The German manufacturer chose to illustrate its Q3 and nine-month results announcement with an AI-generated image of “futuristic packaging” that – somewhat bizarrely given prevailing market trends – appeared to depict a shiny plastic container.
The group’s €10m-plus (£8.3m) spend on Drupa helped it achieve a record order backlog of €1.08bn, “the highest in the company’s history”.
“A large part of this order backlog will be placed on the books after 2024 and is spread unevenly across the segments, providing a good basis for successful business performance and a strong final quarter,” the manufacturer stated.
CEO Dr Andreas Pleßke said the figures for the first nine months of its financial year showed the business was “headed in the right direction”, with its Spotlight cost saving and efficiency programme bearing fruit and despite losses in two of its divisions after all three picked up hefty Drupa and Spotlight costs.
“The macroeconomic environment remained exceptionally challenging in the third quarter of 2024. So, it is all the more encouraging that we were able to significantly boost our operating earnings in Q3 over the previous quarter,” he stated.
“Thanks to a record order backlog, we can expect a strong final quarter and confirm our previous forecast for 2024 as well as our medium-term outlook for 2026.”
Group revenue was down 8% to €819.6m for the first nine months, and was particularly impacted by muted sheetfed press orders in the prior year, and unspecified production-related issues at its Banknote Solutions business.
The group EBIT loss for the period was €55.6m, “particularly due to the aforementioned decline in order intake in the third quarter of 2023, which also caused negative volume and mix effects”.
In Q3 operating EBIT in Q3 was positive at €4.2m, compared with a €14.7m loss in Q2.
One-off charges related to Spotlight and Koenig & Bauer’s Drupa costs “weighed on earnings”.
Order intake at its Sheetfed wing – K&B’s biggest division – was up 12.6% for the first nine months of the year at €511.7m. The division broke even at the EBIT level after picking up the lion’s share of Drupa expenses at €7.8m. Prior year EBIT was €12.1m.
K&B’s loss-making Digital & Webfed unit picked up €400,000 of Drupa costs, and €12.4m for the Spotlight programme. It made an EBIT loss of €24.4m for the first nine months. Order intake was subdued in the period due to “temporary weakness in the market for corrugated board” and was down €25.6m at €107.3m.
However, K&B said business had improved in Q3, particularly in sales of web-fed digital presses.
Order intake at its Special presses unit jumped by €120m to €390.7m for the first nine months, after its Banknote Solutions wing won a significant contract from the US Bureau of Engraving and Printing Washington.
The Special division made an EBIT loss of €13.3m taking into account €6.8m for Spotlight and €100,000 for Drupa.
The total amount attributed to Drupa spend was €10.5m, including €2.2m in reconciliation.
Koenig & Bauer expects operating earnings for the full year will come in at the lower end of the forecast range of €25m-€40m, and it will achieve its revenue target of around €1.3bn despite the challenging market situation.
However, the group also sounded a note of caution and said: “There is slightly elevated uncertainty as to whether the assumed effects will emerge in full in the final quarter, depending, for example, on the period to which individual orders are allocated and successful installations.”
K&B’s share price has risen by nearly 13% over the past five days. It was at €9.88 at the time of writing, up 0.82% on the Q3 results. The 52-week high is €14.48, low: €6.92.
