Ad Hoc 2006
Ralf Sammeck to succeed Andreas Mössner as head of sheetfed sales in August 2007
In its November session Koenig & Bauer’s supervisory board approved changes at the executive level. On 31 July next year, at his own request, Andreas Mössner (43) will step down from the parent company‘s board of directors, resigning the position he has held since January 1998 as executive vice president for sales at KBA’s sheetfed division in Radebeul (Dresden). He will be replaced on 1 August 2007 by Ralf Sammeck (44), who has guided KBA North America’s sheetfed division to new heights since being appointed president and CEO in October 2002. Mössner has accepted an appointment by the supervisory board of KBA’s Austrian subsidiary, KBA-Mödling, as successor to managing director Wolfgang Schischek (62), who retires at the end of January 2008.
KBA: sales climb, profit jumps
In the third quarter the KBA group more or less wiped out a shortfall from the first half-year with an order intake worth €527.3m – the highest in any quarter in its history. New orders for the nine months to 30 September totalled €1,246.6m, just 4.8% below last year’s figure of €1,309.9m, which was boosted by a number of big contracts. Sales climbed 8.9% from €1,107.3m to €1,205.5m. The €1,082m backlog of unfilled orders was roughly the same as in 2005 (€1,095.6m). Group operating profit for the nine months to 30 September almost doubled to €30.1m (2005: €16.1m), and pre-tax earnings (EBT) more than trebled to €30.4m (2005: €8.9m). Net profit, at €22.4m, was more than five times the prior-year level of €4m. Earnings per share improved accordingly from 25 cents in 2005 to €1.38. KBA management reaffirmed its spring prognosis of annual sales in excess of €1.7bn and a pre-tax profit substantially higher than the €25.8m reported in 2005.
KBA posts big jump in profits
In the first six months the KBA group posted a modest 5.1% lift in sales to €726.5m (2005: €691m). While the volume of new orders, at €719.3m, fell short of the prior year’s exceptionally high figure of €860.9m following softer sales of sheetfed, webfed gravure and security presses, the pace picked up again in July. An order backlog of €1,033.7m (2005: €1,062.9m) will keep production plants busy for the rest of the year.
A substantial boost in earnings from web and special presses in the second quarter transformed an operating loss of €6.5m from the first quarter into an €18.8m profit (2005: €0.4m loss), even though sheetfed earnings were well below target. According to KBA president and CEO Albrecht Bolza-Schünemann, efforts to secure an innovation premium commensurate with the competitive benefits delivered over more conventional sheetfed technology are frustrated by market pressures. After deducting a financial loss of €0.1m (2005: €5.7m loss) KBA posted a pre-tax profit of €18.7m (2005: €6.1m loss), closing the quarter with a net profit of €12.5m (2005: €6.6m loss) and a proportional profit per share of 77 cents (2005: loss per share of 41 cents).
Cash flows from operating activities eased to €52.9m, from €64.2m a year earlier, while the free cash flow shrank to €32.5m (2005: €56.5m). Funds at the end of June (€143.4m) were substantially higher than at the end of 2005 (€129m). Equity stood at €456.2m, or 31.8% of the balance sheet total.
Notwithstanding the negative impact of hostilities in the Middle East on energy and commodity prices, currency movements and exports, KBA is targeting an increase in group sales to €1.7bn or more and a substantial improvement in profits compared to 2005.
Upbeat prognosis reaffirmed for 2006
Speaking to a packed hall at the 81st AGM convened by German press manufacturer Koenig & Bauer AG (KBA), group president and CEO Albrecht Bolza-Schünemann reaffirmed his upbeat prognosis for 2006 despite the fact that in the first five months demand had been relatively modest. Sales topped the prior-year figure by more than €40m, and though shipping schedules meant they once again fell short of the an-nual target and thus impaired group earnings, the situation at mid-year will be better than at the end of the first quarter. While the volume of new orders failed to equal the previous year’s exceptionally high figure, and bookings for special security and gravure presses also eased, sales of sheetfed and commercial presses picked up in the second quarter. A €1bn-plus backlog of orders will keep KBA’s web press pro-duction plants busy until well into the first quarter of 2007, while the sheetfed division has sufficient orders to secure production until almost the end of the current year. In view of the big increase in sales and a more earnings-friendly shipping schedule in the second half-year, Albrecht Bolza-Schünemann saw no cause to amend his March prog-nosis of a single-digit increase in group sales and a higher pre-tax profit than in 2005 (€25.8m). However, he pointed out that the recent tariff agreements in the German metalworking and electrical industries will hit group earnings to the tune of several million euros. He added that the risks inherent in currency fluctuations between the euro and the US dollar, and movements in the prices of energy and raw materi-als, mean that it would be premature at this point in time to make a detailed prognosis with regard to sales and earnings in 2006.
He revealed that the Federal Cartel Office had recently approved the acquisition of Stuttgart-based metal-decorating specialist LTG-Mailänder by KBA subsidiary Bauer+Kunzi, which is located in the same area and is already a major player in this lucrative niche market. By expanding its metal-decorating activities into a much bigger opera-tion with a payroll of over 300 and sales in excess of €90m KBA is aim-ing to boost its global market share and gain potentially higher returns.
KBA subsidiary Bauer+Kunzi planning to acquire metal decorating specialist LTG-Mailänder
Metal-decorating press manufacturer Bauer+Kunzi GmbH in Ditzingen near Stuttgart, a successful supplier to the metal decorating industry since 1974, and since 2003 a subsidiary of the Würzburg printing press manufacturer Koenig & Bauer AG (KBA), is pursuing plans to acquire the full assets of Stuttgart-based LTG Print Systems Holding GmbH, including the latter's active metal-decorating supplier LTG-Mailänder GmbH & Co KG and the associated sales subsidiaries in Italy, Great Britain and Japan. The recently signed acquisition agreement, a transaction valued in the lower two-digit million Euro range, is to be implemented by transferring the holding of the London-quoted parent company LTG Technologies PLC. The deal is currently still subject to the expected approval of the German Federal Cartel Office.
The acquisition of metal decorating specialist LTG-Mailänder is the logical continuation of the strategy charted over recent years by Koenig & Bauer AG, the parent company of Bauer+Kunzi GmbH, namely to flank the core competence demonstrated in a strong market position in the high-volume sectors for sheetfed offset, commercial web offset and newspaper printing with targeted acquisitions strengthening its role in niche markets less dependent on the general economic and advertising climate.
Outlook good for 2006 after slow start
German printing press manufacturer Koenig & Bauer AG (KBA) won contracts worth €340.6m in the first quarter, 10.9% below the record figure of €382.4m for the corresponding period in 2005. While new bookings for web and special presses jumped 21.2% to €167.9m following a string of orders for commercial and security presses and big newspaper presses, soft demand in January and February slowed the inflow of new orders for sheetfed presses to €172.7m, 29.2% down on 2005 (which, however, was 40% up on 2004). Far from signalling a downturn, the dip in sheetfed contracts proved to be a temporary blip that allowed the sheetfed offset division to consolidate strong prior-year growth before returning to business as usual in March.
Shipping schedules resulted in group sales of €309.4m, roughly on a par with the previous year (€311.3m) but a long way off course for meeting the annual target. However, an order backlog of €1,072.1m, 11.2% up on the high prior-year figure of €964.1m, will keep KBA’s production plants busy until well into the second half of the year.
Lagging sales also impacted on earnings, leading to an operating loss of €6.5m (2005: –€6.2m) and a net loss of €5.3m (2005: –€6.8m). The proportional loss per share was 33 cents (2005: loss of 42 cents).
Despite a weak start to the year, KBA stands by its end-of-quarter prognosis for 2006 of a single-digit increase in sales and a substantial improvement in pre-tax earnings compared to 2005 (€25.8m).
Koenig & Bauer AG (KBA) 2005:Renewed brisk growth and higher profits
The KBA group benefited from rising domestic demand in 2005 to boost sales by an impressive 13.9% to €1,621m (2004: €1,423m). Operating profit jumped to €33.3m, from €20.4m the previous year. Pre-tax earnings (EBT) of €25.8m (2004: €16m) and a net profit of €18.6m (2004: €11.8m) were both on target, while earnings per share of €1.15 compared well with the prior year’s 73 cents. At the AGM on 22 June management and the supervisory board will therefore propose a dividend of 40 cents per share, up from 25 cents in 2004.
The order intake climbed 21.2% to €1,768.9m (2004: €1,459.1m). Despite an increase in shipments the backlog of unfilled orders at year’s end swelled €150m to €1,040.9m (2004: €893m) and will keep KBA’s production plants busy for some months to come.
Further details will be released this afternoon at a press conference at Pressehaus Stuttgart.
Change in Koenig & Bauer executive board
At its meeting in March the Koenig & Bauer AG (KBA) supervisory board signed off on the financial statements for 2005 (see separate press release) and approved a change in the executive board. Following a successful tenure, Walter Schumacher (49), executive vice-president for web press sales, marketing and service since 1 January 1999, will step down by mutual agreement on 30 April to pursue his personal roadmap. With effect from 1 May he will be succeeded by Christoph Müller (45), who joined Albert-Frankenthal (now part of KBA) in 1984 and was appointed vice president for commercial web offset and publication rotogravure sales in 1998.