Krones significantly increases revenue, order intake & profitability in 2021

Krones recovered very well in 2021 from the pandemic-related recession in 2020, the company improved revenue by 9.4% to EUR 3,634.5 million
Krones significantly increases revenue, order intake & profitability in 2021
Photo - Krones

Based on the preliminary figures for 2021, Krones achieved the upper end of the guidance range for the upgraded growth and earnings targets published in July 2021. As a leading full-service supplier to the international filling and packaging industry, the company benefited in 2021 as markets recovered from 2020’s pandemic-related slump.

Revenue increased by 9.4% year on year, from EUR 3,322.7 million to EUR 3,634.5 million. This means Krones reached the upper end of the upgraded growth target published in July 2021 for the full year 2021 (7% to 9%).

Investment confidence among Krones’ customers recovered faster and more strongly than expected in 2021 from the 2020 pandemic-related slump. Order intake increased by 30.5%, from EUR 3,307.0 million to EUR 4,316.2 million. This means that the contract value of orders in 2021 not only exceeded pre-crisis levels, but also reached a record high. Krones had orders on hand totalling EUR 1,893.0 million at the end of 2021. The order backlog thus exceeded the previous year’s figure by 56.3%.

Profitability benefited from high-capacity utilisation and strategic measures Krones’ profitability improved significantly in 2021. In addition to better production capacity utilisation, this was also a result of strategic measures that the company continued to implement in 2021. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased from EUR 133.2 million in the previous year to EUR 312.6 million. The EBITDA margin rose to 8.6% (previous year: 4.0%). Adjusted for one-off effects on EBITDA in both 2021 and 2020, the EBITDA margin improved from 6.2% in the previous year to 8.1% in the reporting period. Krones consequently reached the upper end of the upgraded EBITDA margin target of 7% to 8% published in July 2021.

Earnings before taxes (EBT) climbed from EUR 36.6 million in the previous year to EUR 177.3 million in 2021. This corresponds to an EBT margin of 4.9% (previous year: −1.1%). Adjusted for one-off income and expenses, the EBT margin was 4.4% (previous year: 1.3%).

Krones generated consolidated net income of €141.4 million in 2021 (previous year: consolidated net loss of EUR 79.7 million). Earnings per share improved to EUR 4.47 (previous year: EUR 2.52).

Krones generated a large free cash flow of EUR 203 million in 2021

Krones’ free cash flow of EUR 203.3 million in 2021 was only slightly down on the very high figure from the previous year (EUR 221.3 million). The company significantly improved the working capital to revenue ratio to 24.8% (previous year: 28.3%). This was below the target corridor of 26% to 27%. At EUR 378.3 million, Krones’ net cash (cash and cash equivalents less bank debt) was significantly higher at the end of 2021 than a year earlier (EUR 184.9 million). The equity ratio was 39.8% (previous year: 39.4%). Overall, the company continues to possess a very robust financial and capital structure.

All stated figures are preliminary and are subject to change in the course of auditing by the independent auditors. Krones publishes its Annual Report for 2021 on 24 March 2022.

Krones provides guidance for the 2022 financial year

Krones made a strong start to the 2022 financial year with a very large order backlog. At the same time, various uncertainties mean that the business environment remains challenging for

Krones. These include material shortages and problems in global supply chains, political risks in Europe and other parts of the world as well as strong inflation in many countries. It is also uncertain how the Covid-19 pandemic will continue to play out around the world.

For the full year 2022, based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones, the Executive Board forecasts revenue growth of 5% to 8% with an improved EBITDA margin of 8% to 9%. From 2022 onwards, return on capital employed (ROCE) replaces the working capital to revenue ratio as Krones’ third key performance indicator. The target for ROCE in 2022 is 10% to 12% (2021: 10.0%).

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