Ad Hoc 2012
Orders up at KBA: black art innovator in the black
Notwithstanding the challenges arising from ongoing structural changes in the print media market the KBA group met all its capital requirements from a healthy operating cash flow of EUR83.9m, scaled back bank debts still further and boosted liquid assets. The 195-year old enterprise bucked the industry trend in disclosing a post-recession profit for the third year in succession.
Brisk demand for security, metal-decorating and coding equipment helped swell the group order intake to EUR1,552.1m – its highest level since the record year of 2006 and 20.8% up on 2010 (EUR1,284.9m). The backlog of unfilled orders almost doubled from EUR440.8m to EUR825.7m. But at EUR1,167.2m group sales were marginally below the prior-year figure of EUR1,179.1m due to shipping delays and weak demand for sheetfed and web offset presses in the second half-year.
Flagging investment activities in the final four months led to an 8.3% drop in new sheetfed contracts to EUR569.9m. Brisk demand for niche products, however, sent the intake of new orders for web and special presses soaring by 48.1% to EUR982.2m. Although the two divisions each posted sales worth EUR583.6m, this represented an improvement of 5.9% over the prior year in sheetfed sales, but a slide of 7.1% in sales of web and special presses following shipping delays.
The rising cost of raw materials, heavy investment in new products, wage increases, unscheduled structural expenses and lower sales following external delays in deliveries until the current year reduced the group operating profit from EUR22.2m in 2010 to EUR9.9m. But despite unsatisfactory market pricing and fluctuating levels of plant utilisation, KBA’s web and special press division posted a profit of EUR28m (2010: EUR14m), with niche and service activities playing a major role. In the sheetfed division, price erosion and the high up-front expense associated with developing new products put paid to any operating profit, even though restructuring measures delivered substantial cost savings. The division therefore made an operating loss of EUR18.1m following a profit of EUR8.2m the year before.
A group pre-tax profit of EUR3.3m and annual net income of EUR0.4m fell well short of the corresponding figures for the previous year of EUR15.3m and EUR12.5m. Earnings per share were just 2 cents (2010: 76 cents). In view of this unsatisfactory performance, and the current challenging business environment, the management and supervisory boards plan to dispense with a dividend for 2011.
Despite bigger inventories, cash flows from operating activities surged to EUR83.9m (2010: EUR30.1m) following a jump in customer prepayments and a drop in trade receivables. This covered higher outflows for investing activities and boosted the free cash flow to EUR57.8m. Liquid assets soared to EUR145.6m while bank loans were trimmed to EUR35.9m, giving a net financial position of EUR109.7m at the end of the December, over twice the figure for 2010 (EUR47.9m). A comfortable level of liquidity and access to adequate credit lines document KBA’s solid financial profile, as does the high ratio of equity to the bigger balance sheet total, which in 2011 was 38.2%.
Looking ahead, KBA management emphasised the higher risks that exporters face from slowing growth in major emerging markets, the high oil price and ongoing debt crisis in Europe. While the Drupa trade fair is expected to stimulate sales, and management is confident that a raft of new products will boost the order intake, particularly in the sheetfed offset division, there will be no return to the high volumes of previous years. If market conditions remain stable KBA is targeting a single-digit percentage increase in sales and a higher pre-tax profit.
KBA issues preliminary figures for 2011: Bucking the industry trend: new orders up, pre-tax profit
Preliminary figures issued on 2 March reveal that German press manufacturer Koenig & Bauer AG (KBA) bucked the industry trend in 2011 to post a pre-tax group profit for the third year in succession, the total being in the single-digit millions. Group sales were marginally lower than in 2010 (EUR1,179.1m) following slacker demand in the second six months and delays to shipments in the fourth quarter. However, at more than EUR1.5bn, the volume of new orders surpassed the prior-year figure by over 20%, primarily due to brisk demand for special presses. The order backlog at year’s end topped the EUR800m mark, exceeding the prior-year figure of EUR440.8m by over 80%. While the world’s second-largest press manufacturer failed to achieve its growth targets for sales and earnings, its performance was once again above the industry average. A major contributory factor was the group’s balance of high-volume and niche products.
KBA reports a good start to 2012 in terms of sales and new orders. The official figures for 2011 will be released on 30 March.
KBA appoints Michael Kummert new head of production
With effect from 1 April 2012 the supervisory board of German press manufacturer Koenig & Bauer AG (KBA) has appointed Michael Kummert (49) new executive vice-president for production. A qualified engineer, Michael Kummert will take over the production remit from president and CEO Claus Bolza-Schünemann, and alongside the two main sheetfed and web press factories in Radebeul and Würzburg will also be responsible for continuing the integration of KBA’s other domestic and foreign production plants in the recently expanded internal group supply network. Following KBA’s inevitable realignment in recent years to a smaller market volume, the supervisory board’s objective in expanding the management board with a production expert is to boost efficiency, cut costs and target new fields of activity.
Mr Kummert was recruited from global roller-bearing manufacturer SKF in Schweinfurt, which he joined in 1990 after taking an engineering degree at the technical university in Karlsruhe, majoring in production technology. Employed at a number of locations, Mr Kummert successfully reorganised manufacturing processes and restructuring production plants in various capacities (head of industrial engineering; manufacturing, plant and site manager head of manufacturing and process development). His last appointment was in Schweinfurt, as head of a new business unit for large and taper roller bearings with a workforce of around 1,000.