Krones Ag Adr

Well, ladies and gentlemen, good afternoon and a warm welcome from my side. My name is Olaf Scholz, Head of Investor Relations here at Croons. In a macroeconomic environment marked by uncertainties, we have confirmed our financial targets for 2025 and have also increased the profitability in the first half year 25. Christoph Klenk and Uta Anders will give you today more details about these figures and give you also additional information. After the presentation, you will have the opportunity to ask questions. I think you also know how the Q&A session will work. Please use the function Raise Your Hands in Teams or send me just a short email, and then I will hand over to you. Please be also reminded that this call will not be recorded, and please deactivate any functions of recording at your Teams. I think we can start with the presentation, so I hand over to Christoph Klink. Christoph, the floor is yours.

Hola, thanks a lot. Welcome from Utah and myself. Happy to have you here in our conference call for the second quarter and the first half here. As always, we run you very briefly through the presentation. Of course, we skip the summary. Most of it, Olaf, is anyway done. And we come directly to the numbers. Here you can see without going to the numbers because you will see all of them. But nevertheless, we are happy what we have achieved so far. Even if not being contributed today in the share price, we see all the time some kind of a miracle for us that with those numbers, we are not matching expectations. If we come directly to order intake, again, here I can comment. We are quite happy with the, let me say, wealth economy Some areas in struggle because of all the things we know. Nevertheless, we are happy what we have achieved here. It's more or less on the same level as last year. And we had in, you remember, in last year in the Q1, a very strong order intake. And we are capable this year in both of the quarters, Q1 and Q2, being close to the numbers we had last year. So all in all, for us, a very good situation. And I can say We believe our markets are still robust. Our intake has been influenced by some of the decisions which have been postponed, in particular North America, because of the uncertainty. And we cannot yet really make a statement on what would be hopefully the deal which has been made on Sunday. And we all hear that there are uncertainties behind what that deal means for our customers. in their way to do decisions for the projects which are pending. But nevertheless, we have been capable of compensating most of it with other regions and other countries, so we are quite happy with that one. Looking to the order backlog, I mean, no surprise here. It's actually in line with the order intake. You see, we are still on a very comfortable level. And with that level, we are reaching into Q2 next year with, let me say, capacity utilization, which gives us a quite safe situation in terms of the planning, at least for the first half of next year. And we do not expect that all the intake will go away. So I would say security that 2026 goes on a good level is given there. Let's jump then to how the split is in the markets, even here, no surprise, actually. I mean, you might look at Central and North America a bit more critical, since you see there a decrease of the numbers, but nevertheless, this has nothing to do with tariffs, first of all. This was expected, because we saw that the, let me say, the investment boom had a bit cooled down in North America, but we believe the 21% you see here is a quite stable level, which might continue for the future. And We have in particular North America many projects which are the second half of the year for commissioning for our bottling lines and for inter-logistics. So this might give a change maybe in the second half of the year to a certain extent. I mean, if you look to South America and the Middle East have developed very nicely, quite happy with how things were going there. And if you look to China, where everybody talks about the Chinese economy is in struggle, for us it's still working good. And if we look on the prospect we have right now, we are satisfied with China. A bit more critical, we see Asia-Pacific. This could be on a higher level. And here there's one country contributing to, let me say, the numbers which are not as high as they should be. This is in particular India. Since there the investments have a bit slowed down because so many investments were going into the country that that needs to be first utilized and brought into the market and being harvested on. before new investments are coming up. But all in all, we believe even Asia Pacific is in good condition and delivers fundamental for the future. So that's from, let me say, the market for the time being. My statement's made, and I hand over with that to Uta.

Thank you, Christoph. Good afternoon also from my side, and as usual, I will continue with P&L information segments and then later on everything around the balance sheet. Let's start with revenue development. I mean, you can see 2.727 billion, 6.7% growth year over year. And yes, the second quarter was only 0.6% growth. I mean, we had forecasted or communicated also in our conference call in Q1 that we expect the second quarter be a little bit lower, just because of the fact that there is full Easter in it, that there is with Sunday and all the other public holidays which we have here in Germany, and which there we are lacking working days and with working days, of course, then also POC revenue recognition. So the revenue which we have recognized was in line with our expectations. And looking at the full year, we are confirming our guidance, our guidance being 7% to 9% revenue growth. And yes, we are well aware that the second half of the fiscal year must be higher than the first one. And first of all, we have the backlog to achieve that. Secondly, production schedule also confirms it. And thirdly, also everything, as Christoph already said, installation and commissioning, not only in North America, is scheduled in a way that we can achieve our 7% to 9% growth. Continuing on with EBITDE, yeah, from our point of view, a good development. 288.5 million EBITDA, which is a year-over-year growth by 12.6%. And looking at the margin, 10.6%, whereas last year we had 10.0%. There is still some diluting effect of net style included. And also, if we look at the second quarter standalone, also here, we have achieved 10.6%. And with our numbers, which we show here, We confirm our guidance for the fiscal year, 10.2 to 10.8%. And this is why, I mean, we know the backlog. We know the price quality in the backlog. We know the utilization of our resources. And also, the effects of the strategic measures, including cost reduction measures, are ascent. EBT and EBT margin, year-to-date 205.5 million, 10.7% increase, 7.5% margin. So here you can see that compared to last year, it's only a 0.2 percentage points increase. And this has two reasons. Reason number one is We had in last year, we had an extraordinary positive effect in financial income of 4.5 million. So that contributed to the 7.3%. There's none included in year-to-date 2025. And then secondly, also depreciation is increased compared to last year. But overall, also EBT margin was in line with our expectations. Personal and material expense, let's start with material costs. I mean, as you can see, despite of the fact that we have increased revenue by 6.7%, we have only increased material costs by 6 million, and that brings down the ratio to 47%, so very similar picture as we had it in quarter one. I mean, that shows that we have realized cost reductions in material costs. On the other hand, we can see in the personal cost, I mean, as we also saw it in quarter one, we are above 30%. And also, we are above last year's number. And this is because of some of the increases in the tariffs, but also because of the headcount we have increased. And looking at the full fiscal year, we expect the number to reduce, the ratio to reduce. Kronos employees worldwide. We have slowed down the growth in employees, as you can see, compared to end of 2024, 333 employees in addition, bringing it to 20,712, which is 1.6%. And, I mean, if we look at where we have increased, I mean, first of all, the breakdown between Germany and outside of Germany is more as it was end of last year and if i look at what we increased it's mainly service technicians this is the bulk of the increase more than 100 and in addition to that all what i had communicated also the other calls digitalization but also strengthening for instance project management but also being able to grow further so far for all overall information on profitability for the group. Now let's come to the three segments. And I mean, filling and packaging technology is very much in line with what I already mentioned with the whole group. So first of all, if we look at the revenue development, 2.301 billion, this is a 7% growth. So it's on the upper end, on the upper end, yeah, on lower end, sorry, on the lower end of the guidance of 7 to 9% year-to-date, but we see also a strong EBITDA development year-to-date with 10.8%, and compared to last year, also an increase by 0.4 percentage points. Also here, we confirm our guidance for both revenue growth as well as EBITDA margins, so 7 to 9% revenue growth and EBITDA margin 10.5. to 11%. Moving on to process technology revenue, 252 million, as you can see, very similar to what we have recognized last year. But if we look at the EBITDA margin, you can see that we have increased it further to 10.7% from 10.1 last year. And this is also because we have a better mix in here. We have more component business, pumps and valves, And on the other hand, the customer or the eternity project, there we have some little delay. So that's why it's a better mix than also from a margin point of view. If I look at the guidance for process technology, also here, we confirm our guidance for revenue growth, which is 0 to 5%, and EBITDA margin, which is 9 to 10%. Last but not least, intra-logistics. Year-to-date revenue, 174 million, and this is 22 million more than we had last year at this point of time, and it's a 14.4% growth, so slightly below our growth target for the whole fiscal year, but you know that in inter-logistics, we normally have a significantly higher second half of the fiscal year than we expect also this year. Looking at the margin on the other hand, I mean, we can see that we have increased margin significantly to 7.1%. And also here, I want to confirm both our guidance for revenue goals, 15 to 20%, but also 6.5 to 7.5% for EBITDA margin. Now moving on to cash and equity. And looking at the middle part of the slide, we can see that as of end of June, we were holding 377 million cash. and reduced credit lines and free credit lines of 2 and 848 million. We have a solid liquidity situation of 1.225 billion, which gives us the opportunities for future goals for M&E opportunities, but also gives us resilience in difficult macroeconomic times. Looking at equity situation, you can see that we have increased equity by 46 million. And that's the composition of, first of all, net income, 146 million. Secondly, we paid out in the second quarter the dividend, 82 million, and the remainder is a mix of non-income effects, which we have in equity. All in all, and also with the constant balance sheet sum, we see that our equity ratio has increased to 41.4%. Working capital, first of all, in the middle part of the slide, we can see that overall, last three fiscal years, we are more or less stable at 17%, so well below our 20%, which we have always mentioned as kind of an orientation for us. Looking at the breakdown of the working capital, There are three developments which I would call positive. There's one development which we will pay further attention to. Let me start, first of all, with the positive ones. I mean, receivables PUC, as you can see, 36%, as we had it also end of last year. Inventory, 12.6%, so it reduced further. That was what we also communicated throughout our last course. that we want to keep it constant despite of increased revenue received premiums repayments is also more or less on the same level payment is where we're going to focus more on to because 13.1 percent um is below our expectations here and if i look at the overall working capital as of end of june we are holding 985 million uh working capital which is an increase by 130 and the bulk of it is actually coming from here. Free cash flow. Free cash flow before M&E, as we also saw it in our communication, is 46.7 million, and it's broken down by the earnings before taxes, which we have communicated as a non-cash changes, where the bulk of it is depreciation. Change in working capital, which I went through a minute ago, Other assets and liabilities, major portion here, also tax payments, and then cash flow from operating activities, 103. CapEx, still underproportional, as we have it usually throughout the fiscal year, and then 46.7 before M&A. M&A activities are the same as we have communicated them in the first quarter, and free cash flow as reported, 44.5, and financing activities are there. That is mainly the dividend payment we had. And all in all, we have a change in net cash of 65 million, which brings us to our 377 million, which I communicated two pages ago. Freakish flow for the whole fiscal year are looking first half of the fiscal year and the rest. I mean, 47 as I said, and we need a strong second half year of the fiscal year. I mean, as you know, we usually have a very strong fourth quarter, and that's also what we count upon this fiscal year. last guiding figure and 19 so a small increase compared to 2024 and also in align with our guidance which is uh 18 to 20 percent and if i look at the breakdown uh two components as you know ebit there we have a significant increase. And if I look at the average working capital, we also see an increase because of the increased capital expenditure or the investment we are doing, but also because of working capital as I had communicated a minute ago. Outlook. Let me continue with the outlook. I mean, all has been said by me already. We are confirming our outlook for revenue growth, 79%. EBITDA margin 10.2 to 10.8, BOCES 18 to 20%. And the same is true for our segments, filling and packaging, seven to nine revenue goals, 10.5 to 11 EBITDA, process technology, zero to five, nine to 10, and inter-logistics, 15 to 20, and 6.5 to 7.5%. Yeah, and our midterm targets for 2028