The German press and post-press manufacturer celebrated its 200th anniversary in 2017. It had an average of 5,760 employees last year so the cuts equate to some 15% of the workforce.
The group has just announced more details of its ‘Performance 2024’ efficiency and future profitability programme, which is likely to cost around €50m (£45.5m) but is expected to deliver annualised cost savings of more than €100m.
“Today, we have made far-reaching decisions for Koenig & Bauer, made necessary by negative global economic developments in tandem with ever-changing customer needs and demands,” stated president and CEO Claus Bolza-Schünemann.
“They are also associated with painful cuts for the workforce. These difficult and challenging steps were not easy to take, but they are imperative to safeguarding the long-term future of our 203-year-old company,” he said.
Between 700 and 900 jobs will go, alongside short-time working, cutting back on the use of subcontractors, and a hiring freeze.
K&B said it would also reorganise its supply chain, improve productivity through new processes, pool some tasks through shared services and change its sales and service structure.
The group also plans to relocate and realign some of its production and assembly facilities, although further details about which facilities would be affected were unavailable at the time of writing.
Investment in R&D will be maintained, and K&B said it would continue to focus on packaging markets and specialist print areas, including digital printing.
“The investments in digital print and direct post-printing on corrugated board are being pursued with vigour, as is the joint venture with the Durst Group; so too are new developments for security printing in the pipeline,” the firm stated.
It will also change the way it reports sales at its Sheetfed division in future. This will result in a one-off deferral of between €40m-€60m in sales, and €9m-€12m in EBIT.
“Up to now revenue recognition in the Sheetfed segment was related to a certain percentage of the order value, in the future revenue recognition is tied to the completion of installation,” a spokesperson explained.
The spokesperson said the global sales and service organisations would be optimised to reflect the level of orders, but also emphasised that K&B’s global and decentralised service abilities, were “a major asset in Covid-19 times limiting international travels”.
The group said that it expected sales to reach €1.3bn once the programme was completed, with a return on sales of “at least 7% over the medium term.”
Prior to the pandemic, K&B had hoped to reach sales of €1.5bn.
The Performance 2024 measures are expected to bear fruit from next year.
Although its core markets were “fundamentally intact”, with “good levels of capacity utilisation” at customers producing packaging for key goods and services, the Covid-19 pandemic has caused some investments to be postponed due to uncertainty.
K&B also reasserted its support for Drupa 2021. The spokesperson told Printweek there was “no change” in its position.
“We are looking forward to Drupa 2021, unless local, regional or federal restrictions require changes.”
Shares in the group have been on the rise since the end of last week, with the share price increasing from €17.04 to €18.50 since Friday.
