Krones publishes its preliminary figures for 2006

Significant increases in sales and profits in 2006
Dividend to rise from 1.40 to 1.60 euros per share

In 2006, the plant and machinery manufacturer Krones, Neutraubling, Germany, continued its series of improved results in terms of sales and profits for the seventh year in succession. The 9,165 employees (+ 1.5 % compared with the previous year) generated a turnover of 1.91 billion euros, approximately 12.7 % up on the previous year’s figure. Net income for the year grew by 20 %, compared with the previous year, subject to confirmation by the accountants.

The high demand for the products of the world’s market leader in filling and packaging technology is reflected in the orders received, which increased in 2006 by 13.3 % to reach approximately € 1.97 bn (2005: € 1.74 bn).
The net liquidity – almost 57 million € at the end of the year – reflects the company’s financial performance, with no liabilities to the banks.

Increased dividend and positive stock price development
The capital market has gained substantially from this development. In 1999, the Krones share started at a price of € 19.80. With a most recent price of € 133.25 (20 February 2007), the Krones share has yielded capital gains of more than 570 %. For 2006, a dividend of € 1.60 (2005: € 1.40) is to be distributed per share.

Outlook
The rates of growth and profits show Krones’ strength in a sector that was dominated by fierce price competition.
Due to the order situation, the Executive Board is confident of achieving a return on sales after tax of 7 % for the first half of 2007 (first half of 2006: approx. 6.5 %). In the first six months of 2007, Krones’ turnover will reach approximately € 1 bn (first half of 2006: € 920 million). 

This forecast is backed up by a backlog totalling € 747 million by early 2007 (+ 8 % compared with the previous year) and by the strong order inflow during the first two months of the ongoing year.

With internal measures, such as the innovation thrust and the pact for safeguarding employment and the production facilities, Krones has significantly increased its efficiency and created a basis for future growth in profits. If the price situation does not worsen considerably, the Executive Board expects a medium–term return on sales before tax of at least 7 %.

In parallel to this, Krones is targeting an annual growth in sales of at least 5 to 10 %. The company expects above-average growth rates in process technology and in the high-yield Life-Cycle-Services sector. Besides organic growth, Krones also plans medium-term business expansion with further acquisitions.

02.27.2007