What Krones (KRN) Said on Its Q3 Earnings Call

Key Points

• Krones cut its 2026 revenue growth forecast to 1%–2% from 3%–5%, and reduced its 2028 revenue target to €6 billion–€6.2 billion from about €7 billion, citing cautious customer investment and slower decisions.
• Orders rose 2.9% in the first nine months to €4.224 billion, and the backlog grew to roughly €4.3 billion, but revenue increased just 0.8% on a currency-adjusted basis. The company said meeting its revised annual growth forecast would require a strong fourth quarter.
• Krones maintained its full-year EBITDA margin forecast of 10.7%–11.1%, while segment outlooks diverged: it lowered expectations for Filling and Packaging Technology and raised its Intralogistics growth forecast to 10%–15%.

Krones ETR: KRN lowered its 2026 revenue growth forecast and reduced its medium-term sales target after slower customer investment and longer decision times weighed on the company’s outlook, executives said on its third-quarter earnings call.

The company now expects currency-adjusted revenue growth of 1% to 2% for 2026, down from its previous forecast of 3% to 5%. It also lowered its 2028 revenue target to €6 billion to €6.2 billion from an earlier goal of around €7 billion.

Chief Executive Officer Thomas Ricker said geopolitical uncertainty and rising costs for Krones and its customers were contributing to more cautious investment decisions. He said the company nevertheless remained on a profitable growth path and maintained its margin targets.

Orders Rise as Revenue Growth Slows

Order intake rose 2.9% to €4.224 billion in the first nine months of 2026, while the order backlog increased about 3% to roughly €4.3 billion. The book-to-bill ratio stood at 1.03, and Ricker said he expected it to remain above 1.0 for the full year.

Ricker described the project pipeline as solid, although he said customers were taking longer to make decisions. Some orders in the backlog will not generate revenue until the end of 2027 or later, he said.

Revenue for the first nine months was approximately €4.1 billion. Adjusted for currency translation, revenue was €4.14 billion, up 0.8% from €4.108 billion a year earlier. Third-quarter revenue was €1.385 billion, compared with €1.381 billion in the prior-year quarter.

Chief Financial Officer Uta Anders said reaching the revised annual growth forecast would require a strong fourth quarter. She cited seasonal after-sales demand, work associated with closing customer sites, a larger contribution from Intralogistics and the production schedule for the order backlog. Achieving the upper end of the forecast would be “much more difficult,” she said.

Tariff Effects Lift Margins

The nine-month EBITDA margin was 11.1%. Anders said the margin would have been approximately 10.8% after normalizing for tariff-related effects. The company maintained its full-year EBITDA margin forecast of 10.7% to 11.1%.

Anders described two tariff-related effects in the third quarter. Krones passed €20 million received from the U.S. government through to customers, reducing both revenue and material costs without affecting the bottom line. It retained another €10 million related to expenses incurred in the prior year, which lifted EBITDA.

Fourth-quarter margins are expected to be below the level achieved in the first nine months, even excluding the tariff benefit, Anders said. She attributed the expected decline partly to a one-time cost in the mid- to high-single-digit millions of euros for flexibility measures in Germany, including accruals related to early retirement. She said the measures would not involve hundreds of people.

Segment Outlooks Diverge

Krones reduced its currency-adjusted growth forecast for Filling and Packaging Technology to a range of minus 1% to plus 1%. The segment’s reported nine-month EBITDA margin was 11.5%, or 11.2% when normalized for tariff effects.

Process Technology recorded nine-month currency-adjusted revenue growth of 4.2%. Krones maintained that segment’s annual growth forecast of 0% to 5% and EBITDA margin forecast of 9% to 10%.

Intralogistics revenue rose 10% on a currency-adjusted basis over nine months, prompting Krones to increase its full-year growth forecast for the segment to 10% to 15%. Anders said the outlook required a strong fourth quarter, which would also help the segment reach its maintained EBITDA margin forecast of 7.5% to 8.5%. Its nine-month margin was 5.5%.

Cash Flow and Longer-Term Plans

Free cash flow before mergers and acquisitions was negative €5 million for the first nine months, with working capital and capital expenditure the main reasons for the decline from a year earlier, Anders said. Working capital rose €221 million from the end of December to €1.157 billion.

Anders said Krones expected working capital to fall in the fourth quarter and free cash flow to improve. She noted that fourth-quarter free cash flow had averaged €190 million in prior years, but cautioned that this was not a forecast for 2026. The company reported €411 million in cash and €1.393 billion in liquidity reserves.

Explaining the reduced 2028 sales target, Anders said expectations for injection molding and turnkey brewery projects had not developed as originally anticipated. Krones also narrowed its 2028 EBITDA margin target to 11% to 12%.

Anders said the company expected growth in 2027, with a somewhat greater contribution toward 2028 as capacity in India ramps up. Ricker said two Indian plants were on plan, but he did not expect a major impact from them in 2027 as the company trains employees and increases production.

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.

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