Following a good third quarter, KBA says it has come closer to achieving its growth targets for revenue and earnings for 2016.
At €869.8m ($1.31bn) at the end of the first nine months, the group order intake rose slightly (1.2 per cent) on last year. New orders exceeded group revenue, which rose 22.3 per cent to €831.4m. KBA says the order backlog, up 2.7 per cent on last, will ensure the capacity utilisation of the group’s plants until spring 2017.
Claus Bolza-Schünemann, president and chief executive at KBA, says, “With underlying economic and political conditions still challenging, our heightened focus on the growth markets of packaging and digital printing as well as service business is paying off.
“Even more encouraging than the substantial revenue growth is the sizeable increase in earnings for the period under review underpinned by the high profit generated in the third quarter. With operating earnings (EBIT) of €39.2m and earnings before taxes (EBT) of €34.9m, we were able to substantially outperform the first nine months of the previous year (EBIT of €6.1m and EBT of €2.1m). All segments contributed to this performance with positive figures for the quarter and the first nine months.”
KBA says increased profit from its sheetfed segment strengthened its earnings with digital and web also making positive contributions. The group’s gross profit margin widened from 26.6 per cent in the previous year to 30.4 per cent. Group net profit after tax came to €32.5m (2015: €2.4m).
In the growing market for flexible packaging, KBA-Flexotecnica received more new orders for its CI flexo-printing presses in 2016 than in 2015. KBA adds that, against the backdrop of the economic slowdown in China and other export markets, the order intake of €429.8m in the sheetfed segment fell short of the previous year’s high figure (€516.4m) in line with expectations. New printing press business was also dampened by workload-driven longer lead times and the necessary price discipline.
On the other hand, revenue rose 17.5 per cent over 2015 to €443.8m. Despite the drupa costs and development expense in connection with a digital sheetfed press, segment profit rose to €17.3m (2015: €10.1m). Order intake in the digital and web segment grew 11.2 per cent thanks to a number of orders for web offset presses as well as further orders from HP for the inkjet web press assembled at the site in Würzburg. Revenue climbed by 74.6 per cent. At €60.3m, the order backlog remained at a satisfactory level.
Increased business in security, metal, coding and flexible packaging caused order intake in the Special segment to climb by 29.9 per cent to €384.3m. Revenue rose by 22.3 per cent to €338.2. With the order backlog growing by 38.1 per cent over 2015, capacity utilisation is assured until well into next year.
At 85.2 per cent, the export level remained at the previous year’s high level, with Europe excluding Germany contributing 30.5 per cent, North America 14 per cent, Asia/Pacific 29.2 per cent and Latin America and Africa 11.5 per cent to group revenue.
At the end of September 2016, the KBA Group had 5,332 employees, 47 more than in the previous year. The higher headcount is due to the acquisition of Spanish flatbed die-cutter manufacturer Iberica, which added 58 employees. Excluding apprentices, trainees, employees exempted from their duties and staff on phased retirement schemes, the workforce dropped to 4,808.
On the strength of the group’s favourable business performance in the first nine months and the high capacity utilisation that is secured until well into spring 2017, the executive board has raised its full-year earnings guidance for 2016, which had previously already been corrected upwards in the first half-year report, at the end of the first nine months again. With group revenue expected to be between €1.1 and €1.2bn, management now projects an EBT margin of up to five per cent
KBA grows earnings
