||Actual H1 2019
|Working capital to revenue
For the core segment, Machines and Lines for Product Filling and Decoration, due to the price increases on new machinery, Krones expects revenue growth of approximately 3% in 2019, which is slightly below the market growth rate. Demand for Krones’ products and services in the service business is projected to make a stronger contribution in the segment in the second half year, especially in the fourth quarter, than in the first. This will have a positive impact on profitability. The EBT margin in the core segment is expected to be approximately 3% in 2019.
The Machines and Lines for Beverage Production/Process Technology segment is expected to grow more strongly in 2019 than the core segment. We forecast approximately 5% revenue growth. With regard to earnings, it is also necessary to note that Krones’ investment in digitalisation activities is reflected in the Machines and Lines for Beverage Production/Process Technology segment. Overall, we expect an EBT margin of approximately 1% for 2019. The intralogistics business, which is part of the segment, is set to make a positive contribution to earnings.
Krones working on structural measures
The strategic measures launched to date, such as the price rises and expansion of our global footprint so far, are not enough for the earnings targets to be attained on a long term basis. The Executive Board is therefore currently working on further structural changes for a sustained increase in profitability. These changes focus on reducing complexity, rapid response to market needs and shaping an even more customer-centric business organisation.
Krones is maintaining to its mid-term targets. Depending on the overall economic situation and developments in the company’s markets, the Executive Board expects average annual revenue growth of 3% to 5% excluding acquisition effects, an EBT margin of 6% to 8% and working capital at 22% to 24% of revenue.