KBA back in the black, ups digital R&D spend
Tuesday, November 10, 2015
KBA’s latest quarterly results show more effects of its wide-ranging restructuring – the group is back in the black and more than 60% of sales now come from the packaging market.
In the nine months to 30 September order intake jumped by 28.5% to €859.6m (£609m), with all three business segments: sheetfed solutions, digital and web solutions, and special presses posting double-digit increases.
Sales were down 14% to €679.7m, while order backlog grew from €437.4m to €597.3m.
The group also returned to profitability with a net profit of €2.4m, compared with a €2.3m loss the prior year.
President and chief executive Claus Bolza-Schünemann said the firm expected to hit its €1bn sales target for the year-end.
In a hard-hitting statement accompanying the figures, Bolza-Schünemann said that KBA’s new structure involving autonomous business units was the way forward for the business, as it prevented cross-subsidies across the organisation.
“We have waited too long for media-driven markets to recover, not paid enough attention to the level of transparency required and tolerated the ongoing losses of individual business fields,” he stated.
“With the realignment we push business areas with growth potential such as packaging and digital printing. We have eliminated the massive level of capacity underutilisation in our former core web offset business.”
He said the business split was now 60% packaging, 25% security printing and special applications including digital decor printing, and 15% from publication printing.
KBA’s Fit@All restructuring programme will be completed by the year-end, and has resulted in the company generating a similar level of sales but with 1,000 fewer employees. The group employed 5,285 at the period end (2014: 5,930).
Bolza-Schünemann said it was “an ongoing task” to reduce the breakeven point in KBA’s business units and he admitted that the enormous rise in order intake, combined with the organisational restructuring, had resulted in some delays during the transition phase.
“I am optimistic the organisation will soon be operating in full swing again,” he stated.
Sheetfed orders rose 18.2% to €148.3m in the quarter, boosted by packaging press orders and despite a slowdown in sales to China. For the nine-month period orders jumped 33% to €516.4m and it turned around last year’s €10.9m loss to post a profit of €10.1m.
In digital and web solutions, new orders jumped 47.4% to €89.9m, although sales were lower year-on-year due to lagging order backlog. The division lost €3.3m for the quarter and €12.2m for the nine month period. KBA said it anticipated a turnaround in the fourth quarter, due to higher revenues and a sizeable reduction in costs.
During the quarter KBA also carried out the first print tests on its co-development with HP, the 2.8m-wide HP PageWide Web Press T1100S system for producing corrugated top liner.
KBA said it anticipated “brighter future prospects” for the division due to both the alliance with HP and other opportunities in digital decor printing for KBA’s own RotaJet inkjet web press.
At its special solutions wing, which includes security printing and metal decorating, order intake rose 14.2% to €295.9m, including a double-digit increase in orders for marking and coding systems. However, profits fell from €51.8m to €15.6m as the prior year had been boosted by major projects involving security presses.
Some web and special press orders were also postponed during the period.
“We still have a good project pipeline, even when contract conclusions often take longer than anticipated,” Bolza-Schünemann said.
The group’s R&D costs increased by €2.1m to €42.6m due to additional development expenses for “new applications and consumables in digital web printing".
“We had and still have to do some R&D work for entering new digital markets like decorative printing with our own RotaJet VL presses as well as for the corrugated packaging market in the common project with HP,” explained marketing director Klaus Schmidt.
On the subject of a mooted possible sheetfed inkjet press, Schmidt said he had “no news so far”.