Report for the second quarter 2008

Dear shareholders and friends of Krones,

The outlook for the global economy has deteriorated over the past several months. Mortgage and financial crises, rising oil and energy prices, and inflation are putting immense pressure on the economy. More and more economists are revising their growth forecasts downward, not only in the US but also in Germany and the rest of Europe. Companies are also lowering their sales and earnings targets for 2008.

But Krones is far from doing that. Our business has developed strongly in the first six months of 2008 and the outlook remains bright. This is thanks in large part to the fact that demand for packaged beverages and foods continues to increase in line with the number of people around the world seeking a prosperous lifestyle, even in weaker economic cycles.

But our good fortune is not merely a matter of being in the right industry. Together with our employees, we have worked very hard to earn our unique position, steadily improving both our products and processes over the years. Our goal is to continue to distinguish ourselves from the competition and to keep business going as strong as in the first half of 2008.

Sales rose 14.3% to €1,204.9m in the reporting period. Earnings before taxes (EBT) were up 21.3% to €91.8m. With new orders up 12%, we are confident that we will achieve our sales and earnings targets for 2008.

 

Volker Kronseder
Chairman of the Executive Board

Hans-Jürgen Thaus
Deputy Chairman of the Executive Board