Krones Group Annual Report 2024

Dear shareholders and friends of Krones,

The entire Krones team can look back on a very successful 2024 financial year. Despite all the political and economic uncertainties, Krones has grown as forecast and in 2024 generated revenues of more than €5 billion for the first time in the company’s history – now with more than 20,000 employees worldwide. All other financial and non-financial key performance indicators also improved. 

Krones once again benefited in the reporting period from the stable long-term growth of the beverage and liquid food market, which is less affected by economic cycles. The willingness of customers from the international food and beverage industry to invest remained stable at a high level, despite the critical general economic conditions. We benefited from this as a global leader with a broad and innovative range of products and services. 

Krones continued its profitable growth in 2024 – revenue and profitability further improved as forecast

At €5.46 billion, order intake once again reached a very good level in the past financial year and was slightly higher than in the previous year (€5.38 billion). The continuing very high level of incoming orders led to a further 4% increase in the order backlog to €4.29 billion at the end of 2024. 

Revenue also developed very positively. Thanks to the stable availability of materials and the great flexibility of our workforce, we were able to significantly increase output in the after-sales business and particularly in the production of machines and lines in 2024. This enabled us to process and complete orders more quickly again and significantly reduce delivery times. Thanks to the high overall production capacity utilisation, we increased revenue by 12.1% in 2024 to €5.29 billion. The company thus achieved its growth target of 9% to 13% for the full year 2024.

Krones also improved profitability in the reporting period, despite persistently high material and labour costs. In addition to good capacity utilisation, our smart production and procurement management and the stable price level also contributed here. The ongoing measures to reduce costs and improve efficiency, which we continue to implement in a disciplined manner, also made an important contribution. Krones improved profitability, as measured by the EBITDA margin, to 10.1% in the reporting period (previous year: 9.7%) and was thus within the guidance range of 9.8% to 10.3%. Return on capital employed (ROCE) increased from 16.3% to 18.2% (guidance: 17% to 19%).

Shareholders to benefit from the company’s success with dividend of €2.60 per share

Our shareholders are also to benefit from the good business results. Krones will therefore significantly increase the dividend. Shareholders are to receive a dividend of €2.60 per share for the 2024 financial year, up 18.2% from €2.20 per share in the previous year.

Economic and political risks continue in 2025

Despite the good business results and prospects, risks remain. These include the ongoing geopolitical disputes. At worst, these can have a negative impact on supply chains and on energy and commodity prices – and ultimately on the global economy. Another source of uncertainty is the tariff policy of the new US administration, which could present the threat of potential trade conflicts. Partly due to the global uncertainties, the experts at the International Monetary Fund (IMF) forecast global economic growth of only 3.3% both for this year and for 2026. This is well below the long-term average growth of 3.7% for the global economy (2000-2019). 

Executive Board expects continuation of profitable growth in 2025

Despite the continuing uncertainties, Krones looks ahead to 2025 with realistic optimism. Going into the year, demand for our products and services remained robust. Together with the comfortable order backlog, we have a solid basis for stable capacity utilisation until early 2026. Based on the continuing positive market trend and Krones’ strong market position, the Executive Board therefore expects consolidated revenue to rise in 2025. We expect an increase of 7% to 9% on the previous year.

Krones plans for further growth in profitability this year compared to 2024. In addition to higher sales, further efficiency improvements and the ongoing implementation of cost optimisation measures will also contribute to improved profitability. We are also confident that we will continue to obtain stable selling prices for our innovative and value-added products and services in 2025. At group level for the current financial year overall, we are forecasting an EBITDA margin of 10.2% to 10.8%. The forecast for the third target, ROCE, is 18% to 20%. 

Krones sets mid-term targets for 2028

We have the same realistic optimism looking beyond 2025. The less cyclical food and beverage industry benefits from megatrends such as world population growth and the expanding middle class. This offers Krones good opportunities for further profitable growth – the title of this Annual Report. Our mid-term targets for 2028, which the company published in early July 2024, reflect the positive conditions in our markets and Krones’ strong position. The company plans to increase consolidated revenue to around €7 billion by 2028. The mid-term target for the EBITDA margin is between 11% and 13%. For ROCE, Krones is aiming for a figure of at least 20% by 2028. 

Netstal acquisition: a major strategic milestone

We continued to successfully implement our acquisition strategy in the reporting year with the purchase of Netstal in March 2024. As a leading supplier of ­injection moulding machines for the beverage market (PET preforms and -closures), this Swiss-based company is a perfect strategic fit for Krones. Through the acquisition of Netstal, Krones can now offer customers all important machines, lines and services for circular closed-loop PET solutions. With injection moulding technology for medical applications and thin-wall packaging, Netstal also underpins Krones’ strategy of extending the customer focus to the medical/pharmaceutical, cosmetics and food industries. 

High investments secure the company’s future

By investing in the transformation in the areas of digitalisation, sustainability, product innovation and internal processes, Krones is creating the foundation for achieving its ambitious mid-term goals. Furthermore, we will be investing heavily over the coming years in our German sites. Germany remains very important for Krones as a production and innovation location. With the further expansion of our global footprint, we will increase the company’s flexibility and resilience so that we are well positioned for emerging international trade conflicts or other crises. 

Sustainability and innovation: key to Krones, key to customers

The high level of investment will also help us achieve our net zero emissions target by 2040. In the reporting period, Krones once again made further progress on this long and ambitious journey, while improving many of its sustainability indicators. Further details can be found in the non-financial statement on pages 76 to 178.

It is not only within its own organisation that Krones takes responsibility for the economical use of resources. Sustainability remains the most important driver of innovation and growth in our industry. Conserving resources and reducing emissions and operating costs are top priorities for our customers. With our future-ready, sustainable technologies and products, we will contribute to a world worth living in and create added value for our customers. Another major focus of our research and development activities is digitalisation. This is the basis for new business models and improved services. True to our motto of “Solutions beyond tomorrow”, we aim to develop solutions for our customers that go beyond what is expected.

At this year’s drinktec in September, we will be presenting a wide variety of new, technologically leading products and services. One of the trade fair highlights will be our line of the future, which we have packed with innovations. This will set new standards in terms of sustainability, digitalisation and efficiency, enabling Krones to implement new business models along the entire life cycle of the line. 

A strong Krones team: the basis for a successful future

Our employees are and will remain the key to Krones’ success. All employees work with competence and high motivation to reliably complete orders and projects every day. 

To successfully master the challenge of the global shortage of skilled workers, we enhanced our employer brand in 2024 to highlight what makes Krones special. Our employer brand, which we have aligned with “Solutions beyond tomorrow”, is designed to attract new talent worldwide and strengthen the loyalty and motivation of the existing workforce. 

Krones’ positive development in the 2024 financial year is the result of continuous hard work, innovation, and operational excellence by the entire Krones team. On behalf of the entire Executive Board, I would like to take this opportunity to thank all our employees worldwide. They work every day to ensure that, together, we consistently live and implement our vision: Sustainable and affordable beverages, food and essentials for everyone and everywhere. This goal spurs us all on and will lead Krones to a successful future.

Christoph Klenk
CEO