Falling order intake takes shine off KBA's latest results
Tuesday, November 11, 2014
KBA has posted significant increases in sales, operating profit and pre-tax earnings in its results for the nine months to 30 September 2014.
Group sales increased 8.5% to €791.8m (£620m), while the press manufacturer's operating and pre-tax results both moved into the black, coming in at €7m and €1.2m respectively, compared with losses of €10.7m and €16.3m in the same period last year.
In KBA's sheetfed presses segment sales rose 6.5% to €406.3m, although this was outstripped by growth in its web and special presses, which increased sales by 10.6% to €385.5m.
However, while KBA confirmed that it was on track to meet its 2014 revenue and earnings targets of more than €1bn and at least break-even earnings, its order backlog and order intake both showed a negative trend.
In particular, KBA's backlog of web and special presses at 30 September 2014, at €184.5m, was less than half the €377.4m backlog at the same point last year. This offset the small 1% increase in the backlog of sheetfed offset presses, resulting in a 30.3% decline in the group order backlog to €437.4m.
"Bookings for newspaper and commercial web presses remain far below KBA's low expectations and new orders for banknote printing presses have only been placed hesitantly despite a raft of projects," the manufacturer said.
Group order intake was down 5.8% at €668.7m, with web and special presses again the main cause of the decline after the segment posted a drop in orders of €12.9% compared with sheetfed presses 1.9% decline.
The manufacturer highlighted the worsening economic climate in "key threshold countries and in parts of Europe" and added that the "impacts of the financial crisis are yet to be overcome".
In addition "military conflicts and concerns about ebola" were said to have resulted in "dampened expectations for the future" and impacted new order volumes.
Group headcount continued to fall in the period as a result of the Fit@All restructuring programme. On a like-for-like basis the group workforce fell by 445 to 4,907 and is expected to decrease to below 4,500 by 2016.
Including apprentices and trainees, as well as staff at newly acquired businesses KBA Kammann and KBA Flexotecnica, total headcount was 5,930.
KBA chief executive Claus Bolza-Schünemann said: "A lot is currently happening at KBA with regard to securing the company’s profitability in the long term. Nevertheless, from today’s point of view we will achieve group sales of more than €1bn and at least balanced group earnings before taxes (EBT) in 2014.
"Following high provisions made in the financial statements for 2013 we expect only limited special expenses for Fit@All which impact on earnings. In contrast, cost savings from the restructuring measures implemented will become noticeable."
KBA said that the expansion of its activities in growth markets, such as digital and special packaging printing, together with the success it has already achieved in expanding its service business, was expected to contribute to stronger group earnings in future.