Ad Hoc 2008
Nine-month profit but market, sales and earnings demand consolidation
Like the rest of the sector, printing press manufacturer Koenig & Bauer AG (KBA) is experiencing the knock-on effects of the current financial turmoil on its export business. Following a slump in demand in key markets such as the USA, and the abrupt tightening of credit lines for customer investments, group order intake in the first nine months fell 12.5% to EUR1,005m (2007: EUR1,148.2m). Group sales, at EUR1,075.3m, were 11% below the prior-year figure of EUR1,208.6m. But despite narrower contribution margins, higher material and energy prices, the substantial expense associated with intermittent below-capacity plant utilisation and allowances for bad debts, KBA posted a modest operating profit of EUR7.9m (2007: EUR41.5m). A financial loss of EUR4.3m was accompanied by a plunge in earnings before taxes (EBT) from EUR38m to EUR3.6m. KBA closed the period with a net profit of EUR7.8m (2007: EUR29.8m) and proportional earnings per share of 47 cents (2007: EUR1.83).
A drop in the order backlog from EUR888.3m to EUR721.6m resulted in below-capacity production output at sheetfed and web press production plants, and this continued in the fourth quarter. As a countermeasure, overtime and holiday accounts are being run down and KBA’s Radebeul plant has submitted an application to introduce short-time work from November onwards.
Reaffirming the revised sales and profit forecast issued in late September for the current financial year (ending 31 December), KBA now anticipates sales of EUR1.5bn (down from EUR1.7bn in 2007) and a group pre-tax loss in the high double-digit millions due to a high one-off expense for consolidating sheetfed production plants, though the pre-restructuring operating loss is unlikely to exceed EUR10m. With global demand exceptionally weak, and little likelihood of improvement in the foreseeable future, management sees an urgent need to reduce sheetfed capacity, having barely completed the capacity adjustment initiated at its web press plants in September 2007. Around 600 of the 3,600 jobs at the sheetfed factories in Radebeul near Dresden (Germany), Mödling (Austria) and Dobruška (Czech Republic) will have to go. Details are still being negotiated with workers’ representatives.
Koenig & Bauer AG: 2008 sales and profit targets no longer attainable
Following a supervisory board meeting to discuss the latest financial figures, Koenig & Bauer AG (KBA) management board announced a downward adjustment in the 2008 earnings forecast issued on 31 March and reaffirmed at the AGM on 19 June in the wake of a highly successful Drupa trade fair. KBA anticipates a slide in group sales for the current financial year (ending 31 December) from €1.6bn to around €1.5bn. Pre-tax earnings, which were originally set to equal last year’s figure of €63.2m, will turn negative in view of a considerable slump in sales of sheetfed presses, provisions for consolidating sheetfed production activities, and adjustments in inventory value.
On current form, sales of web and special presses will exceed targets. Nevertheless, the profit generated will not be sufficient to balance the sheetfed division’s operating loss enlarged by provisions for restructuring measures and value adjustments.
The increase in sheetfed orders anticipated in connection with a sizeable volume of contracts negotiated at Drupa has failed to materialise. Particularly in the USA, but also in other countries affected by the present financial crisis and economic downturn, it is still proving difficult for printers to obtain corresponding funding. The already perceptibly reduced demand in the print media industry has softened further since summer 2008. This has impacted on all press manufacturers, and at KBA also on the web and special press divisions.
KBA management plans to compensate the foreseeable underutilisation of production capacities in the fourth quarter by making greater short-term use of its scheme of flexible working hours. Following a double-digit drop in the worldwide market volume for newspaper, commercial and sheetfed presses over the past eighteen months, KBA management has extended to the sheetfed division the capacity reductions initiated in the web division in September 2007. This adjustment to a probably longer spell of weaker demand, which will include human resources measures, will affect group facilities in Radebeul (Germany), Mödling (Austria) and Dobruška (Czech Republic).
KBA will publish further information with its quarterly report on 14 November.
Koenig & Bauer AG: Drupa sales boost in second half-year
At the 83rd AGM of German press manufacturer Koenig & Bauer AG (KBA), group president and CEO Albrecht Bolza-Schünemann revealed that Drupa, a 14-day print media trade fair recently held in Düsseldorf, had brought in orders worth more than €200m, surpassing the figure for the previous Drupa in 2004. The surge in orders booked at Drupa, along with an-ticipated post-Drupa business, will substantially improve capacity utilisation and sales at KBA's sheetfed production plants. Major web press contracts booked at the turn of the year, and a brisk inflow of orders over the past few months, will keep the group's web press facili-ties busy until the end of the year and materially boost sales in the third and fourth quarters. Following the divestment of KBA's rotogravure business in September 2007, an agreement has now been reached with staff representatives on personnel reductions at the relevant plants. In addition to natural attrition, which has already trimmed the payroll by 180, and other measures such as phased retirement, there will be around 100 redundancies at KBA's Frankenthal operation. While sales of metal-decorating presses and at subsidiary KBA-Metronic were on target at the end of May, the figures for security presses failed to equal the prior year's high level.
Bolza-Schünemann admitted that, with sales and profits flagging in the first five months, his €1.6bn end-of-March sales prognosis for 2008 represents something of a sporting challenge. However, in view of the major boost expected in the second half-year, he believes this to be a realistic figure. Notwithstanding the risks associated with market activities, currency ex-change and the financial crisis, KBA is aiming for a pre-tax profit roughly on a par with 2007 (€63.2m), following a big increase in shipments in the third and fourth quarters.
To stabilise earnings, diversify risk and reduce the group's dependence on more volatile print markets, Bolza-Schünemann stated that KBA will continue to pursue its successful strategy of driving growth in niche print markets and is on the watch for opportunities to diversify through judicious acquisitions, and in addition to stepping up its service and consultancy ac-tivities does not exclude a move into consumables or non-print sectors such as environ-mental technology or other high-growth engineering applications. The group has already ac-quired expertise and patents on air purification through its Stuttgart subsidiary, KBA-MetalPrint.
Koenig & Bauer AG: orders up, turnover down
Defying the financial crisis, a strong euro and a pre-Drupa lag in demand for sheetfed presses, in the first three months of the year German printing press manufacturer Koenig & Bauer AG (KBA) posted a 5.5% increase in new orders to €370.3m (2007: €350.9m). Its web and special press division bucked the industry trend with major contracts from US and Turkish newspaper publishers, which helped boost the order intake by an above-average 10.6% from €180.2m to €199.3m. And despite a sluggish US market, the volume of incoming orders for sheetfed presses, at €171m, was roughly the same as the previous year (€170.7m).
As in the years 2004 to 2006, group sales fell well short of the prior-year figure (€301.7m, compared to €414.2m). While sheetfed sales of €144m were just 8% lower than in 2007 (€156.6m), sales of web and special presses slid by more than a third, from €257.6m to €157.7m. This is because most web presses will not ship until the second half of the year.
The shortfall in sales impacted heavily on results, with an operating loss of €5m (2007: €13.5m profit) and pre-tax loss of €6.4m (2007: €13m profit) lagging targets by a wide margin. KBA closed the quarter with a net loss of €1m (2007: €9.3m profit) and proportional earnings per share of -6 cents (2007: +57 cents).
The volume of unfilled orders for web and special presses rose from €565.9m to €611.5m, ensuring that the level of plant utilisation will be higher into the autumn than it was in the past few quarters. But the backlog of orders for sheetfed presses fell from €319.5m to €249m, so further contracts are needed to safeguard production in the second half-year. KBA is confident that the Drupa trade fair that opens in late May will provide the necessary stimulus.
KBA president and CEO Albrecht Bolza-Schünemann says: "Looking beyond the unsatisfactory first-quarter sales and earnings, and notwithstanding the economic, currency and commodity-related risks our group is facing, we stand by the targets we stated in late March of around €1.6bn in sales and a pre-tax profit on a par with 2007 (€63.2m)."
Koenig & Bauer AG: mehr Gewinn bei etwas weniger Umsatz
Mit 1.703,7 Mio. € erreichte der Konzernumsatz des Druckmaschinenherstellers Koenig & Bauer AG (KBA) im Geschäftsjahr 2007 beinahe den Rekordwert des Vorjahres (2006: 1.741,9 Mio. €). Der Auftragseingang blieb allerdings durch die konjunkturelle Abkühlung in den USA, die relativ verhaltene Investitionsneigung bei Großanlagen und den Nachfrageeinbruch im inzwischen verkauften Segment Illustrationstiefdruck mit 1.546,9 Mio. € um 6,2 % hinter dem Vorjahr (2006: 1.649,7 Mio. €) zurück. Entsprechend verringerte sich der Auftragsbestand zum Jahresende auf 791,9 Mio. € (2006: 948,7 Mio. €).
Aufgrund etwas besserer Margen beim ausgelieferten Produktportfolio und der weiter mit Nachdruck verfolgten Kosteneinsparung konnte die sehr exportintensive KBA-Gruppe die Belastungen durch den starken Euro, höhere Materialpreise, gestiegene Tariflöhne und Rückstellungen für die geplante Kapazitätsanpassung an den Rollenstandorten kompensieren und das Betriebsergebnis auf 65,7 Mio. € (2006: 46,2 Mio. €) steigern. Bei einem leicht negativen Finanzergebnis erhöhten sich das Ergebnis vor Steuern (EBT) auf 63,2 Mio. € (2006: 47,4 Mio. €) und der Konzernüberschuss auf 49,0 Mio. € (2006: 34,3 Mio. €). Das anteilige Ergebnis je Aktie verbesserte sich gegenüber 2006 von 2,11 € auf 3,00 €. Der für die Ausschüttung an die Aktionäre maßgebliche Bilanzgewinn der Muttergesellschaft Koenig & Bauer AG blieb dagegen mit 10,8 Mio. € (2006: 16,1 Mio. €) deutlich hinter dem Vorjahr zurück. Dennoch wollen Vorstand und Aufsichtsrat der am 19. Juni in Würzburg tagenden Hauptversammlung vorschlagen, aus dem Bilanzgewinn eine um 20 % höhere Dividende von 0,60 € je Stückaktie (2006: 0,50 €) auszuschütten.
Vorstandsvorsitzender Albrecht Bolza-Schünemann: "Unter der Prämisse einer einigermaßen stabilen weltwirtschaftlichen Entwicklung erwarten wir für 2008 einen etwas reduzierten Konzernumsatz von ca. 1,6 Mrd. €. Das Vorsteuerergebnis wird aus heutiger Sicht das Niveau von 2007 in etwa erreichen. Nach der internationalen Branchenleitmesse drupa in Düsseldorf werden wir zu unserer Hauptversammlung im Juni klarer sehen, in welche Richtung sich die für unser Geschäft wichtigen Übersee-Märkte und das Investitionsklima in unserer Branche entwickeln."
New York Daily News orders multi-unit 6/2 KBA Commander CT
Third major contract in succession for Koenig & Bauer
Following contracts from India and Turkey early this year for a total of twelve newspaper presses, Würzburg-based German press manufacturer Koenig & Bauer AG (KBA) recently received another major order, this time from the New York Daily News, which has reaffirmed its commitment to print with a contract for a fifteen-tower, triple-wide version of KBA’s ultra-compact Commander CT. Scheduled to go live in autumn 2009, the triple-wide Commander CT press line for the Daily News will have three sections, each with five Pastomat reelstands, five towers and one KF 7 jaw folder. Founded in 1919 as the first US daily printed in tabloid form, the Daily News is the largest and most widely read newspaper in the New York metropolitan market and the fifth largest newspaper in the country. Along with its newly redesigned web site – NYDailyNews.com – the Daily News reaches 4.6 million readers per week.