KBA (Koenig & Bauer) is feeling the post-drupa bite after recording a 25 per cent drop in its order intake for the past five months to €362 million from the previous year’s result for the same period, which was boosted by the quadrennial German trade show in May 2012.
The offset giant’s backlog results were also impacted by last year’s drupa-boosted figures, coming in at €614.5 million at the end of May 2013 – 28 per cent lower than the 2012 result.
The company’s results were unveiled at its 88th annual general meeting (AGM) at the Vogel convention Centre in Würzburg, Germany, with the world’s second largest press manufacturer welcoming around 70 per cent of its shareholders on the day.
Despite the drop in sales for KBA's German headquarters, Dave Lewis, KBA Australasia's general manager for sheetfed presses, says that locally, the company's orders and ongoing projects have remained steady.
"I’d say we’re still pretty steady," said Lewis. "The projects we’ve got are very good, and there are still people out there looking at buying presses."
However, at the AGM, president and CEO, Claus Bolza-Schünemann (pictured), painted a mixed picture of the current situation in the printing press market in his address to shareholders. Although the company’s sheetfed division benefitted from orders placed at the well-attended trade shows China Print in Beijing and Printtek in Istanbul, slow demand for commercial and newspaper web presses is continuing.
- In his speech to shareholders, KBA CEO Claus Bolza-Schünemann reported positive news from the trade shows in China and Turkey.
The company says that, along with competition from online media, economic weakness in key sales markets is acting like a ‘brake’ on investment. In his speech to shareholders, Bolza-Schünemann, indicated that he was not satisfied with the group profit of EU€2.3 million with sales of €1.3 billion.
“When looking at the industry situation it must be noted that KBA is the only large press manufacturer to have remained in the black operationally and after interest for the fourth year in a row despite considerable restructuring expenses and a substantial value adjustment to fixed assets in our sheetfed division,” said Bolza-Schünemann. “We know that there is room for improvement and we are pushing forward in many areas to increase profitability.”
In a statement, the company said:
“Along with realigning production capacity and amendments to wage agreements in place since the beginning of the year, the series of measures include cost-saving initiatives in group purchasing, administration and production, as well as a price increase of sheetfed offset presses.”
According to Lewis, KBA's offset sheetfed prices went up in April this year by about five per cent. "Somebody’s got to stop the decline," he said. "If it keeps on going like it is it’s not going to end well for anybody."
KBA says it anticipates a slight decline in the sales volume for web offset presses and systems for security printing due to current market developments. In the sheetfed segment, management is pursuing a less volume-orientated business strategy and an additional program to reduce costs has been in place in both divisions for some time.
The company's management sees a need for further consolidation in the web business, which continues to be affected by slow market demand below expectations. In his speech, Bolza-Schünemann, pointed out that shareholders should prepare themselves for similar group pre-tax earnings to last year instead of the moderate increase originally planned. KBA will publish the full figures for the first half-year on 9 August.
At the end of May, the KBA group payroll came to 6,156, or 100 fewer than one year ago. Excluding apprentices, trainees and employees in phased retirement schemes, the group payroll stands at nearly 5,500. After the loss of 2,000 jobs group-wide over the past four years, management considers additional measures are necessary, given the ‘disappointing’ market situation for web presses and in some niche markets.
However, compared to the previous year, in 2012 KBA quadrupled its group operating profit not including special items. Even after a special depreciation of €27.1 million in the sheetfed division, operating profit rose to €16 million. The parent, Koenig & Bauer, posted retained earnings of €6.6 million after reinvesting 50 per cent of the sum of 2012’s net profit and the previous year’s profit carried forward.