Krones Q1 2025 Earnings: Revenue Rises 13%, But EPS Misses Slightly Amid Global Headwinds

Krones AG, a global leader in filling and packaging technology, delivered robust revenue growth in its first quarter of 2025, though its earnings per share (EPS) fell short of analyst expectations. The results underscore the company’s resilience in a challenging macroeconomic environment, while also highlighting lingering risks tied to geopolitical tensions and supply chain disruptions.

Key Financial Highlights
- Revenue: €1.41 billion, a 13.1% year-on-year increase, driven by organic growth and the 2024 acquisition of Netstal Maschinen AG.
- Order Backlog: €4.32 billion, ensuring production capacity utilization through early 2026.
- Profitability: EBITDA rose 19.1% to €149.3 million, with the margin expanding to 10.6% (vs. 10.1% in Q1 2024), aligning with its full-year target of 10.2%–10.8%.
- EPS: €2.40, a 15.3% year-on-year rise, but €0.07 below the consensus estimate of €2.47.

Revenue Growth Outperforms, but EPS Misses

Krones’ revenue surged past expectations, fueled by strong demand for its packaging systems and the contribution of Netstal. Excluding the acquisition’s impact, organic growth remained within the 7%–9% full-year guidance range, reflecting disciplined pricing and cost management.

However, the EPS miss—a small but notable shortfall—stemmed partly from the Netstal acquisition’s dilutive effect on margins and higher working capital requirements. While net income rose to €75.9 million from €65.8 million in Q1 2024, the company’s free cash flow dipped slightly to €165.2 million due to increased investments and supply chain pressures.

Navigating Global Headwinds

Despite the EPS shortfall, Krones reaffirmed its full-year 2025 targets:
- Revenue growth: 7%–9%.
- EBITDA margin: 10.2%–10.8%.
- ROCE: 18%–20% (up from 19.0% in Q1 2024 to 20.5% this quarter).

The company cited geopolitical risks, including tariff conflicts and regional instability, as ongoing challenges. Yet its diversified global footprint—with 40% of revenue from Europe, 30% from Asia-Pacific, and 20% from North America—mitigated regional volatility.

Order Backlog and Services Business Offer Stability

Krones’ order backlog of €4.32 billion, up slightly from year-end 2024, remains a key strength. The company’s services division, which accounts for roughly 30% of revenue, also provides recurring income and insulation from cyclical downturns.

Analyst sentiment remains bullish: the consensus recommendation of “Strong Buy” from six analysts reflects confidence in Krones’ long-term prospects. The stock’s 52-week high of €142.50 (as of May 2025) suggests investors are betting on sustained demand for industrial automation and packaging solutions.

Risks and Opportunities

• Upside: The order backlog and disciplined pricing could drive EBITDA margin expansion. Krones’ focus on sustainability and automation positions it to capitalize on trends in food and beverage packaging.
• Downside: Escalating trade conflicts and supply chain bottlenecks could pressure margins further.

Conclusion: A Resilient Play in a Tough Market

Krones’ Q1 results highlight a company thriving in its niche despite macroeconomic turbulence. While the EPS miss is a minor blemish, the 13% revenue growth, strong backlog, and improving ROCE reinforce its ability to execute on its strategic goals. With net cash of €589.7 million and €850 million in unused credit lines, Krones has ample liquidity to weather near-term challenges.

Investors should focus on the long-term story: Krones’ dominance in filling and packaging technology, coupled with its global reach and services-driven model, positions it to outperform peers in both upturns and downturns. The EPS miss is likely a temporary blip, and the stock’s “Strong Buy” rating reflects this resilience.

In a sector where stability is hard to come by, Krones’ fundamentals—backed by data and reaffirmed guidance—suggest it remains a solid bet for patient investors.