Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) reached €395.6 million, which was 24.3 per cent above the figure for the same period of the previous year (Q1 – Q3 2016: €318.2 million excluding Dematic). EBIT for the current year includes the negative purchase price allocation effects of €139.5 million (Q1 – Q3 2016: negative effects of €20.2 million), which were largely attributable to the acquisition of Dematic. Further non-recurring items (negative effects of €26.8 million) were incurred in connection with the integration of Dematic and with the start-up costs for the new factory in the Mexican city of Monterrey. Adjusted for these effects, EBIT stood at €561.8 million, up by 53.4 per cent on the prior-year figure (Q1 – Q3 2016: €366.1 million). The adjusted EBIT margin rose to 9.9 per cent in the period under review (Q1 – Q3 2016: 9.5 per cent). > TABLE 04
EBIT |
04 |
|||||
in € million |
Q3 2017 |
Q3 2016 |
Change |
Q1 – Q3 2017 |
Q1 – Q3 2016 |
Change |
EBIT |
135.3 |
112.4 |
20.4% |
395.6 |
318.2 |
24.3% |
+ Non-recurring items |
11.5 |
7.7 |
49.4% |
26.8 |
27.7 |
–3.3% |
+ PPA items |
47.9 |
6.6 |
>100% |
139.5 |
20.2 |
>100% |
Adjusted EBIT |
194.7 |
126.8 |
53.6% |
561.8 |
366.1 |
53.4% |
Earnings before interest, tax, depreciation and amortisation (EBITDA) improved to €869.9 million, compared with €630.6 million in the corresponding period of 2016. Adjusted EBITDA came to €898.5 million (Q1 – Q3 2016: €654.0 million). This equates to an adjusted EBITDA margin of 15.8 per cent (Q1 – Q3 2016: 17.0 per cent excluding Dematic). > TABLE 05
EBITDA |
05 |
|||||
in € million |
Q3 2017 |
Q3 2016 |
Change |
Q1 – Q3 2017 |
Q1 – Q3 2016 |
Change |
EBITDA |
296.2 |
217.9 |
35.9% |
869.9 |
630.6 |
37.9% |
+ Non-recurring items |
11.5 |
6.2 |
85.6% |
26.7 |
23.4 |
14.3% |
+ PPA items |
1.9 |
0.0 |
– |
1.9 |
0.0 |
– |
Adjusted EBITDA |
309.5 |
224.1 |
38.1% |
898.5 |
654.0 |
37.4% |
Key influencing factors for earnings
The higher volume of revenue was offset by a rise in the cost of sales, which went up by 54.4 per cent to €4,218.4 million (Q1 – Q3 2016: €2,732.9 million excluding Dematic). In addition to the first-time consolidation of Dematic, an increase in the price of materials had the biggest effect on the cost of sales. Currency effects related to pound sterling also had a negative impact, affecting overall earnings in the period under review. At 25.7 per cent, the gross margin was below the figure for the prior-year period (Q1 – Q3 2016: 29.0 per cent). This was compensated for by the disproportionately low increase in selling expenses and administrative expenses, whereas development costs were up by 52.6 per cent year on year (excluding Dematic). The ‘Other’ line item, amounting to €13.7 million (Q1 – Q3 2016: €37.1 million), included the share of profit (loss) of equity-accounted investments, which came to a profit of €12.6 million (Q1 – Q3 2016: €9.9 million).
The change in the cost of sales and in other functional costs is shown in > TABLE 06.
(Condensed) income statement |
06 |
|||||
in € million |
Q3 2017 |
Q3 2016 |
Change |
Q1 – Q3 2017 |
Q1 – Q3 2016 |
Change |
Revenue |
1,847.4 |
1,283.2 |
44.0% |
5,675.2 |
3,847.7 |
47.5% |
Cost of sales |
–1,353.2 |
–904.2 |
–49.7% |
–4,218.4 |
–2,732.9 |
–54.4% |
Gross profit |
494.2 |
379.0 |
30.4% |
1,456.8 |
1,114.8 |
30.7% |
Selling expenses and administrative expenses |
–313.1 |
–254.8 |
–22.9% |
–971.4 |
–765.8 |
–26.9% |
Research and development costs |
–37.7 |
–20.5 |
–84.0% |
–103.5 |
–67.8 |
–52.6% |
Other |
–8.1 |
8.7 |
<–100% |
13.7 |
37.1 |
–63.2% |
Earnings before interest and taxes (EBIT) |
135.3 |
112.4 |
20.4% |
395.6 |
318.2 |
24.3% |
Net financial expenses |
–17.2 |
–16.4 |
–5.3% |
–61.8 |
–79.6 |
22.3% |
Earnings before taxes |
118.1 |
96.1 |
22.9% |
333.7 |
238.6 |
39.9% |
Income taxes |
–38.0 |
–28.7 |
–32.0% |
–103.3 |
–74.2 |
–39.2% |
Net income for the period |
80.2 |
67.3 |
19.0% |
230.4 |
164.4 |
40.2% |
Net financial expenses
The net financial expenses, representing the balance of financial income and financial expenses, improved to €61.8 million thanks to the optimised financing structure (Q1 – Q3 2016: €79.6 million). These expenses include transaction costs of €2.7 million that were recognised in connection with the early repayment of financial liabilities. The prior-year figure included one-off financial expenses of €25.7 million, which were also incurred in connection with the optimisation of the financing structure.
Income taxes
Income tax expenses amounted to €103.3 million (Q1 – Q3 2016: €74.2 million). This resulted in a tax rate of 31.0 per cent (Q1 – Q3 2016: 31.1 per cent).
Net income for the period
The KION Group’s net income after taxes for the first three quarters of 2017 was €230.4 million (Q1 – Q3 2016: €164.4 million). Earnings per share attributable to the shareholders of KION GROUP AG came to €2.03 (Q1 – Q3 2016: €1.59) based on an average 113.1 million (Q1 – Q3 2016: 101.5 million) no-par-value shares.