Profitability improved under challenging conditions
Due to the extensive measures taken to increase efficiency, Krones’ profitability improved in 2022 despite rising material and freight costs. Earnings before interest, taxes, depreciation and amortisation (EBITDA) went up 19.4% year on year, from €312.6 million to €373.3 million. The EBITDA margin rose to 8.9% (previous year: 8.6%). It should be noted that EBITDA in the previous year was positively impacted by one-off effects totalling €17 million. Excluding these one-off effects, the EBITDA margin in 2021 was 8.1%. As forecast, Krones reached the upper end of the EBITDA margin target of 8% to 9% for 2022.
Earnings before taxes (EBT) went up by 36.5%, from €177.3 million in the previous year to €242.1 million. The EBT margin consequently improved to 5.8% (previous year: 4.9%). Excluding the one-off effects, the EBT margin in 2021 was 4.4%. Consolidated net income increased by 32.3% in 2022 to €187.1 million (previous year: €141.4 million). Earnings per share thus rose to €5.92 (previous year: €4.47).
Krones generated an exceptionally large free cash flow of €371 million in 2022
The high order intake and the resulting advance payments from customers had a significant influence on Krones’ free cash flow in 2022. This reached the exceptionally high level of €371.0 million (previous year: €203.3 million). Krones significantly improved the working capital to revenue ratio to 19.0% (previous year: 24.8%). The decrease in average working capital together with the higher earnings before interest and taxes had a positive impact on return on capital employed (ROCE). Krones significantly improved ROCE in 2022 to 14.1% (previous year: 10.0%), thus exceeding the target of 10% to 12%.
The company’s net cash (cash and cash equivalents less bank debt) amounted to €669.5 million at the end of 2022 (previous year: €378.3 million). The equity ratio was 38.3% (previous year: 39.8%). Overall, Krones continues to possess a very robust financial and capital structure.
All stated figures are preliminary and are subject to change in the course of auditing by the independent auditors. Krones publishes its Annual Report for 2022 on 23 March 2023.
Krones forecasts further revenue and earnings growth for 2023
Krones started the 2023 financial year with an extremely large order backlog. At the same time, various uncertainties mean that the business environment remains challenging for Krones. These include geopolitical risks in Europe and other parts of the world, and also high inflation and interest rates in many countries. Material shortages and problems in global supply chains remain an uncertainty factor. Based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones, the company expects consolidated revenue growth of 8% to 11% in 2023.
With increasing revenue and continued implementation of the cost optimisation measures, Krones aims to once again improve profitability this year compared to 2022. Due to the company’s innovative solutions and good project work at customers, Krones succeeded in implementing price increases in 2022. The higher prices will enable the company to compensate for future cost increases. At group level for 2023, the company forecasts an EBITDA margin of 9% to 10%.
For the third performance target, return on capital employed (ROCE), Krones expects an increase to between 15% and 17% in 2023.