Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) reached €554.1 million, which was 26.9 per cent above the figure for the same period of the previous year (Q1 – Q3 2018: €436.6 million). This improvement in earnings was mainly driven by the larger volume of business and the reduction in amortisation expense in connection with purchase price allocations, which decreased by €31.5 million to €65.2 million (Q1 – Q3 2018: €96.8 million).
EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) rose by 16.2 per cent to €624.7 million (Q1 – Q3 2018: €537.6 million). The adjusted EBIT margin was 9.6 per cent, a year-on-year improvement of 0.3 percentage points (Q1 – Q3 2018: 9.3 per cent). > TABLE 04
in € million |
Q3 2019 |
Q3 2018 |
Change |
Q1 – Q3 2019 |
Q1 – Q3 2018 |
Change |
||||||
EBIT |
194.9 |
168.6 |
15.6% |
554.1 |
436.6 |
26.9% |
||||||
+ Non-recurring items |
0.8 |
1.3 |
–36.0% |
5.4 |
4.3 |
25.7% |
||||||
+ PPA items |
21.4 |
22.9 |
–6.3% |
65.2 |
96.8 |
–32.6% |
||||||
Adjusted EBIT |
217.1 |
192.7 |
12.6% |
624.7 |
537.6 |
16.2% |
EBITDA increased to €1,218.7 million, compared with €1,095.2 million in the prior-year period. Adjusted EBITDA improved to €1,224.1 million (Q1 – Q3 2018: €1,097.9 million), giving an adjusted EBITDA margin of 18.8 per cent (Q1 – Q3 2018: 19.0 per cent). > TABLE 05
in € million |
Q3 2019 |
Q3 2018 |
Change |
Q1 – Q3 2019 |
Q1 – Q3 2018 |
Change |
||||||
EBITDA |
419.3 |
378.9 |
10.7% |
1,218.7 |
1,095.2 |
11.3% |
||||||
+ Non-recurring items |
0.8 |
1.3 |
–36.0% |
5.4 |
2.7 |
95.7% |
||||||
+ PPA items |
0.0 |
–0.0 |
100.0% |
0.0 |
–0.0 |
100.0% |
||||||
Adjusted EBITDA |
420.1 |
380.1 |
10.5% |
1,224.1 |
1,097.9 |
11.5% |
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 €245.6 million in the reporting period (Q1 – Q3 2018: €236.2 million).
Key influencing factors for earnings
The cost of sales rose by 12.6 per cent. This was slightly lower than the increase in revenue, partly because material prices continued to rise only moderately and partly because the fallout from the production inefficiencies arising from bottlenecks at suppliers in the Industrial Trucks & Services segment in 2018 was largely resolved over the course of the current year. As a result, the gross margin improved to 26.6 per cent (Q1 – Q3 2018: 26.3 per cent). The 9.8 per cent increase in selling expenses, development costs and administrative expenses was also smaller than the growth in revenue. 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 06.
in € million |
Q3 2019 |
Q3 2018 |
Change |
Q1 – Q3 2019 |
Q1 – Q3 2018 |
Change |
||||||
Revenue |
2,160.0 |
1,895.9 |
13.9% |
6,524.2 |
5,770.3 |
13.1% |
||||||
Cost of sales |
–1,569.5 |
–1,382.9 |
–13.5% |
–4,787.4 |
–4,253.4 |
–12.6% |
||||||
Gross profit |
590.5 |
513.0 |
15.1% |
1,736.8 |
1,516.9 |
14.5% |
||||||
Selling expenses and administrative expenses |
–364.1 |
–316.1 |
–15.2% |
–1,098.6 |
–999.5 |
–9.9% |
||||||
Research and development costs |
–36.5 |
–32.5 |
–12.4% |
–110.9 |
–101.7 |
–9.1% |
||||||
Other |
4.9 |
4.1 |
18.2% |
26.9 |
20.9 |
29.0% |
||||||
Earnings before interest and taxes (EBIT) |
194.9 |
168.6 |
15.6% |
554.1 |
436.6 |
26.9% |
||||||
Net financial expenses |
–25.4 |
–27.2 |
6.6% |
–75.9 |
–81.1 |
6.4% |
||||||
Earnings before taxes |
169.4 |
141.4 |
19.9% |
478.2 |
355.4 |
34.5% |
||||||
Income taxes |
–48.8 |
–45.2 |
–7.8% |
–139.3 |
–111.6 |
–24.8% |
||||||
Net income |
120.7 |
96.1 |
25.5% |
338.9 |
243.8 |
39.0% |
Net financial expenses
The net financial expenses, representing the balance of financial income and financial expenses, improved by €5.2 million to €75.9 million in the period under review (Q1 – Q3 2018: net financial expenses of €81.1 million). This positive trend reflects the continual optimisation of financial liabilities and the financing of the long-term leasing business.
Income taxes
Income tax expenses amounted to €139.3 million (Q1 – Q3 2018: €111.6 million). The decrease in the effective tax rate to 29.1 per cent (Q1 – Q3 2018: 31.4 per cent) resulted from factors such as local tax rate reductions, the adjustment of tax provisions for prior years and tax breaks for R&D activities in the United States.
Net income for the period
At €338.9 million, net income for the period was up by a substantial €95.1 million year on year (Q1 – Q3 2018: €243.8 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €2.88 (Q1 – Q3 2018: €2.09) based on 117.9 million (Q1 – Q3 2018: 117.9 million) no-par-value shares.