DGAP-News: Krones AG: Krones achieved its 2016 growth and earnings targets

Corporate news release
02 March 2017

Krones achieved its 2016 growth and earnings targets

- Revenue increased 6.9% to EUR3.39 billion, order intake increased 7.9%.

- Profitability was stable, with the EBT margin once again at 7.0%.

- Krones generated free cash flow of EUR49.2 million in 2016.

- Revenue and earnings are expected to increase further in 2017.

Krones, the world's leading manufacturer of filling and packaging technology, continued its stable growth in 2016. Revenue increased 6.9% year-on-year from EUR3,173.5 million to EUR3,391.3 million. The increase is partly due to acquisitions. Adjusted for acquisitions, revenue growth came to 4.2%. With that, Krones has slightly exceeded its growth target of 3% for the year 2016. Our comprehensive range of products and services and our strong international presence continue to support the company's growth.

Order intake increased 7.9% year-on-year to EUR3,441.3 million in 2016. The increase is partly due to acquisitions. Adjusted for acquisitions, order intake increased 5.2%. At 31 December 2016, the company had orders on hand totalling EUR1.14 billion, which is up 4.6% on the previous year (EUR1.09 billion).

EBT margin stable despite heavy competition

Krones increased earnings again in 2016 despite the highly competitive markets. Earnings before taxes (EBT) rose 6.4% year-on-year, from EUR223.3 million in 2015 to EUR237.6 million in 2016. The EBT margin remained unchanged year-on-year at 7.0%. Thus, Krones met its EBT margin target for 2016. As expected, market prices provided no support. Krones was able to keep its EBT margin stable in the reporting period partly due the effects from the Value strategy programme. Net income improved 8.2%, from EUR156.3 million in the previous year to EUR169.1 million in 2016. Earnings per share rose to EUR5.40 (previous year: EUR4.98).

Krones has a very robust financial and capital structure

Krones' return on capital employed (ROCE), the ratio of EBIT to average net capital employed, came to 17.0% in 2016 (previous year: 17.7%). With that, Krones did not achieve its ROCE target of 18% for 2016 because of the higher than expected increase in the capital employed. The relatively high positive cash flow from operating activities in the fourth quarter of 2016 resulted in free cash flow of EUR49.2 million for the year as a whole (previous year: EUR70.7 million).

At the end of 2016, Krones held cash and cash equivalents totalling EUR368.9 million (previous year: EUR364.6 million) and had no bank debt. The company's equity ratio was 39.9% on 31 December 2016 (previous year: 41.0%). Overall, Krones continues to possess a very robust financial and capital structure.

All figures stated here are provisional and may change following completion of the audit.

Outlook
Based on the current macroeconomic prospects and developments in the markets relevant to Krones, the company expects consolidated revenue to grow by 4% in 2017. The company expects earnings to rise further and the EBT margin to remain stable at 7.0% this year. The forecast for the company's new financial performance target, working capital to sales, is 27% for 2017. Possible acquisitions are not included in these forecasts for 2017.

Krones will publish its annual report for 2016 on 23 March 2017.

Key Figures for 2016		2016	2015	Change
Revenue	EUR million	3,391.3	3,173.5	+6.9%
Order intake	EUR million	3,441.3	3,189.0	+7.9%
Orders on hand at 31 December	EUR million	1,144.7	1,094.6	+4.6%
EBITDA	EUR million	320.8	305.3	+5.1%
EBIT	EUR million	228.0	216.9	+5.1%
EBT	EUR million	237.6	223.3	+6.4%
EBT margin	%	7.0	7.0	-
Consolidated net income	EUR million	169.1	156.3	+8.2%
Earnings per share	EUR	5.40	4.98	+8.4%
Capital expenditure for PP&E and intangible assets	EUR million	111.3	102.6	+EUR8.7 million
Free cash flow	EUR million	49.2	70.7	-EUR21.5 million
Net cash and cash equivalents* at 31 December.	EUR million	368.9	364.6	+EUR4.3 million
ROCE	%	17.0	17.7	-70 basis points
Employees at 31 December
Worldwide		14,443	13,346	+1,097
Germany		10,061	9,767	+294
Outside Germany		4,382	3,579	+803
* Cash and cash equivalents less debt

 

Contact:
Olaf Scholz
Head of Investor Relations, Krones AG
Phone: +49 9401 70-1169
E-mail: [email protected]