Krones, the world’s market leader for beverage filling and packaging technology, achieved its targets for key financial performance indicators in 2013. Revenue rose 5.7% year-on-year, from €2,664.2 million to €2,815.7 million, thus exceeding the company’s growth target of +4%. Krones benefited from its strong market position, broad range of products and services, and an economic environment that was satisfactory overall. The company’s strong competitive position in the emerging markets had an especially positive impact. New orders improved by 3.2% year-on-year to €2,808.8 million in 2013. Orders on hand at Krones totalled €992.5 million at 31 December 2013 (previous year: €999.3 million).
Krones improved earnings performance in 2013 despite continued price pressures. Measures taken to streamline cost structures under the “Value” strategy programme had a positive impact. Earnings before taxes (EBT) rose from €97.9 million in the previous year to €169.7 million. It should be noted that the year-earlier figure was affected by a one-time expense of €37.8 million (Le-Nature’s settlement). Krones generated an EBT margin (the ratio of EBT to revenue) of 6.0% in 2013. That puts the company at the upper end of its target corridor of 5.8% to 6.0%. In 2012, the EBT margin was 5.1% adjusted for the one-time expense relating to Le-Nature’s.
While the EBT margin for the company’s core segment developed very favourably and reached 7.5%, the two smaller segments fell short of the prediction that they would break even in 2013. In the process technology segment, a write-down of approximately €5 million pushed earnings down to-€2.5 million. At -€2.3 million, earnings at Kosme were also lower than expected in 2013 after a weak fourth quarter.
After taxes, Krones earned consolidated net income of €119.4 million for the reporting period (previous year: €67.0 million). That corresponds to earnings per share of €3.84 (previous year: €2.22).
Cash and cash equivalents up considerably
Krones increased its return on capital employed (ROCE), that is the ratio of EBIT to average net tied-up capital, to 16.7% (previous year, adjusted for Le-Nature’s: 13.6%). With that, the company exceeded its ROCE target of 15.0% for 2013. Free cash flow rose from €30.6 million to €67.0 million. The company’s target had been to achieve a level of free cash flow comparable to the previous year. The sale of the company’s treasury shares also had a positive impact on Krones’ liquidity situation. Including the €74 million in proceeds from the sale of treasury shares, Krones’ cash and cash equivalents increased from €107.0 million to €239.9 million last year. The positive net income figure and the proceeds from the sale of treasury stock brought the company’s equity ratio up year-on-year from 38.5% to 42.6% in 2013.
All figures stated here are preliminary figures and may change as a result of our auditors’ findings.
Krones plans to pay out a total of €2.00 per share for 2013
Krones plans to pay a dividend of €1.00 per share for the financial year 2013 (previous year: €0.75). The considerably higher dividend reflects the improved earnings as well as the company’s new dividend policy to pay out 25% to 30% of consolidated profit to shareholders. Moreover, Krones wants to share the proceeds from the sale of treasury shares with shareholders by paying out an additional €1.00 per share.
Outlook
According to forecasts by leading economic research institutions, momentum is likely to be somewhat stronger in 2014 than it was in 2013, both in the industrialised countries and in the emerging economies.
From today’s perspective, Krones expects consolidated revenue to grow by 4% in 2014. Under the “Value” strategy programme, Krones aims to increase efficiency along the entire value chain in 2014. Market prices are expected to remain tight. Earnings should improve further in the company’s core segment, “machines and lines for product filling and decoration”. In the process technology segment, Krones expects earnings before taxes to be positive. The company plans to break even in terms of operating earnings in its smallest segment, “Kosme”. Overall, Krones expects to achieve an EBT margin of around 6.2% in 2014. For its third financial target, Krones intends to achieve a ROCE of over 16%.
Krones will publish its 2013 Annual Report and its report on the first quarter of 2014 on 30 April 2014.
