Krones Group
Quarterly statement for the period from 1 January to 30 September 2023
Q323
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To our shareholders
Assets, financial position, and results of operations
Interim consolidated financial statements for the period ended 30 SEPTEMBER 2023
Other information
1 | To our shareholders | 2 | INTERIM CONSOLIDATED | 3 | Interim consolidated financial | 4 | other Information |
MANAGEMENT REPORT | statements |
1 ToHighlightsour shareholdersand key figures | . . . . . . . . . . . . . . . . 4 |
Letter from the Executive Board | .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 5 |
The Krones share | . . . . . . . . . . . .6 |
1 | To our shareholders | 2 | INTERIM CONSOLIDATED | 3 | Interim consolidated financial | 4 | other Information |
Highlights and key figures | MANAGEMENT REPORT | statements |
1 | 4 | Highlights and key figures |
Krones confirms full-year guidance for 2023
Demand for Krones' products and services remains strong.. This
reflects the fact that demand for packaged beverages is robust to economic cycles and continues to grow at a steady rate.. In the third quarter of 2023, order intake improved by 4..3% on the previous quarter to €1,327..7 million..
Order backlog exceeds the €4 billion mark for the first time and, at €4..09 billion, ensures capacity utilisation in plant and project business through to 2025..
Krones' revenue developed well between January and September,
despite the tight supply of electrical components.. Thanks to the great flexibility and creativity of the workforce, revenue increased by 14..5% to €3,485..6 million..
The company significantly improved profitability in a challenging
environmentin the first three quarters of 2023.. Earnings before interest, taxes, depreciation and amortisation (EBITDA) went up 23..0% to €332..3 million.. The EBITDA margin improved to 9..5% in the reporting period (previous year: 8..9%)..
On the basis of the nine-month figures and the continuing strong
demand, Krones confirms its full-year guidance for 2023.. The Execu-
Key figures for Q1- Q3 2023 | 1 Jan - 30 Sep | 1 Jan - 30 Sep | Change | |||
2023 | 2022 | |||||
Revenue | € million | 3,485..6 | 3,043..7 | +14.5 % | ||
Order intake | € million | 4,113..6 | 4,599..7 | - 10.6 % | ||
Order backlog at 30 Sep | € million | 4,094..4 | 3,499..0 | + 18.7 % | ||
EBITDA | € million | 332..3 | 270..1 | + 23.0 % | ||
EBITDA margin | % | 9..5 | 8..9 | + 0.6 PP* | ||
EBIT | € million | 217..9 | 168..4 | + 29.4 % | ||
EBT | € million | 235..4 | 176..6 | + 33.3 % | ||
EBT margin | % | 6..8 | 5..8 | + 1.0 PP* | ||
Consolidated net income | € million | 175..7 | 128..3 | + 36.9 % | ||
Earnings per share | € | 5..56 | 4..06 | + 36.9 % | ||
Capital expenditure for PP&E and | ||||||
intangible assets | € million | 87..7 | 84..8 | + €2..9 million | ||
Free cash flow | € million | - 280.6 | 132..3 | - €412..9 million | ||
Net cash at 30 Sep** | € million | 284..8 | 440..9 | - €156.1million | ||
ROCE | % | 17..0 | 12..4 | + 4.6 PP* | ||
Working capital to revenue*** | % | 17..3 | 20..5 | - 3.2 PP* | ||
Employees at 30 Sep | ||||||
Worldwide | 18,258 | 16,795 | + 1,463 | |||
Germany | 10,553 | 10,012 | + 541 | |||
Outside Germany | 7,705 | 6,783 | + 922 | |||
* PP = percentage points ** Cash and cash equivalents less bank debt | *** Average of last 4 quarters | |||||
Key figures for Q3 2023 | 1 Jul - 30 Sep | 1 Jul - 30 Sep | Change | |||
2023 | 2022 |
tive Board expects revenue growth of 11% to 13% this year.. In addi- tion, the company aims to further improve profitability and forecasts an EBITDA margin of 9% to 10% in 2023.. For return on capital employed (ROCE), Krones expects an increase to between 15% and 17%..
Revenue | € million |
Order intake | € million |
EBITDA | € million |
EBITDA margin | % |
EBIT | € million |
EBT | € million |
EBT margin | % |
Consolidated net income | € million |
Earnings per share | € |
1,164..7
1,327..7
110..9
9..5
74..8
74..3
6..4
54..3
1..72
1,058..9
1,443..1
95..0
9..0
60..3
63..4
6..0
45..1
1..43
+ 10.0 %
- 11.1 %
+ 16.7 %
+ 0.5 PP*
+ 24.0 %
+ 17.2 %
+ 0.4 PP*
+ 20.4 %
+20.3 %
1 | To our shareholders | 2 | INTERIM CONSOLIDATED | 3 | Interim consolidated financial | 4 | other Information |
Letter from the | MANAGEMENT REPORT | statements | |
Executive Board |
1 | 5 | Letter from the Executive Board | |
Dear shareholders and friends of Krones, | ||
After a successful first half of the year, the third quarter of 2023 also went well | ||
for Krones. Customers in the international food and beverage industry con- | ||
tinue to be very keen to invest. This underscores the fact that our sales markets, | ||
and with them Krones itself, are robust to economic cycles. | ||
The global environment remains challenging. This is demonstrated by the | ||
latest | geopolitical conflicts, which could have a negative impact on the global |
economy at any time. The experts at the International Monetary Fund (imf) forecast relatively low global economic growth of 3.0% this year and 2.9% in 2024. Both figures are well below the global average growth rate of 3.8% (2000 to 2019).
Krones' third-quarter order intake was up on the previous quarter, reaching the very good level of €1.33 billion. We expect order intake to remain at a high level in the coming quarters. Our order backlog exceeded the €4 billion mark and stood at €4.09 billion at the end of September. This huge order backlog gives us planning certainty through to 2025, even with the expected increase in capacity utilisation in plant and project business. Revenue also developed very posi- tively. From January to September, revenue went up by 14.5% year on year to €3,485.6 million. At the same time, under difficult conditions, we improved our EBITDA margin to 9.5% (9M 2022: 8.9%).
Alongside the good business results, we also had to deal with one less pleasing news item in the past quarter. At the beginning of September, Deutsche Börse informed us that our shares would be removed from the dax index family with effect from 18 September (see "The Krones share", p. 7). After we had prepared the way back to the dax index family as quickly as possible, our shares have been listed in the sdax since 9 October.
All in all, Krones is well on the way not only to achieving its targets for 2023, but also to continuing profitable growth in the future. Firstly, the food and
beverage market is growing more steadily than the global economy. And sec- ondly, Krones benefits from a large global footprint, a balanced international customer base and an innovative and future-oriented product and service portfolio. The company is aided in this by our target picture, "Solutions beyond tomorrow". This provides Krones with support and orientation in order to shape a successful future in a challenging environment. All Krones employees are working with competence and high motivation to make our vision a reality: Sustainable and affordable beverages, food and essentials for everyone and
Christoph Klenk
CEO
1 | To our shareholders | 2 | INTERIM CONSOLIDATED | 3 | Interim consolidated financial | 4 | other Information |
The Krones share | MANAGEMENT REPORT | statements |
1 | 6 | The Krones share | |
Stock markets under pressure in third quarter of 2023 | ||
After a good first half of the year, the third quarter of 2023 did not go very well | ||
for the equity markets. This was mainly due to developments on the bond mar- | ||
kets. Long-term interest rates rose sharply in both the US and Europe between | ||
July and September 2023. The weak economic outlook also meant that investors | ||
had little appetite to buy. As a result, the price gains made in the first half of | ||
2023 melted away in the third quarter. Stock markets rallied strongly in the first | ||
six months of the year, largely on hopes of an early end to the central banks' | ||
cycle | of interest rate hikes and an easing of inflation concerns. Interest rate | |
expectations | continued to boost equity markets at the beginning of the third | |
quarter. The dax reached an all-time high of 16,529 points on 31 July. |
After that, share prices went steeply downhill. The German benchmark index reached its lowest level in the third quarter at 15,139 points on 28 September. Overall, the DAX fell by 4.7% between July and September 2023, closing the quarter at 15,387 points. This was still 10.5% higher than at the beginning of the year.
Krones share price and from " January to ‡ˆ September ‰ˆ‰‡
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Jan | Feb | Mar | Apr | Mai | Jun | Jul | Aug | Sep |
(indexed) | • (indexed) |
Krones share data
Earnings per share (€)
High (€)
Low (€)
Price at 30 September (€)
Market capitalisation at 30 September (€ billion)
Share price data: Closing price (Xetra)
Q1- Q3 2023 | Q1- Q3 2022 |
5..56 | 4..06 |
120..30 | 99..25 |
93..20 | 67..50 |
97..55 | 90..65 |
3..08 | 2..86 |
Krones share price likewise under pressure between July and September
After slight gains of 3.5% and 2.2% in the first two quarters of 2023, the Krones share price fell in the third quarter, as did many important stock market indices. From July to September, it lost 12.2% in value, which is more than the MDAX (down 5.6%) and the SDAX (down 3.9%).
Krones shares lost an above-average 12.2% in the third quarter of 2023, leaving the shares 7.1% down over the first nine months of the year. The SDAX rose by 8.0% in the first three quarters and the MDAX by 3.8%.
1 | To our shareholders | 2 | INTERIM CONSOLIDATED | 3 | Interim consolidated financial | 4 | other Information |
The Krones share | MANAGEMENT REPORT | statements |
1 | 7
Perfomance
Q1- Q3 2023
Krones share: - 12.2 %
SDAX: - 3.9 %
MDAX: - 5.6 %
A decline in the share price in early July was followed by a sharp rise after
Krones raised its full-year revenue guidance for 2023 on 17 July. Supported by positive analyst comments, our shares then reached their high point for the third quarter at €112.60 on 19 July. Following the publication of very strong half-year results on 1 August, the share price fell in accordance with the investor maxim of "sell on good news". In the weeks that followed, the share price fell slightly, with fluctuations, in line with the overall market. The Krones share price marked its lowest level since the beginning of the year at €93.20 on
20 September before recovering towards the end of the quarter.
On 30 September, Krones shares were quoted at €97.55, down 7.1% on the start of the year. Including the dividend of €1.75 per share paid out in May, the Krones share price lost 5.4% in value over the first nine months of 2023 - following a strong outperformance in 2022 (a gain of 9.5%). The SDAX, in which Krones was listed until 18 June, gained 8.0% in the same period (performance in 2022: down 27.3%); the MDAX gained 3.8% (performance in 2022: down 28.5%).
Krones shares drop out of the MDAX and are listed in the SDAX from October
After being promoted to the MDAX index on 19 June 2023, Krones shares briefly left the DAX index family altogether on 18 September 2023. This was due to the fact that the company temporarily no longer met a basic criterion for index membership. In response, Krones took immediate action to regain a place in the Deutsche Börse index ranking list and to return to the DAX index family as swiftly as possible.
Krones once again met all basic criteria for a return to the DAX index family from mid-September and was incorporated into the SDAX in an unscheduled index adjustment with effect from 9 October 2023.
For further information on Krones shares, please see the Krones website: https://www.krones.com/en/company/investor-relations/share.php
Shareholder structure
Familie Kronseder
Konsortium GbR .%
Familie Schadeberg .%
Others .%
Key data for the Krones share
Number of shares | •,••,•• |
German securities identification number | -••• |
€ •••-••• | |
ticker symbol | ' |
2 | Assets, financial position, and results | ||
of operations | |||
Revenue | . . . . . . . . . . . . . . . . . . . . . 9 | ||
Order intake | . . . . . . . . . . . . . . . . . .11 | ||
Order backlog | . . . . . . . . . . . . . . . . . | .12 | |
Earnings | . . . . . . . . . . . . . . . . . 13 | ||
Statement of cash flows | . . . . . . . . . . . . . . . . . . . . . . . . . . 17 | ||
Assets and capital structure | . . . . . . . . . . . . . . . . . . . . .19 | ||
Report from the segments | . . . . . . . . . . . . . . . . . . . . | .21 | |
Employees | . . . . . . . . . . . . . . . . | .24 | |
Report on expected developments . | . . . . . . . . . . . . . . . . . . . . | . 25 |
1 | To our shareholders | 2 | Assets, financial | 3 | Interim consolidated financial | 4 | other Information |
position, and results | statements | ||
of operations | |||
Revenue |
2 | 9 | Revenue | |
Krones continues on stable growth track | ||
In the first three quarters of | Capacity utilisation at Krones improved slightly in | |
2023, Krones' revenue | the third quarter of 2023 compared to the previous | |
climbed by 14.5% year on | ||
quarter but remained below the maximum capac- | ||
year to €3,485.6 million. |
ity. Due to the tight situation on procurement mar-
kets, especially for electrical components, production conditions in the third quarter were challenging overall. Thanks to the high flexibility and creativity of its employees, however, Krones was able to continue its stable growth. Revenue from July to September 2023 was up 10.0% year on year, rising from
€1,058.9 million to €1,164.7 million. In total over the first three quarters of 2023, revenue thus grew by 14.5%, from €3,043.7 million a year earlier to €3,485.6 million. Volume effects contributed more to revenue growth than price increases. Revenue was not materially affected by exchange rates, acquisitions or divestments in the first nine months of 2023.
Revenue from sales of new machinery increased more strongly in the reporting period than service revenue. This is mainly due the very high demand for our machines and lines in recent quarters. After the first nine months, Krones firmly expects to achieve its growth target of 11% to 13% for the full year 2023.
Revenue from Jan to Sep ( million) | Revenue in Q ( million) |
•,••.• |
Revenue by segment from Jan to Sep | Revenue by segment from Jan to Sep |
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Intralogistics
ˆ.‡%* (-€‡‡.… million)
Process Technology ‹.ˆ%* (-•••.… million)
Filling and
Packaging Technology
•€.ˆ%* (-€,••‰.• million)
- Share of consolidated revenue of -•,…•ƒ.‡million
Intralogistics
ˆ.…%* (-€€ƒ.• million)
Process Technology •.•%* (-€‡ˆ.‰ million)
Filling and
Packaging Technology ••.•%* (-€,ƒƒ".… million)
- Share of consolidated revenue of -•,‰…•.ˆmillion
1 | To our shareholders | 2 | Assets, financial | 3 | Interim consolidated financial | 4 | other Information |
position, and results | statements | ||
of operations | |||
Revenue |
2 | 10 | Revenue by region |
revenue. Business was extremely dynamic in North and Central America, South America/Mexico and Asia-Pacific. In North and Central America, revenue in the first
Krones generated
almost 90% of reve-
nue internationally in the first nine months 2022..
Its internationally balanced customer and revenue mix is one of Krones' strategic strengths. The company generated 45.3% of consolidated revenue in emerging markets in the first three quarters (previous year: 45.9%). The share of revenue generated in mature industrialised countries was 54.7% (previous year: 54.1%).
Revenue in Germany increased by slightly less than total revenue between Janu- ary and September 2023, rising by 10.3% to €335.9 million (previous year: €304.6 million). As a percentage of consolidated revenue in the first nine months, this represented a decrease from 10.0% a year earlier to 9.6%.
Following a very strong first half year, business in the large Western Europe sales region calmed slightly in the third quarter. In total from January to September 2023, revenue there rose to €490.9 million, an increase of 9.0% on the already very high prior-year figure (€450.3 million). Krones' revenue in Eastern Europe also went up in the reporting period. Revenue there increased by 13.1% to €135.9 million (previous year: €120.2 million). Conversely, there was a reduction in revenue in Central Europe (Austria, Switzerland and the Netherlands). In that region, revenue decreased by 24.7% relative to the prior-year period (€225.4 million), to
three quarters totalled €908.5 million, exceeding the previous year's already very
high figure (€665.1 million) by 36.6%. Revenue in South America/Mexico rose similarly strongly, increasing by 34.1% from €265.4 million to €355.9 million. South America benefited here from catch-up effects. Markets in the Asia/Pacific region are still noticeably recovering from the effects of the coronavirus pandemic. There, revenue improved by 39.3% to €481.6 million in the reporting period (previous year: €345.7 million).
Revenue in China and the Middle East/Africa was slightly down in the first three quarters of 2023. In China, revenue fell by 5.8%, from €262.3 million to €247.2 million. It should be noted, however, that
revenue in China increased strongly in the previous year's period. In the Middle East/Africa, the revenue of €332.6 million in the reporting period was 8.9% down on the previous year (€365.2 million).
Krones Group revenue by region
€169.7 million. Overall, Krones' revenue in Europe (excluding Germany) showed virtually no change in the first three quarters of 2023 compared to the previous year's period, at €796.5 million (previous year: €795.9 million). The share of consolidated revenue in the reporting period thus decreased to 22.9% (previous year: 26.1%).
The Central Asia region now has only a very minor influence on the Krones Group's business. Revenue decreased there in the first nine months of 2023 by 30.6% to €27.4 million (previous year: €39.5 million). Its share of Group revenue was consequently just 0.8%.
After a strong first half year, Krones' non-European markets continued to perform very well overall in the third quarter of 2023. In total, revenue between January and September rose there by 22.2% year on year to €2,325.8 million (previous year: €1,903.7 million), a significantly stronger increase than Group
Share of consolidated revenue
Germany
Central Europe (excluding Germany) Western Europe
Eastern Europe
Central Asia
Middle East/Africa
Asia-Pacific
China
South America/Mexico
North and Central America
Total
1 Jan to 30 Sep | 1 Jan to 30 Sep | Change | ||
2023 | 2022 | |||
€ million | % | € million | % | % |
335..9 | 9..6 | 304..6 | 10..0 | + 10.3 |
169..7 | 4..9 | 225..4 | 7..4 | - 24.7 |
490..9 | 14..1 | 450..3 | 14..8 | + 9.0 |
135..9 | 3..9 | 120..2 | 3..9 | + 13.1 |
27..4 | 0..8 | 39..5 | 1..3 | - 30.6 |
332..6 | 9..5 | 365..2 | 12..0 | - 8.9 |
481..6 | 13..8 | 345..7 | 11..4 | + 39.3 |
247..2 | 7..1 | 262..3 | 8..6 | - 5.8 |
355..9 | 10..3 | 265..4 | 8..8 | + 34.1 |
908..5 | 26..1 | 665..1 | 21..8 | + 36.6 |
3,485.6 | 100.0 | 3,043.7 | 100.0 | + 14.5 |
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Disclaimer
Krones AG published this content on 02 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2023 08:18:46 UTC.