Koenig & Bauer sales beat expectations
Friday, February 26, 2021
Koenig & Bauer expects sales for 2020 to be above prior estimates at €1bn-plus, thanks to accounting changes that have altered the group’s revenue recognition policy.
The Germany-headquartered press manufacturer operates in a wide range of markets, from sheetfed and web offset to specialist presses for packaging, security printing and metal decorating.
It had previously estimated full-year sales of between €900m-€950m (£782m-£826m), and the figure has now increased to €1.029bn in its preliminary results.
K&B expects to post an EBIT loss of €68m, including restructuring costs associated with its previously announced Performance 24 programme, now known as ‘P24x’.
Excluding one-off items, the EBIT loss would be around €19m, K&B said.
Under the fresh accounting policy recommended by K&B’s new auditors, revenue from new printing presses is “predominantly not recognised until the presses are placed in operation”.
CFO Dr Stephen Kimmich said the policy would reduce volatility and lead to “more balanced budgeting in the future”.
Applied to the 2019 results, the new policy would see sales increase from €1.219bn to €1.246bn, while EBIT would increase from €56m to €70m.
The preliminary 2020 figures show order intake for 2020 of circa €975m, down 14.5% on 2019, but better than the near-22% drop in printing press orders published by German industry association the VDMA.
“Order intake in the fourth quarter came to €262m, continuing the recovery that had emerged in the second half of 2020,” K&B stated.
The manufacturer is predicting “slight organic revenue growth” of around 4% in 2021, despite travel restrictions being reimposed due to the new mutations of Covid-19.
The group said its medium-term target was sales of €1.3bn with an EBIT margin of ”at least” 7%.
Management board spokesman Dr Andreas Pleßke said the P24x programme was the firm’s road back to planned growth.
“We are focusing on packaging and a portfolio strategy in attractive markets, on strong research and development, on synergistic effects in production and on the further development of our service business to improve our customers’ total cost of ownership,” he stated.
K&B did away with the role of CEO when Claus Bolza-Schünemann stepped down at the end of last year after nearly 30 years at the business.
In early trading K&B’s share price rose from €24.38 to €24.92. (52-week high: 27.46, low: 14.42.)
The group’s audited year-end results will be published in March.