Koenig & Bauer Confirms Medium-Term Guidance

Koenig & Bauer AG expects the 2023 financial year to be weaker than previously assumed on the basis of the figures for the first nine months and the outlook for the fourth quarter. Provided that general conditions do not deteriorate any further, Koenig & Bauer expects to achieve its revenue target of around €1.3 billion accompanied by EBIT of €25 million to €35 million in 2023.

The main reason for this is that order intake for Banknote Solutions in the Special segment will be delayed for reasons related to individual nation states despite the still plentiful volume of new orders in the pipeline.

As things currently stand, further start-up costs must be expected in the Digital & Webfed segment in connection with the introduction of the new flexo, corrugated board and digital printing products in the second half of 2023. In the Sheetfed segment, the company still expects growth to be more profitable in 2023 than in the previous year.

“We reaffirm our medium-term guidance, as there is clear evidence that our focus on the packaging market, which is growing sustainably for structural factors, is paying off gradually,” said CEO Dr. Andreas Pleßke.

Koenig & Bauer is still operating in a market characterized by structural growth. However, this market has temporarily come under some pressure as a result of the current global economic situation. The globally growing, consumption-oriented middle class remains a positive driver, spurring the packaging market, which is being prioritized by the company, in the food, beverage and fast-moving consumer goods sectors.

In the first nine months of 2023, order intake came to €831.3 million, down 19.0%. The previous year’s figure had particularly been characterized by above-average demand in the Sheetfed segment. As expected, this demand declined to a robust level up until the first half of the year, after which the third quarter saw a noticeable decline.

By contrast, order intake in the Digital & Webfed segment was significantly higher than in the previous year, while the Special segment was almost at the previous year’s level despite a delay in order intake. New orders were thus slightly below the industry average for printing presses, for which a decline of 16.1% was registered in the first nine months.

Group revenue increased by 10.6% in the first nine months, reaching €891.1 million. Gross profit amounted to €240.7 v, with the gross margin remaining stable at 27.0% (previous year: 27.1%). According to VDMA, revenue across the industry as a whole increased by 6.4% in the first nine months. At €294.7m, revenue in the third quarter fell short of the previous year’s figure by 6.1%, mainly due to a smaller contribution from the Special segment.

Earnings before interest and taxes (EBIT) improved by €0.9 million to €-2.1 million in the first nine months (previous year: €-3.0 million). The improvement in operating earnings despite the start-up and trailing costs in the Digital & Webfed segment is mainly due to the positive overall volume and mix effects and the ability to pass on most of the higher costs through the announced price increases. In the third quarter, EBIT declined from €10.8 million to €3.3 million, but improved during the year.

At the end of October, the company was able to successfully refinance its existing syndicated loan ahead of schedule, thus securing the medium-term stability of its funding operations.

“As in the past, our own liquidity together with the flexible credit facilities will allow us to finance our planned organic growth in the promising market of packaging printing, giving us the financial leeway we require for strategic investments and acquisitions,” said Dr. Stephen Kimmich, CFO of Koenig & Bauer AG, adding that “with the early termination of the KfW loan obtained in connection with the COVID-19 pandemic, Koenig & Bauer will no longer be subject to any of the restrictions associated with that loan.”