Affected neither by the turbulences on the international capital markets, nor by the debt and euro crises, Krones, the world’s market leader for beverage filling and packaging technology, progressed its growth curve during the first three quarters of 2011.
From January to September 2011, the company’s sales rose by 14.6 % compared to the preceding year, from 1,583.0 m euros to 1,814.2 m euros. Krones recorded its highest rates of increase in Asia, South America und Russia. Order bookings rose by 17.0 %, from 1,617.7 m euros in the preceding year to 1,892.7 m euros. Krones benefited overproportionally from growth in the total market, since the company operates as a complete-package vendor. Compared to the previous year, demand rose in all major sales regions. Krones’ order backlog at the end of September was 987.3 m euros (preceding year: 923.2 m euros).
In the period under review, Krones’ profitability showed a significant improvement over the preceding year. This essentially reflects market growth in the newly industrialising countries. Initiatives taken by Krones to upgrade its performance capabilities have also benefited the margin figure, as exemplified by production operations of further enhanced efficiency.
Earnings before taxes (EBT) rose in the first three quarters of 2011 from 47.0 m euros in the previous year to 84.1 m euros. This means the EBT margin, the result before taxes in proportion to total turnover during the year’s first nine months, was 4.6 % (preceding year: 3.0 %). The bottom line showed that Krones earned 59.3 m euros (preceding year: 31.9 m euros) from January to September. Earnings per share were 1.97 euros, following 1.05 euros in the preceding year.
Because of the debt crisis, macro-economic prospects deteriorated in the third quarter of 2011. In Europe and the USA, particularly, economic growth is now expected to proceed significantly more slowly than was being forecast in mid-year. So far, the gloomier cyclical picture has not yet affected Krones’ own business.
Following the first three quarters of 2011, Krones has moved closer to its target of increasing sales by more than 10 % compared to the preceding year, and exceeding the previous record figure from 2008 of around 2,381 m euros. In the “Value” strategic programme, the company has mapped out medium-term growth targets. Krones can achieve these goals only if the company possesses sufficient properly qualified staff.
This is why this year Krones has significantly upsized its workforce, not least through extensive hirings of skilled and motivated temporary workers. This will adversely affect earnings in the short term. Nonetheless, Krones AG’s Executive Board anticipates that in 2011 as a whole the result will show a significant improvement compared to the preceding year, and that a pretax return on sales of about 5 % (preceding year: 3.3 %) can be achieved.
From today’s perspective, it is difficult to predict how the world economy will develop in 2012. Because our customers are from the non-cyclical consumer goods sector, Krones is not heavily dependent on economic cycles. Therefore, assuming that the global economy does not deteriorate further, the company still believes to achieve its target of increasing earnings in all of our segments in 2012 and generating a pre-tax total return on sales of around 7 %.