Report for the second quarter 2007

Dear shareholders and friends of the company,

Investors and analysts often ask us what the underlying »narrative« is when it comes to Krones. Our answer is a simple one: Krones is operating in an exceptionally stable, fast-growing sector, and has for many years now been achieving continual rises in both sales and profits. In the first half of 2007, too, we were once again highly successful. At € 1,053.9 m, sales were 14.5% up on the preceding year’s figure, while earnings before taxes (EBT) climbed by 25.7% to reach € 75.7 m. In the months of April to June alone, we achieved EBT of € 39.6 m, more than in any previous single quarter.

In view of the earnings level meanwhile achieved, perhaps the occasional concern may surface that we cannot keep increasing our sales and profits into perpetuity. Admittedly, we are not magicians, but Krones still has plenty of scope for expansion. The established markets are growing steadily. In the up-and-coming regions like Russia, South America and China, breweries and bottling plants will continue in the future to invest above-average sums in upsizing their production capacities, in order to meet the high level of demand.

To satisfy our existing clients, and to gain new ones, we shall continue to develop innovative, resource-economical machines and lines. Moreover, we shall be expanding our product range and thus reinforcing our front-ranking status as a provider of holistically conceived job packages. And when we succeed, that will be yet another chapter in our ongoing corporate narrative.

 

Volker Kronseder
Chairman of the Executive Board

Hans-Jürgen Thaus
Deputy Chairman of the Executive Board