By Jo Francis, Thursday 08 November 2018
Orders continue to rise at Koenig & Bauer but sales at the press manufacturer have been hit by a bottleneck in parts supply that has hit delivery schedules.
For the first nine months of the year order intake increased by 4.4% to €943.2m (£821.3m), while order backlog jumped by 25.5% to €769.3m.
However, sales to 30 September fell by 6.9% to €788.8m due to the combination of an increase in customer requests for Q4 delivery, and the negative impact on lead times caused by a bottleneck in parts availability.
Earnings before interest and taxes fell from €36.4m to €28.6m and net profit was down by 27.4%% at €25.4m.
President and CEO Claus Bolza-Schünemann said the business was “working intensely” to reduce delivery times by optimising its supply chain.
Sales and profits at K&B’s sheetfed business were particularly affected. A spokesman told PrintWeek that the parts supply issue involved mainly mechanical parts such bearings and inking levers, and was the results of “higher demand for parts than expected from the suppliers”.
Bolza-Schünemann said that the delivery delays could result in around €35m of sales being shifted into the next financial year.
However, the glitches have not dampened K&B’s plans for its 2023 “additional growth offensive”. This will involve an investment of around €50m between 2019-2021 in people, targeted M&A and R&D to take advantage of a what K&B sees as a €2bn market opportunity in corrugated board printing, flexible packaging, two-piece metal can decorating, marking and coding, and specialist finishing areas.
“By 2023, we want to gradually generate additional revenue of around €200m in these addressed business areas,” stated chief financial officer Mathias Dähn.
The manufacturer is set to deliver its first CorruJet digital sheetfed press for corrugated board to Hans Kolb Wellpappe in Bavaria in Q4, and the first MetalDecoJet digital can printing system will go to a beta customer in Q4.
Development of the VariJet 106 B1 sheetfed inkjet press in partnership with Xerox is still “in progress”.
Sales at K&B’s Sheetfed division fell to €429m from €474.7m, and EBIT fell by €5.7m to €14.6m. The order backlog increased from €243.1m to €258.3m. K&B described sales growth in large-format presses for folding cartons as “particularly pleasing”.
Despite a “substantial” increase in orders for flexible packaging presses, a lack of activity in newspaper and digital presses meant that orders in the Digital & Web division crept up to €112.7m (2017: €111.1m). Lower deliveries of digital presses hit sales, which fell by 13.7% to €97.7m.
Losses at the division increased from €3.6m to €10.6m.
At the Special presses division, which includes security printing as well as marking and coding, order backlog jumped to €463.5m (2017: €313.4m) as orders for security printing presses hit the highest level since 2012. Sales slipped from €304.6m to €296.8m and EBIT fell slightly to €25m (2017: €25.6m).
Dähn said the group expected a surge in sales and profits in Q4, and was targeting organic sales growth of 4%, and and EBIT margin of around 7% for the full year.
Shares in K&B fell by €2.48 to €40.50 following the announcement (52-week high €78.70, low: €40.00). The group said its share price had reached an all-time high of €78.70 in April, but had since been affected by profit-taking and a drop in the German stock market.