Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) improved markedly to €372.2 million in the reporting period (H1 2023: €294.1 million).
EBIT included purchase price allocation effects amounting to an expense of €66.8 million in the first half of 2024, which was higher than in the prior-year period (H1 2023: expense of €47.7 million). This increase resulted mainly from the impairment of goodwill that was carried out in an amount of €22.4 million in the KION ITS Americas Operating Unit (Industrial Trucks & Services segment) in the second quarter of 2024. Non-recurring items amounted to a total expense of €8.1 million (H1 2023: expense of €6.5 million). This included costs (including interest and consultancy costs) of €14.8 million that were incurred in the second quarter of 2024 in connection with the ending of a long-running legal dispute related to the acquisition of a group of companies in 2015 by the former Dematic Group. The overall expense for non-recurring items was reduced by income from the reversal of provisions for adjustments to personnel capacity.
EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) rose sharply to €447.0 million in the first half of 2024 (H1 2023: €348.3 million). The Group’s adjusted EBIT margin improved year on year from 6.2 percent to 7.8 percent. Building on its strong earnings performance in 2023, the Industrial Trucks & Services segment once again achieved an adjusted EBIT margin in double digits, at 10.9 percent (H1 2023: 9.2 percent). The Supply Chain Solutions segment’s adjusted EBIT margin increased to 2.9 percent (H1 2023: 1.0 percent).
in € million |
Q2 |
Q2 |
Q1 – Q2 |
in % of revenue |
Q1 – Q2 |
in % of revenue |
|---|---|---|---|---|---|---|
EBIT |
161.3 |
164.6 |
372.2 |
6.5% |
294.1 |
5.2% |
Adjustment by functional costs: |
|
|
|
|
|
|
+ Cost of sales |
7.2 |
12.5 |
10.4 |
0.2% |
22.1 |
0.4% |
+ Selling expenses and administrative expenses |
15.5 |
14.9 |
28.9 |
0.5% |
30.3 |
0.5% |
+ Research and development costs |
– |
0.6 |
0.0 |
0.0% |
0.6 |
0.0% |
+ Other costs |
36.3 |
–0.3 |
35.6 |
0.6% |
1.3 |
0.0% |
Adjusted EBIT |
220.3 |
192.3 |
447.0 |
7.8% |
348.3 |
6.2% |
adjusted for non-recurring items |
14.3 |
5.3 |
8.1 |
0.1% |
6.5 |
0.1% |
adjusted for PPA items |
44.7 |
22.4 |
66.8 |
1.2% |
47.7 |
0.8% |
EBITDA rose to €938.7 million in the first six months of 2024 (H1 2023: €816.8 million). Adjusted EBITDA increased to €948.2 million (H1 2023: €826.1 million). The adjusted EBITDA margin for the reporting period stood at 16.5 percent (H1 2023: 14.7 percent).
in € million |
Q2 |
Q2 |
Q1 – Q2 |
in % of revenue |
Q1 – Q2 |
in % of revenue |
|---|---|---|---|---|---|---|
EBITDA |
460.5 |
429.8 |
938.7 |
16.4% |
816.8 |
14.5% |
Adjustment by functional costs: |
|
|
|
|
|
|
+ Cost of sales |
–2.6 |
3.7 |
–9.1 |
–0.2% |
4.6 |
0.1% |
+ Selling expenses and administrative expenses |
3.1 |
2.7 |
4.0 |
0.1% |
5.8 |
0.1% |
+ Research and development costs |
– |
0.5 |
0.0 |
0.0% |
0.5 |
0.0% |
+ Other costs |
13.0 |
–0.3 |
14.5 |
0.3% |
–1.6 |
–0.0% |
Adjusted EBITDA |
473.9 |
436.5 |
948.2 |
16.5% |
826.1 |
14.7% |
adjusted for non-recurring items |
13.5 |
6.7 |
9.5 |
0.2% |
9.3 |
0.2% |
adjusted for PPA items |
– |
– |
– |
0.0% |
– |
0.0% |
Key influencing factors for earnings
Despite the increase in revenue, the cost of sales decreased to €4,195.0 million in the first six months of 2024 (H1 2023: €4,296.5 million). The gross margin improved markedly to 26.9 percent as a result (H1 2023: 23.5 percent). Other significant factors were higher sale prices and the stability of material prices in the Industrial Trucks & Services segment, improved project implementation and the efficiency measures carried out in the Supply Chain Solutions segment, and the growth of the high-margin service business in both operating segments.
Selling and administrative expenses went up by a total of 9.0 percent compared with the prior-year period. This increase was due not only to a rise in personnel expenses, including variable remuneration components, but also, in particular, to higher IT costs in connection with the strategic, groupwide Business Transformation project and to an intensification of sales activities. Research and development expenditure was 13.6 percent higher than in the prior-year period because of the implementation of the KION 2027 strategy in the ‘automation and software’ and ‘sustainability’ fields of action.
The ‘other’ item, which mainly comprises the share of profit (loss) of equity-accounted investments, along with other income and expenses in the income statement, came to an expense of €15.7 million (H1 2023: income of €26.6 million). This deterioration was mainly due to the full impairment of the goodwill of the KION ITS Americas Operating Unit, which was carried out in an amount of €22.4 million in the second quarter of 2024, and non-recurring expenses of €14.8 million resulting from the ending of a legal dispute.
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 |
2,877.1 |
2,836.4 |
1.4% |
5,736.2 |
5,617.4 |
2.1% |
Cost of sales |
–2,124.7 |
–2,159.2 |
1.6% |
–4,195.0 |
–4,296.5 |
2.4% |
Gross profit |
752.4 |
677.3 |
11.1% |
1,541.1 |
1,320.9 |
16.7% |
Selling expenses and administrative expenses |
–507.1 |
–475.0 |
–6.8% |
–1,027.6 |
–942.7 |
–9.0% |
Research and development costs |
–62.9 |
–56.0 |
–12.3% |
–125.7 |
–110.7 |
–13.6% |
Other |
–21.1 |
18.4 |
< –100% |
–15.7 |
26.6 |
< –100% |
Earnings before interest and tax (EBIT) |
161.3 |
164.6 |
–2.0% |
372.2 |
294.1 |
26.6% |
Net financial expenses |
–43.3 |
–40.8 |
–6.2% |
–84.5 |
–76.5 |
–10.4% |
Earnings before tax |
118.0 |
123.9 |
–4.8% |
287.7 |
217.6 |
32.2% |
Income taxes |
–47.3 |
–51.1 |
7.4% |
–106.0 |
–71.2 |
–48.8% |
Net income |
70.7 |
72.8 |
–2.9% |
181.7 |
146.3 |
24.1% |
Net financial expenses
Net financial expenses, representing the balance of financial income and financial expenses, increased to €84.5 million in the first half of the year (H1 2023: €76.5 million). Interest expense on financial debt amounted to €31.3 million and therefore changed only marginally (H1 2023: expense of €31.9 million). The higher level of interest rates had little effect here because net debt was lower on average. By contrast, the higher level of interest rates meant that net interest income/expense from the lease and short-term rental business deteriorated significantly to a net expense of €45.7 million (H1 2023: net expense of €21.9 million); interest income of €23.9 million was realized on the interest-rate derivatives used for hedging purposes in the lease business during the first half of the year (H1 2023: interest income of €16.5 million).
Income taxes
Income tax expenses rose year on year to €106.0 million (H1 2023: €71.2 million), primarily because of the much improved level of earnings. The effective tax rate in the reporting period was 36.9 percent. The impairment of the goodwill of the KION ITS Americas Operating Unit that was carried out in the second quarter of 2024 was the main reason for the much higher tax rate than in the prior-year period (H1 2023: 32.7 percent). The tax rate adjusted for this non-recurring item came to 34.2 percent.
Net income for the period
Net income for the first half of 2024 amounted to €181.7 million, which was substantially higher than in the corresponding period of the previous year (H1 2023: €146.3 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €1.35 (H1 2023: €1.09) based on an unchanged weighted average of 131.1 million no-par-value shares (H1 2023: 131.1 million).