KBA Reports Inches Closer to Positive Results in All Areas in Q2 2015

In the second quarter of 2015, Koenig & Bauer (KBA) came significantly closer to achieving its target of positive results in all business segments. In the first six months the printing press manufacturer was able to greatly increase its order intake with a plus of 33.2% year-on-year to €607.5 million. At €597.9 million, group order backlog on June 30 was around 43% higher than at the beginning of the year.
 
In contrast, at €426.9 million sales at the mid-year mark were below the previous year (€517.8m) and thus proportionally behind the group’s annual target of more than €1 billion. Although KBA’s cost base has been substantially reduced by Fit@All, the lag in sales impacted on earnings.
 
“Group profit before taxes of €6.9 million in the second quarter led to an improvement in our EBT from –€17.7m after three months to –€10.8m mid-year,” said Claus Bolza-Schünemann, president and CEO. “We are particularly pleased with the major improvements in earnings in Sheetfed and Digital & Web. Despite this half-time shortfall, with catching-up in mind we continue to target an EBT margin of up to 2% of sales for 2015.” After tax deductions, group results were –€9.3 million (2014: –€3.4 million). This corresponds to earnings per share of –€0.55 compared to –€0.20 in 2014. The free cash flow improved greatly to –€25.2 million following –€43 million the year before.
 
The Sheetfed Solutions segment was particularly successful in the first half of 2015 with order intake up 40.3% on the previous year (€262.4 million) to €368.1 million. This was predominantly a result of strong demand from the packaging sector. Sales in KBA’s sheetfed segment were up 1.8% to €239 million year-on-year and are expected to increase more strongly in the second-half of this year. Order backlog mid-year came in at €310.6 million, the highest figure since 2007. Progress made with regard to costs and prices led to a massive earnings improvement from a segment loss of €8.4 million in 2014 to a profit of €3.8 million.
 
New contracts for digital and newspaper presses drove order intake in the Digital & Web Solutions segment up from €45.6 million in 2014 to €69.2 million. Given low order backlog at the start of the year, at €36.7 million revenue remained significantly below the previous year’s figure of €71.3 million. In contrast, order backlog of €83.4 million at the end of the second quarter stood well above the corresponding figure from 2014 (€69.1 million). The segment posted a loss of €8.9m for the first half-year (2014: –€11.5 million). With a segment loss of €0.2 million in the second quarter the turnaround was almost achieved due to the improved order situation and capacity utilization. Earnin
 
Along with growing success in the relatively young field of flexible packaging, more orders for metal-decorating, security printing and coding systems boosted the total volume of incoming orders in the Special Solutions segment by 21% to €199 million. At €169.9 million sales were distinctly lower than the previous year (2014: €227.8 million) that benefitted from large security press orders. KBA anticipates a significant rise in revenue in the third and fourth quarter in particular. Order backlog stood at €224.5 million (2014: €238.5 million) at the mid-year mark. Given the lower margin product mix compared to the first half-year 2014, segment profit fell to €3.6 million compared to the prior-year figure of €33.9 million.
 
The export level climbed to 84.9% (2014: 83.4%) after six months. At 29.7% the proportion of deliveries to other parts of Europe was significantly down on last year’s figure (2014: 40.4%). In contrast, business in North America which was up from 10% to16.6% was boosted by market success with sheetfed offset and flexo presses. The proportion attributable to sales market Asia and the Pacific also rose from 24.3% to 29.3%. Latin America and Africa generated 9.3% (2014: 8.7%) of group sales.