Financial Services (FS) segment
Business performance
The Financial Services (FS) segment is the central financing partner in the KION Group. The FS segment benefited from an increase in business in the LMH and STILL brand segments, enjoying growth in the financing of short-term rental business (which is the operational responsibility of the brand segments) and in the long-term leasing business with external end customers. As in 2014, a large proportion of the financing portfolio was focused on business in western Europe. Outside western Europe, FS recorded its strongest gains in Brazil and China, where long-term financing solutions were offered for the first time.
Funding for the leasing business was secured at all times in 2015 by sufficient lines of credit from our financing partners. Because of the good financing conditions, the KION Group was able to establish new lines of credit with favourable terms and renegotiate existing lines. Smaller regional partners were also brought on board.
Financial position and financial performance
Revenue in the long-term leasing business with external end customers went up to €417.3 million (2014: €350.1 million). Financing for short-term rental business grew by 19.3 per cent to €322.9 million (2014: €270.7 million) because of the expansion of short-term rental fleets. The LMH and STILL brand segments manage this business, which is recognised as intra-group revenue. This brought the total segment revenue up to €740.3 million (2014: €620.9 million). Net financial income in the form of net interest income is a key element of the segment’s earnings and rose to €7.1 million (2014: €3.1 million). Earnings before tax came to €5.3 million, improving only marginally on the figure of €5.2 million in 2014. The return on equity (ROE) was 13.1 per cent (2014: 13.0 per cent).
As at 31 December 2015, total segment assets amounted to €1,603.4 million (2014: €1,361.3 million). Of this total, €627.6 million was accounted for by lease receivables due from external customers (31 December 2014: €521.9 million), while €549.2 million (31 December 2014: €473.0 million) related to the financing of the short-term rental fleet in the LMH and STILL segments. Leased assets under operating leases relating to external customer contracts amounted to €316.1 million (31 December 2014: €267.4 million).
The funding of leases with external end customers gave rise to leasing liabilities with external funding partners amounting to €853.1 million (31 December 2014: €702.9 million). The funding of the intra-group long-term leases (finance leases) with LMH and STILL resulted in lease liabilities of €400.6 million (2014: €334.5 million). Net financial debt attributable to this segment came to €185.6 million (2014: €155.1 million). > TABLE 023
Key figures – Financial Services – |
|
|
023 |
||||
in € million |
2015 |
2014 |
Change |
||||
|
|||||||
Revenue |
740.3 |
620.9 |
19.2% |
||||
Adjusted EBITDA |
88.7 |
82.6 |
7.5% |
||||
Adjusted EBIT |
–1.8 |
2.1 |
<–100% |
||||
Earnings before taxes (EBT) |
5.3 |
5.2 |
1.4% |
||||
|
|
|
|
||||
Total segment assets |
1,603.4 |
1,361.3 |
17.8% |
||||
|
|
|
|
||||
Leased assets |
316.1 |
267.4 |
18.2% |
||||
Lease receivables |
1,176.8 |
994.9 |
18.3% |
||||
thereof lease receivables from long-term leases to third parties |
627.6 |
521.9 |
20.2% |
||||
thereof lease receivables from LMH and STILL from funding of the short-term rental business |
549.2 |
473.0 |
16.1% |
||||
|
|
|
|
||||
Lease liabilities1 |
1,253.7 |
1,037.5 |
20.8% |
||||
thereof liabilities from funding of the long-term leases with third parties |
853.1 |
702.9 |
21.4% |
||||
thereof liabilities from funding of the short-term rental business of LMH and STILL |
400.6 |
334.5 |
19.8% |
||||
Net financial debt |
185.6 |
155.1 |
19.6% |
||||
Equity |
47.5 |
46.5 |
2.2% |
||||
|
|
|
|
||||
Return on equity2 |
13.1% |
13.0% |
– |
||||