Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) improved markedly to €565.9 million in the first nine months of 2024 (Q1–Q3 2023: €490.9 million).
EBIT included purchase price allocation effects totaling an expense of €88.5 million in the reporting period (Q1–Q3 2023: expense of €70.2 million). This increase resulted mainly from the impairment of goodwill that was carried out in an amount of €22.3 million in the KION ITS Americas Operating Unit (Industrial Trucks & Services segment) in the second quarter of 2024. Non-recurring items came to a total expense of €12.3 million (Q1–Q3 2023: expense of €10.8 million). This included costs (including interest and consultancy costs) of €14.7 million that were incurred 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 main countervailing factor that reduced the overall expense for non-recurring items was 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 €666.7 million in the first three quarters of 2024 (Q1–Q3 2023: €571.9 million). The KION Group’s adjusted EBIT margin improved to 7.9 percent (Q1–Q3 2023: 6.9 percent).
in € million |
Q3 |
Q3 |
Q1 – Q3 |
in % of revenue |
Q1 – Q3 |
in % of revenue |
|---|---|---|---|---|---|---|
EBIT |
193.7 |
196.9 |
565.9 |
6.7% |
490.9 |
5.9% |
Adjustment by functional costs: |
|
|
|
|
|
|
+ Cost of sales |
10.6 |
11.2 |
21.0 |
0.2% |
33.3 |
0.4% |
+ Selling expenses and administrative expenses |
12.6 |
14.7 |
41.4 |
0.5% |
45.0 |
0.5% |
+ Research and development costs |
– |
–0.4 |
0.0 |
0.0% |
0.2 |
0.0% |
+ Other costs |
2.7 |
1.3 |
38.3 |
0.5% |
2.6 |
0.0% |
Adjusted EBIT |
219.6 |
223.6 |
666.7 |
7.9% |
571.9 |
6.9% |
adjusted for non-recurring items |
4.2 |
4.3 |
12.3 |
0.1% |
10.8 |
0.1% |
adjusted for PPA items |
21.7 |
22.4 |
88.5 |
1.0% |
70.2 |
0.8% |
EBITDA rose to €1,406.2 million in the first nine months of 2024 (Q1–Q3 2023: €1,275.6 million). Adjusted EBITDA increased to €1,419.0 million (Q1–Q3 2023: €1,289.1 million). The adjusted EBITDA margin for the reporting period stood at 16.8 percent (Q1–Q3 2023: 15.4 percent).
in € million |
Q3 |
Q3 |
Q1 – Q3 |
in % of revenue |
Q1 – Q3 |
in % of revenue |
|---|---|---|---|---|---|---|
EBITDA |
467.5 |
458.8 |
1,406.2 |
16.7% |
1,275.6 |
15.3% |
Adjustment by functional costs: |
|
|
|
|
|
|
+ Cost of sales |
1.0 |
0.9 |
–8.1 |
–0.1% |
5.5 |
0.1% |
+ Selling expenses and administrative expenses |
0.3 |
2.3 |
4.4 |
0.1% |
8.1 |
0.1% |
+ Research and development costs |
– |
–0.4 |
0.0 |
0.0% |
0.1 |
0.0% |
+ Other costs |
2.0 |
1.3 |
16.5 |
0.2% |
–0.3 |
–0.0% |
Adjusted EBIT |
470.8 |
462.9 |
1,419.0 |
16.8% |
1,289.1 |
15.4% |
adjusted for non-recurring items |
3.4 |
4.1 |
12.8 |
0.2% |
13.5 |
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 €6,162.5 million in the first nine months of 2024 (Q1–Q3 2023: €6,305.0 million). As a result, the gross margin jumped to 26.9 percent (Q1–Q3 2023: 24.5 percent). Growth in the high-margin service business in both operating segments, the continued stability of the cost of materials, and success in pushing through higher prices in the Industrial Trucks & Services segment were other key factors in this improvement, as were efficiency gains in project implementation and the significant progress that was made in working through lower-margin legacy orders in the Supply Chain Solutions segment.
Selling and administrative expenses went up by a total of 7.9 percent compared with the prior-year period. This increase was due not only to a rise in personnel expenses 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 up by 10.8 percent relative to the prior-year period because of the efforts to drive forward particular areas of development anchored within the KION 2027 strategy.
The ‘other’ item came to an expense of €3.2 million (Q1–Q3 2023: income of €23.3 million). It mainly comprises the share of profit (loss) of equity-accounted investments, which amounted to income of €13.2 million (Q1–Q3 2023: income of €11.6 million), along with other income and expenses in the income statement. The balance of the latter deteriorated compared with the prior-year period primarily due to the full impairment of the goodwill of the KION ITS Americas Operating Unit, which was carried out in an amount of €22.3 million in the second quarter of 2024, and to non-recurring expenses of €14.7 million resulting from the ending of a legal dispute. Currency translation, meanwhile, had a positive impact on the ‘other’ item.
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 |
2,699.2 |
2,729.9 |
–1.1% |
8,435.3 |
8,347.3 |
1.1% |
Cost of sales |
–1,967.5 |
–2,008.4 |
2.0% |
–6,162.5 |
–6,305.0 |
2.3% |
Gross profit |
731.7 |
721.4 |
1.4% |
2,272.8 |
2,042.3 |
11.3% |
Selling expenses and administrative expenses |
–490.8 |
–464.8 |
–5.6% |
–1,518.4 |
–1,407.5 |
–7.9% |
Research and development costs |
–59.6 |
–56.5 |
–5.5% |
–185.3 |
–167.1 |
–10.8% |
Other |
12.4 |
–3.3 |
> 100% |
–3.2 |
23.3 |
< –100% |
Earnings before interest and tax (EBIT) |
193.7 |
196.9 |
–1.6% |
565.9 |
490.9 |
15.3% |
Net financial expenses |
–63.1 |
–55.3 |
–14.1% |
–147.6 |
–131.8 |
–12.0% |
Earnings before tax |
130.6 |
141.6 |
–7.8% |
418.3 |
359.2 |
16.5% |
Income taxes |
–56.7 |
–59.6 |
4.9% |
–162.7 |
–130.8 |
–24.4% |
Net income |
73.9 |
82.0 |
–9.9% |
255.6 |
228.3 |
11.9% |
Net financial expenses
Net financial expenses, representing the balance of financial income and financial expenses, amounted to €147.6 million in the reporting period (Q1–Q3 2023: €131.8 million). Because net financial debt was lower on average, the interest expense on financial debt fell year on year from €50.2 million to €46.5 million. By contrast, the increase in the financing volume and the higher level of interest rates than in the prior-year period meant that net interest income/expense from the lease and short-term rental business deteriorated significantly to a net expense of €67.8 million (Q1–Q3 2023: net expense of €40.3 million); interest income of €33.6 million was realized on the interest-rate derivatives used for hedging purposes in the lease business during the first nine months of the year (Q1–Q3 2023: interest income of €28.0 million).
Income taxes
Income tax expenses were up year on year at €162.7 million (Q1–Q3 2023: €130.8 million), primarily because of the much improved level of earnings. The effective tax rate for the reporting period came to 38.9 percent (Q1–Q3 2023: 36.4 percent). The main reason for this increase was the impairment of the goodwill of the KION ITS Americas Operating Unit carried out in the second quarter of 2024. This non-recurring item raised the tax rate by around 2 percentage points.
Net income for the period
Net income for the first three quarters of 2024 amounted to €255.6 million, which was substantially higher than in the corresponding period of the previous year (Q1–Q3 2023: €228.3 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €1.90 (Q1–Q3 2023: €1.70) based on a weighted average of 131.1 million no-par-value shares (Q1–Q3 2023: 131.1 million).