Krones keeps its reduced 2026 growth outlook after flat nine-month revenue

Krones, the German maker of packaging and bottling equipment, said on Friday, November 6, that its business remained stable through the first nine months of 2026, with order intake rising and profitability improving even as revenue was nearly flat and the company kept a reduced growth outlook for the full year.

The company said orders from January through September increased 2.9% to €4.22 billion, up from €4.10 billion a year earlier. Revenue was €4.10 billion, compared with €4.11 billion in the same period of 2025. Adjusted for currency effects, revenue increased 0.8%.

Krones said demand across its customer base was still broadly resilient, but that geopolitical tensions, higher operating costs for customers and wider economic uncertainty were affecting investment decisions in some parts of the market. The company said it had partly offset that pressure through its internationally diversified customer base and a broad range of products and services.

Its latest figures are likely to be closely watched in the beverage industry, where Krones is a major supplier of filling, packaging and production systems used by brewers, soft drink makers and other drinks producers. As a result, the company’s order flow and sales can offer a read on how willing beverage manufacturers are to keep investing in production capacity and plant upgrades during a period of weaker growth and higher costs.

Profitability improved more clearly than sales. Earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 5.2% to €453.1 million from €430.7 million a year earlier. The EBITDA margin increased to 11.1% from 10.5%. Krones said that figure included a positive earnings effect of about €10 million tied to U.S. tariff refunds. Excluding that item, the EBITDA margin was 10.8%, still within the company’s full-year target range.

The same tariff issue also affected revenue. Krones said its reported sales included a negative revenue impact of about €20 million from U.S. tariff refunds that was not recognized in profit or loss. Currency translation also reduced revenue by about €40 million in the first nine months.

Pre-tax earnings rose 2.1% to €308.7 million, compared with €302.3 million a year earlier, as higher depreciation and amortization and lower financial income limited the gain. Net income increased 2.7% to €219.5 million from €213.7 million. Earnings per share rose to €6.94 from €6.75.

The company’s order backlog reached €4.31 billion at the end of September, up 3.0% from €4.19 billion at the end of 2025. The book-to-bill ratio was 1.03 for the first three quarters, meaning new orders remained slightly ahead of revenue. Krones said part of that backlog consists of orders that will not turn into revenue until the end of 2027 or later.

Cash generation remained weaker than a year earlier, though it improved in the third quarter. Free cash flow before mergers and acquisitions was negative €5.0 million for the first nine months, compared with positive €80.2 million a year earlier. Krones said the decline was partly due to significantly higher investment spending. In the third quarter alone, free cash flow before M&A improved to positive €25.8 million from negative €21.3 million in the second quarter.

Its balance sheet stayed solid. Net cash at the end of September stood at €410.2 million, up from €361.2 million a year earlier. The equity ratio rose to 44.8% from 42.1%.

Return on capital employed, or ROCE, was 17.6% for the first nine months, down from 19.5% a year earlier.

Krones said it continues to expect growth in 2026, but at a slower pace than it had projected earlier. The company kept its full-year outlook for revenue growth at 1% to 2% on a currency-adjusted basis, below its earlier forecast of 3% to 5%. It also confirmed its targets for an EBITDA margin of 10.7% to 11.1% and ROCE of 19% to 20%.

The lower sales outlook reflects what Krones described as adverse developments in the markets relevant to the company, especially heading into the fourth quarter. It linked those pressures to the geopolitical environment, rising costs for customers and continuing economic uncertainty.

The company also pointed to reduced medium-term ambitions. In line with the weaker 2026 revenue outlook and the tougher broader environment, Krones said it had lowered its 2028 revenue target to €6.0 billion to €6.2 billion from about €7 billion. It now expects an EBITDA margin of 11% to 12% in 2028, compared with its previous goal of 11% to 13%, while keeping its target for ROCE above 20%.

Even with that reset, the results suggest that customer spending has not fallen sharply. For beverage producers and other users of Krones’ equipment, the figures point to a market where investment continues, but with tighter budgets and more caution around the timing of new projects.