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    Krones Group Annual Report 2023

    • Global economy to grow 3.1% in 2024 
    • Krones forecasts further revenue growth in the current year
    • Profitability once again to increase in 2024

    Report on expected developments

    Global economy expected to grow 3.1% in 2024

    In January 2024, the International Monetary Fund (IMF) projected global economic growth of 3.1% for 2024. This is once again below the recent long-term average of 3.8% (2000-2019). The Russia-Ukraine conflict and the Middle East conflict remain negative factors for the current year. Economic activity is also being tempered by persistently high interest rates aimed at curbing inflation. On the positive side, the experts note the resilience of major economies – and especially the US – to the recent crises and the fact that inflation has fallen faster than expected.

    The IMF economists see downside risks to the growth forecast among other things in a further weakening of the Chinese economy and the increasing emergence of geo-economic blocs inhibiting free trade. A further risk factor identified by the experts is core inflation, which is proving to be highly persistent. Larger swings in commodity prices (for food, oil, gas, fertilisers, etc.) due to geopolitical conflicts and climate change could also reduce the expected growth.

    For industrialised economies, the IMF once again anticipates GDP growth to be below average in 2024, at 1.5%. As Europe is no longer suffering as severely from the Russia-Ukraine conflict as in the last couple of years, the IMF forecasts that the euro area will see growth rise to 0.9%. Germany continues to lag behind with projected growth of just 0.5%. The IMF expects the US economy to grow by 2.1% in 2024. In Japan, growth is likely to slow somewhat after a good year in 2023. The IMF’s forecast is for growth of 0.9% in the current year.

    In emerging and developing markets, the IMF predicts economic growth of 4.1% in 2024, as in the previous year. For China, the IMF expects GDP growth to fall sharply, from 5.2% in the previous year to 4.6% in the current year. India, which is now the world’s fifth-largest economy after Germany, will once again record the highest growth rate among the emerging and developing markets in 2024, at 6.5%. While Latin America will also have below-average growth (of 1.9%) in the current year, the Middle East/Central Asia region is set to grow by 2.9%.

    Percentage GDP growth in 2024 (forecast)



    The Russia-Ukraine conflict, the Middle East conflict and high interest rates will slow global economic growth in 2024. According to the IMF, the euro area economy will remain weak with growth of 0.9%, while the emerging and developing markets are expected to grow by 4.1%.


    Weak economy weighing down machinery sector

    Year-on-year change in German mechanical engineering output, in %


    The German Mechanical Engineering Industry Association (VDMA) expects that the ongoing slump in the global economy will continue to impact the entire industry this year. After a slight 1% fall in 2023, the VDMA expects output to decline by 4% in 2024. The main reason for the forecast decline, besides the general weakening of the economy, is the significantly smaller order backlog in the entire sector compared to the previous year. This is expected to provide less of a bolster for production in the current year. It should be noted in general here that the various subsectors of the industry are developing at very different rates.

    The VDMA expects that the food processing machinery and packaging machinery subsector relevant to Krones will show growth of 4% to 5% in 2024*.

    * Source: VDMA Food Processing and Packaging Machinery Association, February 2024


    Krones’ customers benefiting from rising beverage consumption

    Global inflation rate 2014 to 2022 and forecast to 2025, in %



    Consumer spending is a key determinant of Krones customers’ propensity to invest, and thus of demand for beverage filling and packaging machinery. Low unemployment and moderate inflation rates have a positive effect on consumer purchasing power. They thus support demand for packaged food and beverages and indirectly influence demand for our company’s products and services. With ongoing low unemployment and with inflation on the way down again, we expect overall consumer and customer demand to be stable in 2024. Private consumption has also proved to be a pillar of economic growth in many countries during the recent difficult years. According to Global Data figures, the global consumption of packaged beverages, which is important for our customers, is expected to grow at an average annual rate of 2.8% from 2023 to 2026.


    Good overall prospects for positive business performance in 2024

    Krones is optimistic overall going into the 2024 financial year. The reasons for this are a large order backlog and sustained good demand for Krones’ products and services – despite only slow economic growth.

    However, there are still risks for the global economy and thus also for Krones’ business performance. 2024 will be characterised by economic and geopolitical uncertainties. For example, it is difficult to predict how the Russia-Ukraine conflict and the Middle East conflict will develop and what impact they will have on the global economy. If these risks do not have a greater impact on the economy than is currently expected, there should be no negative effect on Krones’ order intake from customers, and investment confidence in the beverage industry will develop positively.

    Overall, we fundamentally expect that the global market for filling and packaging equipment will develop well and that selling prices follow a positive trend in 2024. Competition in our markets and cost pressure will again remain strong this year.

    The medium and long-term outlook remains positive. Consumer demand for packaged beverages and liquid foods is growing steadily, driven by a number of megatrends such as the increasing world population and the growing middle class in emerging and developing markets. The focus on sustainability and digitalisation is likewise making for stable demand growth for innovative beverage filling and packaging machinery.

    Because they share comparable sales and procurement markets, the economic, sectoral and company-specific outlooks essentially apply to all three segments of the Krones Group.


    All three segments to increase revenue and profitability in 2024

    In order to counteract the rise in material and labour costs throughout the Group, Krones will continue to adhere strictly to its pricing strategy in all three segments in the current year and will maintain sales prices in line with the market. We will also continue to press ahead with the steps taken by the company to optimise costs and increase efficiency.

    In addition, we aim to exploit growth opportunities in our market throughout the group with innovations and future-ready products and services. Our focus here is on the areas of sustainability, digitalisation and system solutions.

    Acquisitions are an option in all segments. We focus on medium-sized, profi­table companies that complement the existing portfolio technologically and regionally or provide access to markets beyond the beverage and liquid food ­industry.

    The goal in 2024 is to increase profitability in all segments, supported by higher revenue.


    Filling and Packaging Technology segment


    In the core segment, Filling and Packaging Technology, Krones will continue to streamline and optimise internal structures and processes in the current year. For example, the PET recycling activities will be managed as a standalone unit from mid-2024 in order to even better exploit the growth opportunities in the plastic recycling market. In addition, the focus in the core segment is on expanding our global footprint. The company will expand production in Hungary and China together with the related supply chains and strengthen the global service network by recruiting additional local talent. This ensures that Krones is close to its customers and can even better leverage the opportunities of digitalisation in production and service.

    Our customers’ ambitious goals of sustainable low-carbon production will also support the growth of the core segment in the current financial year. -Krones is very well positioned with its resource-efficient enviro products and its sustainable and circular PET solutions. In addition, the company will make use of its line expertise to consolidate and expand its market position in efficient, reliable, high-performance filling and packaging lines for PET, glass, cans and aseptics.

    For the core segment in 2024, Krones expects 9% to 13% revenue growth with an EBITDA margin of 10.3% to 10.8%.

    The forecast figures include the effects of the acquisition of Netstal Maschinen AG, which is still to be finalised.


    Process Technology segment


    In the Process Technology segment, as elsewhere, Krones is benefiting substantially from the trend among our customers towards sustainable and economical production. The company is well positioned here with our energy-efficient solutions for beverage production and handling and our technologies for the production of alternative proteins. Expansion of the after-sales and components business together with the successful integration of Ampco Pumps, USA, which was -acquired in 2023, is also expected to make an additional contribution to growth and earnings.

    Krones will continue to optimise the cost structures in Process Technology in the current year. This involves streamlining and digitalising processes and structures while making the global units more flexible and interconnected.

    Krones forecasts revenue growth of 15% to 20% for the Process Technology segment in 2024, with an EBITDA margin of around 8% to 9%.

    In 2024, the Process Technology segment is expected to increase revenue by between 15% and 20% year on year and improve the EBITDA margin to between 8% and 9%.


    Intralogistics segment


    The Intralogistics segment benefits from customers saving costs and energy with automation solutions from Intralogistics subsidiary System Logistics, while significantly improving workplace safety and employee workloads.

    To generate further growth in a highly competitive environment, the segment will increasingly exploit the opportunities offered by the dynamically growing North American market. On the products side, the expansion of automated picking systems and autonomous mobile robots is also expected to further improve profitability in Intralogistics.

    Krones forecasts revenue growth of 5% to 10% for Intralogistics in 2024. The EBITDA margin is expected to be between 6% and 7%.


    Krones forecasts that the Group will further increase all three financial targets in 2024

    Krones made a strong start to the 2024 financial year with a comfortable order backlog. At the same time, various uncertainties mean that the business environment remains challenging for Krones. These include geopolitical risks in Europe, the Middle East and other parts of the world. Material shortages and problems in global supply chains that could result from military action along important trade routes remain a source of uncertainty.

    Based on the prevailing macroeconomic outlook and the current expected -development of the markets relevant to Krones, the company expects consolidated revenue growth of 9% to 13% in 2024.

    On the basis of increasing revenue, an ongoing disciplined price strategy and continued implementation of the cost optimisation measures, Krones aims to improve profitability again this year compared to 2023, despite rising material and labour costs. At group level for 2024, the company forecasts an EBITDA margin of 9.8% to 10.3%.

    For the third performance target, return on capital employed (ROCE), Krones expects an increase this year to between 17% and 19%.

    The forecast figures include the effects of the acquisition of Netstal Maschinen AG, which is still to be finalised.

    Krones Group


    Krones expects to further improve revenue, EBITDA margin and ROCE in 2024.