Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) improved by a very healthy 34.1 per cent to €359.3 million (H1 2018: €268.0 million). The total figure for EBIT included the budgeted negative purchase price allocation effects of €43.8 million, which were down by €30.1 million on the prior-year period (H1 2018: €73.9 million). EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) improved by 18.2 per cent to €407.6 million (H1 2018: €344.9 million). The KION Group’s adjusted EBIT margin increased by 0.4 percentage points to 9.3 per cent and so was higher than in the first half of 2018 (H1 2018: 8.9 per cent). The EBIT margin thus also improved on the first quarter of 2019 (Q1 2019: 8.8 per cent). > TABLE 05
EBIT |
05 |
|||||
in € million |
Q2 2019 |
Q2 2018 |
Change |
Q1 – Q2 2019 |
Q1 – Q2 2018 |
Change |
EBIT |
200.6 |
142.1 |
41.1% |
359.3 |
268.0 |
34.1% |
+ Non-recurring items |
3.4 |
4.0 |
–15.1% |
4.6 |
3.0 |
51.2% |
+ PPA items |
21.3 |
40.9 |
–47.9% |
43.8 |
73.9 |
–40.7% |
Adjusted EBIT |
225.2 |
187.0 |
20.5% |
407.6 |
344.9 |
18.2% |
EBITDA advanced to €799.4 million (H1 2018: €716.3 million). Adjusted EBITDA rose to €804.0 million (H1 2018: €717.8 million), giving an adjusted EBITDA margin of 18.4 per cent (H1 2018: 18.5 per cent). > TABLE 06
EBITDA |
06 |
|||||
in € million |
Q2 2019 |
Q2 2018 |
Change |
Q1 – Q2 2019 |
Q1 – Q2 2018 |
Change |
EBITDA |
421.7 |
374.6 |
12.6% |
799.4 |
716.3 |
11.6% |
+ Non-recurring items |
3.4 |
2.4 |
38.3% |
4.6 |
1.5 |
>100% |
+ PPA items |
0.0 |
–0.1 |
100.0% |
0.0 |
0.0 |
– |
Adjusted EBITDA |
425.0 |
377.0 |
12.7% |
804.0 |
717.8 |
12.0% |
EBITDA for the long-term leasing business, which is derived from internal reporting and assumes a minimum rate of return on the capital employed, amounted to €164.6 million in the reporting period (H1 2018: €155.9 million).
Key influencing factors for earnings
The cost of sales rose by 12.1 per cent to €3,217.9 million (H1 2018: €2,870.5 million). This was lower than the increase in revenue, partly because material prices rose only modestly and partly because the fallout from the production inefficiencies arising from bottlenecks at suppliers in the Industrial Trucks & Services segment was largely resolved in the second quarter. As a result, the gross margin improved to 26.3 per cent (H1 2018: 25.9 per cent). Selling expenses and general administrative expenses as well as research and development costs were up by 7.5 per cent overall, a disproportionally low increase that also contributed to the improvement in the EBIT margin. Moreover, the reduced purchase price allocation effects had a positive impact on both the cost of sales and other functional costs.
The change in the cost of sales and in other functional costs is shown in > TABLE 07.
(Condensed) income statement |
07 |
|||||
in € million |
Q2 2019 |
Q2 2018 |
Change |
Q1 – Q2 2019 |
Q1 – Q2 2018 |
Change |
Revenue |
2,280.7 |
2,031.1 |
12.3% |
4,364.1 |
3,874.4 |
12.6% |
Cost of sales |
–1,686.2 |
–1,518.4 |
–11.0% |
–3,217.9 |
–2,870.5 |
–12.1% |
Gross profit |
594.6 |
512.7 |
16.0% |
1,146.2 |
1,003.9 |
14.2% |
Selling expenses and administrative expenses |
–375.0 |
–346.0 |
–8.4% |
–734.5 |
–683.4 |
–7.5% |
Research and development costs |
–38.0 |
–34.4 |
–10.6% |
–74.5 |
–69.3 |
–7.5% |
Other |
19.0 |
9.8 |
94.3% |
22.0 |
16.7 |
31.6% |
Earnings before interest and taxes (EBIT) |
200.6 |
142.1 |
41.1% |
359.3 |
268.0 |
34.1% |
Net financial expenses |
–25.7 |
–25.1 |
–2.5% |
–50.5 |
–53.9 |
6.3% |
Earnings before taxes |
174.8 |
117.0 |
49.4% |
308.8 |
214.1 |
44.2% |
Income taxes |
–49.7 |
–37.7 |
–31.7% |
–90.5 |
–66.4 |
–36.4% |
Net income |
125.2 |
79.3 |
57.8% |
218.3 |
147.7 |
47.7% |
Net financial expenses
The net financial expenses, representing the balance of financial income and financial expenses, improved slightly to €50.5 million in the first half of 2019 (H1 2018: net financial expenses of €53.9 million). This is partly a reflection of the lower average net financial debt in comparison with the prior-year period.
Income taxes
Income tax expenses rose to €90.5 million (H1 2018: €66.4 million) because of the increase in earnings before tax. The tax rate was 29.3 per cent (H1 2018: 31.0 per cent). This decrease in the effective tax rate resulted from factors such as local tax rate reductions and the adjustment of tax provisions for prior years.
Net income for the period
At €218.3 million, net income for the period was up by €70.5 million year on year (H1 2018: €147.7 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €1.87 (H1 2018: €1.26) based on 117.9 million (H1 2018: 117.9 million) no-par-value shares.