Annual report 2018

The Neutraubling-based manufacturer of filling and packaging technology released its annual report on 21 March 2019.

Revenue increased by 4.4% year-on-year to EUR 3,854.0 million. The company thus achieved the revised target of 4% revenue growth announced in autumn 2018. Revenue grew operationally (i.e., adjusted for currency and acquisition effects) around 5%.

Despite the high prior-year figure, order intake increased by 4.5% in 2018 to EUR 3,957.3 million. The company had orders on hand totalling EUR 1,261.1 million at the end of 2018. This once again exceeded the very high prior-year figure by 1.7%.

The company continued to invest in the growth of its workforce in 2018, primarily for the expansion of its global footprint. The company employed 16,545 people worldwide at the end of 2018. This represents an increase of 1,246 employees on the previous year, about 400 of which related to acquisitions.

Krones’ earnings were significantly impacted by higher material and labour costs in 2018. The 5.3% EBT margin includes approximately EUR 42 million in one-off expenses, mainly for reorganisation. In total, earnings before taxes (EBT) in 2018 were down by 21.1% year-on-year to EUR 204.3 million.

The company was able to significantly reduce working capital between October and December 2018. This had a positive impact on free cash flow, which improved in 2018 by a substantial EUR 271.4 million compared with the prior year, to EUR 120.7 million. The ratio of average working capital over the past four quarters to revenue developed slightly better than expected, holding stable at 27.3% in 2018. Net cash went up to EUR 215.1 million at the 2018 reporting date. Due to the increase in total assets, the company’s equity ratio decreased slightly to 43.2%.

At the Annual General Meeting on 5 June 2019, a dividend of EUR 1.70 per share will be proposed for the 2018 financial year. The proposed dividend is stable relative to the previous year. The planned payout is 35.7% of consolidated net income.

Based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to the company, they expect consolidated revenue growth of 3% in 2019. EBT margin is expected of around 6% for 2019. Above all due to the focus on increases in the sales price level, in the current economic and geopolitical climate, the company sees the achievement of its targets for 2019 subject to greater uncertainties than in the past. For its third performance target, working capital to revenue, they expect a figure of 26%.