Krones, the world’s leading manufacturer of filling and packaging technology, published on Thursday its preliminary results for 2017. The company continued its stable growth in the last year. 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 German engineering 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 totaling €1,240 million, which is 8.3% more than the previous year.
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 Neutraubling/Germany based company met its EBT margin target for 2017. As expected, market prices provided no support. Krones was able to offset increased costs with increased efficiency. Expanding our global footprint and general cost-cutting measures helped here.
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.
Based on the current macroeconomic prospects and developments in the markets, the company expects consolidated revenue to grow by 6% in 2018. Profitability is expected to remain stable despite investment in digitalization and start-up costs associated with expanding the company’s global footprint, in particular for the new site in Hungary. Krones 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.