Earnings

EBIT and EBITDA

The Group improved earnings before interest and tax (EBIT), adjusted for KION acquisition items and non-recurring items, to €442.9 million, an increase of 6.3 per cent compared with 2013 (€416.5 million). The higher administrative expenses since the IPO and the higher IT costs in connection with the infrastructure changes throughout the Group were more than offset by the higher gross profit. The adjusted EBIT margin improved from 9.3 per cent in 2013 to 9.5 per cent in the reporting period.

EBIT including KION acquisition items and non-recurring items amounted to €347.0 million (2013: €374.2 million). This decline was largely attributable to the recognition of an impairment loss related to the 30 per cent equity investment in Linde Hydraulics GmbH & Co. KG (referred to below as Linde Hydraulics), which had become necessary because of the downturn in the business performance of Linde Hydraulics. EBIT for the KION Group was also adversely impacted by the earnings and the pro rata purchase-price-related non-operating effects on earnings from Linde Hydraulics. Overall, the non-cash effects from Linde Hydraulics came to a total loss of €33.9 million, which was recognised under share of profit (loss) of equity-accounted investments. Other material non-recurring items included non-recurring administrative expenses in connection with the growth strategy and expenses arising from the early termination of service contracts for members of the Executive Board. In addition to depreciation / amortisation, earnings-related items from the KION acquisition also included significant expenses arising from the disposal of assets amounting to €10.7 million (2013: €0.4 million). > TABLE 018

EBITDA amounted to €714.2 million and was therefore close to the equivalent figure in 2013 (€708.8 million). In contrast, adjusted EBITDA rose significantly to €780.4 million (2013: €721.5 million). As a consequence, the adjusted EBITDA margin improved from 16.1 per cent to 16.7 per cent. > TABLE 019

Key influencing factors for earnings

Compared with the rise in revenue, there was a disproportionately low year-on-year increase of 2.5 per cent in the cost of sales to €3,337.4 million (2013: €3,255.2 million). Gross profit therefore improved by 8.2 per cent to €1,340.5 million (2013: €1,239.4 million) and the gross margin improved from 27.6 per cent to 28.7 per cent. One of the main factors behind this improvement in margin was the greater proportion of revenue accounted for by the high-margin service business. In addition, the new trucks business benefited from a better margin based on the high proportion of customised equipment.

Selling expenses went up by €32.3 million year on year, for the most part because the dealers Willenbrock and Arser were consolidated for the first time for the whole of the year. Trade fair participation expenses incurred by LMH and STILL also had an impact. One of the causes of the rise in R&D costs was the development of platform concepts. The rise of 11.6 per cent in administrative expenses to €323.6 million (2013: €290.0 million) was attributable to the enhanced requirements associated with the IPO, salary increases and the early termination of service contracts for members of the Executive Board.

The ‘other’ item amounting to €26.4 million accounted for a much smaller proportion of net income than in 2013 (€76.6 million). In particular, the share of profit (loss) of equity-accounted investments reported under ‘other’ went from a share of profit of €1.7 million in 2013 to an overall share of loss of €24.8 million in the year under review. The negative amount arose primarily from Linde Hydraulics (loss of €33.9 million); some of this loss was offset by a total share of profit of €9.1 million from the other equity-accounted investments. > TABLE 020