K&B: sheetfed orders "robust", continues digital drive
Friday, November 13, 2020
Koenig & Bauer came close to breaking even at an EBIT level in Q3 despite ongoing issues caused by the Covid-19 pandemic, and said it had “substantially outperformed the sector as a whole” in terms of new business.
The Germany-headquartered manufacturer builds presses and finishing kit for a diverse range of print and packaging applications including specialist areas such as metal decorating, corrugated printing and security presses.
Its Q3 results were also complicated by a change in accounting policy regarding its Sheetfed division, with revenue recognition now tied to the completion of installation.
Order intake in Q3 was down 13.8% at €232.6m (£208.7m), while sales were down 32.2% at €198.1m. The sales figure was impacted by €52.5m of sheetfed sales that will be shifted into its 2021 results because of the accounting change.
President and CEO Claus Bolza-Schünemann flagged that the “worsening” Covid-19 situation in many countries was hampering the group’s operations with travel restrictions and quarantines “impeding the global deployment of our assembly staff and service technicians to a considerable extent”.
Packaging printers dealing with additional workloads due to the pandemic were “not fully accessible to third parties required to ensure smooth production chains,” he added.
K&B UK managing director Andy Pang said the business here had been able to handle the situation, including the major installation underway at Bell & Bain.
“We have had no issues here, we do most of it ourselves anyway and have had technicians over from Germany for customer installations and technical work,” Pang said.
Bolza-Schünemann also said that despite “considerable interest” in its products, customers were postponing new investments because of the uncertainty unleashed by the pandemic.
In Q3 K&B made a €57.6m provision for the costs of its Performance 2024 restructuring programme aimed at improving competitiveness and achieving cost savings of at least €100m a year. Between 700-900 jobs will go.
The group also made a €4.8m gain from selling a building in Frankenthal.
Adjusted EBIT excluding one-off costs “improved substantially” to negative €2.2m from negative £10.2m in the previous quarter.
“The adjusted EBIT almost reached the break-even threshold in Q3,” Bolza-Schünemann stated.
The bottom line EBIT loss for the first nine months of the year was €102.2m, taking into account all charges.
Order intake at its biggest division, Sheetfed, was described as “robust” at €128.6m, while orders at its Digital & Web division were “encouraging” at €34.1m.
Orders in the Special presses segment, which can vary wildly depending on large projects, slipped to €82.8m compared with €131.4m the prior year, reflecting lower orders for security printing, glass decorating, and marking and coding. However, metal decorating orders were up.
Bolza-Schünemann said the group was “driving forward” with its investments in direct corrugated board and digital printing, and its joint venture with Durst.
K&B said it expected sales of between €900m-€950m for the full year.
Its shares rose from €18.18 to €18.90 following the news.