Koenig & Bauer details Q1 virus impact
Thursday, May 7, 2020
Koenig & Bauer has described its Q1 order intake as “solid” amid a 25.3% decline in sales due to the Covid-19 pandemic.
For the three months to 31 March, overall revenues were down 25.3% at €172.4m (£150.6m) with the biggest fall at the manufacturer’s Sheetfed division, where sales slumped 40% to €68.2m.
“Restrictions especially in travelling initially imposed in China and then gradually in many parts of the world are having a significant impact on order and project processing for the delivery, assembly and installation of the machines at our international customers. The effects are also being felt in the services area,” the firm said in a statement.
Coronavirus-related restrictions at Italian subsidiary Flexotecnica also hit sales.
Order intake slipped by just 1.8% to €271.5m, boosted by a big jump in orders of 36.7% at K&B’s Digital & Web operation, compared with declines of 8%-8.6% elsewhere.
The group’s net loss increased from €4.9m to €36.6m.
Higher inventories due to pandemic-related delivery delays also hit cashflow.
Newly-appointed CFO Dr Stephen Kimmich said that uncertainty due to the virus crisis and concerns about the potential for a “deep global recession” meant that the outlook was unpredictable.
“Because of the drastic effects that are already apparent, our planning for 2020 is no longer achievable. Accordingly, corona crisis management currently has the highest priority so that we can master the challenges that lie ahead and be prepared for the period after the Covid-19 pandemic. In addition to the Performance 2024 efficiency programme, the strategic focus on packaging printing and digital services is to be stepped up again afterwards,” he said.
President and CEO Claus Bolza-Schünemann said that, despite the obvious major challenges for the business, he believed that K&B’s broad product portfolio, strength in the packaging market, and sound balance sheet would “limit the risk potential”
“With the corona crisis management established in March, we are working to actively counter this extraordinary situation. The health and safety of our employees, customers and suppliers is our top priority. Our action plan focuses on reliable customer support, cost and investment discipline and securing liquidity. Short-time working has been in place at different locations since 1 April due to capacity utilisation,” he said.
Regarding the situation here in the UK, managing director Andy Pang told Printweek: “I would say the UK is matching the overall view as described in our Q1 results. Our packaging and pharma customers are overall very busy and our commercial customers range between flat out and very quiet.
“All are having to deal with the day to day difficulties of managing social distancing in the workplace and of course some are having to manage staff that either have the coronavirus or are having to shield due to other family members.”