Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) reached €436.6 million, which was 11.6 per cent above the same period of the previous year (Q1 – Q3 2017: €391.3 million). The main reason for this was the sharp reduction, to €96.8 million, in the purchase price allocation effects included in EBIT (Q1 – Q3 2017: €139.5 million). This was countered to an extent by the adverse impact on EBIT of negative currency effects totalling €14.2 million. EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) was below the prior-year period at €537.6 million (Q1 – Q3 2017: €557.5 million). The adjusted EBIT margin fell by 0.6 percentage points year on year to reach 9.3 per cent. > TABLE 04
EBIT |
04 |
|||||||
in € million |
Q3 2018 |
Q3 2017* |
Change |
Q1 – Q3 2018 |
Q1 – Q3 2017* |
Change |
||
|
||||||||
EBIT |
168.6 |
136.1 |
23.9% |
436.6 |
391.3 |
11.6% |
||
+ Non-recurring items |
1.3 |
11.5 |
–89.1% |
4.3 |
26.8 |
–84.0% |
||
+ PPA items |
22.9 |
47.9 |
–52.2% |
96.8 |
139.5 |
–30.6% |
||
Adjusted EBIT |
192.7 |
195.5 |
–1.4% |
537.6 |
557.5 |
–3.6% |
||
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased to €1,095.2 million (Q1 – Q3 2017: €1,062.2 million). Adjusted EBITDA came to €1,097.9 million (Q1 – Q3 2017: €1,090.8 million). This equates to an adjusted EBITDA margin of 19.0 per cent (Q1 – Q3 2017: 19.4 per cent). > TABLE 05
EBITDA |
05 |
|||||||
in € million |
Q3 2018 |
Q3 2017* |
Change |
Q1 – Q3 2018 |
Q1 – Q3 2017* |
Change |
||
|
||||||||
EBITDA |
378.9 |
367.7 |
3.0% |
1,095.2 |
1,062.2 |
3.1% |
||
+ Non-recurring items |
1.3 |
11.5 |
–89.1% |
2.7 |
26.7 |
–89.7% |
||
+ PPA items |
–0.0 |
1.9 |
< –100% |
–0.0 |
1.9 |
< –100% |
||
Adjusted EBITDA |
380.1 |
381.1 |
–0.3% |
1,097.9 |
1,090.8 |
0.6% |
||
Key influencing factors for earnings
A 1.7 per cent rise in the cost of sales slightly detracted from the increase in revenue, resulting in an improved gross margin of 26.3 per cent (Q1 – Q3 2017: 25.8 per cent). Higher material prices and wage cost rises in the reporting period partly negated the positive impact of reduced purchase price allocation effects. In addition, the delivery bottlenecks in the Industrial Trucks & Services segment led to production inefficiencies and thus an increase in the cost of sales. Furthermore, delays in the awarding of projects by customers in previous quarters squeezed earnings in the Supply Chain Solutions segment and led to temporary underutilisation of project-related personnel capacity. Currency effects, mainly from the US dollar, also had a noticeable negative impact overall on the key financials and therefore on the KION Group’s EBIT.
The change in the cost of sales and in other functional costs is shown in > TABLE 06.
(Condensed) income statement |
06 |
|||||||
in € million |
Q3 2018 |
Q3 2017* |
Change |
Q1 – Q3 2018 |
Q1 – Q3 2017* |
Change |
||
|
||||||||
Revenue |
1,895.9 |
1,832.4 |
3.5% |
5,770.3 |
5,634.7 |
2.4% |
||
Cost of sales |
–1,382.9 |
–1,337.9 |
–3.4% |
–4,253.4 |
–4,183.5 |
–1.7% |
||
Gross profit |
513.0 |
494.5 |
3.7% |
1,516.9 |
1,451.2 |
4.5% |
||
Selling expenses and administrative expenses |
–316.1 |
–312.6 |
–1.1% |
–999.5 |
–970.1 |
–3.0% |
||
Research and development costs |
–32.5 |
–37.7 |
13.9% |
–101.7 |
–103.6 |
1.8% |
||
Other |
4.1 |
–8.1 |
>100% |
20.9 |
13.7 |
52.7% |
||
Earnings before interest and taxes (EBIT) |
168.6 |
136.1 |
23.9% |
436.6 |
391.3 |
11.6% |
||
Net financial expenses |
–27.2 |
–20.1 |
–35.7% |
–81.1 |
–68.4 |
–18.5% |
||
Earnings before taxes |
141.4 |
116.0 |
21.8% |
355.4 |
322.9 |
10.1% |
||
Income taxes |
–45.2 |
–37.1 |
–21.9% |
–111.6 |
–99.2 |
–12.5% |
||
Net income for the period |
96.1 |
78.9 |
21.8% |
243.8 |
223.6 |
9.0% |
||
Net financial income / expenses
The net financial expenses, representing the balance of financial income and financial expenses, amounted to €81.1 million for the nine-month period (Q1 – Q3 2017: 68.4 million) and included negative exchange rate effects (Q1 – Q3 2017: positive exchange rate effects). Current interest expense on financial liabilities decreased overall due to the corporate actions carried out in 2017.
Income taxes
Income tax expenses rose to €111.6 million (Q1 – Q3 2017: €99.2 million) because of the increase in earnings. The tax rate was 31.4 per cent (Q1 – Q3 2017: 30.7 per cent).
Net income for the period
The KION Group’s net income for the period after taxes was €243.8 million (Q1 – Q3 2017: €223.6 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €2.09 for the first three quarters of 2018 (Q1 – Q3 2017: €1.97) based on an average of 117.9 million (Q1 – Q3 2017: 113.1 million) no-par-value shares outstanding.