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Krones Reports Lower Order Intake for Q2

4.7

Andrew R. Michaud

August 07, 2023

Shares in Krones, a German bottling equipment manufacturer, experienced a decline on Tuesday following the company's announcement of lower order intake for the second quarter. Despite the decrease, Krones reassured investors that order trends are returning to a more normal level compared to the exceptionally high levels recorded last year.

At 1146 GMT, shares were down 6% at EUR103.

Second-quarter order intake for Krones amounted to EUR1.27 billion ($1.40 billion), marking a decline from the previous year's EUR1.55 billion during the same period. While this decrease may initially concern some investors, the company remains optimistic about the future. Krones expects order intake to stabilize in the second half of 2023.

One factor contributing to Krones's lower order intake is the company's supply chain challenges. Shortages of electrical components have affected productivity and resulted in additional costs. However, despite these obstacles, Krones's order backlog as of June 30 climbed 30% compared to the previous year, standing at EUR3.93 billion.

Thanks to strategic adjustments, such as implementing price increases, Krones managed to offset rising material costs and reported a second-quarter net profit increase to EUR57.9 million from the previous year's EUR43.0 million. Additionally, revenue grew by 12.5%, reaching EUR1.12 billion.

Looking ahead, Krones maintains its recently upgraded outlook for 2023. Industry analyst Peter Rothenaicher from Baader Helvea expressed confidence in the company's conservative guidance.