Krones Presents Strong Nine-Month Figures

Last Updated: 15. November 2023By

Many machine and plant builders are currently suffering from the weaker economic development. Not so for the German plant builder Krones. The medium-sized family business has even raised its sales forecast this year and presented very strong nine-month figures a few days ago.

Nevertheless, the Krones share has been slightly in the red since the beginning of the year. Alone up to the highs reached in April this year, there was more than 15% air. Before I go into the latest figures in detail, I will introduce the company briefly.

Krones AG:โ€ˆA short portrait Krones AG plans, develops and manufactures individual machines and turnkey plants for all areas of filling and packaging technology and beverage production. Krones is regarded as one of the world’s leading companies in the industry.

The customers include international companies in the beverage, food and chemical and pharmaceutical industries. Krones offers all services from building beverage factories to delivering the finished products from one source.

To improve production processes, the company works closely with its customers and develops individually tailored products and services. In addition to its products, Krones offers a comprehensive service portfolio in the after-sales area, which includes the worldwide assembly, commissioning, maintenance or conversion of plants.

Clear sales and earnings growth Now let’s look at the strong figures for the first nine months of the current year, which Krones presented a few days ago. Demand for Krones products and services is still very good. The order intake has recently increased further and the order backlog has climbed above the 4 billion euro mark for the first time.

Sales rose 14.5% to almost 3.5 billion euros. The earnings before interest, taxes and depreciation (EBITDA) could even be improved by 23% to 332.3 million euros. The EBITDA margin therefore rose from 8.9 to 9.5%. In addition, the forecasts for the current financial year were confirmed.

The Krones Board of Directors continues to expect a sales growth of 11 to 13%. In addition, the company wants to further improve its earnings power and forecasts an EBITDA margin of 9 to 10% for 2023. If these goals are achieved, this will be the basis for another attractive dividend next year.

Based on the strong nine-month figures and the full order books, the Krones share is too low at prices around 100 euros according to my analysis. In addition, Krones has a very strong balance sheet and is a good dividend payer. This makes the Krones share worth a look despite the stronger price fluctuations in the industry for value investors.