Report for the second quarter 2017
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Report for the second quarter 2017

    Highlights and key figures

    Krones continues stable growth in the first half of 2017

    • Revenue and order intake increased 13.8% and 11.0%, respectively, in the first half.
    • Earnings before taxes (EBT) improved by 12.8% in the period from January to June. 
      EBT margin is 6.8%.
    • Ratio of working capital to revenue comes to 26.3% (previous year: 25.5%).
    • Executive Board keeps forecast for 2017 unchanged. Krones expects 4% revenue growth and an EBT margin of 7.0%, excluding effects from acquisitions.
    Key figures for H1 2017
        1 Jan – 30 Jun
    1 Jan – 30 Jun
    Revenue € million 1,775.2 1,560.3 + 13.8 %
    Order intake € million 1,779.3 1,602.4 + 11.0 %
    Orders on hand at 30 June € million 1,148.8 1,136.7 +1.1 %
    EBITDA € million 164.4 147.2 + 11.7 %
    EBIT € million 117.1 103.3 + 13.4 %
    EBT € million 121.0 107.3 + 12.8 %
    EBT margin % 6.8 6.9
    Net income € million 82.4 74.4 + 10.8 %
    Earnings per share 2.64 2.37 + 11.4 %
    Capital expenditure for PP&E and intangible assets €million 46.1 34.1 + €12.0 million
    Free cash flow € million – 159.5 – 169.2 + €9.7 million
    Net cash and cash equivalents at 30* € million 160.4 149.6 + €10.8 million
    Working capital to revenue ** % 26.3 25.5
    ROCE % 16.3 15.6
    Employees at 30 June        
    Worldwide   14,794 13,742 + 1,052
    Germany   10,106 9,734 + 372
    Outside Germany   4,688 4,008 + 680
    * Cash and cash equivalents less debt
    ** Average of last 4 quarters


    Key figures for Q2 2017
        1 Apr – 30 Jun
    1 Apr – 30 Jun
    Revenue € million 875.8 788.2 + 11.1 %
    Order intake € million 903.8 780.2 + 15.8 %
    EBITDA € million 77.2 71.2 +  8.4 %
    EBIT € million 53.1 49.1 + 8.1 %
    EBT € million 55.0 52.2 + 5.4 %
    EBT margin % 6.3 6.6
    Net income € million 38.7 36.0 + 7.5 %
    Earnings per share 1.24 1.15 + 7.8 %

    Letter from the Executive Board

    Dear shareholders and friends of Krones,

    Krones had a successful first half of 2017 overall. Revenue and earnings increased further year-on-year. We are confident that we will achieve our targets for the year as a whole. A major industry event that will contribute to Krones’ profitable growth well beyond the current year is only a few weeks away. 

    The “drinktec” trade fair will take place in Munich from 11 to 15 September. Held every four years, drinktec is the world’s leading trade fair for the international packaging industry and serves as a meeting place for everybody who’s anybody in the industry. Customers from around the world will be there, learning about trends and innovations and deciding on future investments. Krones will present a number of innovative machines and lines from various parts of our portfolio at drinktec. 

    Of course, digitalisation will play a starring role at Krones’ booth. The merger of mechanical engineering and process technology with clouds and data is resulting in deeper, closer integration of all processes along the entire value chain. Factories are getting smart. And we intend to be the industry leader in this area as well. At drinktec, Krones will present solutions for the beverage plant of the future. Our aim is to further boost the efficiency of our customers’ factories. I am certain that our innovations in engineering and IT will be well received by drinktec visitors and help drive Krones’ continued success.


    Christoph Klenk

    Report on expected developments

    Krones remains confident about the year 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.

    Krones intends to improve revenue and earnings in all 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 in all three segments 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 reduce costs in 2017. We will expand our international service structures and Centers 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 late 2015. This year, we intend to seize upon the considerable growth opportunities in intralogistics, which are also part of the process technology segment. In all, we expect the process technology segment to achieve revenue growth of around 10% and an EBT margin of 2% to 3% this year. 
    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.

    Outlook for 2017 as a whole affirmed 

    Because of the strong results achieved in the first half, Krones’ forecast for the year 2017 as a whole remains unchanged. Based on the current macroeconomic prospects and development of the markets relevant to Krones, we are still targeting consolidated revenue growth of 4% (excluding acquisitions) in 2017. The company’s profitability should be stable this year. Krones expects to achieve an EBT margin of 7.0% in 2017. Our forecast for our third financial performance target, working capital to revenue, is 27% for the current financial year.

      Forecast for 2017* Actual value H1 2017
    Revenue growth +4% +13.8%
    EBT margin 7.0% 6.8%
    Working capital to revenue (%) (LTM) 27% 26.3%
    * Excluding acquisitions