The Executive Board of Krones AG has now decided on the next structural efficiency measures and concretised measures to sustainably increase Krones' profitability.
As part of the efficiency measures Krones is already cutting jobs in the current financial year. This programme will be continued in 2020. In the coming year, 300 more jobs are to be created in Germany and a further 200 jobs worldwide. be reduced in a socially responsible manner. The expenses and provisions required for this total around 30 million euros. The job cuts particularly affect positions in the administrative areas.
Also with the Portfolio optimisation we are making progress. For many years, Krones has been investing in various Future technologies for direct printing with ink. In future, the company will be focussing on direct printing technology with the greatest market acceptance. An impairment loss of around 20 million euros will be recognised for direct printing technologies that are no longer being pursued. The company plans to announce further portfolio optimisation measures in March 2020.
EBT margin for 2019 expected to be around one per cent
The measures to reduce personnel costs and targeted portfolio optimisation are leading to Provisions and value adjustments of around 70 million euros in 2019. This means that total expenses within the previously communicated range of EUR 60 to 80 million will already have an impact on earnings in 2019. Accordingly, the EBT margin for 2019 as a whole is expected to be at around one per cent be higher. Without the special charges, the EBT margin for 2019 would probably be around 3 per cent, as recently forecast.
„2019 is and will remain a very challenging year for Krones. We are already back on track in terms of order and sales development. Nevertheless, we must continue to improve our cost structures and optimise our portfolio. These measures will affect our EBT margin for the current financial year. However, the positive EBT effects will compensate for the costs after just two years,“ says Christoph Klenk, Chairman of the Executive Board of Krones AG.
Positive effects expected for 2020 and 2021
For 2020 and 2021, Krones expects a positive EBT effect totalling around 150 million euros. The impairments and provisions for the structural measures have no effect on the dividend for the 2019 financial year. The dividend is calculated on the basis of the result excluding these special charges and is expected to be in the usual range of 25 to 30 per cent of the result.
Source: Krones AG
