KRN.DE 126.6 (+0.96%)
DE0006335003Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-07

Krones (KRN.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Comprehensive Piotroski F-Score analysis of Krones (KRN.DE) for 2023 with detailed profitability, liquidity, and operating metrics. Final score: 4/9.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 4

We're running Krones (KRN.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
0
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

Krones (KRN.DE) was analyzed using the Piotroski F-Score, which assesses financial strength based on profitability, liquidity, and operating efficiency. The company scored 4 out of 9, indicating moderate financial health. Key points include positive net income and cash flow from operations, growth in ROA, and stable share count. However, Krones has a declining current ratio, leverage ratio, gross margin, and asset turnover ratio. The mixed results show some areas of strength but also raise concerns in liquidity and operational efficiency.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski score of 4, investing in Krones (KRN.DE) may require cautious evaluation. While the company has strengths in profitability and cash generation, declining metrics in liquidity and operational efficiency warrant closer scrutiny. If you are looking for strong, undervalued stocks, you might want to consider monitoring Krones for improvements or looking into other companies with higher Piotroski scores.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Krones (KRN.DE)

Company has a positive net income?

Net income is an essential criterion in the Piotroski F-Score, indicating the overall profitability of a company. A positive net income shows that a company is generating profit, hence adding 1 point.

Historical Net Income of Krones (KRN.DE)

For the year 2023, Krones (KRN.DE) reported a net income of €224.51 million, which is indeed positive. This earns the company 1 point in the Piotroski F-Score analysis. Over the past two decades, Krones has experienced fluctuations in earnings. The net income data from the last 20 years reveals both positive years, such as €157.43 million in 2015 and €170.75 million in 2016, and negative ones, most notably -€79.71 million in 2020. This volatility emphasizes the importance of examining not just the latest figures but long-term trends as well. For 2023, the positive net income is a good indicator of profitability.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) criterion measures a company's effectiveness in generating cash from core business operations. It's a critical metric for evaluating a company's ability to sustain and grow its business without relying on external financing.

Historical Operating Cash Flow of Krones (KRN.DE)

In 2023, Krones (KRN.DE) reported a CFO of 137,622,000, indicating a positive cash flow. This is a favorable trend, earning the company 1 point in the Piotroski analysis. Reviewing historical data, Krones has mostly reported positive CFOs over the last 20 years, with the only negative year being 2017. The positive cash flow in 2023 aligns with the majority trend and suggests consistent operational efficiency and financial health. It's also worth noting that the operating cash flow in 2023 is a decrease from 2022's 478,699,000. This decline warrants a closer examination of the company's cash flow drivers and operational adjustments, but overall, the positive CFO is a good sign.

Return on Assets (ROA) are growing?

Change in ROA measures the change in Return on Assets from one year to the next and is crucial in understanding a company's profitability trend.

Historical change in Return on Assets (ROA) of Krones (KRN.DE)

Krones (KRN.DE) saw an increase in ROA from 0.0488 in 2022 to 0.0519 in 2023. This positive change adds 1 point to its score in the Piotroski analysis. This trend indicates an improvement in the company's efficiency at turning its assets into profit, showcasing better asset utilization. Industry median ROA has been consistently higher than Krones'. For context, looking at the 20-year industry median trends reveals that Krones has lagged behind considerably as industry medians have fluctuated between 0.3154 and 0.3616 while Krones shows a significantly lower ROA.

Operating Cashflow are higher than Netincome?

The criterion checks if the Operating Cash Flow exceeds Net Income, which indicates quality earnings as cash flow is less easily manipulated by accounting practices.

Historical accruals of Krones (KRN.DE)

For 2023, Krones (KRN.DE) reported an Operating Cash Flow of €137.62 million and a Net Income of €224.51 million. Since Operating Cash Flow is lower than Net Income, this will add 0 points. This trend is concerning as consistent cash flow is essential for financing operations. Historical data shows variability: in 2018, 2020, and 2021, OCF exceeded Net Income, but recent years show declining OCF relative to NI (-61.3% OCF vs. NI). Monitoring is crucial to ensure this does not signify poor earnings quality.

Liquidity of Krones (KRN.DE)

Leverage is declining?

Leverage compares a company's debt levels to its equity. It's vital to monitor because a rising leverage may indicate potential financial instability.

Historical leverage of Krones (KRN.DE)

Krones' leverage ratio climbed slightly from 0.0209 in 2022 to 0.0229 in 2023, suggesting a marginal increase in debt compared to equity. Analysing the historical data, Krones had very low or no leverage for most of the last two decades. Notable leverage began to appear in 2020. Given this recent uptick, it means Krones has started engaging in more debt-financed activities, which increases financial risk slightly. This change sets the leverage criterion score to 0, but it’s critical to note that their leverage is still relatively low compared to industry norms.

Current Ratio is growing?

The Current Ratio evaluates a company's ability to pay short-term obligations with its short-term assets. It is crucial for assessing short-term financial health.

Historical Current Ratio of Krones (KRN.DE)

In 2022, Krones had a Current Ratio of 1.3679, which decreased to 1.3392 in 2023, indicating a slight reduction in its capability to cover short-term liabilities with short-term assets. Although the decline seems minor, it reflects a trend that requires scrutiny as the company's immediate financial flexibility has experienced some contraction. Historically, Krones had a significantly higher Current Ratio in years like 2011 (2.7576) and 2012 (2.7909). When compared to the industry's median current ratio, which stood at 1.7757 in 2023, Krones is underperforming, suggesting relatively lower liquidity management efficiency. Therefore, for the Piotroski score concerning the Current Ratio, no point is awarded this year.

Number of shares not diluted?

Change in Shares Outstanding is crucial as it affects the ownership dilution and earnings per share. A lower outstanding share count is generally favorable.

Historical outstanding shares of Krones (KRN.DE)

The number of outstanding shares for Krones (KRN.DE) in 2023 remained flat at 31,593,072 compared to 2022, which also recorded the same number of shares. Over the last 20 years, the number of shares has fluctuated slightly, with notable decreases in 2009 and 2010 before stabilizing. Given that there was no increase in 2023, this trend neither adds nor detracts from the investor's value, resulting in a score of 0 for this criterion.

Operating of Krones (KRN.DE)

Cross Margin is growing?

Change in Gross Margin is a measure of how a company's profitability evolves across periods. It is crucial as it reflects the company’s ability to manage production costs relative to revenues.

Historical gross margin of Krones (KRN.DE)

For Krones (KRN.DE), the Gross Margin decreased from 0.5093 in 2022 to 0.4949 in 2023. This is a decrease, suggesting that the company’s ability to manage its production costs relative to revenues has weakened. The decline, although slight, indicates the company faced higher costs or reduced prices. Additionally, comparing Krones' Gross Margin to the industry median (0.3492 in 2023), Krones still performs above the industry median but the downward trend warrants caution. Therefore, the score for this criterion is 0.

Asset Turnover Ratio is growing?

Comparing periods asset turnover gives insights into operational efficiency.This indicates how effectively a company uses its assets to generate revenue.

Historical asset turnover ratio of Krones (KRN.DE)

For Krones (KRN.DE), the Asset Turnover has slightly decreased from 1.0982 in 2022 to 1.0917 in 2023, resulting in a Piotroski score of 0 for this criterion. This slight decrease suggests a marginal decline in efficiency in generating revenue from assets. Historical data shows fluctuations from 1.8727 in 2012 to a low of 1.0316 in 2009. The trend in 2023, though slightly down, remains relatively consistent with recent historical performance yet signals no improvement in the current asset utilization efficiency.


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