Krones remains optimistic about the financial year 2018
As economic forecasts for the current year remain positive overall, Krones is still confident about 2018 despite several political and economic uncertainties. The packaging machinery market is growing at a relatively stable pace because demand for packaged beverages and foods is rising.
As of the start of this year, our core segment Machines and Lines for Product Filling and Decoration now also includes our machines and lines for the compact class, that is subsidiaries Kosme and Gernep. Krones expects core-segment revenue to increase by 4%, slightly more than the market as a whole, in 2018 on strong order intake and an attractive product range. Krones expects the reported EBT margin to be 8.3% in 2018 despite high capital expenditure.
We intend to significantly improve profitability in the Machines and Lines for Beverage Production/Process Technology segment in the future. We are confident that we will be able to leverage revenue and earnings potential by further expanding our global footprint and fully integrating acquisitions. In the area of intralogistics, which is part of our Process Technology segment, we will further develop our subsidiaries System Logistics and Syskron, both regionally and in terms of product technology. In all, we are forecasting 15% revenue growth and a reported EBT margin of 1.0% for the Machines and Lines for Beverage Production/Process Technology segment for 2018.
Growth and earning targets for 2018 confirmed
Because of the strong results achieved in the first half and continued high demand for our products and services, Krones’ forecast for the growth and earning targets for the year 2018 remains unchanged. To ensure Krones’ continued ability to offer the highest quality, innovative products and services despite rising costs for goods and services purchased and personnel, Krones raised its prices on all machines for bottling and packaging equipment and for process technology by 4.5% on average effective 1 May 2018. Because the price adjustments are aimed at offsetting current cost increases, Krones is keeping its revenue and earnings targets for 2018 and for the medium term unchanged. Krones intends to maintain its market position.
Based on the current macroeconomic prospects and expected development of the markets relevant to Krones, we are targeting consolidated revenue growth of 6% in 2018. Krones intends to keep profitability stable despite heavy investment in digitalisation and start-up costs associated with our global footprint, particularly the new site in Hungary. The company expects to post an EBT margin of 7.0% in 2018. Our third financial performance target, working capital to revenue, will be slightly improved in the second half-year. The target of 26% for the full year 2018 cannot be achieved. The new target is 28%.