Press giant Koenig & Bauer (KBA) increases its revenue and orders in the third quarter, with its profit slightly dipping, partly due to increased investment.
Following Heidelberg’s results made available earlier this month, it is the second piece of positive news for the industry, with two of the biggest, oldest players improving financial performance.
The third quarter order intake rose 3.9 per cent, from €869.8m in the prior corresponding period (pcp) to €903.4m, with revenue rising two per cent to €847.7m. KBA’s profit dipped from €32.5m in 2016 to €29.5m, however the company invested big money in a new demo centre based in Würzburg, completed in time for its 200th anniversary; with investment totalling €29.7, an increase of €10m from the pcp.
The book-to-bill ratio of 1.07, and order backlog of €613.2m at the quarter’s end remained at the previous year’s high level. EBIT is sitting at €36.4m, down from last year’s figure of €39.2m. KBA says this had been influenced by a catch-up effect of €4.9m from a security press project.
Mathias Dähn, CFO, KBA says, “In addition to our expanding service business, the increase in new orders was underpinned by gains in the growth fields of packaging and digital printing.”
Claus Bolza-Schünemann, CEO, KBA, says, “The numerous press deliveries and service orders in the fourth quarter will trigger a surge in revenue and earnings. In view of this business concentration, which is challenging due to the high capacity utilisation but not unusual, we expect an organic growth of up to €1.25bn in group revenue and an EBIT margin of around 6 per cent in 2017.
“KBA reported on the first order for newly developed digital inkjet CorruJET sheetfed press addressing the prospering market of corrugated printing, which attracted great customer interest at the trade event Fefcor.”
Following a good third quarter, the Koenig & Bauer group took a large step towards achieving its growth targets for revenue and earnings in 2017, the year in which it was celebrating its 200th anniversary. In the first nine months, order intake rose by 3.9 per cent over the previous year
Order intake in the sheetfed segment rose by 11.7 per cent from €429.8m to €480.3m. In addition to the clear increase in service orders, this performance was underpinned by strong demand in the packaging sector and orders for commercial sheetfed presses and flatbed die-cutters. Revenue in the sheetfed segment grew by 7 per cent from €443.8m in the previous year to €474.7m. The additional revenue with a service business and lower costs resulted in an increase in segment profit to €20.3m compared to €17.3m from last year.
Following the two per cent increase in revenue in the year to 30 September 2017 and the good earnings in the third quarter, the management board’s guidance for 2017 is based on the high order backlog of €613m.
Order intake in the Digital & Web segment dropped to €111.1m compared with €128.5m in the previous year particularly as a result of fewer new contracts for web offset presses for newspaper and commercial printing. Reflecting this, revenue came to €113.2m, down 8.8 per cent on the previous year (€124.1m) despite the growth in service business and digital printing presses. The positive earnings trend in web offset and digital printing business came under strain from optimisation efforts at KBA-Flexotecnica, resulting in segment EBIT of minus €3.6m compared with the previous year’s figure of -€1.9m.
In the Special segment, growth in orders for metal, glass/hollow container decorating and coding systems together with a slight shortfall in security printing business over the previous year’s high level resulted in an increase in new orders from €355.3m to €359.8m. At €304.6m, revenue still fell short of the previous year (€323.6m). EBIT came to €25.6m in the first nine months (2016: €29.6m). The segment posted an EBIT margin of 8.4 per cent.
The group added 210 employees, bringing the total to 5,542 employees as of September 30.