NEUTRAUBLING (dpa-AFX) - With a thick order book as a cushion, bottling and packaging equipment manufacturer Krones expects profitable growth again in 2024. The MDax group is also building on its latest acquisition, the mechanical engineering company Nestal. The Bavarians have long since put the coronavirus pandemic behind them and have also digested the bottlenecks in various components well. Thanks to price increases and more flexible processes, Krones was able to grow further last year and increase its profitability. Krones was also able to convince investors on the stock market with this news on Thursday.

The share price climbed by 2.2 percent in the morning. Warburg expert Stefan Augustin praised the good profitability in the final quarter in particular. He believes the targets for 2024 are in line with expectations. One trader spoke in the morning of solid key data and an encouraging order intake, although the outlook was somewhat conservative. He therefore did not rule out profit-taking during the course of the day. Since the interim low at the beginning of November 2020, the share price has continued to climb towards its 2018 record of just under EUR 123. The share price currently stands at around 118 euros.

"Krones has made a confident start to the year," the company announced in Neutraubling. Demand for products and services remains high. At the same time, however, the Group pointed to a persistently difficult environment. Geopolitical risks in Europe, the Middle East and other regions of the world continue to represent an imponderable. The Executive Board did not rule out further material bottlenecks.

For the current year, Krones CEO Christoph Klenk is now forecasting an increase in sales of 9 to 13 percent, which means that the pace of growth could only accelerate slightly in the best-case scenario. Profitability, however, is generally expected to continue to improve. The margin measured in terms of earnings before interest, taxes, depreciation and amortization (EBITDA) should rise to between 9.8 and 10.3 percent.

In its targets for the year, Krones has already taken into account the contribution of the mechanical engineering company Nestal, whose takeover has not yet been finalized. According to previous information, the Executive Board expects to be able to complete the acquisition of the injection molding machine supplier in the first half of the year.

Last year, Krones raised its growth forecast in the summer. In the end, the increase came in around the middle of the targets, with sales rising by a good 12 percent to 4.72 billion euros in 2023. Although the value of orders fell by seven percent according to preliminary calculations, they remained at a high level of EUR 5.4 billion, the Group said. In 2022, incoming orders had reached a record level due to catch-up effects following the pandemic.

The Group passed on increased material costs to customers via higher prices in 2023. Operating profit (EBITDA) climbed by more than a fifth to 457 million euros. The margin amounted to 9.7 percent after 8.9 percent in the previous year, putting the company at the upper end of its own forecast. Analysts had on average expected slightly lower profitability. At the bottom line, Krones earned 224.6 million euros, an increase of 20 percent.

The high order backlog, which reached the €4 billion mark for the first time in the company's history in the past twelve reporting months, should now offer good prospects for the still young year 2024. Orders have also picked up recently, with incoming orders in the final quarter again exceeding the previous year's level.

Krones intends to present its final annual report on March 22./tav/nas/jha/