The German press manufacturer said initial positive impacts from its group realignment, which began at the start of 2014, are now visible.
Compared with the previous year, when restructuring expenses of over €155.2m strained its operating result and delivered an operating loss of €130.7m, in 2014 both KBA’s sheetfed offset segment and the web and special press division posted an operating profit.
Despite further special expenses of €10m, the rise in operating profit to €14.1m was significantly higher than expected a year ago.
The sheetfed offset segment generated an operating profit of €11.5m in 2014 (2013: -€77.6m) while the web and special press division generated €2.6m (2013: -€53.1m).
The firm’s pre-tax profit came to €5.5m and a group net profit of €300,000 also exceeded the forecast.
“We made rapid progress in the first 12 months of the most extensive realignment project in our company’s recent history and were pleased to see its positive effects earlier than anticipated,” said KBA chief executive Claus Bolza-Schünemann.
Group revenues remained flat compared with 2013 and were at the top end of its forecast at €1.1bn. The sheetfed division reported a 3.3% increase to €590.6m (2013: €571.9m) while web and special press sales fell 3.5% to €509.5m (2013: €527.8m).
Rising sales of sheetfed offset presses were attributed to brisk business of metal-decorating systems while falling sales in the web and special press segment were said to be compensated in part by KBA-Kammann and KBA-Flexotecnica, which were consolidated for the first time over the entire reporting period.
KBA director of marketing and corporate communications Klaus Schmidt said: “These results are positive because the sales are at the upper end of our outlook.
“Our only concern is that the order level has dropped in the web market; but we’ve reduced our capacity for the web offset market enormously within the last 12 months due to the shrinking demand.”
Order intake was down 5.5% to €956.9m (2013: €1.012bn). While sheetfed offset orders were up 0.3% to €610.1bn, orders for web and special presses were down 14.2% to €346.8m.
In its annual report the company said: “Order intake in 2014 was characterised by negative external impacts resulting from numerous global conflicts, economic weakness in parts of Europe and in key emerging countries as well as slower growth in China.
“This is why the positive performance of the group’s sheetfed offset division was particularly pleasing as order intake here profited from KBA’s strong position in folding carton and metal decorating, and lifted slightly, bucking the industry trend.”
The group attributed the decline in orders for web and special presses to continued sluggish business trends in newspaper and publication printing and a slide in demand for security presses.
The business said it has already initiated and, to a large extent implemented, all necessary measures to its Fit@All restructuring programme, a package of measures aimed at creating long-term profitability through the consolidation of its core business.
At the end of the year group order backlog came to €417.3m, compared with €560.5m in 2013.
The group now has 5,114 employees, excluding apprentices and trainees. The number of staff on the payroll will drop further to about 4,500 by the end of 2016 due to the group's ongoing restructure.
Schmidt confirmed that the total number of job cuts would finish at the upper level of the 1,100 to 1,500 bracket announced at the end of 2013.
Looking ahead the group is preparing its new company structure from a functional to a divisional organisation. The new structure will be submitted to the AGM on 21 May 2015 and could be implemented with effect from 1 January upon approval retrospectively.
The group’s management board also perceive further opportunities for growth, predominantly in digital and packaging printing, and aims to focus more on applications with challenging materials and large substrate widths.
Group R&D spend in 2014 was equivalent of 5.3% of total sales (2013: 5.8%). The company said it would continue to invest in R&D in the digital area for its RotaJet family and its partnership with HP for the development of the T1100 Simplex Color Inkjet Web Press for the digital corrugated printing sector.
The company said it “sees no overall growth for the global press market in 2015 given the raft of imponderables impacting on the global economy”.
It said that, as long as the general economic environment remains relatively stable, it is targeting over €1bn group sales for 2015 and anticipates an improvement in earnings to a pre-tax profit margin of up to 2% of sales.
