Earnings

The cost of sales rose by 12.6 per cent. This was slightly lower than the increase in revenue, partly because material prices continued to rise only moderately and partly because the fallout from the production inefficiencies arising from bottlenecks at suppliers in the Industrial Trucks & Services segment in 2018 was largely resolved over the course of the current year. As a result, the gross margin improved to 26.6 per cent (Q1 – Q3 2018: 26.3 per cent). The 9.8 per cent increase in selling expenses, development costs and administrative expenses was also smaller than the growth in revenue. Moreover, the reduced purchase price allocation effects had a positive impact on both the cost of sales and other functional costs. The change in the cost of sales and in other functional costs is shown in > TABLE 06.

The net financial expenses, representing the balance of financial income and financial expenses, improved by €5.2 million to €75.9 million in the period under review (Q1 – Q3 2018: net financial expenses of €81.1 million). This positive trend reflects the continual optimisation of financial liabilities and the financing of the long-term leasing business.

Income tax expenses amounted to €139.3 million (Q1 – Q3 2018: €111.6 million). The decrease in the effective tax rate to 29.1 per cent (Q1 – Q3 2018: 31.4 per cent) resulted from factors such as local tax rate reductions, the adjustment of tax provisions for prior years and tax breaks for R&D activities in the United States.

At €338.9 million, net income for the period was up by a substantial €95.1 million year on year (Q1 – Q3 2018: €243.8 million). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €2.88 (Q1 – Q3 2018: €2.09) based on 117.9 million (Q1 – Q3 2018: 117.9 million) no-par-value shares.