- Revenue rose 4.9% in 2014 to €2.95 billion.
- Profitability, measured as the EBT margin, improved 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.
- For 2015, Krones is expecting revenue growth of 4% and an EBT margin of 6.8%.
In the 2014 financial year, Krones, the world’s leading manufacturer of filling and packaging technology, met its forecasts for 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 broadly diversified portfolio of products and services and its international operative capabilities. 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 preceding 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, which have upgraded corporate efficiency. Earnings before taxes (EBT) in 2014 climbed by 13.1% year-on-year, 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 the reporting period to €135.7 million. That corresponds to earnings per share of €4.30 (previous year: €3.84).
With revenue of €2,492.7 million, the EBT margin in the company’s core segment advanced by a very satisfying 7.8%. 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 1.0%. In the Kosme segment, a restructuring provision meant that the EBT margin was negative, at –4.6%, despite a break-even operating result and revenues of €102.0 million. The segment thus performed in line with expectations.
Cash and cash equivalents are up thanks to improved cash flow
In 2014, Krones achieved a return on capital employed (ROCE), that is the ratio of earnings before interest and taxes (EBIT) to average net tied-up capital, of 16.4% (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 running at 40.7% on 31 December 2014 (previous year: 42.6%). Krones thus continues to possess an exceptionally sound financial and capital structure.
All figures stated here are provisional and may change following completion of the audit.
Krones to pay a dividend of €1.25 per share
The Executive Board and 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 corridor targeted (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.
Outlook
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.
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 around 17% this year.
Krones will publish its annual report for 2014 and its report on the first quarter of 2015 on 30 April 2015.
