Earnings

The cost of sales rose by 56.7 per cent to €2,865.2 million (H1 2016: €1,828.7 million). The year-on-year increase was mainly attributable to the Supply Chain Solutions segment and the inclusion of Dematic. Higher material prices also impacted on the cost of sales. At 25.1 per cent, the gross margin was below the figure for the prior-year period (H1 2016: 28.7 per cent). There was a disproportionately small increase in selling expenses, development costs and administrative expenses compared with the growth in revenue. The ‘other’ item came to €21.8 million (H1 2016: €28.4 million). This included the share of profit (loss) of equity-accounted investments, which amounted to a profit of €12.0 million (H1 2016: profit of €9.6 million).

The changes in the cost of sales and functional costs are shown in > TABLE 07.

The net financial expenses representing the balance of financial income and financial expenses came to €44.6 million in the first six months of this year (H1 2016: €63.3 million). Among other items, these expenses include transaction costs of €2.7 million that were expensed in connection with the early repayment of financial liabilities. In the first half of last year, net financial expenses had included one-off financial expenses of €25.7 million incurred in connection with the optimisation of the financing structure in February 2016.

Income tax expenses amounted to €65.3 million (H1 2016: €45.5 million). Current income taxes, which increased largely because of the level of earnings, came to €106.8 million (H1 2016: €31.3 million excluding Dematic). The tax rate was 30.3 per cent (H1 2016: 31.9 per cent).

The KION Group’s net income for the period after taxes was €150.3 million (H1 2016: €97.1 million). Earnings per share attributable to the shareholders of KION GROUP AG came to €1.35 for the first half of the year (H1 2016: €0.97) based on an average of 110.7 million (H1 2016: 98.7 million) no-par-value shares.