Krones achieves full-year growth target for 2019
Difficult economic environment | The Neutraubling-based manufacturer of filling and packaging technology achieved its 3% growth target in 2019 despite the difficult overall economic environment. Revenue increased by 2.7% year-on-year, from EUR 3,854.0 million to EUR 3,958.9 million.
The company’s order intake improved by 3.2%, from EUR 3,957.3 million in the previous year to EUR 4,083.5 million in 2019. The company benefited from a strong year-end. The contract value of orders was up 10.7% year-on-year in the fourth quarter of 2019. At the end of 2019, the company had orders on hand totalling EUR 1,385.7 million. This exceeded the already high prior-year order backlog of EUR 1,261.1 million by 9.9%.
Consolidated earnings before taxes (EBT) decreased from EUR 204.3 million in the previous year to EUR 41.7 million in 2019. The EBT margin dropped from 5.3% to 1.1%. It should be noted in this connection that Krones recognised provisions and impairments totalling around EUR 70 million in the fourth quarter of 2019 for measures to cut personnel expenses and streamline the portfolio. About EUR 30 million of this relates to expenses and provisions for the job reductions in 2020. Impairment losses totalling around EUR 20 million were incurred for certain direct printing technologies that the company is partly not pursuing further. A further amount of approximately EUR 20 million relates to goodwill impairments. Without these expenses the EBT-margin would be 2.8%. As a result the company is in line with the revised margin target of around 3% published in July 2019.
Mainly because of the new IFRS 16 accounting standard and the impairment losses, the company’s depreciation and amortisation rose substantially in 2019 to EUR 183.3 million. EBITDA, which is unaffected by this, decreased less sharply than EBT in 2019, falling from EUR 305.9 million to ERU 227.3 million. The EBITDA margin was 5.7%.
Free cash flow went down in the full year 2019 to a negative ERU 94.4 million. The reduction in free cash flow was mainly due to higher working capital at year-end. However the average working capital over the past four quarters as a percentage of revenue decreased from 27.3% in the previous year to 26.9% and was slightly above the 26% targeted for 2019. Net cash and cash equivalents came to EUR 38.1 million at the end of the reporting period. The equity ratio was 41.3%.
All stated figures are preliminary and are subject to change in the course of auditing by the independent auditors.
Krones publishes its Annual Report for 2019 and outlook for 2020 on 19 March 2020.