Krones aims to restore pre-crisis price levels

The company plans to increase prices for all bottling & packaging equipment and process technology by 6%, effective 1 August 2021
Krones aims to restore pre-crisis price levels
Krones raises full-year guidance for 2021 and publishes preliminary half-year figuresPhoto - Krones

Following a successful start to the 2021 financial year, Krones’ business continued to develop dynamically through the second quarter of 2021. Based on preliminary figures, order intake in the first six months of 2021 was around EUR 2,045 million, 40% higher than a year earlier. From April to June 2021, the contract value of orders increased compared with the second quarter of 2020 by almost 60% to around EUR 975 million. It should be noted with regard to the revenue performance that revenue in the first quarter of 2020 was hardly affected by the pandemic. As a result, revenue in the first half of 2021 was up only slightly year on year, gaining about 1% to EUR 1,720 million. On the other hand, in the second quarter of 2021, revenue showed strong year-on-year growth to some EUR 845 million, marking an increase of around 12% on the prior-year quarter. Despite rising costs, notably of materials and freight, Krones’ profitability improved significantly from January to June 2021. This was most of all to structural measures that the company has launched and already implemented. Earnings before interest, taxes, depreciation, and amortization reached approximately EUR 138 million in the first half of the year (previous year: EUR 118.5 million). The EBITDA margin increased to 8.0% (previous year: 7.0%). The second-quarter EBITDA of EUR 61 million (previous year: EUR 29.0 million) includes a Covid-19 bonus for employees totaling around EUR 5 million.

Krones raises full-year guidance for 2021

Overall, Krones’ markets have so far recovered faster than expected from the pandemic-related downturn. For the second half of the year, the company expects demand to stay strong and production capacity utilization to remain stable. Based on the preliminary figures for the first half-year and the good outlook for the third and fourth quarters of 2021, Krones is raising its full-year guidance for 2021. The Executive Board expects full-year revenue growth of 7% to 9% in 2021 (previously 2.5% to 3.5%) for the Krones Group. Krones anticipates an EBITDA margin of 7% to 8% (previously 6.5% to 7.5%). For the third performance target, working capital to revenue, the guidance remains unchanged at 26% to 27%.

The guidance for 2021 is subject to the assumption that there will be no severe impacts from the Covid-19 pandemic, problems in supply chains, or other general economic impacts.

Krones will publish its Interim Report as of 30 June 2021 as planned on 3 August 2021.

Krones implements price increases

Since the start of the global Covid crisis, sales prices on Krones’ markets have declined and remain relatively low. Krones is aiming to restore pre-crisis price levels. In addition, the company also has to compensate for the significantly increased material costs. For this reason, Krones will increase prices for all bottling and packaging equipment and process technology by 6% effective 1 August 2021. This measure will enable Krones to continue to provide its customers worldwide with innovative products and services meeting the highest quality standards. At the same time, Krones will further intensify the measures launched in 2019 and 2020, making the Krones solutions more competitive yet. Krones intends to benefit from the current growing demand to strengthen its leading market position in the beverage and food industries.

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