The company’s outlook for the current year is positive.
- Revenue rose 4.9% in 2014 to €2.95 billion and the EBT margin widened from 6.0% to 6.5%.
- Dividend for 2014 to increase over previous year’s regular dividend, from €1.00 to €1.25 per share.
- Krones improved revenue, new orders, and profitability in the first quarter.
- Krones is expecting 4% revenue growth and an EBT margin of 6.8% for 2015.
In the 2014 financial year, Krones, the world’s leading manufacturer of filling and packaging technology, met its forecasts for all key financial performance indicators. With revenue up by 4.9% to €2.95 billion, the company exceeded its revenue target of +4%. Krones profited from its broad portfolio of products and services and its international diversification. The company benefited from its strong competitive position in the newly industrialising countries. The share of revenue that Krones earns in the emerging markets rose in 2014 from 58.2% in the previous year to 60.4%.
New orders grew more steeply than revenue in 2014, rising by 8.2% to reach €3.04 billion (previous year: €2.81 billion). At 31 December 2014, Krones had orders on hand totalling €1.08 billion (previous year: €992.4 million).Profitability again improved
Despite continued price pressures, Krones significantly improved its profitability in 2014.Key here were the measures taken under the Value strategy programme, with which the company has increased efficiency. Earnings before taxes (EBT) climbed by 13.1% year-on-year in 2014, from €169.7 million to €191.8 million. Krones improved its EBT margin – the ratio of earnings before taxes to revenue – from 6.0% in the previous year to 6.5%. With that, the company exceeded the forecast figure of “around 6.2%”. Net income improved 13.6% year-on-year in 2014 to €135.7 million. That corresponds to earnings per share of €4.30 (previous year: €3.84).
With revenue at €2.49 billion, the EBT margin in the company’s core segment advanced by a very satisfying 7.7%. The two smaller segments’ operating figures were in the black for the year 2014 as a whole. Process technology, with revenue of €358.7 million, achieved an EBT margin of 0.9%. In the segment for the low output range, a restructuring provision meant that the EBT margin was negative, at –4.6%, despite a break-even operating result and revenue of €102.0 million. The segment thus performed in line with expectations.Cash and cash equivalents are up thanks to improved free cash flowIn 2014, Krones achieved a 16.4% return on capital employed (ROCE) – the ratio of earnings before interest and taxes (EBIT) to average net tied-up capital – (previous year: 16.7%). With that, the company has achieved its ROCE target of “>16.0%”. Free cash flow rose significantly, from €67.0 million to €152.1 million.Overall, cash and cash equivalents increased by €96.6 million on the previous year to €336.4 million. The equity ratio was 40.7% at 31 December 2014 (previous year: 42.6%). Thus, Krones still has an extremely robust financial and capital structure overall.Krones to pay a dividend of €1.25 per share
The Executive Board and the Supervisory Board will propose to the annual shareholders’ meeting a dividend of €1.25 per share for the 2014 financial year. The planned payout corresponds to 29% of consolidated net income and lies near the upper limit of the target corridor (25% to 30%). In the previous year, shareholders received not only a regular dividend of €1.00, but also an additional special payout of €1.00 per share, with which Krones enabled its stockholders to benefit from its sale of treasury shares.
Good first quarter of 2015
Krones has got 2015 off to a good start. In the period from January to March, revenue rose 5.1% year-on-year to €738.9 million. That gives Krones a solid basis for achieving our growth target of 4% for the year as a whole. At €787.0 million, new orders exceeded the already-high year-earlier figure of €738.8 million by 6.5%. Demand was brisk across much of Krones’ range of products and services. At €1,127.2 million, orders on hand at 31 March 2015 were up 4.5% over the end of 2014.
Krones also further increased its profitability in the first quarter of 2015, generating a very good margin for the period. Key here were the measures taken under the Value strategy programme, with which Krones is progressively increasing efficiency. As expected, prices yielded no positive effects. Krones improved earnings before taxes (EBT) by 16.5% to €50.2 million. The EBT margin widened from 6.1% to 6.8%.In the company’s core segment, revenue was up 12.8% and the EBT margin widened from 7.2% to 7.4%. The segment for the low output range accomplished the turnaround and generated an EBT margin of 4.4%. In process technology, the first-quarter EBT margin was down slightly, from 1.7% to 1.6%, on lower revenue as a result of invoice timing.Consolidated net income climbed 17.1% in the first quarter of 2015 to €35.0 million. That corresponds to earnings per share of €1.11 (previous year: €0.95). Krones improved its return on capital employed (ROCE) to 16.5% in the reporting period (previous year: 15.4%).
Outlook affirmed
Based on the current macroeconomic prospects and developments on the markets relevant to Krones, the company expects consolidated revenue to grow by 4% in 2015. Krones expects only little support from price levels.
The company’s profitability is set to improve yet again this year. Krones expects the EBT margin to rise to 6.8%. That puts Krones very close to the medium-term target of 7%, which the company had set itself when launching its Value programme. The company is aiming to increase its third strategy target, ROCE, to 17% this year.Krones published its Interim Report for the first quarter of 2015 and its Annual Report for 2014 online today at http://www.krones.com/en/investor_relations/reports.php.The audited figures for the year 2014 are unchanged from the preliminary figures that were reported on 19 March 2015.
