Langley aims to bolster Manroland through M&A
Wednesday, February 13, 2019
Langley Holdings is looking for a suitable bolt-on acquisition to make more effective use of Manroland Sheetfed’s sales and manufacturing facilities after a fall in sales at the company.
In his commentary alongside the group’s 2018 report and accounts, chairman Tony Langley said that Manroland’s 92,900sqm manufacturing facility in Offenbach was “significantly under-utilised” after sales at the business fell by 9.3% to €259.8m (£227.7m), while order intake slumped by nearly 34% to €27.4m.
Although Manroland Sheetfed had recorded a record level of order intake for new presses in the first three months of 2018, orders went on to “plummet” as the year progressed.
“China is Manroland’s largest market and tensions between the USA and China have translated into a ‘wait and see’ sentiment amongst many of the predominantly owner-managed print houses. The same sentiment, to a greater or lesser extent, prevails across other markets, but it is the slowdown in China that had the biggest impact,” Langley stated.
Langley Holdings has a cash pile of €379.5m, zero debt and access to further funding for acquisitions should it be required.
“The search continues to find a suitable bolt-on acquisition for this state-of the-art facility and world-class sales and service organisation. Investment also continues in product development and in apprentice training in Germany,” he added.
Headcount is likely to reduce this year at the 1,520-employee business as retiring employees will not be replaced.
Langley also revealed that the Langley Holdings had spent the first six months of 2018 pursuing an acquisition target that would have “transformed” the overall group had it come to fruition. The nature of the target business was not disclosed.
Manroland Sheetfed is the group’s biggest single operation, and Langley said that despite the downturn in sales and profits, it had still made a positive contribution, albeit a “nominal” one.
“Despite this, and much more substantial reorganisation costs in the early years of our ownership, the business has stood on its own feet financially since it was acquired and our initial investment has been more than recouped.”
German print chemicals firm Druck Chemie, acquired in 2014, is part of the €130m turnover ‘Other Businesses’ division. It had a “challenging” year due to raw material price increases and stiff competition in its markets.
Druck Chemie has a small subsidiary in the UK that made a loss “but adding back margin to the German production business, resulted in a positive contribution overall”.
Overall group sales at Langley Holdings were €848.4m, down from €903.5m the prior year, while pre-tax profits slipped from €111.8m to €103.5m.
Langley said that 2018 had involved “something of a much-anticipated slowdown”, but he continued to take a long-term view about the group’s businesses and said that the overall results had still been ahead of budget.
“Looking ahead to 2019, the opening order book at €208.4m is much reduced when compared to prior years. Although timing effects partly contributed, this is further indication that 2019 may not be an outstandingly good year, however I am confidently optimistic that 2019 will be another satisfactory year for the group.”
Manroland Sheetfed shipped the 1,000th unit of the Roland 700 Evolution press, developed under Langley's ownership, at the end of last year.