KRONES AG

Quarterly Report • Jul 31, 2024

Interim report for the period
from 1 January to 30 June 2024

1

TO OUR SHAREHOLDERS

2

INTERIM CONSOLIDATED MANAGEMENT REPORT

3
INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2024

TO OUR SHAREHOLDERS

Highlights and key figures ..... 4
Letter from the Executive Board ..... 5
The Krones strategy ..... 6
The Krones share. ..... 8

Highlights and key figures

Krones reports very good first half year - significant increase in revenue and profitability

• Demand for Krones' products and services remains robust. From April to June 2024, order intake increased by $2.9 \%$ to $€ 1,310.2$ million, exceeding the already high level of the previous year ( $€ 1,272.8$ million). The contract value of orders in the first six months of 2024 increased by $0.3 \%$ over the strong prior year to $€ 2,792.9$ million.
• As expected, Krones' revenue growth accelerated significantly in the second quarter of 2024 ( $+16.7 \%$ ) compared to the first quarter of 2024 ( $+4.0 \%$ ). In the first six months of 2024, Krones' revenue climbed by $10.1 \%$ year on year to $€ 2,556.1$ million. Revenue growth is therefore within the guidance range for the full year 2024.
• Due to efficiency gains, the EвítDA margin increased despite high material and labour costs from $9.5 \%$ in the previous year to $10.0 \%$, which is within the guidance range for the full year 2024.
• The company significantly increased free cash flow (before M\&A activities) to $+€ 127.0$ million between January and June (previous year: -€131.2 million).
• Following the very positive trend in the first half year, Krones confirms the guidance for 2024. For the full year, the company expects revenue growth of $9 \%$ to $13 \%$, an EвítDA margin of $9.8 \%$ to $10.3 \%$ and ecce of $17 \%$ to $19 \%$.

Key figures for H1 2024		$1 \mathrm{Jan}-30 \mathrm{Jun}$ 2024	$1 \mathrm{Jan}-30 \mathrm{Jun}$ 2023	Change
Revenue	€ million	2,556.1	2,320.9	+10.1\%
Order intake	€ million	2,792.9	2,785.9	$+0.3 \%$
Order backlog at 30 June	€ million	4,359.1	3,931.4	$+10.9 \%$
EвítDA	€ million	256.2	221.4	$+15.7 \%$
EвítDA margin	\%	10.0	9.5	$+0.5 \mathrm{PP}^{\mathrm{a}}$
EвT	€ million	178.5	143.1	$+24.7 \%$
EвT	€ million	185.7	161.1	$+15.3 \%$
EвT margin	\%	7.3	6.9	$+0.4 \mathrm{PP}^{\mathrm{a}}$
Consolidated net income	€ million	135.0	121.4	$+11.2 \%$
Earnings per share	€	4.27	3.84	$+11.1 \%$
Capital expenditure for PM\&S and intangible assets	€ million	71.8	59.4	$+€ 12.4$ million
Free cash flow	€ million	$-58.4$	$-245.7$	$+€ 187.3$ million
Net cash and cash equivalents at 30 June**	€ million	291.1	324.7	$-€ 33.6$ million
ecce	\%	18.8	17.3	$+1.5 \mathrm{PP}^{\mathrm{a}}$
Working capital to revenue***	\%	17.4	17.2	$+0.2 \mathrm{PP}^{\mathrm{a}}$
Employees at 30 June
Worldwide		19,534	17,746	$+1.788$
Germany		10,861	10,337	$+524$
Outside Germany		8,673	7,409	$+1.264$
Key figures for Q2 2024		$1 \mathrm{Apr}-30 \mathrm{Jun}$ 2024	$1 \mathrm{Apr}-30 \mathrm{Jun}$ 2023	Change
Revenue	€ million	1,309.0	1,122.1	$+16.7 \%$
Order intake	€ million	1,310.2	1,272.8	$+2.9 \%$
EвítDA	€ million	130.8	106.5	$+22.8 \%$
EвítDA margin	\%	10.0	9.5	$+0.5 \mathrm{PP}^{\mathrm{a}}$
EвT	€ million	90.8	62.7	$+44.8 \%$
EвT margin	€ million	96.7	78.1	$+23.8 \%$
EвT margin	\%	7.4	7.0	$+0.4 \mathrm{PP}^{\mathrm{a}}$
Consolidated net income	€ million	69.2	57.9	$+19.5 \%$
Earnings per share	€	2.19	1.83	$+19.7 \%$

Dear shareholders and friends of Krones,

As expected, Krones' growth accelerated in the second quarter of 2024 compared to the first quarter (revenue growth of 4.0\%). From April to June, revenue increased by 16.7\% year on year to $€ 1,309.0$ million. This is partly due to the acquisition of Netstal Maschinen AG, whose revenue we have consolidated since 28 March 2024.

However, the revenue increase was mainly due to organic growth, which benefited from increased efficiency and favourable market conditions that Krones can exploit with its innovative range of products and services. Customers con tinue to be very willing to invest. Krones' order intake in the second quarter was again strong, at $€ 1.31$ billion, and showed growth of $3 \%$ on the high prior-year figure. Overall, after the first six months, we can confirm our full-year financial targets for 2024.

Krones adopts mid-term targets to 2028

We also continue to be optimistic for the years ahead. The cyclically resilient food and beverage industry benefits from megatrends such as world population growth and the expanding middle class. This provides Krones with good prospects for continuing its profitable growth. Our mid-term targets for 2028, which the company published in early July, reflect the positive conditions in our markets. Krones plans to increase consolidated revenue to around $€ 7$ billion by 2028 (2023: $€ 4.7$ billion). The mid-term target for the EBITDA margin is between $11 \%$ and $13 \%$ (2023: 9.7\%). For the third financial target, return on capital employed (ROCE), Krones is aiming for more than 20\% by 2028 (2023: 16.3\%).

Investment and a strong team: the basis for a successful future

By investing in digitalisation, sustainability, product innovation and internal processes, Krones is pressing ahead with the transformation and laying the basis for achieving its ambitious mid-term goals. However, our employees are and will remain the key to the company's future success. To meet the challenge of the global shortage of skilled workers, we have enhanced our employer brand to highlight what makes Krones special. Our employer brand, which we have aligned with our vision of "Solutions beyond tomorrow", is designed to attract new talent and further strengthen the loyalty and motivation of the existing workforce.

In "Solutions beyond tomorrow", we have developed an ambitious vision that extends far into the future. In order to make this a reality, we need a clear strategy and a team that will remain as strong in the years and decades to come as it is today.

Unicraple

Christaph Klenk
cEO

The Krones strategy

Shaping a sustainable and successful future

Krones developed a new, ambitious target picture in 2022: "Solutions beyond tomorrow". The focal points of "Solutions beyond tomorrow" are three key challenges confronting humanity: Combating climate change, feeding the world, and ensuring responsible use of packaging materials.

The target picture derived from these provides the basis for our corporate strategy. Our strategic focus here is on the core areas of sustainability, service quality and digitalisation. These three areas also determine the strategic orientation of our three segments and help Krones achieve its ambitious targets.

Our strategic focus

One important success factor is our workforce. Our employees implement our adopted strategy and ensure satisfied customers. So that we continue to have a well-motivated and highly qualified workforce, Krones will further enhance its attractivity as an employer on a long-term basis. To this end, the elements of our vision are incorporated into our newly developed employer brand.

Krones adopts mid-term financial targets to 2028

Krones will continue its profitable growth in the years ahead. This is reflected in the mid-term targets for 2028, which the Executive Board presented at the Capital Market Day in early July. The company plans to increase consolidated revenue to around $€ 7$ billion by 2028 (2023: $€ 4.7$ billion). Profitability is also set to improve. The mid-term target for the EBITDA margin is between II\% and I3\% (2023: 9.7\%). For the third financial target, return on capital employed (ROCE), Krones is aiming for more than 20\% by 2028 (2023: 16.3\%).

The detailed Group strategy and related measures are described on pages 64 to 78 of the 2023 Annual Report.

Krones has also set itself ambitious targets for its non-financial performance indicators. In addition to the mid-term climate targets through to 2030, Krones aims to achieve net zero greenhouse gas emissions by 2040.

Krones sustainability targets for 2030 and net zero target for 2040

The Krones share

Positive first half year on the stock markets in 2024
Following the strong price gains in 2023, international stock markets continued their upward trend in the first six months of 2024. Most share indices performed better in the first quarter than in the second. This was mainly due to the decline in speculation about interest rate cuts, which led to a strong rally on the stock markets in the first quarter. Although the European Central Bank lowered its benchmark interest rates in June 2024 for the first time since March 2016, the US interest rate turnaround has not yet materialised. Despite interest rate expectations generally going unfulfilled, equity markets did not suffer a major setback.

This can also be seen in the performance of the DAX over the reporting period. Germany's best-known share index started 2024 at around 16,750 points. After a short period of weakness, the DAX rose significantly in the first quarter. At the end of March, the DAX was up 10.4\% on the beginning of the year at 18,492 points. The DAX consolidated at the beginning of the second quarter before starting a dynamic upward trend in early May. On 15 May, the index hit an all-time high at 18,893 points. After this temporary spurt, the DAX trended slightly downwards. At the end of June, the index stood at 18,235 points, 1.4\% lower than at the end of the first quarter of 2024. After the first six months, the DAX was 8.9\% higher than at the beginning of the year.

Performance $S$ Tabs - $S$ June 2024	Krones share data	H1 2024	H1 2023
Krones share - 4.6\%	Earnings per share ( $K$ )	4.27	3.84
Index - 7.2\%	High (K)	131.80	118.80
	Low (K)	108.30	102.40
	Price at 30 June (K)	117.20	111.10
	Market capitalization 30 June (K billion)	3.70	3.51

Source: The Krones share
The Krones share performed significantly better than the The Krones share perfo
asss in the first half of 2024.

Krones share price gains 4.8\% from January to June 2024
Underpinned by the generally upbeat market and good business figures, Krones' share price rose in the first half of 2024. Along with many indices, our shares performed better in the first quarter than between April and June.

Krones shares reached their lowest closing price of the reporting period at €108.30 on 5 January. They quickly recovered from this level, rising to around €117 by the end of January. The publication of the preliminary full-year figures for 2023 and the positive forecast for the 2024 financial year on 22 February gave a short-run boost to the share price. At the end of February, our shares began a sustained upward trend. Positive analyst comments were a positive factor here.

On March 26, our share price surpassed its 2018 all-time high of $€ 122.80$ and closed at $€ 123,40$. At the end of the first quarter, Krones shares stood at $€ 122.70$, $9.7 \%$ higher than at the beginning of the year.

The upward trend continued at the beginning of the second quarter. Our share price then consolidated slightly. Supported by several analysts raising their target prices, Krones shares rose sharply in early May. On 8 May, our shares reached their highest price of the first half of 2024 at $€ 131.80$ (closing price) and also a new all-time high. They then moved sideways through to the middle of June. Some selling pressure followed, which was partly due to the overall market. At the end of June, Krones shares stood at $€ 117.20$, up $4.8 \%$ on the beginning of the year. Including the $€ 2.20$ per share dividend, the first-half performance of our share price in 2024 was $6.8 \%$. This means that our shares significantly outperformed the mDAX, which fell by $7.2 \%$ between January and June 2024.

Annual General Meeting held in person

On 4 June 2024, Krones' Annual General Meeting took place as an in-person event in Regensburg. Shareholders received a dividend of $€ 2.20$ per share for the successful 2023 financial year, $25.7 \%$ higher than in the previous year (previous year: $€ 1.75$ per share). For information on the 2024 Annual General Meeting, please see https://www.krones.com/en/company/investor-relations/annual-gen-eral-meeting.php

Shareholder structure

Krones' shareholder structure remained largely unchanged in the first half of 2024 compared to the end of 2023. At 30 June 2024, Familie Kronseder Konsortium GbR held the majority of Krones AG's shares, with 51.9\%. The Kronseder family intends to remain a stable majority shareholder of Krones AG. 5.8\% of the shares were held at the end of the first half year by the Schadeberg family.

Shareholder structure at 30 June 2024

Analyst recommendations for the Krones share

At the end of June 2024, 14 recommendations for Krones shares were available from analysts at various institutes. There were 11 buy recommendations, two analysts rated the Krones share as a hold, while one recommended selling.

Analyst recommendations at 30 June 2024

Key data for the Krones share
Number of shares
German securities identification number
1678
1678 XITRA Eicker symbol

For further information on Krones shares, please see the Krones website: https://www.krones.com/en/company/investor-relations/share.php

INTERIM CONSOLIDATED MANAGEMENT REPORT

Economic environment ..... 11
Revenue. ..... 12
Order intake and order backlog. ..... 14
Earnings ..... 16
Cash flow ..... 20
Assets and capital structure ..... 22
Report from the segments ..... 24
Employees ..... 27
Risk and opportunity report ..... 28
Events after the reporting period ..... 29
Report on expected developments. ..... 30

Economic environment

Global economy expected to grow $3.2 \%$ in 2024

The International Monetary Fund forecasts that the global economy will grow by $3.2 \%$ in 2024.

In July 2024, the International Monetary Fund (IMF) forecast global economic growth of $3.2 \%$ for 2024 (2023: 3.2\%). This is once again below the recent longterm average of $3.8 \%$ (2000-2019). Economic growth will be modest this year, particularly in industrialised economies. The ongoing Russia-Ukraine and Middle East conflicts and continued high interest rates remain negative factors in 2024. In addition, government support programmes are being scaled back and productivity growth remains low.

The IMF economists see downside risks to the forecast among other things in a further escalation of regional conflicts. This would probably lead to a rise in commodity and energy prices, which would push inflation back up again. Core inflation - which excludes volatile energy and food prices - may also prove more persistent than expected and the expected interest rate cuts may be delayed. In addition, the increasing emergence of geo-economic blocs and the associated restrictions on trade would have a negative impact on the global economy.

According to IMF estimates, growth in the emerging and developing countries will stay stable at $4.3 \%$ in 2024 (2023: 4.4\%). The higher momentum relative to the global economy is mainly accounted for by India and China. After China benefited from positive catch-up effects from the Covid pandemic last year (2023: growth of 5.2\%). the IMF forecasts GDP growth of 5.0\% for the Chinese economy in 2024. As in the previous year, India is expected to record the strongest growth among the emerging markets, with an increase of 7.0\%. The IMF ex-
pects increasingly dynamic growth in the Middle East/Central Asia region. There, the experts forecast GDP growth of 2.4\% (2023: 2.0\%). In Latin America, the economy is expected to grow in 2024 by 1.9\%.

For industrialised economies, the IMF forecasts continued weak GDP growth with an increase of $1.7 \%$ in 2024 (2023: 1.7\%). With Europe now less affected by the Russia-Ukraine conflict and high inflation, the IMF forecasts growth of 0.9\% for the euro area (2023: 0.5\%). In Germany, the economy is expected to grow by $0.2 \%$ in 2024, after contracting in the previous year (2023: -0.2\%). Japan is predicted to see GDP growth of just $0.7 \%$ this year. According to the IMF forecast, the US economy is once again projected to expand the strongest among the major industrialised nations in 2024, with growth of 2.6\%.

Machinery sector to consolidate in 2024 - food and packaging machinery subsector growing

The German Mechanical Engineering Industry Association (VDMA) expects that the ongoing weakness of the global economy will continue to impact the industry this year. Output is thus expected to fall by. $4 \%$ in 2024. It should be noted here that the various subsectors of the industry are developing at very different rates. The VDMA expects that the food processing and packaging machinery subsector relevant to Krones will see moderate growth in 2024 after the strong previous year.

The German Mechanical Engineering Industry Association (VDMA) expects the sector's output to fall by. $4 \%$ in 2024. The food processing and packaging machinery sector is expected to see moderate growth relative to the high prior-year level.

Revenue

Krones increases revenue by $10.1 \%$ in first half of 2024

Krones continued its stable corporate growth in the first half of 2024. Revenue increased by $10.1 \%$ to $€ 2,556.1$ million.

As expected, Krones' growth accelerated signifcantly in the second quarter of 2024 compared to the first quarter ( $4.0 \%$ revenue growth). From April to June 2024, revenue went up by $16.7 \%$ year on year to $€ 1,309.0$ million. Part of this growth is due to the acquisition of Netstal Maschinen AG, whose revenue Krones has consolidated since 28 March 2024. However, the largest contribution to the second-quarter revenue increase took the form of organic growth. It should also be noted that production in the same period last year was still affected by the shortage of electronic components.

In the first six months of 2024, Krones' revenue climbed by $10.1 \%$ year on year, from $€ 3,320.9$ million to $€ 2,556.1$ million. Growth in the reporting period was therefore within the full-year 2024 guidance range of $9 \%$ to $13 \%$. This forecast includes the effects of the acquisition of Netstal Maschinen AG. The revenue growth in the first half-year mainly reflects volume effects. Prices for our products and services remained stable in the first two quarters of 2024. Krones' revenue was not materially affected by exchange rates or divestments in the first half of 2024 .

Revenue by segment from 1 Jan to 30 Jun 2024	Revenue by segment from 1 Jan to 30 Jun 2023
Intrasig
5.9\%* ( 6151.9 million)	Intrasig
Process Technology
10.0\%* ( $€ 254.6$ million)	Process Technology
Filling and
Packaging Technology
84.1\%* ( $€ 2,169.6$ million)	Filling and
* Share of consolidated revenue of	Packaging Technology
€2,556.1 million	83.0\%* ( $€ 1,927.2$ million)

*Share of consolidated revenue of
$€ 2,320.9$ million

Revenue by region

Revenue in Germany was stable in the first half of 2024. At $€ 237.0$ million, it was $1.0 \%$ down on the previous year's $€ 239.3$ million. As a percentage of consolidated revenue in the first six months, this represented a decrease from 10.3\% a year earlier to 9.3\%.

Krones has previously reported revenue performance separately for Central Europe and Western Europe. From this report onwards, revenue in the Central and Western Europe regions is combined. In the first half of 2024, revenue in these regions increased by $3.0 \%$ to $€ 495.9$ million (previous year: $€ 481.6$ million). Eastern European saw a strong increase in revenue by $30.7 \%$ in the reporting period to $€ 129.0$ million (previous year: $€ 38.7$ million). In all, Krones' revenue in Europe (excluding Germany) increased in the first half of 2024 by $7.7 \%$ year on year to $€ 624.9$ million (previous year: $€ 580.3$ million). The share of consolidated revenue fell to $24.4 \%$ (previous year: 25.0\%).

First half-year revenue in the Central Asia region rose from $€ 18.7$ million in the previous year to $€ 65.2$ million in 2024. With a $2.6 \%$ share of consolidated revenue, the region now has only a very minor influence on the Krones Group's business.

Krones' remaining non-European markets saw in some cases substantial revenue growth in the first half of 2024. Overall, revenue there grew from an already high level by $9.9 \%$ to $€ 1,629.0$ million (previous year: $€ 1,482.4$ million). Revenue in the Middle East/Africa region showed very dynamic growth, rising by $31.7 \%$ from $€ 220.5$ million to $€ 290.5$ million. In China, Krones benefited from catch-up demand in investment spending after the Coronavirus epidemic. Revenue there improved in the first six month by $23.2 \%$ to $€ 185.1$ million (previous year: $€ 150.2$ million). In the Asia/Pacific region, which recorded the highest percentage growth in the full year 2023, Krones' revenue decreased moderately in the reporting period by $6.5 \%$ to $€ 295.6$ million (previous year: $€ 316.3$ million).

In the large North and Central America sales region and in South America/Mexico, business picked up in the second quarter. From January to June 2024, revenue in North and Central America rose to $€ 594.7$ million, an increase of $2.8 \%$ on the already very high prior-year figure ( $€ 378.6$ million). In the South America/Mexico region, revenue climbed by $21.4 \%$ in the reporting period to $€ 263.1$ million (previous year: $€ 216.8$ million).

In the large North and Central America sales region and in South America/Mexico, business picked up in the second quarter. From January to June 2024, revenue in North and Central America rose to $€ 594.7$ million, an increase of $2.8 \%$ on the already very high prior-year figure ( $€ 378.6$ million). In the South America/Mexico region, revenue climbed by $21.4 \%$ in the reporting period to $€ 263.1$ million (previous year: $€ 216.8$ million).

Quarterly revenue figures for the various regions are generally not very meaningful because orders and revenue can fluctuate significantly from one quarter to the next. The Central Europe and Western Europe regions are reported together from the second quarter of 2024.

Krones Group revenue by region

Share of consolidated revenue	$\begin{gathered} 1 \text { Jan to } 30 \text { Jun } \ 2024 \ \text { $€$ million } \end{gathered}$		$\begin{gathered} 1 \text { Jan to } 20 \text { Jun } \ 2023 \end{gathered}$		Change $€$
Germany	237.0	9.3	239.5	10.3	$-1.0$
Central and Western Europe	495.9	19.3	482.6	20.7	$+3.0$
Eastern Europe	129.0	5.0	98.7	4.3	$+30.7$
Central Asia	65.2	2.6	18.7	0.8	$+248.7$
Middle East/Africa	290.5	11.4	220.5	9.5	$+31.7$
Asia/Pacific	295.6	11.6	316.3	13.6	$-6.5$
China	185.1	7.2	350.2	6.5	$+23.2$
South America/Mexico	263.1	10.3	216.8	9.4	$+21.4$
North and Central America	594.7	23.3	578.6	24.9	$+2.8$
Total	2,556.1	100.0	2,320.9	100.0	$+10.1$

Order intake and order backlog

Strong demand for Krones products and services

Krones' markets are cyclically
After a good first quarter, demand for Krones' prod
resilient and customers contin-
ucts and services continued to grow from April to
use to be very willing to invest. June 2024. At $€ 1,300.2$ million, order intake exceeded
That is also reflected in the growth in order intake. the already high prior-year figure ( $€ 1,272.8$ million) by 2.9%. The contract value of orders in the first six months of 2024 increased by 0.3\% year on year, from $€ 2,785.9$ million to $€ 2,792.9$ million. Customer order activity therefore remained at a very high level in the first two quarters of 2024 .

As a global leader with a broad and innovative range of products and services, Krones was able to take advantage of the good market conditions. International customers in the food and beverage industry continue to be very keen to invest and there are many projects in the pipeline. Exchange rates, acquisitions and divestments did not have a material impact on the contract value of orders in the first half of 2024 .

Order intake in the first six months significantly exceeded the prior-year figure in the Europe, Eastern Europe, Central Asia and Middle East/Africa regions. In China, North and Central America and South America, order intake increased similarly to that for the entire Group. The contract value of orders was below the Group level in Asia/Pacific, where a strong increase was recorded in the previous year.

The company has a very large order backlog of $€ 4.36$ billion
Krones' order backlog as of 30 June 2024 was 3.7\% up on the beginning of the year.

As forecast, order intake exceeded revenue in the first half of 2024. The book-to-bill ratio for the period was 1.09. As a result, the order backlog further increased in the first six months despite the strong revenue growth. Krones had orders on hand totalling $€ 4,359.1$ million at the end of June 2024. The order backlog thus grew by $5.7 \%$ relative to the 2023 year-end ( $€ 4,122.3$ million). Relative to the previous year's figure of $€ 3,931.4$ million, the increase was 10.9\%.

The very large order backlog enhances Krones' planning certainty and ensures production capacity utilisation in the lines and project business beyond mid2025.

Order backlog at 30 Jun (6 million)

The company continued its profitable growth in the first six months of 2024. Profitability further im-
proved despite continued high labour and material costs. This mainly reflected the company's higher efficiency. Prices for our machines and lines remained stable at their increased level.

From January to June 2024, earnings before interest, taxes, depreciation and amortisation (ERITDA) went up by 15.7\% year on year, from €221.4 million to €256.2 million. The eritda margin improved from 9.5\% to 10.0\%. After the first two quarters, Krones has thus laid a good basis for achieving its ERITDA margin target of 9.8\% to 10.3\% for the full year 2024.

Earnings before taxes (ERT) increased by 15.3\% year on year, from €161.1 million to €183.7 million in the first half of 2024. This results in an ERT margin of 7.3\% (previous year: 6.9\%). Due to the slightly higher tax rate, consolidated net income did not increase quite as strongly as ERT, rising by 11.2\% to €135.0 million (previous year: €121.4 million). Earnings per share improved to €4.27 in the first half of 2024 (previous year: €3.84).

In the second quarter of 2024, Krones generated eritda of €130.8 million, up 22.8\% on the previous year (Q2 2023: €106.5 million). The eritda margin rose from 9.5\% to 10.0\%. From April to June 2024, ERT increased at a similar rate to eritda, rising by 23.8\% year on year from €78.1 million to €96.7 million. Consolidated net income went up by 19.5\%, from €57.9 million to €69.2 million. This equates to earnings per share of €2.19 in the second quarter of 2024 (previous year: €1.83).
erita margin from 1 Jan to 30 Jun in $\%$
cerita margin in Q2 in \%

Personal expense

At $€ 378.0$ million, other operating expenses were 3.8\% higher in the reporting period than the previous year's figure of $€ 364.2$ million, whereas other operating income decreased by $€ 14.4$ million to $€ 77.9$ million. Both other operating expenses and other operating income were influenced by currency effects, although these almost cancelled each other out. At $€ 26.1$ million, own work capitalised was $€ 6.8$ million higher than in the previous year. The net balance of other operating income and expenses and own work capitalised changed from - $€ 252.6$ million in the prior-year period to - $€ 274.0$ million in the first half of 2024. As a percentage of total operating performance, this represented a decrease from $10.9 \%$ to $10.6 \%$.

In total, Krones improved ERITDA (earnings before interest, taxes, depreciation and amortisation) by $15.7 \%$ in the reporting period - more than the increase in revenue - from $€ 221.4$ million to $€ 256.2$ million. The eritda margin rose from $9.5 \%$ in the previous year to $10.0 \%$. After deducting depreciation and amortisation of fixed assets of $€ 77.7$ million (previous year: $€ 78.3$ million), earnings before interest and taxes (ERIT) increased by $24.7 \%$ to $€ 778.5$ million in the first half of 2024. It should be noted, however, that depreciation and amortisation in the previous year were affected by remeasurement adjustments. At $€ 7.2$ million, financial income was down on the exceptionally high prior-year figure ( $€ 18.0$ million), which reflected the positive impact of adjustments due to contingent purchase price payments. As the two effects in the previous year almost cancelled each other out, earnings before taxes (ERT) in 2023 was unaffected. ERT increased almost at the same rate as eritda in the reporting period by $15.3 \%$ to $€ 185.7$ million (previous year: $€ 161.1$ million). This results in an ERT margin of $7.3 \%$, compared with $6.9 \%$ in the previous year. As the company's tax rate of $27.3 \%$ in the first half-year was higher than in the prior-year period ( $24.6 \%$ ), consolidated net income improved less strongly by $11.2 \%$ to $€ 135.0$ million.

Mainly due to the signifi-
cantly smaller increase in working capital, Krones' cash flow from operating activities increased significantly by $€ 270.0$ million and free cash flow (excluding W&A activities) by $€ 219.2$ million in the first half of 2024.

Krones significantly increased cash flow from operating activities in the first half of 2024 by $€ 270.0$ million year on year to $€ 185.4$ million. The main reason for strong improvement was the smaller $€ 114.3$ million increase in working capital compared to the previous year. Last year, the increase in working capital had a negative impact of $€ 256.8$ million on cash flow. In addition to the $€ 24.6$ million increase in earnings before taxes, non-cash changes also made a positive contribution to cash flow from operating activities. At $€ 102.1$ million, this contribution was larger in the reporting period than the $€ 65.2$ million recorded in the previous year. Changes in other assets and liabilities, also contributed to the increase in cash flow from operating activities with a positive amount of $€ 11.9$ million (previous year: negative amount of $€ 54.1$ million).

Krones Group working capital to revenue at 10 June ( $\%$, average over four quarters)

Working capital as a percentage of revenue on good level at $17.4 \%$
Krones increased working capital by $€ 114.3$ million in the reporting period. The rise in contract assets and inventories was partly offset by only slightly lower trade receivables. Contract liabilities remained near-constant, while trade payables showed a slight decrease.

The ratio of average working capital for the past four quarters to revenue remained at a low level at $17.4 \%$ (previous year: $17.2 \%$ ). The working capital to revenue ratio was $17.8 \%$ as of the 30 June reporting date (previous year: $18.7 \%$ ). This reflects the smaller increase in working capital in the first half of 2024.

Significant improvement in free cash flow

Krones invested a total of $€ 71.8$ million in property, plant and equipment and intangible assets in the reporting period. As planned, this is above the low pri-or-year figure of $€ 39.4$ million. The company spent an additional $€ 166.7$ million in the reporting period on the acquisition of Netstal Maschinen AG. In addition, Krones made a deferred purchase price payment of $€ 13.4$ million in the first half of 2024 for Ampco Pumps and acquired interests in the Portuguese Perfinox Group ( $€ 3.3$ million). Despite the cash outflow from M\&A activities totalling €185.4 million, Krones improved free cash flow by $€ 187.3$ million to -€58.4 million in the reporting period (previous year:-€245.7 million). Excluding м\&A activities, free cash flow increased even more significantly by $€ 258.2$ million to €127.0 million.

Free cash flow without M\&A from 1 January to 30 June (€ million)

The company had a total cash outflow from financing activities totalling $€ 92.4$ million between January and June 2024 (previous year: $€ 73.4$ million). In the reporting period, this item included the cash outflow from the dividend payout of $€ 69.5$ million (previous year: $€ 33.3$ million), the repayment of lease liabilities in the amount of $€ 22.4$ million (previous year: $€ 17.4$ million) and the repayment of bank debt in the amount of $€ 0.5$ million (previous year: $€ 0.7$ million). The "Other" item (-€3.3 million) includes other changes in cash and cash equivalents resulting from currency translation. Krones had cash and cash equivalents totalling $€ 294.3$ million as of 30 June 2024 (previous year: $€ 329.0$ million).

Capital expenditure for He\&s and intagible assets from 1 Jan to 30 Jun (€ million)

Krones' total assets is the first half year to €1,483.4 million (31 December 2023: €1,327.4 million). The growth related to fixed assets, which increased by $€ 157.3$ million or $12.7 \%$ to $€ 1,398.3$ million as of 30 June 2024 (31 December 2023: €1,241.0 million). This reflects the acquisition and first-time consolidation of Netstal Maschinen AG (Netstal), Switzerland, as of 28 March 2024. The acquisition led to a significant increase in intangible assets, which rose from $€ 460.7$ million at the end of 2023 to $€ 373.8$ million, and also added to property, plant and equipment and right-of-use assets, which amounted to $€ 802.4$ million at the end of the first half-year (31 December 2023: €762.6 million).

The $€ 6.1$ million increase in contract liabilities to $€ 1,047.1$ million (31 December 2023: €1,041.0 million) mainly reflects the rise in prepayments from customers. At $€ 699.2$ million, trade payables were $3.3 \%$ down in the reporting period (31 December 2023: €723.2 million). As of the end of June 2024, the company had non-current bank debt totalling $€ 1.3$ million (31 December 2023: $€ 1.2$ million).

Non-current liabilities rose slightly to $€ 425.6$ million as of 30 June 2024 (31 December 2023: €410.2 million). The largest item, provisions for pensions, decreased marginally to $€ 176.7$ million (31 December 2023: $€ 178.4$ million). Other financial liabilities and lease liabilities also went down by $€ 5.7$ million to $€ 123.8$ million. Conversely, deferred tax liabilities increased by $€ 14.8$ million to $€ 28.3$ million. As of the mid-year reporting date, the company had $€ 1.9$ million in non-current bank debt (31 December 2023: €2.5 million).

There were no material exchange rate or divestment effects in the reporting period on any assets side or equity and liabilities side items of the statement of financial position. The acquisition of Netstal Maschinen AG mainly affected non-current assets and cash and cash equivalents.

The solid 38.5\% equity ratio and $€ 291.1$ million in net cash give Krones stability in the current challenging economic and political environment.

The very good half-year consolidated net income significantly exceeded the dividend that Krones paid out in June. As a result, equity increased significantly relative to the 2023 reporting date to $€ 1,771.5$ million (31 December 2023: €1,714.9 million). The equity ratio improved slightly to $38.5 \%$ as of 30 June 2024 (31 December 2023: 38.3\%). With net cash (cash and cash equivalents less bank debt) of $€ 291.1$ million at the end of the reporting period, Krones continues to have a very stable and solid financial and capital structure. In addition, the group had approximately $€ 850$ million in unused lines of credit as of 30 June 2024.

Krones improved return on capital employed (ROCE) - the ratio of EвIT to average net capital employed over the last four quarters - to $18.8 \%$ in the reporting period (previous year: $17.3 \%$ ), mainly as a result of the significantly higher EвIT.

Report from the segments

Filling and Packaging Technology

Segment revenue

In the first six months of 2024, Krones' core segment revenue increased by 11.15 year on year to $€ 2,149.6$ million.

In Filling and Packaging Technology, revenue increased in the second quarter of 2024 by a significant 20.075 year on year to $€ 1,107.0$ million. This was partly due to the acquisition of Netstal Maschinen AG, whose revenue Krones has consolidated in the core segment since 28 March 2024. Even without this effect, however, the segment grew substantially between April and June. In the first six months of 2024, revenue climbed by 11.5\% year on year, from $€ 1,927.2$ million to $€ 2,149.6$ million. The core segment's growth in the first half-year was therefore within the full-year 2024 guidance range of 9\% to 13\%.

In the new machinery business, which showed partly acquisition-driven, stronger growth than service revenue, the better availability of electronic com ponents in the first two quarters compared to the previous year had a positive impact on output. The core segment's share of consolidated revenue in the first half of 2024 was 84.1\% (previous year: 83.0\%).

Segment revenue ( $€$ million) from 1 January to 30 June

Segment earnings

The profitability of the Filling and Packaging Technology segment increased in the first half of 2024. Despite higher material and labour costs and a change in the product mix, earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 13.2\% year on year, from $€ 197.1$ million to $€ 223.1$ million. The segment's EBITDA margin improved from 10.2\% to 10.4\%. This mainly reflects higher capacity utilisation and higher efficiency. Prices for our machines and lines remained stable at their increased level.

EBITDA rose by 24.1\% from $€ 93.9$ million to $€ 156.5$ million between April and June 2024. As a result, the EBITDA margin improved improved in the first six months of 2024 to 10.4\% from 10.2\% in the previous year. Overall, Filling and Packaging Technology segment is fully on track to achieve the margin target of 10.3\% to 10.8\% for the full year 2024.

Segment EBITDA ( $€$ million) and EBITDA margin (\%) from 1 January to 30 June

Process Technology

Segment revenue

At $18.6 \%$, revenue growth in the Process Technology segment was the first six months of 2024 was within the forecast range of $15 \%$ to $20 \%$ for the full year.

After a good first quarter (revenue increase of 16.2\%), growth in the Process Technology segment accelerated further between April and June 2024. At $€ 127.4$ million, second-quarter revenue was 21.1\% higher than in the previous year ( $€ 105.2$ mil-
lion). As a result, the segment's revenue increased by $18.6 \%$ year on year in the first half of 2024, from $€ 214.7$ million to a total of $€ 254.6$ million.

One reason for the disproportionately strong growth in Process Technology in the first half-year is the acquisition of Ampco Pumps, which Krones has consolidated since 1 June 2023. In addition, revenue was positively impacted by strong sales of individual machines and components. The segment's share of consolidated revenue in the first half year was 10.0\% (previous year: $9.3 \%$ ). Krones expects revenue in the Process Technology segment to increase by $15 \%$ to $20 \%$ in the full year 2024.

Segment revenue ( $€$ million) from 1 January to 30 June

Segment earnings

The profitability of the Process Technology segment benefited in the first half of 2024 from good production capacity utilisation and strategic measures with which Krones has lastingly increased the segment's efficiency. In addition, the effects of the acquisition

The segment's profitability has The segment's profitability has improved on a lasting basis. The extra margin in the first the the sector margin in the first half of 2024 was exceptionally high at 10.1\% (previous year: $6.9 \%$ ).
of Ampco Pumps and the favourable product mix also had a positive impact on earnings. The revenue share accounted for by component sales (valves and pumps) increased in the first half of 2024 in line with our strategy. As a result, earnings before interest, taxes, depreciation and amortisation (ERITDA) improved from $€ 14.9$ million in the previous year's period to $€ 25.7$ million. The eritDA margin went up significantly, from $6.9 \%$ to 10.1\%. The eritDA margin adjusted for Ampco Pumps is also within the forecast of $8 \%$ to $9 \%$ for the full year 2024.

Between April and June, the segment generated eritDA of $€ 10.9$ million (previous year: $€ 7.8$ million). This corresponds to an eritDA margin of $8.6 \%$ (previous year: $7.4 \%$ ).

Segment eritda ( $€$ million) and eritda margin (\%) from 1 January to 30 June

The international market environment for intralogistics products has been and remains challenging. This is also reflected in the Intralogistics segment's reve-
2024, revenue decreased by $15.1 \%$. the low order intake in 2023, revenue was down 15.1
from $€ 179.0$ million to $€ 151.9$ million. It should be noted in this connection that the first six months of the previous year saw revenue rise by $31 \%$.

The Intralogistics segment's share of consolidated revenue in the first half-year decreased to 5.9\% (previous year: 7.7\%). In view of the current level of orders, the segment expects significant revenue growth in the second half-year. Krones is therefore sticking to its ambitious target, given the competitive situation, of increasing revenue by $5 \%$ to $10 \%$ in the full year 2024 compared to 2023.

Segment revenue ( $K$ million) from 1 January to 30 June

Segment earnings

The focus on smaller projects with above-average margins and a high degree of flexibility helped to keep the profitability of the Intralogistics segment relatively stable despite the lower revenue. Earnings before interest, taxes, depreciation and amortisation (ENITDA) went down in the first six months from $€ 9.4$ million in the previous year to $€ 7.4$ million in 2024. This corresponds to an enitDA margin of 4.9\% (previous year: 5.3\%). The segment's ENITDA in the second quarter of 2024 came to $€ 3.4$ million, compared to $€ 4.8$ million in the previous year. The enitDA margin was 4.5\% (previous year: 5.1\%).

After the first half of the year, Krones is sticking to its forecast of an ENITDA margin of $6 \%$ to $7 \%$ for the full year 2024. Increasing efficiency improvements and growing revenues should help the segment achieve this ambitious target.

Segment ENITDA ( $K$ million) and ENITDA margin (\%) from 1 January to 30 June

Krones employs 19,534 people worldwide

Krones increased the number of employees between January and June 2024, above all internationally. This reflects the dynamic development of our international markets and the acquisition of Netstal.

Krones' workforce increased by 1,788 employees year on year to 19,534 employees as of 30 June 2024 Compared to 31 December 2023, the number of employees worldwide increased by 1,021 or 5.5\%. This growth in the workforce is mainly due to the ongoing positive development of the international markets. The number of employees outside Germany thus increased significantly in the first half of 2024, rising by 814 or 10.4\% to 8,673 (31 December 2023: 7,859). It should be noted that 524 international employees were added as a result of the acquisition of Netstal Maschinen AG in Switzerland. The number of people employed in Germany increased by 207 or 1.9\% to 10,861 (31 December 2023: 10,654).

To ensure a sufficient pool of qualified employees for the long term, we continue to invest heavily in training and employee development. As of 30 June 2024, Krones AG had 332 young people in training (previous year: 295).

Risk and opportunity report
Events after the reporting period

Risk and opportunity report

Krones' risk management system

Krones is exposed to a variety of risks that are inextricably linked with doing business globally. We continuously monitor all significant business processes to identify risks early and to actively manage and limit them. Within our corporate strategy, we also identify, analyse and unlock opportunities. However, unlike risks, business opportunities are not documented within our risk management system.

Multi-stage risk management system

We are continually improving our risk management system on the basis of practical experience. The system consists of the following modules: risk analysis, risk monitoring, and risk planning and control.

Risk analysis

In order to identify risks early, we continuously monitor all business activities. Material project-related risks are reduced or avoided before an order is accepted. We conduct a profitability analysis of all quotes prior to order acceptance. Orders that exceed a specified volume are also subject to a product status report. Apart from profitability, we also individually record and evaluate financing risks, technological risks, regional risks and tax risks as well as scheduling and other contractual risks before accepting an order.

To manage risks that arise from changes in the market and competitive situation, we create detailed market and competition analyses for all segments and business areas on a regular basis.

In addition, we conduct a comprehensive risk inventory annually for Krones AG and all significant group companies. The results of the risk inventory and mitigating actions are used in our annual planning and forecasting. The basic principles and the process are documented in a risk manual. The risk management system not only serves the purpose mandated by law - early detection of going concern risks - but also covers all risks that may have a significant negative impact on earnings.

Risk monitoring

We use a variety of interlinked controlling processes to monitor risks within the Krones Group. Regular comprehensive reports from the individual business units keep the Executive Board and other decision-makers apprised in a timely manner of all possible risks and deviations from company planning and of the status of mitigating actions. For projects with a high contract value, potential risks are examined and evaluated in regular meetings. Employees who identify risks pass their information on without delay through the company's internal reporting system.

Risk planning and control

We primarily use the following tools to plan our business activities and control risk within our internal control system risk within our internal control system:

• Annual planning
• Mid-term planning
• Strategic planning
• Rolling forecasts
• Monthly and quarterly reports
• Capital expenditure planning
• Production planning
• Capacity planning
• Project controlling
• Accounts receivable management
• Exchange rate hedges
• Insurance policies

From today's perspective, Krones is not exposed to any risks that threaten the company's continued existence. A detailed presentation of the company's risks and an in-depth description of our risk management system can be found in the management report in the 2023 Group Annual Report, on pages 180 to 192.

The assessment of risks and opportunities has not fundamentally changed since presentation of the management report for 2023.

Events after the reporting period

There were no reportable events after the half-year reporting date (30 June 2024).

Report on expected developments

Krones confirms full-year financial targets for 2024

After the successful first two quarters, the company has laid an excellent basis for achieving its targets for the 2024 financial year. Krones increased revenue and earnings as expected compared to the same period of the previous year. The order backlog rose further due to the high order intake from January to June 2024. At the same time, various uncertainties mean that the business environment remains challenging for Krones. This includes geopolitical risks in Europe, the Middle East and other parts of the world. Material shortages and the global supply chain problems that could result from military action along important trade routes remain a source of uncertainty.

After the positive first half-year, we confirm our financial targets overall for 2024. This is based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones.

We expect consolidated revenue growth of $9 \%$ to $13 \%$. On the basis of increasing revenue, an ongoing disciplined price strategy and continued implementation of the cost optimisation measures, Krones aims to improve profitability again this year compared to 2023. At group level for 2024, the company forecasts an ERITDA margin of 9.8\% to 10.3\%. For the third performance target, return on capital employed (ROCE), Krones expects an increase this year to between $17 \%$ and $19 \%$.

Krones Group
	Guidance for 2024	H1 2024 actual
Revenue growth	$9-13 \%$	$10.1 \%$
ERITDA margin	$9.8-10.1 \%$	$10.0 \%$
ROCE	$17-19 \%$	$18.8 \%$

All forecast figures for 2024 include the effects of the acquisition of Netstal Maschinen AG, which has been consolidated within the Filling and Packaging Technology segment since 28 March 2024.

The forecast for Krones' individual segments also remains unchanged relative to the information provided in the Annual Report 2023 and is as follows:

Krones segments

Filling and Packaging Technology

	Guidance for 2024	H1 2024 actual
Revenue growth	$9-13 \%$	$11.1 \%$
ERITDA margin	$10.3-10.8 \%$	$10.4 \%$

Process Technology

	Guidance for 2024	H1 2024 actual
Revenue growth	$15-20 \%$	$18.6 \%$
ERITDA margin	$8-9 \%$	$10.1 \%$

Intralogistics

	Guidance for 2024	H1 2024 actual
Revenue growth	$5-10 \%$	$-15.1 \%$
ERITDA margin	$6-7 \%$	$4.9 \%$

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 JUNE 2024

Condensed consolidated statement of profit or loss ..... 32
Condensed consolidated statement of financial position. ..... 34
Condensed consolidated statement of cash flows ..... 36
Condensed consolidated statement of changes in equity ..... 37
Consolidated statement of comprehensive income ..... 38

Notes to the consolidated interim financial statements Consolidated segment reporting ..... 39
General disclosures ..... 40
Members of the Supervisory Board and the Executive Board ..... 48
Shareholdings ..... 49

• Legal basis

The interim consolidated financial statements of Krones AG (the "Krones Group") for the period ended 30 June 2024 have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IABB), London, applicable at the reporting date, including the interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC), as adopted by the European Union. The interim consolidated financial statements have been prepared in accordance with IAS 34 and are condensed relative to the consolidated financial statements. From 1 January 2024, Krones applies the following amendments to existing standards that have been issued by the IABB and are mandatory in the EU and have no material impact on the presentation of the financial statements:

• Amendments to IAS 1: Classification of Liabilities as Current or Non-Current
• Amendments to IAS 1: Classification of Liabilities as Current or Non-Current - Deferral of Effective Date
• Amendments to IAS 1: Non-current Liabilities with Covenants
• Amendments to IAS 7: Supplier Finance Arrangements
• Amendments to IFRS 7: Supplier Finance Arrangements
• Amendments to IFRS 16: Lease Liability in a Sale and Leaseback

IFRS standards and interpretations that have not yet entered into force have not been applied early and the interim consolidated financial statements for the period ended 30 June 2024 have not been reviewed by an auditor.

Non-controlling interests in group equity are presented on the statement of financial position where applicable as a separate item within equity. On the statement of profit and loss, the share of profit or loss attributable to
non-controlling interests is presented where applicable as a component of consolidated net income. The shares of consolidated net income attributable to the owners of the parent and to non-controlling interests are presented separately where applicable.

Non-controlling interests are additionally shown where applicable on the statement of changes in equity. The explanatory notes provided in the following comprise disclosures and commentary that, in accordance with IFRS, must be included as notes to the interim consolidated financial statements in addition to the consolidated statement of financial position, consolidated statement of profit and loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows.

The consolidated statement of profit and loss was prepared using the nature of expense method. The group currency is the euro.

- Consolidated group

Besides Krones AG, the interim consolidated financial statements of Krones AG for the period ended 30 June 2024 include all material domestic and foreign subsidiaries over which Krones AG has direct or indirect control.

45\% of the shares in Perfinox Indistria Metalúrgica S.A., Vale de Cambra, Portugal and Cambra-System - Engenharia de Sistemas, S.A., Vale de Cambra, Portugal (Perfinox) were acquired directly and indirectly in the 2024 financial year. The companies are accounted for using the equity method.

In addition, Krones Recycling GmbH, Flensburg, has been established and included in the consolidated group.

In the 2024 financial year, Krones acquired 100\% of the shares in Netstal Maschinen AG, Näfels, Switzerland on 28 March 2024. The acquisition of the

Netstal Group is a strategic milestone. As a leading supplier of injection moulding machines for the beverage market (PET preforms and closures), Netstal is a perfect strategic fit for Krones. For one thing, the acquisition will enable the company to provide additional innovative products, technologies and services. In addition, following the acquisition of Netstal, Krones now has all technologies required for circular PET solutions - from injection moulding of preforms to PET bottle production and from filling and packaging to used bottle recycling.

Initial accounting was completed as of the acquisition date.
The table below presents the consideration transferred for the acquisitions and the fair values of the assets identified and liabilities assumed at the acquisition date.

	Netstal
€ million	Fair value
Goodwill	37.2
Non-current assets	118.0
Current assets	80.0
(of which trade receivables)	23.2
Cash and cash equivalents	10.3
Total assets acquired	$\mathbf{2 4 5 . 6}$
Liabilities	75.1
Total liabilities acquired	$\mathbf{7 5 . 1}$
Net assets acquired	$\mathbf{1 7 0 . 5}$
Non-controlling interests	$\mathbf{0 . 0}$
Purchase prices	170.5
of which paid in cash	170.5
of which earn-out	0.0
of which equity	0.0

The goodwill recognised for Netstal also relates to the integration of its employees into the group.

The total amount of goodwill that is expected to be deductible for tax purposes is $€$ - million.

The fair value of the trade receivables equals the gross amount. None of the trade receivables are impaired and the contractually agreed amounts are expected to be recoverable in their entirety.

The revenue generated since acquisition date amounted to $€{45.6}$ million and net income amounted to - $€{0.2}$ million. Had the above acquisition already been made as of I January 2024, Krones would have reported revenue of $€{2,599.5}$ million. The net income would amount to $€{109.4}$ million. This includes effects from purchase price allocations for 2024. A notable negative factors was the amortisation of the intangible assets. The purchase price allocation has not yet been finalised, as the underlying financial information is still being prepared and reviewed. As a result, the allocation of the purchase price to individual assets and liabilities may still change.

The costs directly attributable to the acquisition amount to $€ 1.5$ million and were recognised as expense.

Consolidation principles
The separate financial statements of the companies included in the interim consolidated financial statements are prepared as a fundamental rule in accordance with uniform accounting policies. They are all prepared as of the reporting date of the interim consolidated financial statements.

Acquisition accounting is performed in accordance with DRS 3 (Business Combinations), under which all business combinations must be accounted for using the acquisition method. The acquired assets and liabilities are therefore recognised at fair value.

Goodwill that arose before I January 2004 continues to be accounted for as a deduction from reserves.

Shares in the equity of a subsidiary that are not attributable to the parent are presented as non-controlling interests.

Companies for which Krones has the ability to exercise significant influence over their business and financial policies (generally by indirectly or directly holding between $20 \%$ and $50 \%$ of voting rights), are accounted for in the interim consolidated financial statements using the equity method and initially recognised at cost. Any excess of the cost of the investment over Krones' share of the net fair value of an associate's identifiable assets and liabilities is adjusted on a fair-value basis and the remaining amount is recognised as goodwill. Goodwill relating to the acquisition of an associate is included in the carrying amount of the investment and is not amortised. Instead, it is tested for impairment as part of the entire carrying amount of the investment in the associate. Krones' share in an associate's profit or loss subsequent to the acquisition date is recognised in the consolidated statement of profit and loss. The carrying amount of associates is increased or decreased to recognise cumulative changes in fair value subsequent to the acquisition date. Krones' share in associates' gains or losses resulting from transactions between Krones and its associates is eliminated.

Inter-company receivables, liabilities, provisions, revenues and expenses between consolidated companies are eliminated in consolidation.

This also applies for inter-company profits or losses from trade between group companies provided the inventories from these transactions are still held by the group at the reporting date.

Currency translation

The interim consolidated financial statements are presented in euros, the functional currency of Krones AG.

The financial statements of consolidated companies that are prepared in a foreign currency are translated on the basis of the functional currency approach under 14221 using a modified closing rate method. Because the subsidiaries primarily operate independently in the economic environment of their respective countries, the functional currency is normally the local currency for each subsidiary. In the interim consolidated financial statements, assets and liabilities are therefore translated at the closing rate at the reporting date, while income and expenses from the financial statements of subsidiaries are translated at average annual rates.

Any exchange differences resulting from translation using these different rates in the statement of financial position and the statement of profit and loss are recognised directly in other comprehensive income. Exchange differences resulting from the translation of equity using historical exchange rates are also recognised in other comprehensive income.

Exchange rate differences compared with the previous year arising from acquisition accounting are normally recognised outside profit or loss, in other profit reserves.

The separate financial statements of Krones AG and its domestic and foreign subsidiaries have been prepared using uniform accounting policies, in accordance with IFRS 10. As a fundamental rule, the accounting policies used in the interim consolidated financial statements are the standards and interpretations applied as of 31 December 2023.

Estimates and judgements

In preparing the interim consolidated financial statements, management makes judgements, estimates and assumptions that affect the reported amounts of assets and liabilities as of the reporting date, the disclosure of contingent liabilities and the reported amounts of expenses and income. The uncertainty inherent in such assumptions and estimates can, however, lead to events that result in material adjustments to the carrying amount of affected assets and liabilities in future periods. Krones does not currently expect that the consequences of climate change will have any significant impact on its business model.

Areas involving estimates and assumptions are explained in more detail in the notes to the 2023 consolidated financial statements. Due to a persistently complex and uncertain macroeconomic and geopolitical environment, particularly as a result of the ongoing conflict in Ukraine and the conflict in Israel/Gaza/Middle East, with continuing inflation, continued high interest rates and the related risks of a slowdown in economic growth, estimates and judgements are subject to increased uncertainty. Available information on expected economic developments and country-specific government measures was taken in account in adopting the estimates and judgements.

Other disclosures relating to financial instruments

The following tables present the financial instruments by their measurement categories and classes and also show how the financial instruments that are measured at fair value fit within the fair value hierarchy.

Segment reporting

Krones reports on three operating segments, which are the strategic business units. These are organised by product divisions and services and managed separately due to the different technologies they cover. The Executive Board, as the chief operating decision maker, manages the company as a whole on the basis of monthly reports from the segments.

Segment 1 comprises Filling and Packaging Technology, Segment 2 Process Technology and Segment 3 Intralogistics.

Segment performance is measured on the basis of internal reporting to the Executive Board, primarily segment revenue and segment EROTIDA.

Intra-segment transfers are made on arm's length terms. There is no material inter-segment revenue.

Related party transactions

Related party transactions have no material impact on the profit or loss or financial position in the interim consolidated financial statements.

Events after the reporting period

There were no material events for Krones after the end of the reporting period on 30 June 2024.

Pursuant to Section 8 (I) of the articles of association, eight members of the Supervisory Board are elected by the shareholders in accordance with the German Stock Corporation Act (Sections 96 (I) and 101). Eight members are elected by the employees pursuant to Section 1 (I) and Section 7 (I) Sentence 1 Number 1 of the Codetermination Act.

Supervisory Board				Executive Board
	Robert Friedmann	Professor Dr. jur. Susanne Nonnast	Petra Schadeberg-Hermann	Christoph Klenk
	Chairman of the Supervisory Board	Professor at Ostbayerische	Managing partner	Chief Executive Ofice
* Universitätsklinikum	managing board of the	Technische Hochschule (otrv)	Krombacher Brauerei
	Regensburg	Regensburg	Bernhard Schadeberg GmbH \& Co. KG,	Uta Anders
* Wirtschaftsberat	* 27 Friedrichshafen AG	Krombacher Finance GmbH,	Krombacher Finance GmbH,	Chief Financial Officer
Bayerische Landesbank		Schawei GmbH,	Schawei GmbH,
	Oliver Ginder**	Diversity Children \& Co.	Diversum Holding GmbH \& Co.	Thomas Ricker
Josef Weitzer**	Deputy Chairman of the	Die German Trade Union	Jürgen Scholz**	Chief Sales Officer
Deputy Chairman of the	Council, Rosenheim	Confederation in Bavaria)	First authorised representative
Supervisory Board, Chairman of		Beate Eva Maria Pöppel**	G. Metall administrative office,	Markus Tischer
Group Central Works Council	Thomas Hilt**	Independent Member of the	Regensburg	International Operations
Chairman of the Works Council	Chairman of the Employees'	Employees' Council	* Infineon Technologies AG	and Services
Neutraubling	Council, Nittenau
* Bay Betriebskrankenkassen	Markus Hüttner**	Stefan Raith**	Stephan Selfert	Ralf Goldbrunner
Norbert Broger	Deputy Group Employees'	Head of Business Line, Line Solutions	Chaiman of the Executive Board	Operations
Diplom-Kaufmann	Council Chairman	*re-suit AG	of Köhler AG, Hamburg
Nora Diepold	Deputy Composite Employees'	Olga Redda**	*Boad of Strustees of the Köhler
Chief Executive Officer	Council Chairman	Second authorised representatives	Foundation
we Immobilienverwaltung GmbH,	Deputy Employees' Council	and managing director,	Matthiass Winkler
Regensburg	Chairman, Neutraubling	u. Metall Regensburg	Partner at Baker Tilly Germany	Partner at Baker Tilly Germany
		*ostkan GmbH
		*ams ostkan International GmbH
		*Maschinenfabrik Reinhausen GmbH

4

OTHER INFORMATION

Responsibility statement ..... 54
Financial glossary ..... 55
Publishing information ..... 56
Financial calendar ..... 56
Contact ..... 56

"To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the group, and the interim consolidated management report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group over the remainder of the financial year."

Neutraubling, July 2024

Themas Ricker
cso

Markus Tischer

Kalf Goldbrunner