Financial result and taxes

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€ million

12M 2012

9M 2012

9M 2013

1

Adjustment of previous year (see chapter “Notes to the group accounting principles and methods”)

2

Revised terminology (see chapter “Notes to the group accounting principles and methods”)

Earnings before interest and taxes EBIT1

1,395

409

703

Result from associates and joint ventures2

2

2

6

Other investment result

15

3

7

Interest income/expenses (net interest result)1

–547

–394

–365

Other financial result

–36

–50

–162

Net financial result1

–566

–439

–514

Earnings before taxes EBT1

829

–30

189

Income taxes1

–714

16

–260

Profit or loss for the period1

115

–14

–71

Financial result

The financial result comprises above all the net interest result of €–365 million (9M 2012: –394 million) and the other financial result of €–162 million (9M 2012: €–50 million). The improvement of net interest result is primarily attributable to lower interest expenses. The change in other financial result by €–112 million is primarily due to a decline in cumulative result from currency effects and valuation results from hedging transactions and hedging relationships. This decline is due largely to developments of some Eastern European currencies and the related exchange effects and hedging transactions. In addition, currency effects in the amount of €66 million resulting from the translation of the financial statements of foreign subsidiaries that are recognised in profit or loss due to the divestment of the subsidiary and are shown as a special item in the financial result had an effect.

Additional information on the financial result can be found in the notes to the consolidated financial statements in nos. 6 to 9 “Result from associates and joint ventures”, “Other investment result”, “Net interest income/interest expenses” and “Other financial result”.

Taxes

The distinct decline in taxes paid or owed compared with the financial year 2012 is essentially due to lower earnings before taxes resulting from the absence of the Christmas business in the short financial year 2013. The largest share of this can be attributed to the international cash & carry business. In Germany, the decline in income tax expenses stemmed from the Media-Saturn sales line. Tax expenses of the short financial year 2013 cannot be compared with tax expenses shown in the previous year’s period. The reason is that taxes are determined during quarterly reporting under the rules of interim reporting – IAS 34 (Interim Reporting) – using the so-called integral approach. Under this approach, the reported tax expenses correspond to the forecast tax rate for the year and cover a twelve-month period. But the tax result in the short financial year covers nine months.

The relatively low expenses from changes in deferred taxes in the reporting period resulted largely from the reversal or expiration of tax-deductible temporary differences in the previous year. In addition, temporary differences were carried forward proportionately in the short financial year 2013.

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€ million

12M 2012

9M 2013

1

Adjustment of previous year (see chapter “Notes to the group accounting principles and methods”)

Taxes paid or owed

528

232

thereof Germany

(161)

(67)

thereof international

(367)

(165)

thereof tax expenses/income of current period

(516)

(240)

thereof tax expenses/income of previous periods

(12)

(–8)

Deferred taxes1

186

28

thereof Germany1

(103)

(–9)

thereof international1

(83)

(37)

 

714

260

In the reporting period, the group’s tax rate stood at 137.8 per cent (12M 2012: 86.2 per cent). Adjusted for special items, the ratio amounted to 94.5 per cent (12M 2012: 49.1 per cent). The group tax rate represents the relationship between recognised income tax expenses and earnings before taxes. The mathematically calculated high group tax rate is essentially due to low earnings before taxes in the short financial year 2013. As a result, slight changes in earnings or income tax expenses lead to high fluctuations in the tax rate.

Additional information on income taxes can be found in the notes to the consolidated financial statements in no. 11 “Income taxes”.