Report for the second quarter 2024

• Demand for Krones’ products and services remains robust. From April to June 2024, order intake increased by 2.9% to €1,310.2 million, exceeding the already high level of the previous year (€1,272.8 million). The contract value of orders in the first six months of 2024 ­increased by 0.3% over the strong prior year to €2,792.9 million.
   
• As expected, Krones’ revenue growth accelerated significantly in the second quarter of 2024 (+16.7%) compared to the first quarter of 2024 (+4.0%). In the first six months of 2024, Krones’ revenue climbed by 10.1% year on year to €2,556.1 million. Revenue growth is therefore within the guidance range for the full year 2024.
   
• Due to efficiency gains, the EBITDA margin increased despite high ­material and labour costs from 9.5% in the previous year to 10.0%, which is within the guidance range for the full year 2024.
   
• The company significantly increased free cash flow (before M&A activities) to +€127.0 million between January and June (previous year: –€131.2 million).
   
• Following the very positive trend in the first half year, Krones confirms the guidance for 2024. For the full year, the company expects revenue growth of 9% to 13%, an EBITDA margin of 9.8% to 10.3% and ROCE of 17% to 19%.

* PP = percentage points
** Cash and cash equivalents less debt
*** Average of last 4 quarters

Dear shareholders and friends of Krones,

As expected, Krones’ growth accelerated in the second quarter of 2024 compared to the first quarter (revenue growth of 4.0%). From April to June, revenue increased by 16.7% year on year to €1,309.0 million. This is partly due to the acquisition of Netstal Maschinen AG, whose revenue we have consolidated since 28 March 2024.

However, the revenue increase was mainly due to organic growth, which benefited from increased efficiency and favourable market conditions that Krones can exploit with its innovative range of products and services. Customers continue to be very willing to invest. Krones’ order intake in the second quarter was again strong, at €1.31 billion, and showed growth of 3% on the high prior-year figure. Overall, after the first six months, we can confirm our full-year financial targets for 2024.

Krones adopts mid-term targets to 2028

We also continue to be optimistic for the years ahead. The cyclically resilient food and beverage industry benefits from megatrends such as world population growth and the expanding middle class. This provides Krones with good prospects for continuing its profitable growth. Our mid-term targets for 2028, which the company published in early July, reflect the positive conditions in our markets. Krones plans to increase consolidated revenue to around €7 billion by 2028 (2023: €4.7 billion). The mid-term target for the EBITDA margin is between 11% and 13% (2023: 9.7%). For the third financial target, return on capital employed (ROCE), Krones is aiming for more than 20% by 2028 (2023: 16.3%).

Investment and a strong team: the basis for a successful future

By investing in digitalisation, sustainability, product innovation and internal processes, Krones is pressing ahead with the transformation and laying the basis for achieving its ambitious mid-term goals. However, our employees are and will remain the key to the company’s future success. To meet the challenge of the global shortage of skilled workers, we have enhanced our employer brand to highlight what makes Krones special. Our employer brand, which we have aligned with our vision of “Solutions beyond tomorrow”, is designed to attract new talent and further strengthen the loyalty and motivation of the existing workforce.

In “Solutions beyond tomorrow”, we have developed an ambitious vision that extends far into the future. In order to make this a reality, we need a clear strategy and a team that will remain as strong in the years and decades to come as it is today.

Christoph Klenk
CEO

Krones confirms full-year financial targets for 2024

After the successful first two quarters, the company has laid an excellent basis for achieving its targets for the 2024 financial year. Krones increased revenue and earnings as expected compared to the same period of the previous year. The order backlog rose further due to the high order intake from January to June 2024. At the same time, various uncertainties mean that the business environment remains challenging for Krones. This includes geopolitical risks in Europe, the Middle East and other parts of the world. Material shortages and the global supply chain problems that could result from military action along important trade routes remain a source of uncertainty.

After the positive first half-year, we confirm our financial targets overall for 2024. This is based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones.

We expect consolidated revenue growth of 9% to 13%. On the basis of increasing revenue, an ongoing disciplined price strategy and continued implementation of the cost optimisation measures, Krones aims to improve profitability again this year compared to 2023. At group level for 2024, the company forecasts an EBITDA margin of 9.8% to 10.3%. For the third performance target, return on capital employed (ROCE), Krones expects an increase this year to between 17% and 19%.
 

All forecast figures for 2024 include the effects of the acquisition of Netstal Maschinen AG, which has been consolidated within the Filling and Packaging Technology segment since 28 March 2024.

The forecast for Krones’ individual segments also remains unchanged relative to the information provided in the Annual Report 2023 and is as follows: