Earnings

EBIT and EBITDA

Total earnings before interest and tax (EBIT) amounted to €374.2 million. As expected, this was substantially below EBIT for the previous year (2012: €549.1 million), which had included a net gain from the sale of the hydraulics business of €211.8 million. The 2012 figure had also included the contribution to operating profit of the hydraulics business for the whole year.

A more meaningful comparison is provided by EBIT adjusted for non-recurring items, which went up by 2.0 per cent to €416.5 million (2012: €408.3 million excluding the hydraulics business). Price increases that the KION Group was able to implement thanks to its strong technological and competitive position had a noticeable effect, as did product innovations and a greater proportion of higher-margin trucks with customer-specific equipment. Efficiency increases at production sites and other cost savings also had a beneficial impact. The adjusted EBIT margin therefore improved from 9.0 per cent in 2012 to 9.3 per cent.

Non-recurring items totalled €42.3 million, of which €29.5 million was attributable to KION acquisition items. The remaining amount was accounted for by, among other things, costs for the IPO and accompanying capital increases, which were taken directly to income, follow-up costs in connection with the closure of production sites and expenses related to restructuring. These were partly offset by income of €7.0 million arising from remeasurement of the previous shares in connection with the acquisition of a further 51.0 per cent of the shares in Willenbrock Fördertechnik Holding GmbH. There was further non-recurring income of €8.1 million relating to the hydraulics business that was sold in December 2012, but also purchase-price-related losses for equity-accounted investments. The net income from non-recurring items and KION acquisition items of €112.0 million (or €140.8 million excluding the operating profit of the hydraulics business) in 2012 included the net gain from the sale of the hydraulics business, the income arising from remeasurement of shares and, in particular, depreciation, amortisation and impairment charges and administrative fees in connection with the purchase price allocation. In the previous year, the expense arising from the purchase price allocation had been €41.5 million. >> Table 018

EBITDA was down by 22.5 per cent year on year at €708.8 million (2012: €914.4 million). Adjusted EBITDA amounted to €721.5 million, which was above the comparable figure for 2012 of €700.5 million (adjusted for the hydraulics business). The adjusted EBITDA margin was 16.1 per cent, compared with 15.4 per cent in the previous year. >> Table 019

Key influencing factors for earnings

The cost of sales fell by 5.1 per cent to €3,255.2 million (2012: €3,430.8 million). The main reason was the absence of the hydraulics business. Other factors included the cost benefits derived from the successful restructuring of the production sites and the resultant increase in capacity utilisation as well as favourable price movements in the commodity markets. Gross profit came to €1,239.4 million (2012: €1,295.9 million). Consequently, the KION Group was able to slightly improve its gross margin to 27.6 per cent (2012: 27.4 per cent) despite the sale of the high-margin hydraulics business.

Cost-cutting measures introduced at the start of the reporting year also had a positive impact on selling and administrative expenses. The comparative prior-year figures had included the hydraulics business, however. Despite more extensive international business, selling expenses were down by €24.3 million on 2012, while administrative expenses fell by €23.2 million year on year. As a result, the costs of the IPO, which were recognised as administrative expenses, were more than offset by various savings.

As expected, the ‘other’ item of €76.6 million was lower than the previous year’s figure of €253.4 million. The other expenses and other income reported under this item amounted to net income of €75.0 million. This was considerably below the €237.5 million reported in 2012, which had included non-recurring income from the sale of the hydraulics business. In the reporting year, this transaction generated subsequent income of €8.1 million. Other income also included earnings from commission collected, which are not reported under revenue.

The income from companies accounted for under the equity method, which is also reported under ‘other’, declined from €15.9 million in 2012 to €1.7 million in 2013. The decisive factor for the fall in the share of profit of equity-accounted investments was the pro-rata loss made by Linde Hydraulics of €14.2 million. This loss was partly offset by the remeasurement of the 23.0 per cent stake in Willenbrock Fördertechnik Holding GmbH (which had previously been accounted for under the equity method) when additional shares were acquired to increase the stake to 74.0 per cent in 2013. This resulted in income of €7.0 million. >> Table 020