Earnings

EBIT and EBITDA

Earnings before interest and tax (EBIT) reached €260.2 million, which was 26.5 per cent above the same period of the previous year (H1 2016: €205.8 million excluding Dematic). This includes the negative purchase price allocation effects of €91.6 million (H1 2016: €13.6 million), which, in the six months under review, were largely attributable to the acquisition of the Dematic Group. EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) was up by 53.4 per cent on the prior-year period at €367.1 million (H1 2016: €239.4 million). The adjusted EBIT margin rose to 9.6 per cent (H1 2016: 9.3 per cent). > TABLE 05

EBIT

05

in € million

Q2 2017

Q2 2016

Change

Q1 – Q2 2017

Q1 – Q2 2016

Change

EBIT

163.7

116.8

40.1%

260.2

205.8

26.5%

+ Non-recurring items

5.6

17.1

–67.5%

15.3

20.0

–23.6%

+ PPA items

45.0

6.9

>100%

91.6

13.6

>100%

Adjusted EBIT

214.2

140.8

52.2%

367.1

239.4

53.4%

Earnings before interest, tax, depreciation and amortisation (EBITDA) improved to €573.7 million, compared with €412.7 million in the corresponding period of 2016. Adjusted EBITDA rose to €588.9 million (H1 2016: €430.0 million). This equates to an adjusted EBITDA margin of 15.4 per cent (H1 2016: 16.8 per cent excluding Dematic). > TABLE 06

EBITDA

06

in € million

Q2 2017

Q2 2016

Change

Q1 – Q2 2017

Q1 – Q2 2016

Change

EBITDA

320.4

222.8

43.8%

573.7

412.7

39.0%

+ Non-recurring items

5.6

15.4

–64.0%

15.3

17.2

–11.3%

+ PPA items

0.0

0.0

0.0

0.0

Adjusted EBITDA

326.0

238.2

36.8%

588.9

430.0

37.0%

Key influencing factors for earnings

The cost of sales rose by 56.7 per cent to €2,865.2 million (H1 2016: €1,828.7 million). The year-on-year increase was mainly attributable to the Supply Chain Solutions segment and the inclusion of Dematic. Higher material prices also impacted on the cost of sales. At 25.1 per cent, the gross margin was below the figure for the prior-year period (H1 2016: 28.7 per cent). There was a disproportionately small increase in selling expenses, development costs and administrative expenses compared with the growth in revenue. The ‘other’ item came to €21.8 million (H1 2016: €28.4 million). This included the share of profit (loss) of equity-accounted investments, which amounted to a profit of €12.0 million (H1 2016: profit of €9.6 million).

The changes in the cost of sales and functional costs are shown in > TABLE 07.

(Condensed) income statement

07

in € million

Q2 2017

Q2 2016

Change

Q1 – Q2 2017

Q1 – Q2 2016

Change

Revenue

2,016.4

1,343.8

50.0%

3,827.8

2,564.5

49.3%

Cost of sales

–1,510.6

–956.2

–58.0%

–2,865.2

–1,828.7

–56.7%

Gross profit

505.8

387.6

30.5%

962.6

735.8

30.8%

Selling expenses and administrative expenses

–327.3

–267.7

–22.3%

–658.3

–511.0

–28.8%

Research and development costs

–31.5

–22.6

–39.3%

–65.8

–47.3

–39.1%

Other

16.6

19.5

–14.9%

21.8

28.4

–23.2%

Earnings before interest and taxes (EBIT)

163.7

116.8

40.1%

260.2

205.8

26.5%

Net financial expenses

–8.8

–22.8

61.5%

–44.6

–63.3

29.4%

Earnings before taxes

154.9

94.0

64.8%

215.6

142.5

51.3%

Income taxes

–46.6

–30.0

–55.6%

–65.3

–45.5

–43.7%

Net income for the period

108.2

64.0

69.1%

150.3

97.1

54.8%

Net financial income/expenses

The net financial expenses representing the balance of financial income and financial expenses came to €44.6 million in the first six months of this year (H1 2016: €63.3 million). Among other items, these expenses include transaction costs of €2.7 million that were expensed in connection with the early repayment of financial liabilities. In the first half of last year, net financial expenses had included one-off financial expenses of €25.7 million incurred in connection with the optimisation of the financing structure in February 2016.

Income taxes

Income tax expenses amounted to €65.3 million (H1 2016: €45.5 million). Current income taxes, which increased largely because of the level of earnings, came to €106.8 million (H1 2016: €31.3 million excluding Dematic). The tax rate was 30.3 per cent (H1 2016: 31.9 per cent).

Net income for the period

The KION Group’s net income for the period after taxes was €150.3 million (H1 2016: €97.1 million). Earnings per share attributable to the shareholders of KION GROUP AG came to €1.35 for the first half of the year (H1 2016: €0.97) based on an average of 110.7 million (H1 2016: 98.7 million) no-par-value shares.