KBA is looking at further consolidation of its global infrastructure and workforce amid declining web press sales volume – with the company recording a group net loss of EU€-10.6 million (AU$-15.7m) for the its half-year results ending June.
KBA (Koenig & Bauer Group), which released its quarterly financial results on 8 August, also reported a pre-tax profit of €10 million ($14.8m) for the quarter and a rise in sheet fed orders and revenue, despite recording a pre-tax loss for the full six-month period of €-8.8m ($-13m), down from the previous year’s result of €6.7m ($9.9m) for the same period.
According to the figures, the German press giant’s web press division was hit by a 30 per cent drop in sales volume compared to the same period the previous year, coming in at €150.8 million – down from €215.3 million last year. However, business with sheet fed presses was more stable, with orders for the six-month period approaching €300 million.
Given market trends in the web press sector, KBA CEO Claus Bolza-Schünemann (pictured) believes that further consolidation within the company is ‘indispensable’. KBA management is considering alternative business models intensively to combat the sharply declined sales volume in the web press business. Potential reductions in workforce still have to be negotiated with employee representatives.
At the end of June group workforce totalled 6,158, down 94 from the same time the previous year. Excluding apprentices, student trainees, temporary employees and staff on phased retirement schemes, the number of group employees was down to 5,431.
In a letter to shareholders Bolza-Schünemann said:
“Compared to 2012 our order and sales figures after six months mirror the slump in economic momentum in large parts of the world.
“The uncertainty of many decision-makers given future media trends acts as a brake on investment in traditional web offset presses. At the same time demand for special presses for other market segments was also sluggish.
“Given media and industry developments, demand for web presses is declining faster than expected. Along with the capacity adjustments already carried out and those still necessary, management is considering which business model could make the web press business more profitable in the longer term, even at a significantly reduced volume,” he said.
KBA expects improved operating results in the course of the year as it pushes forward with turn-around programmes in its traditional web and sheetfed business. Projects to ‘harmonise’ processes and align group-wide purchasing are well on target.
In the mid-term KBA aims to compensate as much as possible for the slump in traditional web offset sales with the entry into growing and profitable market segments and to improve group earnings, including its majority takeover in July of Kammann Machines, a market leader in screen printing presses for directly decorating premium-quality hollow glass containers for the cosmetics and spirituous beverage industry.
KBA’s results for the six months ending June come only weeks after market-leading rival, Heidelberg, reported a net loss of €-110 million ($159.3m) for the financial year ending 2013.