President and chief executive Claus Bolza-Schünemann said it was “especially pleasing” to buck the industry trend by increasing orders – orders for sheetfed presses and special presses both rose by more than 30%.
The group’s results for the three months to 31 March painted a mixed picture. Although overall order intake jumped by 27% to €306.7m (£220m), group sales were down 16.9% at €177.3m and losses at the earning before taxes (EBT) level rose from €12.1m to €17.7m. Both were behind targets. The net loss for the period increased from €14m to €16.9m.
However, KBA typically generates more than half of its annual sales in the second half of the year, and Bolza-Schünemann said a €1bn sales target for the full year was “realistic”.
Its Fit@All cost-saving and restructuring programme is now at “an advanced stage” and a 2% EBT margin is predicted for the full year.
The company stated: “The group realignment is expected to reduce our reliance on shrinking markets and strengthen profitability in the long-term.”
It’s the first time KBA has reported its results under the three new segments – Sheetfed Solutions, Digital & Web Solutions, and Special Solutions – that will be spun-off from the parent as autonomous business units.
The new, decentralised structure was implemented from 1 January but still needs to be officially ratified by shareholders at the group’s AGM on 21 May.
“We expect this reorganisation to provide a clear allocation of management responsibility including targets for all business units as well as more strategic flexibility,” Bolza-Schünemann stated.
Order intake for Sheetfed Solutions, KBA’s biggest division, rose 30.5% to €174.7m on the back of “brisk” demand for high-spec presses for packaging customers. Actual sales were slightly down year-on-year at €109.8m (2014: €111.1m). This, together with restructuring costs and an “unfavourable product mix”, involving a lot of standard presses for price-competitive markets, resulted in segment losses that increased by €1.1m to €2.7m.
Incoming orders for the Special Solutions division were up 31% at €117.4m, while actual sales were down 8.1% to €63.2m. The division includes presses for security printing and metal decorating, as well as flexible packaging business KBA Flexotecnica. Operating profits were down 70% at €1.2m, but KBA anticipates “a considerable upturn” in business for the segment in the second half of the year.
Sales at the loss-making Digital & Web Solutions operation slumped from €41.5m to just €13.3m because of weak order intake in the prior year, and losses grew to €8.7m from €4.3m. However, new orders were up 5.7% to €27.9m and KBA highlighted “more promising strategic opportunities” for the division through the alliance with HP in corrugated printing, and new industrial markets for the RotaJet inkjet web press.
KBA director of marketing Klaus Schmidt told PrintWeek that the group had completed the downsizing of its conventional web offset capacity in March. “This means a stronger focus on industrial segments in the digital market like decor printing, and other areas,” he said. “The demand for web offset presses will never bounce back to a level sufficient for our capacity as we had to learn painfully in the last seven years.”
He also responded to suggestions that the new de-centralised structure would make it easier for KBA to sell, spin-off or shutdown under-performing operations in the future.
“This is not part of our plan but a potential reality in the worst-case since cross-subsidies between different business segments are not acceptable for the long run,” Schmidt stated.
The world’s first user of the RotaJet L press in an industrial application has just gone live. Interprint, based in Arnsberg in north-west Germany, has installed a 1.68m-wide, 150m/minute press to print industrial decor materials.
Interprint said that, compared with the gravure printing typically used for its specialist product area, the KBA inkjet press would deliver customer benefits such as quick turnarounds and small batch sizes of new designs, as well as short print runs for designs that are at the end of their life cycle.
KBA has also just sold another RotaJet with a web width of 2.25m to an as-yet-unnamed decor printer “and there are more projects,” Schmidt added.
Separately, work continues on the cooperation with HP over the development of the T1100 Color Inkjet Web, a simplex inkjet web press designed to print top liner for the corrugated market. The 2.8m-wide machine is set to be unveiled in Q4.
KBA also said that it was working on “a raft of new developments” for Drupa 2016.
The group’s share price hit a seven-year high of €21.70 last month, but slipped on the Q1 results announcement, falling 6.35% to €19.85.
