Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) improved year on year to reach €414.8 million (€137.6 million). EBIT included budgeted negative effects from purchase price allocations totaling €41.8 million (H1 2020: €44.8 million). Non-recurring items amounting to an expense of €5.5 million were also recognized in the period under review and related in part to the capacity and structural program. The prior-year figure, an expense of €22.3 million, mainly included components of the capacity and structural program as well as an impairment charge on an equity investment. Earnings before interest and tax adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) amounted to €462.2 million for the first six months of 2021, which was more than double the figure for the first half of 2020 of €204.8 million. The adjusted EBIT margin recovered to 9.3 percent (H1 2020: 5.2 percent).
in € million |
Q2 |
Q2 |
Q1 – Q2 |
in % of revenue |
Q1 – Q2 |
in % of revenue |
|---|---|---|---|---|---|---|
EBIT |
221.3 |
17.5 |
414.8 |
8.4% |
137.6 |
3.5% |
Adjustment by functional costs: |
|
|
|
|
|
|
+ Cost of sales |
9.4 |
10.3 |
18.9 |
0.4% |
20.3 |
0.5% |
+ Selling expenses and administrative expenses |
15.1 |
22.0 |
29.5 |
0.6% |
35.7 |
0.9% |
+ Research and development costs |
0.0 |
0.0 |
0.1 |
0.0% |
0.1 |
0.0% |
+ Other costs |
1.4 |
10.9 |
–1.1 |
0.0% |
11.0 |
0.3% |
Adjusted EBIT |
247.2 |
60.7 |
462.2 |
9.3% |
204.8 |
5.2% |
adjusted for non-recurring items |
5.0 |
20.6 |
5.5 |
0.1% |
22.3 |
0.6% |
adjusted for PPA items |
20.9 |
22.7 |
41.8 |
0.8% |
44.8 |
1.1% |
Earnings before interest, tax, depreciation, and amortization (EBITDA) rose to €873.9 million (H1 2020: €597.1 million). Adjusted EBITDA increased to €879.5 million (H1 2020: €619.4 million), giving an adjusted EBITDA margin of 17.7 percent (H1 2020: 15.8 percent).
in € million |
Q2 |
Q2 |
Q1 – Q2 |
in % of revenue |
Q1 – Q2 |
in % of revenue |
|---|---|---|---|---|---|---|
EBITDA |
452.7 |
247.8 |
873.9 |
17.6% |
597.1 |
15.2% |
Adjustment by functional costs: |
|
|
|
|
|
|
+ Cost of sales |
0.0 |
–0.1 |
0.0 |
0.0% |
–0.1 |
0.0% |
+ Selling expenses and administrative expenses |
3.6 |
9.8 |
6.6 |
0.1% |
11.4 |
0.3% |
+ Research and development costs |
0.0 |
0.0 |
0.0 |
0.0% |
0.0 |
0.0% |
+ Other costs |
1.4 |
10.9 |
–1.0 |
0.0% |
11.0 |
0.3% |
Adjusted EBITDA |
457.7 |
268.4 |
879.5 |
17.7% |
619.4 |
15.8% |
adjusted for non-recurring items |
5.0 |
20.6 |
5.6 |
0.1% |
22.3 |
0.6% |
adjusted for PPA items |
0.0 |
0.0 |
0.0 |
0.0% |
0.0 |
0.0% |
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 €170.0 million in the reporting period (H1 2020: €167.7 million).
Key influencing factors for earnings
The cost of sales rose at a slower rate than revenue, increasing by 24.9 percent to €3,702.6 million (H1 2020: €2,964.8 million). The KION Group’s gross margin therefore rose to 25.5 percent in the period under review (H1 2020: 24.5 percent). This was primarily driven by the increase in the gross margin in the Industrial Trucks & Services segment thanks to a limited rise in fixed costs. Gross profit in the Supply Chain Solutions segment, meanwhile, was up significantly due to strong revenue growth. In this segment too, revenue grew at a faster rate than the mainly volume-related increase in functional costs. Selling expenses rose by just 5.2 percent, partly because of the ongoing restrictions on travel and marketing activities, whereas administrative expenses and research and development costs increased year on year by 8.7 percent and 11.1 percent respectively. Purchase price allocation effects included in the cost of sales and in other functional costs were lower overall than in the prior-year period. The ‘other’ item includes not only income and expense resulting from currency translation but also line items such as the share of profit (loss) of equity-accounted investments, which amounted to a profit of €10.3 million (H1 2020: loss of €3.6 million).
The change in the cost of sales and in other functional costs is shown in the following condensed income statement.
in € million |
Q2 |
Q2 |
Change |
Q1 – Q2 |
Q1 – Q2 |
Change |
|---|---|---|---|---|---|---|
Revenue |
2,592.8 |
1,899.6 |
36.5% |
4,967.9 |
3,927.3 |
26.5% |
Cost of sales |
–1,942.8 |
–1,480.3 |
–31.2% |
–3,702.6 |
–2,964.8 |
–24.9% |
Gross profit |
649.9 |
419.3 |
55.0% |
1,265.2 |
962.5 |
31.5% |
Selling expenses and administrative expenses |
–395.8 |
–355.8 |
–11.3% |
–782.9 |
–734.7 |
–6.5% |
Research and development costs |
–45.8 |
–39.6 |
–15.8% |
–86.3 |
–77.7 |
–11.1% |
Other |
13.0 |
–6.4 |
> 100% |
18.8 |
–12.4 |
> 100% |
Earnings before interest and tax (EBIT) |
221.3 |
17.5 |
> 100% |
414.8 |
137.6 |
> 100% |
Net financial expenses |
–9.2 |
–21.2 |
56.7% |
–19.2 |
–46.9 |
59.0% |
Earnings before tax |
212.1 |
–3.7 |
> 100% |
395.6 |
90.8 |
> 100% |
Income taxes |
–57.9 |
–13.4 |
< –100% |
–104.4 |
–40.2 |
< –100% |
Net (loss) income |
154.2 |
–17.1 |
> 100% |
291.2 |
50.6 |
> 100% |
Net financial expenses
The net financial expenses, representing the balance of financial income and financial expenses, improved to €19.2 million (H1 2020: €46.9 million). Reasons for this included the further reduction in borrowing, improved net interest income / expense from the leasing business, and lower net expenses in respect of the retirement benefit obligation.
Income taxes
Income tax expenses rose significantly year on year to €104.4 million (H1 2020: €40.2 million), reflecting the level of earnings. However, the effective tax rate fell to 26.4 percent (H1 2020: 44.2 percent). The figure for the comparative period of 2020 had been influenced in particular by high non-tax-deductible expenses and losses that could not be utilized for tax purposes owing to the level of earnings.
Net income for the period
Net income for the period came to €291.2 million, which was substantially higher than in the same period of the previous year (H1 2020: €50.6 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €2.21 (H1 2020: €0.46) based on 131.1 million (H1 2020: 118.0 million) no-par-value shares.