Segment report

The Executive Board divides the KION Group into financial services activities, the activities grouped in the ‘Other’ segment and the Linde Material Handling (LMH) and STILL brands for management purposes. Segment reporting follows the same breakdown, taking into account the relevant organisational structures and corporate strategy of the KION Group. Since the start of 2015, KION India Pvt. Ltd., Pune, India, has been included in the LMH brand segment. This change has not been reflected in the prior-year figures in the segment reporting because it only had a minor effect on the key financials for the LMH and Other segments.

The KPIs used to manage the brand segments are order intake, revenue and adjusted EBIT. Segment reporting therefore includes a reconciliation of externally reported consolidated earnings before interest and tax (EBIT) – including KION acquisition items and non-recurring items – to the adjusted EBIT for the segments (‘adjusted EBIT’).

Earnings before tax (EBT) and return on equity (ROE) are the KPIs used to manage the Financial Services segment. ROE is calculated on the basis of average equity employed excluding net income (loss) for the current period. As at 30 June 2015, ROE – earnings before tax as a percentage of average equity – was 13.2 per cent (31 December 2014: 13.0 per cent).

The tables below show information on the KION Group’s operating segments for the second quarter of 2015 and 2014 and for the first half of 2015 and 2014. > TABLES 29-32

Segment report for Q2 2015

Segment report for Q2 2015

29

in € million

LMH

STILL

Financial Services

Other

Conso­lidation / Recon­ciliation

Total

1

Capital expenditure including capitalised development costs, excluding leased and rental assets

2

On intangible assets and property, plant and equipment excluding leased and rental assets

Revenue from external customers

765.1

386.6

99.5

4.7

1,256.0

Intersegment revenue

97.8

97.5

82.6

49.5

–327.3

Total revenue

862.9

484.1

182.1

54.2

–327.3

1,256.0

Earnings before taxes

83.1

21.0

1.3

–0.5

–28.1

76.8

Financial income

3.3

0.3

15.8

5.8

–12.1

13.2

Financial expenses

–7.3

–8.9

–14.4

–18.0

12.7

–35.8

= Net financial expenses

–4.0

–8.5

1.5

–12.1

0.6

–22.6

EBIT

87.1

29.5

–0.1

11.6

–28.6

99.4

+ Non-recurring items

2.0

0.7

0.0

7.5

10.2

+ KION acquisition items

5.3

1.6

0.0

0.1

6.9

= Adjusted EBIT

94.3

31.7

–0.1

19.2

–28.6

116.4

Profit from equity-accounted investments

3.3

1.8

2.9

0.0

8.0

Capital expenditure1

15.1

13.6

0.0

3.8

32.4

Amortisation and depreciation2


23.1

11.6

0.0

4.3

39.0

Order intake

917.0

493.0

182.2

54.2

–329.1

1,317.3

Segment report for Q2 2014

Segment report for Q2 2014

30

in € million

LMH

STILL

Financial Services

Other

Conso­lidation / Recon­ciliation

Total

1

Capital expenditure including capitalised development costs, excluding leased and rental assets

2

On intangible assets and property, plant and equipment excluding leased and rental assets

3

Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015

Revenue from external customers

691.9

367.0

75.2

10.2

1,144.4

Intersegment revenue

63.8

78.5

63.1

48.1

–253.6

Total revenue

755.8

445.6

138.3

58.2

–253.6

1,144.4

Earnings before taxes

66.8

17.3

1.3

–14.1

–30.1

41.3

Financial income

6.2

2.4

13.5

3.0

–14.7

10.3

Financial expenses

–9.1

–10.1

–12.4

–42.7

13.7

–60.6

= Net financial expenses

–2.9

–7.7

1.1

–39.7

–1.0

–50.3

EBIT

69.7

25.0

0.2

25.6

–29.0

91.5

+ Non-recurring items

0.8

0.5

0.0

3.6

4.9

+ KION acquisition items

12.4

0.6

0.0

0.0

13.0

= Adjusted EBIT

82.9

26.1

0.2

29.2

–29.0

109.5

Profit from equity-accounted investments

0.1

1.1

2.7

0.0

3.9

Capital expenditure1

15.7

11.4

0.0

3.6

30.8

Amortisation and depreciation2

21.6

10.2

0.0

4.3

36.0

Order intake3

790.5

487.3

145.5

58.7

–277.3

1,204.8

Segment report Q1 – Q2 2015

Segment report Q1 – Q2 2015

31

in € million

LMH

STILL

Financial Services

Other

Conso­lidation / Recon­ciliation

Total

1

Capital expenditure including capitalised development costs, excluding leased and rental assets

2

On intangible assets and property, plant and equipment excluding leased and rental assets

3

Number of employees (full-time equivalents) as at 30/06/2015; allocation according to the contractual relationship

Revenue from external customers

1,475.2

752.1

184.5

8.9

2,420.8

Intersegment revenue

175.0

193.5

144.9

99.5

–612.9

Total revenue

1,650.3

945.6

329.4

108.4

–612.9

2,420.8

Earnings before taxes

150.5

35.5

2.7

–29.9

–20.7

138.2

Financial income

6.7

0.6

31.5

11.0

–24.2

25.6

Financial expenses

–13.8

–17.2

–28.6

–34.1

24.9

–68.8

= Net financial expenses

–7.2

–16.6

2.9

–23.1

0.7

–43.3

EBIT

157.7

52.1

–0.2

–6.8

–21.4

181.5

+ Non-recurring items

3.9

0.6

0.0

19.1

–9.0

14.6

+ KION acquisition items

10.5

3.1

0.0

0.1

13.7

= Adjusted EBIT

172.1

55.9

–0.2

12.4

–30.3

209.8

Segment assets

5,156.3

2,242.0

1,466.3

543.7

–2,969.4

6,438.9

Segment liabilities

1,776.7

1,388.7

1,422.8

3,085.3

–2,987.8

4,685.7

Carrying amount of equity-accounted investments

49.7

4.2

19.5

0.0

73.4

Profit from equity-accounted investments

1.7

1.8

2.9

0.0

6.4

Capital expenditure1

29.1

23.1

0.0

7.6

59.8

Amortisation and depreciation2

46.1

23.0

0.0

8.5

77.6

Order intake

1,760.9

992.6

334.4

108.4

–631.1

2,565.2

Number of employees3

14,385

7,990

60

528

22,963

Segment report Q1 – Q2 2014

Segment report Q1 – Q2 2014

32

in € million

LMH

STILL

Financial Services

Other

Conso­lidation / Recon­ciliation

Total

1

Capital expenditure including capitalised development costs, excluding leased and rental assets

2

On intangible assets and property, plant and equipment excluding leased and rental assets

3

Prior-year figures restated to reflect the change in the order intake calculation introduced in 2015

4

Number of employees (full-time equivalents) as at 30/06/2014; allocation according to the contractual relationship

Revenue from external customers

1,343.2

718.2

152.5

19.4

2,233.3

Intersegment revenue

133.5

159.7

124.8

95.5

–513.6

Total revenue

1,476.7

877.9

277.3

115.0

–513.6

2,233.3

Earnings before taxes

130.8

32.0

2.6

–42.0

–35.5

88.0

Financial income

8.8

1.0

28.1

6.3

–22.5

21.8

Financial expenses

–14.7

–17.0

–26.2

–66.4

21.9

–102.3

= Net financial expenses

–5.8

–16.0

1.9

–60.0

–0.5

–80.5

EBIT

136.7

48.0

0.8

18.0

–35.0

168.5

+ Non-recurring items

3.9

1.0

0.0

4.5

9.5

+ KION acquisition items

17.7

1.2

0.0

0.0

18.9

= Adjusted EBIT

158.3

50.3

0.8

22.5

–35.0

196.9

Segment assets

4,758.7

2,145.7

1,286.6

724.4

–2,807.6

6,107.8

Segment liabilities

1,590.6

1,264.0

1,244.5

3,213.2

–2,788.0

4,524.2

Carrying amount of equity-accounted investments

121.3

4.4

17.5

0.0

143.2

Profit from equity-accounted investments

–1.4

1.1

2.7

0.0

2.4

Capital expenditure1

30.0

20.8

0.0

7.2

58.0

Amortisation and depreciation2

43.1

19.7

0.0

8.5

71.3

Order intake3

1,557.2

959.0

283.4

116.0

–544.0

2,371.6

Number of employees4

13,783

7,686

60

682

22,211

As a result of the reclassification of KION India, LMH’s revenue from external customers increased by €14.8 million in the first half of 2015, with a corresponding decline for the Other segment. The contribution to earnings from KION India amounted to €0.7 million.

The non-recurring items mainly comprise consultancy costs and expenses in connection with severance payments. In addition, write-downs and other expenses in relation to hidden reserves / liabilities identified in the process of acquiring equity investments are eliminated. Non-recurring items resulted in an overall net expense of €14.6 million in the first six months of 2015 (H1 2014: €9.5 million).

The KION acquisition items relate to the acquisition of the KION Group, which was formed at the end of 2006 when it was spun off from Linde AG, Munich. These items comprise net write-downs and other expenses in relation to the hidden reserves identified as part of the purchase price allocation.