Order intake at Koenig & Bauer has been boosted by a big banknote press deal with the United States Bureau of Engraving, while the firm has also revealed its likely eight-digit Drupa spend.
The German manufacturer has just announced its preliminary results for 2023.
Group sales were at the upper end of expectations, up nearly 12% at just under €1.33bn (£1.13bn), while EBIT of €29.9m was within the expected range, and the margin improved from 1.9% to 2.3%.
K&B said it had been more efficient in its handling of inflation-induced cost increases, and had largely been able to pass on higher energy, materials and personnel costs.
Sales at its biggest division, Sheetfed, increased by 16% to €779.8m while EBIT jumped by almost 57% to €29.8m.
However, order intake compared to the boom in orders in the “catch-up” post-pandemic period was down €207.3m at €606.2m.
K&B also said that sheetfed sales in the first half of the current financial year were likely to be impacted by Drupa, and said: “In the Sheetfed sector in particular, a wait-and-see attitude ahead of the industry's leading trade fair Drupa could lead to a purchasing restraint.”
The firm noted that EBIT in the current financial year “will be burdened by up to €10m as a result of spending on Drupa”.
Koenig & Bauer is one of the two biggest exhibitors at the upcoming show, the other being HP.
Order intake at K&B’s Special presses division jumped by 37.1% to €538.8m on the back of a big order for banknote presses from the United States Bureau of Engraving and Printing in Washington.
However, sales at the unit were down slightly at €413.7m, with stable EBIT of €23.2m.
Sales at its Digital & Webfed operation grew by 23.2% to €172.3m, but EBIT was crimped by start-up and trailing costs for new digital, flexo, corrugated products, and the loss increased by €2.6m to €23.9m. Order intake at the unit was up 9.9% at €179.8m.
CFO Dr Stephen Kimmich said the business was transforming from being a printing press manufacturer “into a technology company”.
“As we are still operating in an extremely challenging market environment, we have continued on our path aimed at improving operating profit,” he stated.
“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.”
Kimmich has also taken on responsibility for the Special presses division from CEO Dr Andreas Pleßke.
The German manufacturer’s new ‘Spotlight’ programme is focused on growth drivers, with initiatives that do not directly impact earnings “deprioritised”.
It has canned its dividend for 2023, but the K&B board have proposed a new future dividend policy with a minimum dividend of €0.30 per share, and with the aim of paying out 15 - 35% of consolidated earnings.
Koenig & Bauer’s share price fell to a new 52-week low of €9.69 earlier this month, but subsequently recovered slightly. After the preliminary results it slipped from €10.30 to €10.10 (52-week high: €20.20).
