Growth with stable profitability

Kro­nes, man­u­fac­tur­er of fill­ing and pack­ag­ing tech­nol­o­gy, con­tin­ued its sta­ble growth in 2017. Rev­enue increased 8.8% year-on-year from €3,391 mil­lion to €3,691 mil­lion. Adjust­ed for acqui­si­tions, rev­enue was up 7.2% year-on-year. The main rea­son was that the com­pa­ny was able to invoice more projects than expect­ed in the fourth quar­ter. Order intake was up 10.0% year-on-year to €3,787 mil­lion in 2017. Adjust­ed for acqui­si­tions, the increase was 7.1%. At the end of 2017, the com­pa­ny had orders on hand totalling €1,240 mil­lion, which is 8.3% more than the pre­vi­ous year.
The com­pa­ny broad inter­na­tion­al diver­si­fi­ca­tion and com­pre­hen­sive port­fo­lio of prod­ucts and ser­vices also served the com­pa­ny well in 2017.

The EBT margin was stable at 7.0%

Kro­nes fur­ther increased earn­ings before tax­es (EBT) as fore­cast in 2017. EBT improved 8.9% year-on-year to €259 mil­lion. The EBT mar­gin remained sta­ble at 7.0%, as in the year-ear­li­er peri­od. Thus, the com­pa­ny met its EBT mar­gin tar­get for 2017. As expect­ed, mar­ket prices pro­vid­ed no sup­port. The firm was able to off­set increased costs with increased effi­cien­cy. Expand­ing our glob­al foot­print and gen­er­al cost-cut­ting mea­sures helped here.

Robust financial and capital structure

The ratio of aver­age work­ing cap­i­tal for the past four quar­ters to rev­enue was up from 26.7% in the pre­vi­ous year to 27.3% in 2017. The tar­get for 2017 was 27%. The com­pa­ny is not sat­is­fied with the devel­op­ment of free cash flow, which decreased to –€151 mil­lion (2016: +€49 mil­lion). As a result, net cash and cash equiv­a­lents (that is, cash and cash equiv­a­lents less lia­bil­i­ties to banks) decreased to €157 mil­lion (pre­vi­ous year: €369 mil­lion). The com­pa­ny’s equi­ty ratio improved to 43.8% (pre­vi­ous year: 39.9%). Over­all, Kro­nes con­tin­ues to pos­sess a very robust finan­cial and cap­i­tal structure.
All fig­ures stat­ed here are pro­vi­sion­al and may change fol­low­ing com­ple­tion of the audit.

Outlook

Based on the cur­rent macro­eco­nom­ic prospects and devel­op­ments in the mar­kets rel­e­vant to Kro­nes, the com­pa­ny expects con­sol­i­dat­ed rev­enue to grow by 6% in 2018. Prof­itabil­i­ty is expect­ed to remain sta­ble despite invest­ment in dig­i­tal­i­sa­tion and start-up costs asso­ci­at­ed with expand­ing the company’s glob­al foot­print, in par­tic­u­lar for the new site in Hun­gary. The firm expects to post an EBT mar­gin of  7.0% in 2018. The company’s third finan­cial per­for­mance tar­get, work­ing cap­i­tal to rev­enue, is expect­ed to improve to 26%.
Kro­nes will pub­lish its annu­al report for 2017 on 15 March 2018.