Krones to increase dividend for 2022 by 25% to €1.75 per share
- Krones today published its 2022 Annual Report and confirmed its preliminary figures.
- At the Annual General Meeting for 2022, the Executive Board and Supervisory Board will propose a dividend of €1.75 per share (previous year: €1.40 per share).
- For the full year 2023, the Executive Board is forecasting revenue growth of 8% to 11%, with an improved EBITDA margin of 9% to 10% (2022 actual: 8.9%) and ROCE of 15% to 17% (2022 actual: 14.1%).
Krones today published its 2022 Annual Report. Its title is “Solutions beyond tomorrow”, the company’s new target picture. For the first time, the company has integrated its non-financial statement into the Annual Report as part of the group management report. The non-financial statement contains all important qualitative and quantitative non-financial information on material sustainability topics. By combining its financial and non-financial reporting, Krones underscores the importance it attaches to sustainability in all business decisions. This is also reflected in the company’s “Solutions beyond tomorrow” target picture. With the strategic focus on sustainability, digitalisation and service quality, Krones intends to continue its profitable growth in the future. The company presented new record figures for 2022.
Revenue topped the €4 billion mark for the first time, rising from €3,634.5 million to €4,209.3 million, an increase of 15.8% on the previous year. Krones thus exceeded the upgraded growth target of 10% to 12% published in October 2022 (original target 5% to 8%).
Customer demand for Krones’ products and services was very strong in 2022. Order intake rose by 34.0% year on year, from €4,316.2 million to €5,782.8 million. The order backlog also grew strongly. At the end of 2022, Krones’ order backlog totalled €3,466.4 million. The order backlog was thus 83.1% up on the previous year (€1,893.0 million).
Profitability improved under difficult conditions
Thanks to the company’s great flexibility and wide-ranging measures to increase efficiency, Krones was able to improve profitability in 2022 despite rising material and freight costs and resource shortages. This was also partly due to Krones’ price increases, which enabled the company to largely offset the higher costs. Earnings before interest, taxes, depreciation and amortisation (EBITDA) went up 19.4% year on year, from €312.6 million to €373.3 million. It should be noted that EBITDA in the previous year was positively impacted by one-off effects totalling €17 million. The EBITDA margin improved to 8.9% (previous year: 8.1% excluding one-off effects). As forecast, Krones reached the upper end of the EBITDA margin target of 8% to 9% for 2022.
Earnings before taxes (EBT) rose 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: 4.4% excluding one-off effects). On the bottom line, Krones generated consolidated net income of €187.1 million in 2022, an increase of 32.3% (previous year: €141.4 million). This corresponds to earnings per share of €5.92 (previous year: €4.47).
All three segments contributed to the improvement in earnings
In the Filling and Packaging Technology segment – the largest segment by far – revenue climbed in 2022 by 14.8% year on year to €3,497.3 million. Despite rising material prices and resource shortages, EBITDA increased by 17.5% to €332.7 million. The EBITDA margin rose to 9.5% (previous year: 8.7% excluding one-off effects).
Revenue in the Process Technology segment increased by 23.9% to €367.5 million in 2022. EBITDA went up from €18.6 million in the previous year to €20.4 million. The improved segment earnings reflect the strategic measures implemented by Krones. In 2021, the brewery business was spun off into a separate company and processes were streamlined for project-based business. The EBITDA margin remained almost stable at 5.5% in 2022 (previous year: 6.3%).
Intralogistics has been Krones’ third segment since the beginning of 2022. Its activities were previously part of Process Technology. The new segment’s revenue developed well in 2022, growing by 17.9% to €344.5 million. EBITDA increased by 87% to €20.2 million. The EBITDA margin thus improved to 5.9% (previous year: 3.7%).
Exceptionally high free cash flow leads to significant increase in net cash
The high order intake and the resulting advance payments from customers had a significant influence on the company’s free cash flow in 2022. The free cash flow 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 and the higher earnings before interest and taxes had a positive impact on return on capital employed (ROCE). Krones significantly increased ROCE in 2022 to 14.1% (previous year: 10.0%), thus exceeding the target of 10% to 12%.
Krones continues to have a very robust financial and capital structure. The company’s net cash (cash and cash equivalents less bank debt) amounted to €669.5 million at the end of 2022, €291.2 million more than in the previous year. The equity ratio was 38.3% (previous year: 39.8%).
With the above figures, Krones has confirmed the preliminary figures published on 23 February 2023.
Krones to increase dividend for 2022 by 25% to €1.75 per share
Krones’ long-term dividend policy is to distribute 25% to 30% of consolidated net income to shareholders. At the Annual General Meeting on 23 May 2023, the Executive Board and Supervisory Board will propose a dividend of €1.75 per share for the successful 2022 financial year. This represents a 25% increase in the dividend compared to the previous year (€1.40 per share) and is equivalent to 29.6% of consolidated net income.
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 a source of uncertainty. However, Krones expects that the situation on the procurement markets relevant to the company may ease slightly in the second half of 2023. 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 improve profitability again this year compared to 2022. Thanks to the company’s innovative solutions and good project work with customers, Krones succeeded in implementing price increases in 2022. The higher prices will enable the company to offset future cost increases. At group level, Krones is forecasting an EBITDA margin of 9% to 10% for 2023.
For the third performance target, ROCE, the company expects an increase this year to between 15% and 17%.
Krones has published the Annual Report 2022 online at:
https://www.krones.com/en/company/investor-relations/krones-group-annual-report-2022.php
