Report for the second quarter 2022

• Very strong demand for Krones products and services. Order intake up by 52.0% in first half year to €3,106.4 million. At €3,014.6 million, the order backlog as of 30 June 2022 was almost twice as high as in the previous year.
• Revenue growth accelerated in the second quarter (+18.0%). Revenue from January to June 2022 increased by 15.4% to €1,984.8 million. 
• Despite material shortages and significantly increased material 
• and freight costs, earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 27.2% in the first half year to €175.1 million. The EBITDA margin rose to 8.8% (previous year: 8.0%).
• For the full year, Krones has confirmed the guidance issued in spring, with revenue growth of 5% to 8%, an EBITDA margin of 8% to 9% (H1 2022: 8.8%) and ROCE of 10% to 12% (H1 2022: 11.8%). 
• The Executive Board expects the upper end of the target range to be reached for each of the three target figures. This guidance is subject to the reservation that the war in Ukraine does not further escalate, the coronavirus situation does not worsen and there are no significant energy shortages.
   

Dear shareholders and friends of Krones,

Despite the difficult circumstances, Krones is fully on target with the business results for the first half of 2022. Demand for our products and services remains very strong, despite the recent price increases. At €3.1 billion, order intake was the highest for a single half-year in our corporate history. Our order backlog likewise reached a record level of €3.0 billion. 

The great challenge for Krones now is to process the orders to the usual standard of quality and with acceptable delivery times. We are aided in this by our flexible corporate structures and the enormous creativity of our employees. As a result, we have been able to keep capacity utilisation at a relatively high level despite the material and supply shortages. This is reflected in the positive revenue performance, with revenue increasing by 15.4% to just under €2 billion in the first half of 2022. Our strategic cost-cutting measures are also delivering results. Profitability in terms of the EBITDA margin improved in the first half-year from 8.0% to 8.8%. 

However, the very good course of business so far in 2022 is set against many uncertainties and hard-to-assess risks in the second half-year. The Russian war of aggression against Ukraine is unlikely to end anytime soon, while the Covid-19 pandemic is by no means over. In addition, material and supply shortages and high inflation rates worldwide will continue to occupy us for some time to come. Moreover, a complete halt to Russian gas supplies would have consequences that are almost impossible to predict. The global economy is already suffering under the many pressures. At the end of July, the experts at the International Monetary Fund once again reduced their forecast for global growth in 2022, from the original 4.4% at the start of the year to now just 3.2%. 

Despite all the uncertainties, Krones is maintaining its full-year guidance for the key financial performance indicators in 2022 unchanged. The Executive Board is confident that, working as a team at Krones, we will master the challenges that lie ahead. The company stands on strong financial and technological foundations. Krones will underscore its technology leadership at the upcoming drinktec trade fair in September. There, we will be presenting a wide range of innovations. These will be all about saving resources and media in production, sustainable packaging solutions and digital transformation. In addition, we will also be presenting our future-oriented target vision under the new Krones slogan, “Solutions beyond tomorrow”. 

Christoph Klenk
CEO

Krones confirms full-year guidance for 2022 after good first half-year

Despite the difficult market conditions, Krones came well through the first half of 2022 to end the half-year with a very large order backlog. The company is consequently also confident for the full year 2022. Krones’ business environment nevertheless remains challenging. Uncertainties and risks include material shortages and problems in global supply chains, rising material and energy procurement prices, political risks in Europe and other parts of the world, and also strong inflation in many countries. It is also uncertain how the Covid-19 pandemic will continue to play out around the world and how the impacts of the war in Ukraine will affect the growth of the global economy in 2022. Threatened energy supply shortages or a complete halt to Russian gas supplies would have consequences that are almost impossible to predict.

Based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones, the company continues to forecast consolidated revenue growth of 5% to 8% in 2022, with good chances of achieving the upper end of this guidance range.

Thanks to higher revenue, higher selling prices and continued implementation of the cost optimisation measures, Krones aims to improve its profitability this year compared with 2021. At group level for 2022, the company continues to forecast an EBITDA margin of 8% to 9%, with the upper end of the target range likely to be achieved. The same applies to the third performance target, return on capital employed (ROCE), for which Krones expects an increase this year to between 10% and 12%.  

The guidance for revenue growth and the EBITDA margin given for the three segments of the Krones Group in the 2021 Annual Report also remains unchanged.