After nine record years, the global economic crisis puts Krones in the red

In 2009, order bookings at the Krones Group fell by 18 percent, to EUR 1,916 million (2008: EUR 2,326 million). Not until the fourth quarter of 2009 was there any discernible turnaround in the ordering patterns of Krones’ clients, with a plus of 10 percent compared with the already weakened fourth quarter of 2008.

This meant the order backlog on 31 December 2009 totalled EUR 888 million (2008: EUR 837 million).

As a consequence of weaker order bookings, consolidated sales in 2009 fell by 22 percent compared with the record year of 2008, to a total of EUR 1,865 million (2008: EUR 2,381 million).

On the basis of the order bookings, Krones does not anticipate any reversal of the trend in terms of sales until the first half of 2010.

Although Krones’ Executive Board had already launched the “Conversion” programme at the end of 2008, designed to revamp the entire company to cope with the shrinking markets, Krones in 2009 registered a consolidated loss of EUR 34.5 million. In 2008, the consolidated profit was EUR 106.5 million.

Krones’ rock-solid financial position has proven an advantage, constituting a crucial safety factor in the global crisis. Despite the loss recorded in the 2009 financial year, the company upped its free cash flow by 5 percent to EUR 83 million.

On the reporting date of 31 December 2009, the Krones Group had no debts with banks, and in addition possessed liquid funds (net cash) amounting to more than EUR 135 million (2008: EUR 107 million).

Krones says that future developments in the global economy overall are anybody’s guess, with forecasts ranging from optimistic to critical. Due to the multilayered global interdependencies, there are no verified trends pointing unequivocally to what is going to happen.

The long-term growth prospects for Krones continue to be good, since the mega-trends are auspicious: global population continues to increase; affluence in many countries is rising, as is beverage consumption.

In view of developments over recent months, Krones is cautiously optimistic for 2010. The company anticipates a turnaround in the overall trend during the first half of 2010, leading to an increase in sales of 5 percent to 15 percent and a return to positive results.

Krones 2009 financial statements will be published on 27 April 2010.