Germany: Krones CEO Klenk exceeds expectations

CEO Christoph Klenk reported better than expected results for his first year with Krones AG. The German Beverage filling and packaging company could increase revenue by 6.9% from €3.17bn in 2015 to €3.39bn in 2016 and adjusted for acquisitions by 4.2%. The forecast for 2016 anticipated only a growth of 3%. Earnings before taxes (EBT) rose year-to-year 6.4% to €237.6m from €223.3m.

In 2016 Krones acquired 60 % of System Logistics S.p.A. in the Italian city of Fiorano and 80 % of Trans-Market Sales & Equipment Inc. in Tampa, Florida, whose results were already included in 2016.

Most analysts did expect a weaker performance because of the merger of the two largest breweries in the world AB InBev and SABMiller, adverse economic conditions in major markets like Brazil and Russia and a reduced growth of the Chinese economy. On top came uncertainties because of the war in Syria and unstable political conditions in many other Arab countries, the British vote for leaving the European Union (Brexit) and  the Euro-crisis in Greece and other southern European countries, which usually should affect investments in durable goods.

The number of employees increased in 2016 by 1.097 to 14.443 with more than two thirds of the new staff being employed outside of Germany.

In 2017 Krones expects consolidated revenue to grow by 4%, which would be slightly less than last year. The projections of a further earnings growth and a stable EBT margin, which is expected to remain at 7.0%, does not consider any possible acquisitions.

Today Krones announced the purchase of US-based Process and Data Automation (PDA). PDA is an industrial control systems integrator across several sectors including liquid food based in Erie, Pennsylvania. The deal is expected to enhance Krones’ controls and integrated data handling capabilities in the North American market.

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