-7.4% |
-147 |
-133 |
-10.1% |
Other |
20 |
30 |
-31.9% |
31 |
35 |
-10.5% |
Earnings before interest and taxes (EBIT) |
105 |
98 |
6.6% |
196 |
159 |
23.5% |
Net finance cost |
-74 |
-65 |
-13.8% |
-126 |
-114 |
-10.4% |
Earnings before taxes |
31 |
33 |
-7.6% |
70 |
45 |
57.1% |
Income taxes |
-21 |
-25 |
15.3% |
-44 |
-40 |
-10.3% |
Net income (+) / loss (-) for the period |
9 |
8 |
16.6% |
26 |
4 |
>100% |
Our revenue growth can be broken down by product category as follows:
Revenue by product category | ||||||
€ million |
Q2 |
Q2 |
Change |
Q1-Q2 |
Q1-Q2 |
Change |
|
|
|
|
|
|
|
New business |
653 |
590 |
10.8% |
1,277 |
1,130 |
13.0% |
Hydraulics |
44 |
44 |
-0.6% |
93 |
83 |
11.2% |
Service offering |
469 |
462 |
1.4% |
941 |
899 |
4.6% |
- After sales |
284 |
261 |
8.6% |
568 |
520 |
9.1% |
- Rental business |
99 |
107 |
-7.8% |
206 |
212 |
-2.9% |
- Used trucks |
57 |
72 |
-21.5% |
110 |
122 |
-9.8% |
- Other |
30 |
21 |
37.6% |
56 |
45 |
26.4% |
Total revenue |
1,166 |
1,096 |
6.4% |
2,311 |
2,113 |
9.4% |
Q2/2012
Revenue
The overall higher order volume for new trucks had a positive effect on our revenue in Q2/2012, which in total grew by 6%, or €70 million, to €1,166 million, compared to €1,096 million in Q2/2011. We mainly benefited from growth in our home market of Germany which grew by 9%. China, which grew by 3%, is still one of our major growth drivers in the emerging markets.
The new truck business contributed revenues of €653 million in Q2/2012, which is an increase of €63 million, or 11%, from €590 million in Q2/2011. The new truck business remained our strongest absolute revenue driver in Q2/2012. Due to our continuously growing installed base of more than one million trucks, we were also able to slightly grow our service business from €462 million in Q2/2011 to €469 million in Q2/2012. Within the service business after sales business reported the highest revenue growth rate of 9% compared to Q2/2011. Revenue in the ‘Other’ category, which includes advisory services, IT solutions and warehouse technology systems, increased by 38% to €30 million in Q2/2012 compared to Q2/2011.
Cost of Sales
The cost of sales in Q2/2012 increased by 5% to €838 million, from €796 million in Q2/2011. Compared to our 6% revenue growth, cost of sales rose at a lower rate. This was due to further efficiency gains in the production process and a higher overall capacity utilisation.
Gross Profit and Gross Margin
Our gross profit rose by 9% to €328 million in Q2/2012, from €300 million in Q2/2011. This was due to the higher business volume and an under-proportional increase of cost of sales compared to our revenue growth due to economies of scale and further improved operating performance across the main product categories. Consequently, gross margin rose from 27.4% in Q2/2011 to 28.1% in Q2/2012.
Selling Expenses
Our selling expenses increased by €7 million, or 5%, to €138 million in Q2/2012, from €131 million in Q2/2011. The increase in selling expenses reflected the higher business volume and related direct selling expenses. As a percentage of revenue, selling expenses were further reduced from 12.0% in Q2/2011 to 11.8% in Q2/2012.
Research and Development Costs
In Q2/2012, our research and development expenses remained stable at €29 million compared to Q2/2011. The costs incurred mainly related to research and development of new products, facelifts of existing trucks as well as to research and development of new technologies, such as the hybrid IC technology.
General and Administrative Expenses
Our general and administrative expenses increased by 7% to €76 million in Q2/2012 compared to €71 million in Q2/2011. As a percentage of our revenue, our administrative expenses remained almost stable at 6.6% in Q2/2012.
Other Income and Expense
Other income and expense primarily consists of gains and losses related to foreign exchange rate differences resulting from the measurement of financial assets and receivables denominated in a foreign currency. Additionally, gains and losses related to the sale, disposal or impairment of long-lived assets are included. Our net other income decreased by €6 million to €13 million from €19 million in Q2/2011. In the prior year period, net other income had mainly been related to the remeasurement of purchase price obligations in connection with the acquisition of outstanding shares in UK dealers (mostly Linde Sterling) of €11 million. Similarly, in Q2/2012 we recognized a Non-recurring gain of €4 million for Linde Creighton.
Profit from Equity Investments/Other Financial Result
Profit from equity investments consists of all gains and losses that we realise on associates and joint ventures, which we account for under the equity method and for which we have no controlling interest. The profit from equity investments/other financial result amounted to €8 million in Q2/2012 compared to €11 million in the prior year period. The revaluation of our existing equity investment of 49% in our UK dealers due to the acquisition of the remaining 51% of outstanding shares resulted in a Non-recurring gain of €3 million in Q2/2012 (Linde Creighton) and of €4 million (Linde Sterling) in Q2/2011. The other financial result remained relatively stable at €1 million in Q2/2012 compared to the prior year period.