Earnings
EBIT and EBITDA
Following the severe impact of the coronavirus pandemic in the prior-year period when earnings before interest and tax (EBIT) totaled just €272.8 million, EBIT in the first nine months of 2021 reached €623.9 million, reflecting the widespread recovery of the market. EBIT included budgeted negative effects from purchase price allocations totaling €63.1 million (Q1–Q3 2020: €66.4 million). There were also non-recurring items amounting to a total expense of €4.1 million in the reporting period. The prior-year figure, an expense of €24.6 million, mainly included adverse effects on earnings from the capacity and structural program as well as an impairment charge on an equity investment. EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) amounted to €691.1 million in the first nine months of the year (Q1–Q3 2020: €363.8 million). The adjusted EBIT margin improved to 9.2 percent (Q1–Q3 2020: 6.1 percent).
|
in € million |
Q3 |
Q3 |
Q1 – Q3 |
in % of revenue |
Q1 – Q3 |
in % of revenue |
|---|---|---|---|---|---|---|
|
EBITDA |
209.1 |
135.2 |
623.9 |
8.3% |
272.8 |
4.5% |
|
Adjustment by functional costs: |
|
|
|
|
|
|
|
+ Cost of sales |
9.5 |
14.8 |
28.4 |
0.4% |
35.1 |
0.6% |
|
+ Selling expenses and administrative expenses |
13.0 |
11.5 |
42.5 |
0.6% |
47.2 |
0.8% |
|
+ Research and development costs |
0.0 |
0.0 |
0.1 |
0.0% |
0.2 |
0.0% |
|
+ Other costs |
–2.8 |
–2.4 |
–3.9 |
–0.1% |
8.6 |
0.1% |
|
Adjusted EBITDA |
228.9 |
159.1 |
691.1 |
9.2% |
363.8 |
6.1% |
|
adjusted for non-recurring items |
–1.4 |
2.2 |
4.1 |
0.1% |
24.6 |
0.4% |
|
adjusted for PPA items |
21.2 |
21.6 |
63.1 |
0.8% |
66.4 |
1.1% |
Earnings before interest, tax, depreciation, and amortization (EBITDA) rose to €1,317.6 million (Q1–Q3 2020: €962.1 million). Adjusted EBITDA increased to €1,321.4 million (Q1–Q3 2020: €986.7 million), giving an adjusted EBITDA margin of 17.5 percent (Q1–Q3 2020: 16.4 percent).
|
in € million |
Q3 |
Q3 |
Q1 – Q3 |
in % of revenue |
Q1 – Q3 |
in % of revenue |
|---|---|---|---|---|---|---|
|
EBITDA |
443.7 |
365.0 |
1,317.6 |
17.5% |
962.1 |
16.0% |
|
Adjustment by functional costs: |
|
|
|
|
|
|
|
+ Cost of sales |
0.0 |
4.8 |
0.0 |
0.0% |
4.8 |
0.1% |
|
+ Selling expenses and administrative expenses |
1.4 |
–0.2 |
8.0 |
0.1% |
11.2 |
0.2% |
|
+ Research and development costs |
0.0 |
0.0 |
0.0 |
0.0% |
0.0 |
0.0% |
|
+ Other costs |
–3.2 |
–2.4 |
–4.2 |
–0.1% |
8.6 |
0.1% |
|
Adjusted EBITDA |
441.9 |
367.3 |
1,321.4 |
17.5% |
986.7 |
16.4% |
|
adjusted for non-recurring items |
–1.9 |
2.2 |
3.8 |
0.0% |
24.6 |
0.4% |
|
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 €248.8 million in the reporting period (Q1–Q3 2020: €248.6 million).
Key influencing factors for earnings
The cost of sales rose at a slower rate than revenue, increasing by 24.9 percent to €5,631.3 million (Q1–Q3 2020: €4,508.7 million). The KION Group’s gross margin therefore improved to 25.3 percent in the period under review (Q1–Q3 2020: 24.9 percent), largely due to the limited rise in fixed costs in the Industrial Trucks & Services segment. Other functional costs also grew at a slower rate than revenue and the growth was partly for volume-related reasons. Selling expenses rose by just 7.0 percent, partly because of the ongoing restrictions on travel and marketing activities. Administrative expenses and costs for research and development increased by 9.2 percent and 13.0 percent respectively year on year. Earnings also included a higher level of personnel expenses than in the prior-year period that was attributable to variable remuneration components.
Purchase price allocation effects included in the cost of sales and in other functional costs were slightly lower than in the first three quarters of 2020. The ‘other’ item included 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 €11.5 million (Q1–Q3 2020: loss of €4.9 million including impairment losses).
The change in the cost of sales and in other functional costs is shown in the following condensed income statement.
|
in € million |
Q3 |
Q3 |
Change |
Q1 – Q3 |
Q1 – Q3 |
Change |
|---|---|---|---|---|---|---|
|
Revenue |
2,565.8 |
2,072.9 |
23.8% |
7,533.7 |
6,000.2 |
25.6% |
|
Cost of sales |
–1,928.7 |
–1,543.8 |
–24.9% |
–5,631.3 |
–4,508.7 |
–24.9% |
|
Gross profit |
637.2 |
529.0 |
20.4% |
1,902.4 |
1,491.5 |
27.5% |
|
Selling expenses and administrative expenses |
–393.1 |
–355.8 |
–10.5% |
–1,176.0 |
–1,090.6 |
–7.8% |
|
Research and development costs |
–41.9 |
–35.8 |
–17.2% |
–128.2 |
–113.4 |
–13.0% |
|
Other |
7.0 |
–2.2 |
> 100% |
25.7 |
–14.7 |
> 100% |
|
Earnings before interest and tax (EBIT) |
209.1 |
135.2 |
54.6% |
623.9 |
272.8 |
> 100% |
|
Net financial expenses |
–5.9 |
–17.2 |
65.5% |
–25.1 |
–64.1 |
60.8% |
|
Earnings before tax |
203.2 |
118.0 |
72.2% |
598.8 |
208.8 |
> 100% |
|
Income taxes |
–63.6 |
–36.2 |
–75.9% |
–168.0 |
–76.3 |
< –100% |
|
Net income |
139.6 |
81.9 |
70.5% |
430.8 |
132.5 |
> 100% |
Net financial expenses
The net financial expenses, representing the balance of financial income and financial expenses, improved to €25.1 million (Q1–Q3 2020: €64.1 million). The main reasons for this included improved net interest income / expense from the leasing business, currency translation effects, and lower net interest expense from defined benefit plans.
Income taxes
Income tax expenses rose significantly year on year to €168.0 million (Q1–Q3 2020: €76.3 million), reflecting the increase in earnings. However, the effective tax rate fell to 28.1 percent (Q1–Q3 2020: 36.6 percent) because the figure for the comparative period of 2020 had been heavily influenced by high non-tax-deductible expenses and by 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 €430.8 million, which was substantially higher than in the same period of the previous year (Q1–Q3 2020: €132.5 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €3.26 (Q1–Q3 2020: €1.18) based on 131.1 million (Q1–Q3 2020: 118.0 million) no-par-value shares.