Earnings

EBIT and EBITDA

The KION Group’s total earnings before interest and tax (EBIT) amounted to €168.5 million, which was 5.3 per cent below the same period of the previous year (H1 2013: €177.9 million). The adjusted EBIT figure does not include any current earnings-related items from the KION acquisition. The figure is also adjusted for non-recurring items such as the purchase-price-related, non-operating items resulting from Linde Hydraulics. In addition, the figure for the equivalent period of 2013 includes non-recurring expenses incurred in connection with the initial public offering. Adjusted EBIT for the first six months of 2014 amounted to €196.9 million, remaining at roughly the same level of the previous year (€200.4 million) despite higher administrative expenses since the IPO. The adjusted EBIT margin fell only slightly, from 9.0 per cent in 2013 to 8.8 per cent in 2014, but rose significantly from the first quarter to the second, from 8.0 per cent to 9.6 per cent. >> TABLE 05

Earnings before interest, tax, depreciation and amortisation (EBITDA) reached €348.3 million, roughly the same level as last year (H1 2013: €344.6 million). Adjusted EBITDA was up by 3.8 per cent on the figure for 2013 (H1 2013: €351.4 million). This equates to an adjusted EBITDA margin of 16.3 per cent (H1 2013: 15.7 per cent). >> TABLE 06

Key influencing factors for earnings

Against a background of a more or less constant revenue trend, the cost of sales fell by 1.8 per cent to €1,589.6 million (H1 2013: €1,618.2 million). Gross profit rose by 4.5 per cent to reach €643.7 million (H1 2013: €616.2 million). The primary factor in this was the improved product mix, which saw a greater proportion of revenue generated by the high-margin service business coupled with strong demand for bespoke versions of new trucks.

Selling expenses rose slightly year on year, by 3.4 per cent, to reach €282.7 million (H1 2013: €273.4 million). The reasons for this rise included the consolidation of the German dealer Willenbrock and the appearances at trade fairs by LMH and STILL in the second quarter. The moderate increase in administrative expenses, which rose by 2.3 per cent to reach €155.8 million (H1 2013: €152.3 million), is due in part to higher administrative costs incurred since the initial public offering.

The sharp decline in the ‘Other’ item, which dropped by €24.7 million to €21.4 million (H1 2013: €46.1 million), is due in part to the one-off positive impact of the sale of the hydraulics business in 2013. The profit from equity-accounted investments amounted to €2.4 million (H1 2013: profit of €3.3 million) and was impacted by the pro-rata loss from Linde Hydraulics. >> TABLE 07

Net financial expenses

Net financial expenses in the first half of 2014 amounted to €80.5 million, a substantial improvement of €31.5 million on the prior-year level (H1 2013: €112.0 million). The main reason for this was the lower interest expenses arising from loan liabilities following repayment in full of the acquisition finance and repayment of the floating-rate portion of the 2011/2018 corporate bond (floating rate note, €175.0 million) in July 2013. Excluding the non-recurring interest expenses of €23.2 million incurred in the second quarter from the early repayment of two tranches of the corporate bonds (see Business performance), the net financial expenses in the second quarter of the year came to €27.1 million (Q1 2014: €30.3 million).

Income taxes

Income tax expenses amounted to €27.4 million in the first half of the year. In contrast with the tax income of €4.4 million in the corresponding prior-year period, income tax expenses in the first six months of 2014 were proportionate to the earnings for the period. The tax rate in the first half of this year was 31.1 per cent. The tax income in the first half of 2013 was mainly attributable to the recognition of deferred tax assets on loss carryforwards that it had previously not been possible to utilise.

Net income for the period

The KION Group’s net income after taxes totalled €60.6 million in the first six months of 2014. As expected, this was down on the corresponding prior-year period (H1 2013: €70.3 million), which benefited from the positive one-off tax effects. In addition, the repayment of the tranches of the corporate bond in the second quarter of 2014 resulted in non-recurring financial expenses that had a negative impact on the Group’s net income in the first half of the year. Diluted and basic earnings per share for the reporting period came to €0.60. Based on an average of 98.9 million no-par-value shares, pro-forma earnings per share for the first half of 2013 came to €0.70.