Krones aims to upgrade the profitability of its Process Technology Segment

26-Nov-2015 - Germany

Krones, the world’s leading manufacturer of filling and packaging technology, intends to provide a sustainable boost to the profitability of its “Machines and Lines for beverage production / Process Technology” segment, which in 2014 achieved earnings before taxes (EBT) of 3.3 million euros (share of consolidated EBT: 1.7 %).

The optimisation measures will focus firstly on improving key work sequences, like drawing up quotations, processing orders and managing projects, and secondly on cutting costs. Above and beyond that, Krones is significantly reducing its degree of vertical integration, making extensive use of its international vendor structure for this purpose. Another goal is to further expand the regional structures involved, which is essential so as to be able to offer a larger number of regional products at competitive prices.

The action package planned is scheduled for implementation by 2017, with the first steps already being expedited. Krones estimates that accruable expenditure for the whole package will total two to three million euros, and will be forming accruals for this amount in the fourth quarter of 2015.

The Krones Group’s EBT margin target for 2015 as a whole, of 7.0 %, will not be affected by this. Overall, Krones anticipates an EBT margin of at least 4 % for its Process Technology Segment as from 2017 (2014: 0.9 %).

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