- Krones achieved its targets for 2015.
- Revenue rose 7.5%, EBT margin improved from 6.5% to 7.0%.
- Dividend for 2015 to increase to €1.45 per share (previous year: €1.25).
- Krones continues stable growth in first quarter of 2016 and confirms targets for 2016 as a whole.
Krones, the world’s leading manufacturer of filling and packaging technology, met its forecasts for all key financial performance indicators in 2015. Revenue rose 7.5% from €2.95 billion in the previous year to €3.17 billion. That exceeds Krones’ growth target of 4% for the year 2015. Demand in Krones’ markets developed well overall in 2015. The company was able to expand its business considerably thanks to its broad range of products and services and strong global presence.
New orders increased 4.9% year-on-year in 2015, from €3.04 billion to €3.19 billion. At 31 December 2015, Krones had orders on hand totalling €1.09 billion (previous year: €1.08 billion).
Krones further improved profitability
Krones’ earnings before taxes (EBT) rose 16.4% from €191.8 million in the previous year to €223.3 million in 2015. The EBT margin, the ratio of earnings before taxes to revenue, advanced from 6.5% to 7.0%. Thus, Krones has met its EBT margin target for 2015. The continued improvement in profitability can be attributed largely to increased efficiency resulting from measures taken under the Value strategy programme. Market prices did not provide any positive effects.
While the EBT margin in the core segment, machines and lines for product filling and decoration, improved from 7.7% in the previous year to 8.1% on considerably higher revenue (+8.6%), the company’s second-largest segment, machines and lines for beverage production/process technology, fell short of expectations. The segment only broke even in terms of operating earnings and revenue was flat. Krones developed an action package in 2015 aimed at strengthening the segment’s profitability for the long term. The company’s smallest segment, machines and lines for the compact class, developed well in 2015. With revenue up 6.8%, earnings before taxes (EBT) rose from –€4.7 million in the previous year to +€4.9 million.
Krones’ consolidated net income was up 15.2%, from €135.7 million in the previous year to €156.3 million in 2015. Earnings per share rose to €4.98 (previous year: €4.30).
Very robust financial and capital structure
Krones generated free cash flow of €70.7 million in 2015 (previous year: €152.1 million). The return on capital employed (ROCE), that is the ratio of earnings before interest and taxes to average net tied-up capital, increased to 17.7% in the reporting period (previous year: 16.4%). With that, the company exceeded its ROCE target of 17% for 2015.
At the end of 2015, Krones had cash and cash equivalents totalling €364.6 million (previous year: €336.4 million). The company had no bank debt at the end of the 2015 reporting period. The equity ratio was 41.0% at 31 December 2015, which is up slightly from the year-earlier figure of 40.7%. Overall, Krones continues to possess an exceptionally robust financial and capital structure. Krones’ workforce worldwide grew by 722 in 2015 to 13,346.
Krones to raise dividend from €1.25 to €1.45 per share
The Executive Board and the Supervisory Board will propose to the annual shareholders’ meeting on 15 June 2016 a dividend of €1.45 per share for the 2015 financial year (previous year: €1.25). The planned payout corresponds to 29% of consolidated net income and lies near the upper limit of the target corridor (25% to 30%).
Successful first quarter of 2016
Krones continued its stable growth in the first quarter of 2016. In the period from January to March 2016, revenue increased 4.5% year-on-year from €738.9 million to €772.1 million. New orders also rose 4.5%, from €787.0 million in the year-earlier period to €822.2 million. The biggest increase in new orders came in Europe and North America. Demand was stable in China. At 31 March 2016, orders on hand at Krones totalled €1,144.7 million, which is 4.6% higher than at the end of 2015.
Krones’ earnings increased further. In the period from January to March 2016, earnings before taxes (EBT) once again rose more than revenue, 9.8% from €50.2 million in the previous year to €55.1 million. The EBT margin, the ratio of earnings before taxes to revenue, rose from 6.8% to 7.1%. Krones benefited primarily from cost savings achieved as part of the Value strategy programme. Market prices did not improve in the reporting period.
Consolidated net income increased 9.7% in the first quarter of 2016 to €38.4 million. That corresponds to earnings per share of €1.23 (previous year: €1.11). The return on capital employed (ROCE) improved to 16.7% (previous year: 16.5%).
Good start to the year affirms outlook for 2016 as a whole
Based on the current macroeconomic prospects and developments on the markets relevant to Krones, the company expects consolidated revenue to grow by 3% in 2016. Krones’ earnings are set to improve yet again this year. The Executive Board is forecasting an EBT margin of 7.0% for 2016. Krones aims to increase its third strategy target, ROCE, to 18% this year.
