Dear shareholders and friends of Krones,
The economic recovery continued in the second quarter of 2021. An easing of the corona pandemic in industrialised countries contributed here, as well as major government support programmes in the USA, Europe and Asia. The International Monetary Fund (IMF) projects 6.0% growth for the world economy in 2021. This estimate had stood at 5.5% at the beginning of the year. In June, the German Mechanical Engineering Industry Association (VDMA) raised its forecast for the total value of plant and machinery produced in 2021. This is now expected to increase by 10% compared with the previous year rather than 7%.
Customers in the food and beverage sector, too, are once again more willing to invest. That is reflected in Krones’ rapidly growing order intake. At €2.04 billion in the first half of the year, this was around 40% higher than in the prior-year period. It should be noted with regard to the revenue performance that revenue in the first quarter of 2020 was hardly affected by the pandemic. As a result, revenue in the first half of 2021 was up only slightly year on year, gaining 1.3% to €1.72 billion. In the second quarter of 2021, revenue went up relative to the prior-year quarter by almost 12% to €846 million. Because the cost-cutting measures continue to take effect, Krones also improved profitability between January and June. As a result, the EBITDA margin increased from 7.0% in the previous year to 8.0% in the first half of 2021.
For the second half of the year, Krones likewise expects strong demand and stable production capacity utilisation. In view of this, we are raising our full-year guidance for 2021. For the Krones Group, based on current estimates, the Executive Board now expects full-year revenue growth of 7% to 9% in 2021 (previously 2.5% to 3.5%). Krones anticipates an EBITDA margin of 7% to 8% (previously 6.5% to 7.5%).
Despite the positive overall outlook, the entire Krones team will continue to systematically implement the measures taken in order to overcome the challenges ahead. In the short term, the main priority is to process the large order intake on time and to our customers’ satisfaction. Krones is also affected by international shortages in its supply chains. This is reflected in rising material and freight costs. As an internationally operating group, Krones is dependent on the global path of the Covid-19 pandemic. It should be noted here that there are regions where the Covid situation remains challenging.
In order not to undermine the positive effects we have gained through the cost-cutting measures, Krones will increase the prices of all bottling and packaging equipment and for process technology by 6% with effect from 1 August 2021.
The Executive Board is confident that the measures taken will enable Krones to strengthen its leading market position in the filling and packaging sector. That is the basis for us to use the growth opportunities that our market holds after the Covid era.