Executive Board affirms targets for 2017 as a whole
Despite many political and economic uncertainties, Krones remains optimistic about the 2017 financial year. The packaging machinery market is growing at a relatively stable pace. Driving this growth are megatrends such as the steady growth of the middle class and increasing urbanisation in the emerging economies. Moreover, food and beverage producers increasingly must rely on innovative packaging solutions to distinguish themselves from the competition.
Targets for the three segments
Given the competitive nature of our markets, Krones does not expect prices to improve this year. Launching new products and services and further reducing costs remain important factors in our effort to grow further and increase earnings before taxes within the group in 2017. Moreover, Krones intends to considerably increase its presence worldwide and move even closer to customers.
In our core segment, machines and lines for product filling and decoration, Krones will press ahead with the modularisation of our products. We will expand our international service structures and LCS Centres in the interest of further growth. We are also strengthening our mid-range business – that is, less complex lines with high performance. There is high demand for these lines in the emerging markets. Krones is projecting slightly lower-than-average revenue growth of 3% in 2017 for our core segment because we are intentionally forgoing low-margin orders. The EBT margin should be around 8%, as in the previous year.
In our process technology segment, we will continue to implement the measures developed in 2015 and complete implementation of several parts in 2017. This year, we intend to seize upon the considerable growth opportunities in intralogistics, which are also part of the process technology segment. Based on the results for the first nine months, we expect to achieve revenue growth of at least 10% and break-even earnings (previous forecast: EBT margin of 2% to 3%).
We expect the machines and lines for the compact class segment to achieve revenue growth of around 5% and an EBT margin of at least 5% in 2017.
Forecast for 2017 as a whole unchanged
Despite the somewhat weaker third quarter, Krones’ forecast for the year 2017 as a whole remains unchanged because we expect the fourth quarter to be strong. Based on the current macroeconomic prospects and development of the markets relevant to Krones, we are targeting consolidated revenue growth of 4% in 2017. The company’s EBT margin should be stable at 7.0% this year. Our forecast for our third financial performance target, working capital to revenue, is 27% for the current financial year. Acquisitions are not included in these forecasts.