Koenig & Bauer Meets Its Own Forecast for 2023

Koenig & Bauer AG has announced that, on the basis of its preliminary and as yet unaudited figures, it has fulfilled its own forecast for 2023.

Despite the ongoing challenging global economic environment, which is additionally being exacerbated by a number of factors such as higher energy, material and personnel costs, Group earnings before interest and taxes (EBIT) reached €29.9 million.

This places EBIT within the forecast range of €25 million to €35 million, which was adjusted on Nov. 8, 2023.

At €1,326.8 million, group revenue is at the upper end of the guidance of €1,300 million. In the previous year, revenue amounted to €1,185.7 million and EBIT to €22 million. Consequently, revenue improved by 11.9% compared to the previous year, while EBIT increased by €7.9 million, translating into an increase of 35.9%. The EBIT margin reached 2.3%, compared with 1.9% in the previous year.

The heightened profitability despite the start-up and trailing costs in the Digital & Webfed segment is mainly due to the more efficient handling of inflation-induced additional costs (material, energy and personnel) as well as improved cost management in the third quarter as a result of the absence of any recovery in demand.

At the same time, it was possible to largely pass on the higher energy, material and personnel costs, while the temporary increase in the costs of materials subsided again.

In the fourth quarter, Koenig & Bauer was able to remain on the growth trajectory that it had adopted in the first half of 2023, despite a weaker third quarter. In this regard, the final quarter showed its usual strength again, with revenues coming to €435.7 million (previous year: €380 million) and EBIT to €32 million (previous year: €25 million). This marked a significant improvement over the same period in the previous year.

Order intake amounted to €1,287.9 million at the end of the year, thus falling slightly short of the previous year’s historically high figure of €1,329.3 million, as expected. The book-to-bill ratio stood at 1.0 in the fourth quarter, up from the previous year’s figure of 0.8. As planned, the order backlog contracted from €950.4 million to €911.5 million at the end of the year as a result of the completed deliveries.

Order intake in the Special segment increased by 37.1% to €538.8 million as of the end of the year (previous year: €392.9 million). In the fourth quarter alone, order intake amounted to €268.1 million, underpinned by an order in the Banknote Solutions business unit received from the United States Bureau of Engraving and Printing in Washington, D.C.

At €413.7 million as of Dec. 31, 2023, revenue was slightly down on the previous year’s figure of €417.1 million.  However, at €23 million. EBIT almost reached the previous year’s level of €23.2 million.

At €606.2 million, order intake in the Sheetfed segment was below the extremely high figure of €813.5 million recorded in the previous year following a sequential improvement in the fourth quarter.

However, the previous year had been characterized by post-pandemic catch-up effects as well as greater stockpiling by customers and brand owners as a result of supply chain and material bottlenecks.

After a strong final quarter, revenue increased by 16% to €779.8 million (previous year: €672.2 million). This performance is also reflected in EBIT, which climbed by 56.8% to €29.8 million (previous year: €19 million), thus further widening its positive contribution to earnings.

At €179.8 million, the Digital & Webfed segment recorded a 9.9% increase in order intake (previous year: €163.6 million). Revenue also climbed by 23.2% year-on-year to €172.3 million (previous year: €139.8 million), not least due to a successful final quarter.

“As we are still operating in an extremely challenging market environment, we have continued on our path aimed at improving operating profit,” Dr. Stephen Kimmich, CFO, said. “Nevertheless, we are aware that Koenig & Bauer needs to be more profitable looking forward. Just like our successful customers, we must focus on the value drivers that are spurring our transformation from a printing press manufacturer into a technology company. In addition, we have to address the challenges of a world characterised by rapid and unpredictable change.”

With the “2023 Growth Offensive” adopted in 2018, which aimed to proactively exploit the market opportunities arising in digital printing, corrugated board, cardboard packaging and flexible packaging printing in particular, as well as in the postpress sector in the interests of sustainable profitable growth, Koenig & Bauer has significantly driven forward its transformation from a printing press manufacturer to a technology company. For this reason, the Management Board initiated the “Spotlight” focus program at the end of 2023.

“The old adage that you reap what you sow still applies,” CEO Dr. Andreas Pleßke observed. “We launched the growth initiatives in 2018 with foresight. With this mindset, we have been the market and technology leader in many areas for more than 200 years. And that’s how we want things to stay.

“We have now almost completed the sowing phase and want to reap the harvest,” added Dr. Pleßke. “This will also be aided by the “Spotlight” program, in which we are prioritizing initiatives and business models that boost earnings and financial strength, deprioritizing initiatives that do not directly impact earnings and optimizing the Group and segment organization as well as the indirect cost structure to make processes even leaner and more customer-friendly.”

In December 2023, Dr. Kimmich, was appointed deputy CEO in order to additionally contribute to the company’s operating business beyond his role as CFO. As of April 1, 2024, he will assume responsibility on the Management Board for the Special segment, which was previously held by Dr. Pleßke.

Koenig & Bauer continues to face a challenging macroeconomic environment in 2024. Even so, the Management Board expects the EBIT margin and revenue to remain stable at the previous year’s level in 2024.