Koenig & Bauer Releases First Half-Year Report for 2016

Alongside a successful drupa trade show, the second quarter of 2016 for the Koenig & Bauer Group (KBA) was characterized by strong order figures, revenue and earnings. At €352.5 million group order intake from April to June was up 17.2% year-on-year, although the group’s figures for this quarter only contain around a third of orders placed at the trade show, which were in the triple-digit million euro range. The catch-up effect will ensure additional stimulus in the second half-year as KBA traditionally only books orders that are fully documented and financially secure.
 
After six months, group order intake of €618.8 million was 1.9% higher than the strong prior year. Revenue increased over the same period by 29.7% to €553.9 million and order backlog rose 7% to €639.8 million.
 
“This is a solid buffer for the second half-year and gives us ample security to raise our targets for 2016 despite existing economic and political turbulence,” said Claus Bolza-Schünemann, KBA president and CEO. “We now expect an EBT margin of around 4% with group revenue between €1.1 billion and €1.2 billion.”
 
A rise of 30% in revenue compared to 2015, solid capacity utilization at KBA’s facilities and cost savings from the restructuring program completed at the start of the year had a positive impact on earnings after six months despite high trade show and development costs. EBIT improved to €20.7 million compared to the prior-year loss of –€8.3 million. A slightly negative interest result of –€2.9 million led to a group pre-tax profit (EBT) of €17.8 million.
 
Compared to the prior year (2015: –€28.9 million) cash flows from operating activities improved markedly to –€10.6 million thanks to the company’s solid earnings. The free cash flow stood at –€14.4 million, compared to –€25.2 million 12 months ago.
 
Drupa brought in orders in the triple-digit million euro range for KBA’s largest segment, Sheetfed. Around a third of these orders were already visible in the group’s figures for the second quarter and the other two-thirds will be booked in the coming months. At €290.8 million, order intake with unchanged good margins was on track. However, given the weaker economy in some key markets it did not reach the prior year’s high figure of €368.1 million. Revenue was up 22.1% to €291.7 million compared to the previous year. Order backlog at the end of June came to €281.9m.
 
At €66 million, order intake in the Digital & Web segment was similar to that of the prior year. Revenue rose by over 75% to €64.5 million with digital presses for the decor and corrugated markets making a key contribution. Order backlog remained solid at €71.8 million.
 
The increase in demand in security, metal, coding, flexible packaging and direct glass decorating drove order intake in the Special segment up 47.7% to €294 million year-on-year. Additionally, revenue rose by a sizeable 37.7% to €233.9 million compared to the previous year. At €310.2 million, order backlog at half-time was 38.2% higher than 12 months ago.
 
The group’s export level rose from 84.9% in 2015 to 86.1%; 28.4% of deliveries went to other parts of Europe, 14.1% to North America, 30.4% to the region Asia and the Pacific and 13.2% went to Latin America and Africa.
 
5,201 employees were on the KBA group payroll at the end of June 2016, 65 fewer than the previous year.
 
KBA-Sheetfed underscored its solid footing in folding carton printing with the largest sheetfed offset press at this year’s drupa and the presentation of a digital sheetfed press developed in alliance with the Xerox Corporation in America for this segment. It is expected to be available for delivery in 2017.
KBA’s Sheetfed segment, which has an outstanding footing in packaging printing, is on track to reach its revenue and earnings targets for 2016. This facilities’ high workload extends beyond the turn of the year with the existing volume of orders. The management board is targeting a profit in its Digital & Web segment by the end of the financial year. In the Special segment KBA anticipates clear growth with a significant earnings improvement in 2016. The security business almost doubled order intake compared to 2015. Incoming orders from the flexible packaging printing and hollow glass container decoration markets also rose by two digits.