Koenig & Bauer on track to meet 2018 targets

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Following expected customer acceptance, delivery of digital CorruJET sheetfed press to a well-known corrugated printer.
Following expected customer acceptance, delivery of digital
CorruJET sheetfed press to a well-known corrugated printer.

With order intake reaching a particularly high 454.4m in the second quarter and the order backlog rising to 805.8m at the end of the first half, the Koenig & Bauer Group is on track to meet its targets for 2018. Strong security business and more orders in packaging printing caused order intake to rise by 17.2% to 705.3m in the first half of 2018 (2017: 601.9m).

Sheetfed expands market leadership in large-format

The Sheetfed segment reached a strong order intake of 326.3m, exactly matching the previous year’s figure, which had been influenced by the Print China fair. President and CEO Claus Bolza-Schünemann, said, “Substantial growth was achieved in large-format cardboard printing. As the world market leader in folding carton printing, we are benefiting from heightened capital spending of the international packaging printers.”

World premiere: Ipress 106 K PRO flatbed die-cutter with proven feeder of Rapida presses for the growing folding carton market
World premiere: Ipress 106 K PRO flatbed die-cutter with proven feeder of
Rapida presses for the growing folding carton market

Despite the encouraging growth in new business in flexible packaging, orders in Digital & Web (84.7m) were slightly down on the previous year (85.7m) due to fewer orders for newspaper web presses and services. In addition to the market-entry costs for corrugated and flexible packaging in particular, EBIT was significantly burdened by the decline in revenue from 68.3m to €55.8m. CFO Mathias Dähn, said, “This was materially due to the decline in revenue from digital printing presses as a result of subdued demand. However, we see significantly greater short and medium-term potential in the large corrugated and foil printing markets, which are expanding at above-average rates. The targeted expenses required for future growth will leave traces on our cost position, exerting pressure on segment earnings.”

Driven by large orders in security printing and growth in marking and coding, order intake in the Special segment rose by 52.8% to 330.6m (2017: 216.3m). With revenue rising slightly from 189.2m to 195m, EBIT came to 14.4m, thus matching the previous year’s figure (14.6m). President and CEO Claus Bolza-Schünemann, added, “With the major order received from Giesecke+Devrient for the delivery of several press lines for the production of ultra-secure banknotes in Egypt, we have a high degree of capacity utilisation in security printing until well into 2019.”

Group targets for 2018

In 2018, the management board expects to achieve organic growth of around 4% in group revenue and an EBIT margin of around 7%. With many projects still in the pipeline in all business fields, the forecast is based on the high order backlog of 805.8m as of the end of the first half year together with further progress being made in the group-wide service initiative and the cost-cutting projects in security printing, purchasing and production. These projects should cause earnings to rise by 70m over 2016 by 2021.

Medium-term goals until 2021

Depending on global economy, end markets and the necessary investments in growth, management is targeting a group-wide organic revenue growth rate of around 4% p.a. and an EBIT margin of between 4% and 9% by 2021. Product innovations in corrugated printing and 2-piece can decorating are not included in the medium-term targets, neither revenue nor costs. President and CEO Claus Bolza-Schünemann, concluded, “In addition to our printing, finishing, coding and postpress solutions for cardboard, banknotes, cans, glass and hollow containers and other products, we are particularly focusing on corrugated board and flexible packaging. With the focus on the growing packaging printing, we want to boost our revenue and profitability as well as the stability of our business on a sustained basis.”

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