Krones Group Annual Report 2025

Global economy expected to grow 3.3% in 2026

In January 2026, the International Monetary Fund (IMF) projected global economic growth of 3.3% for 2026. This is below the recent long-term average of 3.7% (2000–2019). Military and trade policy conflicts continue to be negative factors in the current year. A source of impetus according to the IMF is rising technology investment in artificial intelligence (AI), particularly in North America and Asia. Loose fiscal and interest rate policies are also supporting the economy in many regions. 

The IMF economists see downside risks to the forecast among other things in 
a reassessment of expectations for productivity growth from AI. This could trigger a significant correction on financial markets, reducing the assets of private households. Furthermore, an escalation of trade and geopolitical conflicts would negatively impact the global economy by slowing investment, distorting trade flows and potentially disrupting supply chains. Conversely, the IMF experts believe that a sustained and significant easing of trade disputes could have a positive impact on the global economy. 

According to IMF estimates, emerging and developing economies are once again set to grow at an above-average rate of 4.2% in 2026. This is due to the large Chinese and Indian economies. For China, the experts predict that gross domestic product (GDP) will grow by 4.5%, compared to 5.0% in the previous year. For India – now the world’s fifth-largest economy after Germany – the IMF once again forecasts the highest expected growth rate among major economies at 6.4% for 2026. While Latin America is once again expected to see below-average growth compared to the global economy in the current year, with an increase of 2.2%, the IMF is forecasting growth of 3.9% for the Middle East/Central Asia region and 4.6% for sub-Saharan Africa.

For industrialised economies, the IMF anticipates below-average GDP growth of 1.8% in 2026. The euro area economy continues to show little momentum, with forecast growth of 1.3%. Germany is slowly recovering from its weak performance in previous years, with an expected growth rate of 1.1%. The IMF forecasts that the US economy will grow by 2.4% in 2026, supported by expansionary fiscal policy. Growth in Japan is expected to slow to 0.7% (previous year: 1.1%).

Economic and geopolitical ­uncertainties will continue to restrain global economic growth in 2026. While the IMF predicts 4.2% growth for emerging and developing economies, the euro area ­continues to lag behind with growth of 1.3%. Economic output in the USA is expected to improve by 2.4% in the c­urrent year.

High volatility on the financial markets influencing exchange rates

According to experts at the European Central Bank, economic policy uncertainty is increasing volatility in financial markets. IMF experts say this could lead to sharp exchange rate movements. For example, the US dollar lost around 13% of its value against the euro in 2025. The increased volatility of exchange rates makes it very difficult to reliably forecast exchange rate trends in the current year.

Machinery and mechanical engineering sector set for a slight recovery at a very low level

The German Mechanical Engineering Industry Association (VDMA) expects that the still relatively weak economy, difficult locational conditions in Germany and the trade policies of the USA and China as key sales regions will continue to weigh on the sector as a whole. VDMA’s economists expect a slight, 1% increase in output in 2026, following a significant expected 5% contraction in 2025. However, after twelve consecutive quarters of decline, the VDMA believes growth would have to be significantly higher in order to speak of real growth momentum. 

It should be noted in general here that the various subsectors of the industry are developing at very different rates and that Krones, with an export ratio of around 90%, has its focus on the development of international markets.
 

Krones’ customers benefiting from rising beverage consumption

Demand for beverage filling and packaging machinery is dependent on consumer spending. Moderate inflation rates have a positive effect on consumer purchasing power. They support demand for packaged food and beverages and indirectly influence demand for our company’s products and services.

With global inflation forecast to decline as a whole in 2026, we expect consumer demand to remain positive overall this year. Private consumption has also been a pillar of economic growth in many regions over recent years. According to GlobalData figures, global consumption of packaged beverages, which is important to our customers, is expected to grow by 2.7% year on year in 2026.

Krones expects positive business performance in 2026

Overall, despite the volatile global economic situation, Krones started the 2026 financial year with realistic optimism. The solid order backlog ensures production capacity utilisation well into the third quarter of 2026. This assessment is also supported by the robust demand for Krones’ products and services. 

At the same time, the business environment is very challenging for Krones. Global economic growth remains subdued and there are risks for the global economy and thus also for Krones’ business performance. This includes global tariff policies, which could lead to a decline in world trade. Geopolitical tensions in Europe, the Middle East and other regions of the world could also have a negative impact on economic growth. Military action on key trade routes could lead to material shortages and problems in global supply chains.

Krones expects that the global market for filling and packaging technology will generally develop robustly in 2026 and that selling prices will remain at a relatively stable level. However, competitive and cost pressures in our markets will remain high during the current financial year.

The medium and long-term outlook for Krones remains positive. Consumer demand for packaged beverages and liquid foods is growing steadily, driven by megatrends such as the increasing world population and the growing middle class in emerging and developing markets. The focus on digitalisation and economic sustainability is likewise making for stable demand for innovative beverage filling and packaging machinery.

Because they share comparable sales and procurement markets, the economic, sectoral and company-specific outlooks and risks essentially apply to all three segments of the Krones Group.

Segment guidance for 2026

In order to generate profitable growth, Krones will continue to adhere strictly to its pricing strategy in all three segments in the current year and will keep sales prices in line with costs. By continue to expand its global value chain, Krones is improving its cost structures and strengthening its resilience to economic and political risks. The company also continues to implement cost optimisation programmes and increase efficiency by investing in the automation of its production facilities. In addition, Krones aims to exploit growth opportunities in our market throughout the group with innovative and trailblazing products and services. Our focus here is on digitalisation, system solutions and economic sustainability. 

With regard to funding future growth, we will continue to rely on our very solid capital structure with a high equity ratio, low financial debt and comfortable net cash.

In the core segment, Filling and Packaging Technology, Krones will expand production capacity in the US, China and India in the second half of 2026 and support the markets with local products. In Germany, the company is investing heavily in the automation of its production sites and in production logistics in order to further increase efficiency. 

We also plan to continue expanding the lifecycle service (LCS) business in the Filling and Packaging Technology segment. To this end, the company will continue to invest in the global service network and the quality of the services provided in order to further enhance customer loyalty and customer proximity. Krones will also take advantage of the opportunities presented by digital services and new business models.

With the new and highly innovative Ingeniq line generation, we have set new standards in terms of efficiency, digitalisation and economic sustainability while consolidating and extending our lead in PET filling and packaging lines. 

For the core segment in 2026, Krones expects 2% to 4% revenue growth adjusted for currency translation effects, with an EBITDA margin of 11.0% to 11.5%.

The Process Technology segment has developed positively in recent years. Krones will continue its established strategy and drive forward diversification into markets with above-average medium to long-term growth, including energy-efficient solutions for beverage production, resource-efficient water treatment and technologies for the biotechnological production of plant proteins.

The Process Technology segment will also further optimise its cost structure by expanding its global footprint and the associated supply chains, particularly in the US and India. The company will be able to leverage additional cost and efficiency potential through better networking among its global units. Krones intends to exploit the above-average growth opportunities available in the North American and Asia/Pacific markets. Expansion of the after-sales and components business is expected to make an additional contribution to revenue and earnings.

Krones forecasts revenue growth, adjusted for currency translation effects, of 0% to 5% for the Process Technology segment in 2026, with an EBITDA margin of 9.0% to 10.0%.

The Intralogistics segment, with subsidiary System Logistics, benefits from growing demand for fast and efficient order processing. System Logistics’ automation solutions help customers reduce energy consumption and operating costs while decreasing the number of operating personnel required and increasing efficiency.

To capitalize on growth opportunities in a highly competitive environment, Krones is expanding its international presence in the Intralogistics segment. The focus is on non-European markets. Expansion of the sites in India and the US and new subsidiaries in China and Canada will thus contribute to growth and diversification. Krones will also focus more on sectors beyond beverages and the liquid foods market, such as food wholesaling. System Logistics is also driving profitable growth primarily with automated order picking systems and expansion of the service and software business.

Adjusted for currency translation effects, Krones expects revenue growth of 5% to 10% in the Intralogistics segment in 2026. The EBITDA margin is expected to be between 7.5% and 8.5%.

Krones forecasts profitable growth for the Group in 2026

Krones made a good start to the 2026 financial year. However, there are various unforeseeable factors that could have an impact on the company’s business processes and production. These include geopolitical risks in Europe, the Middle East and other parts of the world. Uncertainty also surrounds global tariff policies, which could lead to a decline in world trade. Material shortages and problems in global supply chains remain a further source of uncertainty. The revenue forecast is also impacted by large exchange rate fluctuations.

Based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones, the company expects consolidated revenue growth, adjusted for currency translation effects, of 3% to 5% in 2026. 

Krones aims to further increase profitability in 2026.

On the basis of increasing operating revenue, an ongoing disciplined price strategy and continued implementation of the cost optimisation measures, Krones aims to improve profitability again this year compared to 2025. At group level for 2026, the company forecasts an EBITDA margin of 10.7% to 11.1%.

For the third performance target, return on capital employed (ROCE), Krones expects 19% to 20% in the current year.

Krones will continue to share the company’s success with shareholders in the form of dividend payments. The company’s dividend strategy is to distribute 25% to 30% of consolidated net income to shareholders, although in recent years it has aimed for the upper end of this range.