Earnings
EBIT and EBITDA
Earnings before interest and tax (EBIT) came to €117.8 million, which was 39.1 percent below the same period of the previous year (Q1 2021: €193.5 million). EBIT included budgeted purchase price allocation effects amounting to an expense of €22.1 million in the first quarter of 2022 (Q1 2021: expense of €21.0 million). In the reporting period, there were also non-recurring items amounting to a total expense of €30.5 million (Q1 2021: expense of €0.5 million) that predominantly related to impairment losses on assets of the Russian subsidiaries.
EBIT adjusted for non-recurring items and purchase price allocation effects (adjusted EBIT) decreased to €170.3 million (Q1 2021: €215.0 million). The adjusted EBIT margin thus fell to 6.2 percent (Q1 2021: 9.1 percent).
in € million |
Q1 |
in % of revenue |
Q1 |
in % of revenue |
|---|---|---|---|---|
EBIT |
117.8 |
4.3% |
193.5 |
8.1% |
Adjustment by functional costs: |
|
|
|
|
+ Cost of sales |
17.5 |
0.6% |
9.5 |
0.4% |
+ Selling expenses and administrative expenses |
21.1 |
0.8% |
14.4 |
0.6% |
+ Research and development costs |
0.0 |
0.0% |
0.0 |
0.0% |
+ Other costs |
13.9 |
0.5% |
–2.5 |
–0.1% |
Adjusted EBIT |
170.3 |
6.2% |
215.0 |
9.1% |
adjusted for non-recurring items |
30.5 |
1.1% |
0.5 |
0.0% |
adjusted for PPA items |
22.1 |
0.8% |
21.0 |
0.9% |
Earnings before interest, tax, depreciation, and amortization (EBITDA) stood at €373.1 million in the reporting quarter (Q1 2021: €421.3 million). Adjusted EBITDA came to €391.0 million (Q1 2021: €421.9 million), giving an adjusted EBITDA margin of 14.3 percent (Q1 2021: 17.8 percent).
in € million |
Q1 |
in % of revenue |
Q1 |
in % of revenue |
|---|---|---|---|---|
EBITDA |
373.1 |
13.6% |
421.3 |
17.7% |
Adjustment by functional costs: |
|
|
|
|
+ Cost of sales |
7.6 |
0.3% |
0.0 |
0.0% |
+ Selling expenses and administrative expenses |
8.9 |
0.3% |
3.0 |
0.1% |
+ Research and development costs |
0.0 |
0.0% |
0.0 |
0.0% |
+ Other costs |
1.4 |
0.1% |
–2.4 |
–0.1% |
Adjusted EBITDA |
391.0 |
14.3% |
421.9 |
17.8% |
adjusted for non-recurring items |
17.9 |
0.7% |
0.6 |
0.0% |
adjusted for PPA items |
0.0 |
0.0% |
0.0 |
0.0% |
Adjusted EBITDA for the long-term lease business, which is derived from internal reporting and assumes a minimum rate of return on the capital employed, amounted to €77.8 million in the period under review (Q1 2021: €81.9 million).
Key influencing factors for earnings
The cost of sales rose at a much faster rate than revenue, increasing by 21.1 percent to €2,130.3 million (Q1 2021: €1,759.8 million). The KION Group’s gross margin therefore dropped to 22.1 percent in the quarter under review (Q1 2021: 25.9 percent). The squeeze on earnings was partly attributable to the higher cost of materials and increased energy costs – only a small proportion of which could be passed on to customers – and to production inefficiencies created by supply bottlenecks. Logistics costs also rose, which was due not only to higher costs for incoming freight but also to the cost of renting additional storage space to hold the growing number of unfinished trucks in the EMEA region.
There was an overall year-on-year increase in other functional costs. Selling and administrative expenses went up to a lesser degree than revenue, rising by 12.2 percent. This was partly due to much lower personnel expenses in connection with variable remuneration components. Costs for research and development grew by 15.9 percent year on year, reflecting the KION Group’s investment in groundbreaking developments in the fields of new energy, automation, and digitalization.
Purchase price allocation effects included in the cost of sales and in other functional costs were slightly higher than in the first quarter of 2021 due to currency effects. The ‘other’ item included not only foreign currency exchange rate gains and losses but also line items such as the share of profit (loss) of equity-accounted investments, which amounted to a profit of €2.7 million (Q1 2021: profit of €4.6 million).
The change in the cost of sales and in other functional costs is shown in the following condensed income statement.
in € million |
Q1 |
Q1 |
Change |
|---|---|---|---|
Revenue |
2,734.5 |
2,375.1 |
15.1% |
Cost of sales |
–2,130.3 |
–1,759.8 |
–21.1% |
Gross profit |
604.2 |
615.3 |
–1.8% |
Selling expenses and administrative expenses |
–434.4 |
–387.0 |
–12.2% |
Research and development costs |
–47.0 |
–40.5 |
–15.9% |
Other |
–5.1 |
5.8 |
< –100% |
Earnings before interest and tax (EBIT) |
117.8 |
193.5 |
–39.1% |
Net financial expenses |
–2.8 |
–10.0 |
72.5% |
Earnings before tax |
115.0 |
183.5 |
–37.3% |
Income taxes |
–34.8 |
–46.5 |
25.1% |
Net income |
80.2 |
137.0 |
–41.5% |
Net financial expenses
The net financial expenses, representing the balance of financial income and financial expenses, stood at €2.8 million (Q1 2021: €10.0 million). This marked improvement in net financial expenses was due to a better level of net interest income / expense from the lease business, interest income from tax rebates, and changes in the fair value of interest-rate derivatives.
Income taxes
Income tax expenses fell year on year to €34.8 million (Q1 2021: €46.5 million), reflecting the decrease in earnings and tax rebates for previous years. No deferred tax assets were recognized in respect of negative non-recurring items relating to business in Russia. Consequently, the effective tax rate for the reporting period was higher than in the comparative period at 30.3 percent (Q1 2021: 25.4 percent).
Net income for the period
Net income for the period stood at €80.2 million, which was below the level for the prior-year period (Q1 2021: €137.0 million). This figure included an expense of €29.2 million for non-recurring items relating to business in Russia (after taxes). Basic earnings per share attributable to the shareholders of KION GROUP AG came to €0.61 (Q1 2021: €1.04) based on 131.1 million (Q1 2021: 131.1 million) no-par-value shares.