Krones specifies structural measures

Krones | On 12 December 2019, the executive board of the Neutraubling-based company decided on additional structural efficiency measures.

Furthermore, the management specified the expected expenses for all measures intended to substantially enhance profitability. Measures initiated to cut personnel costs as well as specific portfolio optimization measures lead to provisions and impairments of approximately EUR 70 million in 2019. Thus, the resulting expenses will remain within the already communicated range of EUR 60 to EUR 80 million and affect the EBT margin already in 2019. The corresponding EBT margin for the year 2019 is expected to be around 1 %. Without one-time effects, the EBT margin for 2019 would be around 3 % as previously predicted.

Cutting personnel costs

As part of the efficiency measures, the company is already reducing jobs in the current fiscal year. This programme will be continued in 2020. In the coming year, 300 additional jobs in Germany and 200 additional jobs worldwide are to be cut in a socially responsible manner. The expenses and provisions required for this amount to approximately EUR 30 million. The job reductions mainly concern administrative functions.

Portfolio optimization

Progress has also been made in portfolio optimizing. For many years, the company has invested in different future technologies for direct ink printing. In the future, they will focus on the direct printing technology with the highest market acceptance. For direct printing technologies that are not further pursued, an impairment loss of around EUR 20 million is incurred. Additionally, goodwill is impaired by approximately EUR 20 million. Both impairments do not affect liquidity and have no impact on cash flow. The company will announce further portfolio optimization measures in March 2020.

Positive effects expected, dividend policy to be continued

For the years 2020 and 2021, Krones is expecting a positive EBT effect of a total of approximately EUR 150 million from the reduction of personnel costs, the optimized portfolio and further measures. The provisions and impairments for the structural measures will have no effect on the dividend for the fiscal year 2019. The dividend will be calculated based on the profit excluding those one-time effects and should be in the usual range of 25 to 30 % of the profit.