KBA increases sales targets following successful Q3
Monday, November 14, 2016
KBA has again revised upwards its sales and earnings targets for the full year after achieving double-digit growth in Q3, with a strong showing across all areas of the business.
The Würzburg, Germany-headquartered press manufacturer achieved a 22.3% increase in group revenue in the first nine months of 2016 to 30 September, up from €679.7m (£585m) to €831.4m.
Group order intake grew by 1.2% over the same period in 2015 to €869.8m, meaning new orders exceeded group sales by more than €38m.
The order backlog was valued at €613.3m at the end of September, up 2.7% on the previous year, which KBA said is sufficient to ensure the capacity utilisation of the group’s plants until spring 2017.
The Sheetfed segment achieved a 17.5% increase in revenue in the first nine months of 2016 to €443.8m, accompanied by segment earnings of €17.3m.
New orders in the segment, however, were down from the previous year’s figure of €516.4m. KBA attributed this to factors including the economic slowdown in China and other export markets, longer lead times and the shift in the distribution of orders over the individual quarters compared to 2015, due to the impetus generated by Drupa.
Order intake in the Digital & Web segment rose due to a number of orders for web offset presses for commercial and newspaper printing as well as further orders from HP for the inkjet web presses for corrugated packaging, assembled at Würzburg. New orders in the segment rose by 11.2% to €100m with revenue jumping by 74.6% to €110m.
The group’s Special presses segment saw order intake climb by 29.9% to €384.3m and revenue rise by 22.3% to €338.2m. This was attributed to increased business in security, metal, coding and flexible applications.
Group EBIT of €39.2m and EBT of €34.9m was also well up on the previous year’s figures of €6.1m and €2.1m respectively.
KBA president and chief executive Claus Bolza-Schünemann said: “Our heightened focus on the growth markets of packaging and digital printing as well as service business is paying off.
“Even more encouraging than the substantial revenue growth is the sizeable increase in earnings for the period under review underpinned by the high profit generated in the third quarter.”
The group’s gross profit margin rose from 26.6% in the previous year to 30.4%. Group net profit after tax came to €32.5m (2015: €2.4m), equivalent to earnings per share of €1.98 (2015: €0.16).
KBA outlined a host of issues causing uncertainty, including international and political conflicts as well as economic and financial problems.
It has nevertheless increased its sales and earnings targets, which had previously already been corrected upwards in the first half-year report, due to its performance in the first nine months of the year and the capacity utilisation secured into spring 2017.
It is now targeting group revenue of between €1.1bn and €1.2bn and an EBT margin of up to 5%.
“Despite the heightened challenges in the international market, we see our main task as being to stabilise the profitability of all segments and KBA companies and to additionally enhance it in the medium term,” said Bolza-Schünemann.
“Alongside additions to our own range of products, the expansion of our sales network and the growth of our service business, we will also be forging partnerships with other companies.”
KBA shares rose by 1.9% to €44.27 immediately after the announcement last Thursday (10 November) and have since settled down to €42.91 at the time of writing.