Earnings

The cost of sales increased by 8.0 per cent to €2,580.2 million (Q1 – Q3 2014: €2,390.0 million), slightly below the rate of growth in revenue. Gross profit totalled €1,077.1 million (Q1 – Q3 2014: €982.3 million). Selling expenses grew by 5.3 per cent to €443.2 million (Q1 – Q3 2014: €421.0 million) and thus rose to a lesser extent than revenue. The sharp increase in development costs to €106.1 million (Q1 – Q3 2014: €87.8 million) was a clear indication of the higher expenses required to implement the Strategy 2020, particularly with regard to innovations in drive technology and the global platform strategies. Administrative expenses were also affected by the Strategy 2020, climbing by 10.3 per cent to €261.0 million (Q1 – Q3 2014: €236.6 million). In addition, currency effects and changes to collective bargaining agreements contributed to a rise in the individual functional divisions. The ‘Other’ item was higher than in the first nine months of 2014 at a positive €23.4 million (Q1 – Q3 2014: €0.8 million). This included the share of profit (loss) of equity-accounted investments, which amounted to a profit of €7.8 million (Q1 – Q3 2014: loss of €31.5 million). The prior-year figure had contained an impairment charge of €32.0 million on the stake held in Linde Hydraulics. Furthermore, the negative contribution to earnings from Linde Hydraulics was lower than in the first nine months of the previous year. > TABLE 07

There was a significant improvement in the balance of financial income and financial expenses, leading to net financial expenses of €68.2 million compared with a prior-year figure (adjusted for nonrecurring items) of €81.6 million. The main factor here was the optimisation of the funding structure in 2014. The net financial expenses of €61.8 million reported for the first nine months of last year had included financial income from the remeasurement of options in connection with Linde Hydraulics (€43.0 million) and financial expenses of €23.2 million incurred by the early repayment of two tranches of the corporate bonds.

Income tax expenses totalled €78.2 million (Q1 – Q3 2014: €57.2 million). This increase was primarily due to the rise in earnings. The tax rate was 35.2 per cent (Q1 – Q3 2014: 32.5 per cent).

The KION Group’s net income after taxes reached €143.8 million, a year-on-year increase of 21.2 per cent (Q1 – Q3 2014: €118.6 million). Diluted and basic earnings per share for the reporting period rose to €1.44 (Q1 – Q3 2014: €1.19).