Report for the first quarter 2007

Dear shareholders and friends of Krones,

The outlook for the global economy has deteriorated in the wake of the mortgage and lending crisis in the United States. Krones is not unaffected by this.
However, unlike many machinery and industrial equipment manufacturers, we are not heavily dependent on economic cycles. Demand in our industry is rising steadily. We view positively the fact that the process of consolidation in the packaging industry is in a very advanced stage. For instance, the Salzgitter Group, whose original business is steel, has entered the market as a competitor to Krones by buying out KHS and SIG Beverages. We welcome the competition and will continue to do everything we can to supply our customers with better, more efficient machines and lines.

Acquisitions that expand our range of products and services are also an option for Krones. However, any potential takeover candidate’s price must be in reasonable proportion to its profitability.

The figures for the first quarter of 2008 confirm that we are not under pressure to expand through acquisitions and that Krones is already very well positioned.
Sales were up 17.9% on the previous year, to €595.2m. At €45.6m, earnings before taxes (EBT) were up 26.3% year-on-year. Our EBT margin improved from 7.1% to 7.7%. A strong first quarter has us well on our way to another record year at Krones.

 

Volker Kronseder
Chairman of the Executive Board

Hans-Jürgen Thaus
Deputy Chairman of the Executive Board