Koenig & Bauer on track for 2018 despite Q1 revenue drop

By Richard Stuart-Turner, Thursday 03 May 2018

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Koenig & Bauer said it is on track to meet its 2018 targets, despite its revenue falling by 16.1% year-on-year in Q1.

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Koenig & Bauer's Sheetfed division revenue was down in Q1 but order intake was up

The Würzburg-headquartered group’s sales dropped from €259.1m (£228.3m) in Q1 2017 to €217.3m in its results for the three-month period ended 31 March 2018. This included revenue of €116.8m in its Sheetfed division (down 22.1% year-on-year), €31.5m in Digital & Web (up 3.6%) and €76.8m in its Special presses segment (down 12.5%).

The company’s order intake was also down by 22% overall to €250.9m, albeit with a 5.3% increase in sales to €160.1m in the Sheetfed division. Digital & Web orders fell by 20.6% to €45.8m while orders in the Special presses division were down by 52.7% to €59.4m.

The manufacturer said its order intake in 2017 had been higher because the Special segment had been boosted by a major security press project. This aided its full-year 2017 sales, which were up 4.3% on 2016 at €1.218bn.

Earnings before Interest and Tax (EBIT) in Q1 fell to -€1.9m from €5m in Q1 2017, while the group made a net loss of €2.3m in the period – compared with a net profit of €4.7m in Q1 2017. Its earnings per share fell from €0.30 to -€0.15.

The manufacturer attributed its revenue and EBIT declines to a “stronger concentration of deliveries in H2” but said its confidence in reaching its full-year 2018 targets of revenue growth of around 4% and an EBIT margin of around 7% is “underpinned by a high order backlog and a well filled project pipeline”.

Its order backlog was up by 4.6% year-on-year in Q1 to €648.5m, with Sheetfed up 15.6% to €276.8m and Special presses up by 6.6% to €315.3m. The Digital & Web order backlog fell by 26.8% year-on-year to €75.8m.

Chief executive Claus Bolza-Schünemann said: “Alongside our expansionary service business, we made further progress in the flourishing packaging printing.

“With our customer-centric solutions, we were able to increase order intake in cardboard and film printing, metal decorating, marking and coding printing. As expected, demand for digital printing presses was subdued.”

Chief financial officer Mathias Dähn added: “Due to the delivery dates requested by our customers, press installations in 2018 will be concentrating on the second half of the year and particularly Q4 to an even greater extent than last year.

“The significantly increasing revenue momentum in the second half of the year together with further progress made by the cost-cutting projects in security printing, purchasing and production will lead to a clear improvement in group earnings.”

Koenig & Bauer’s share price fell by €1 to €68.45 in early trading but has since recovered to €68.95 at the time of writing.

Separately, last week it was announced that Bolza-Schünemann, Koenig & Bauer founder Friedrich Koenig’s great-great-great grandson, was honoured with the Friedrich-Koenig medal for his exceptional achievements in press manufacturing. Bolza-Schünemann is the third family member to receive the medal awarded by the German Mechanical Engineering Association (VDMA).

“I am deeply honoured to receive this award, [which] rounds off our 200-year company anniversary perfectly,” he said.

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