In its 2013 financial report the German press manufacturer said an anticipated revival in demand for web and sheetfed presses during the year didn’t happen, while sales of special presses also fell short.
“Capacity utilistaion of our traditional web press business in particular is unstable and inefficient despite the raft of counter measures implemented. The same is true of our earnings which are completely unsatisfactory. Clearly we have a lot of catching up to do,” said KBA chief executive Claus Bolza-Schünemann.
Group revenues fell 15% to €1.1bn last year (2012: €1.3bn) with the sheetfed division reporting an 11.1% decline to €572m (2012: €643m) and web and special press sales falling 19% to €528m (2012: €651m).
Gross profit margin, meanwhile, plummeted from 25.5% to 14.4%.
Capacity and structural adjustments, related to KBA’s Fit@All reorganisation programme, created a one-off expense of €155.2m resulting in a group operating loss after special items of €130.7m (2012 profit: €13.7m). Without one-off costs KBA achieved an operating profit of €24.5m although this fell far short of the €40.8m achieved in 2012.
Across its segments, the web division posted an operating loss, after restructuring and impairment costs, of €53m (2012 profit: €52.3m), while sheetfed slumped to a further loss of €77.6m (2012 loss: €38.6m).
Group R&D spend amounted to €64.2m (2012: €58.8m) in 2013, the equivalent of 5.8% of total sales (2012: 4.5%) and the company said it aimed to continue to invest in R&D “to continue to make a contribution to the attractiveness of offset printing”.
The company said it was targeting €1bn-€1.1bn sales in 2014 but expected further restructuring expenses to result in another operating loss in its final results for the year.
KBA’s Fit@All restructuring programme is a package of measures aimed at creating long-term profitablility through the consolidation of its core business and a redundancy programme that will result in around 1,400 job losses. Of this number, 710 jobs are set to go at KBA’s Radebeul and Würzburg plants, 385 from its Austrian Modling and Ternitz sites and 330 to go in Frankenthal and the Czech Republic.
The restructure is also focusing on developing four autonomous business units including sheetfed offset, web offset, special applications and production.
In its annual report the company said: “With this extensive package of restructuring measures and a stronger focus on profitable special markets with growth potential such as digital and packaging printing, we should see and return to sustainable profits for the benefit of our shareholders and our equity base by 2016 at the latest.”
Looking ahead the company aims to expand its retrofit and service buisness for exisiting presses due to the “markedly smaller volume of investment in new presses”.
Meanwhile R&D will focus on developing technical solutions for new advertsing formats in newspapers, enhancing the Rotajet for suitable markets over next few years and developing new digital printing systems for various applications including industrial coding, banknote and security printing, as well as metal decorating.
KBA's share price dropped to €11.3 at the time of writing (52-week high/low: €18.6/€10.3).
