Krones (ETR:KRN) reported higher order intake and improved profitability in the first half of 2026, while maintaining its full-year financial targets despite what management described as a challenging macroeconomic and geopolitical environment.
In his first half-year results presentation as chief executive officer, Thomas Ricker said global economic growth was slowing and market uncertainty remained elevated. Still, he said Krones’ business model and global presence supported a positive first-half performance.
Orders Rise, Backlog Supports Production
First-half order intake reached €2.85 billion, an increase of 4.5% from the prior-year period. Second-quarter order intake rose about 3.5% year over year, while the book-to-bill ratio stood at 1.05 after six months.
Ricker said order growth was strongest in North and South America and Eastern Europe. Order intake was stable in Europe and Asia-Pacific, while the Middle East and China saw lower intake than a year earlier. He said the company expects a catch-up effect in those regions during the second half, noting that China’s first half is affected by the timing of the Chinese New Year.
Krones’ order backlog increased to approximately €4.3 billion, with delivery times stabilizing at around 30 weeks. Management said the backlog, combined with first-half bookings, largely secures production capacity utilization for the full year.
Ricker said customers are taking longer to make investment decisions because of uncertainty tied to conflicts, volatile energy prices and raw-material costs. However, he said the company’s pipeline remained robust across its segments and regions, and that July orders had supported this assessment.
Revenue Growth and Margin Improvement
Revenue totaled €2.715 billion in the first half, including approximately €60 million of foreign-exchange effects, primarily related to the U.S. dollar. On a currency-adjusted basis, revenue was €2.775 billion, representing growth of 1.8%.
CFO Uta Anders said Krones would need a stronger second half to reach its full-year revenue growth target of 3% to 5%. The company’s production schedule, installation and commissioning plans, backlog and recurring revenue provide confidence in the outlook, she said. However, Anders told analysts that management was more comfortable toward the lower end of the range.
First-half EBITDA increased to €292.8 million, and the EBITDA margin improved to 10.8% from 10.6% a year earlier. Earnings before taxes declined to €197.7 million, reflecting a negative financial result carried over from the first quarter and higher depreciation, according to Anders.
Material expenses fell to 45.1% of revenue, benefiting from supplier agreements reached in 2025, price levels and some product-mix effects. Anders said the ratio is expected to normalize somewhat during the year. Personnel expenses rose as a result of higher average employee numbers and wage-related increases, though management expects the personnel-cost ratio to move toward 30% as revenue accelerates.
Employee headcount was broadly stable at 21,249 at the end of June, down 90 from year-end 2025. The reduction was mainly in Germany.
Segment Performance
- Filling and Packaging Technology: Currency-adjusted revenue grew 1.8% to €2.342 billion. The EBITDA margin rose to 11.2%, within the company’s 11% to 11.5% target range.
- Process Technology: Revenue declined from the prior year, partly due to delays in turnkey projects. EBITDA margin reached 10.6%, above the segment’s 9% to 10% guidance, aided by units and components such as pumps and valves.
- Intralogistics: Currency-adjusted revenue increased 9.7%, near the upper end of its 5% to 10% growth target. EBITDA margin was 5.3%, below the 7.5% to 8.5% target because of business mix. Management expects improved margins in the second half based on backlog quality.
Ricker said Krones’ operations in China and India are part of its longer-term growth strategy. The expanded China facility is expected to enter production shortly after opening in the fourth quarter of 2026. India’s new plant is scheduled to open in the third quarter, though management said it will take longer to develop employees and the supplier base before producing its full benefits in 2027.
Cash Flow, Acquisition and Outlook
Free cash flow before mergers and acquisitions was negative €30.8 million in the first half, primarily because working capital increased by €181.1 million and capital expenditures rose. Inventory increased due to safety-stock holdings and more localized inventory in North America intended to support local deliveries and mitigate tariff exposure.
Krones ended June with €1.304 billion in liquidity, including €405 million in cash and nearly €900 million in available credit lines. Its equity ratio increased to 43.6%.
The company also said it had closed, or was in the final closing phase of, the acquisition of Wiro Precision Tool in July. The business generates about €10 million in revenue and employs 50 people. Anders said the acquisition is margin accretive and expands Krones’ capabilities in molds and tools for special-purpose caps, complementing its Netstal and MHT operations.
Management acknowledged that Netstal has faced lower-than-expected order intake amid pressure in the injection-molding market, particularly in North America. Anders said Netstal remains margin dilutive to the group, with the dilution increasing somewhat as volumes have fallen short of expectations.
For 2026, Krones reaffirmed its targets for revenue growth of 3% to 5%, an EBITDA margin of 10.7% to 11.1%, and return on capital employed of 19% to 20%. The company also maintained its 2028 targets of roughly €7 billion in revenue, an EBITDA margin of 11% to 13%, and return on capital employed above 20%, while noting that the geopolitical environment has become more difficult since those goals were set in 2024.
About Krones (ETR:KRN)
Krones AG, together with its subsidiaries, engages in the planning, development, and manufacture of machines and lines for the production, filling, and packaging technology in Germany and internationally. It operates in three segments, Filling and Packaging Technology, Process Technology, and Intralogistics. The Filling and Packaging Technology segment offers machines and lines for stretch blow molders, bottle washing, filling, inspection, labelling, conveying, product packing, palletizing, treatment, technology products, as well as for producing PET containers and converting used plastic bottles into food-grade recycled material.
