Ad-hoc disclosure – Krones specifies structural measures and adjusts earnings for 2019

The Executive Board of Krones AG today has decided on additional structural efficiency measures. Furthermore, the Management has specified the expected expenses for all measures intended to substantially enhance the profitability of Krones. Measures initiated to cut personnel costs as well as specific portfolio optimization measures lead to provisions and impairments of approximately € 70 million in 2019. The corresponding EBT margin for the year 2019 is expected to be around 1 percent. Without one-time effects, the EBT margin for 2019 would be around 3 percent as previously predicted.

As part of the efficiency measures, Krones is already reducing jobs in the current fiscal year. This programme will be continued in 2020. The expenses and provisions required for this amount to approximately € 30 million. The job reductions mainly concern administrative functions.

For many years, Krones has invested in different future technologies for direct ink printing. In the future, Krones will focus on the direct printing technology with the highest market acceptance. For direct printing technologies that are not further pursued, an impairment loss of around € 20 million is incurred. Additionally, goodwill is impaired by approximately € 20 million. Both impairments do not affect liquidity and have no impact on Krones’ cash flow.

For the years 2020 and 2021, Krones is expecting a positive EBT effect of a total of approximately € 150 million from the reduction of personnel costs, the optimized portfolio and further measures. The provisions and impairments for the structural measures will have no effect on the dividend for the fiscal year 2019. The dividend will be calculated based on the profit excluding those one-time effects and should be in the usual range of 25 to 30 percent of the profit.

Explanation of financial figures of Krones:
EBT margin represents earnings before taxes in relation to sales.