Business News
Koenig & Bauer Q1 report 2016: 46% more revenue and EBT up 18m y-o-y
Thursday 12. May 2016 - Order intake of 266.3m higher than quarterly revenue of 258.8m
Order backlog of 582.4m secures utilisation well into autumn
Positive Q1 with 2.1m EBIT and 0.6m EBT
Outlook: Group revenue of around 1.1bn with EBT margin of 3 – 4%
2016 started well for the Koenig & Bauer Group (KBA). At 258.8m group revenue in the first quarter was up 46% on the prior-year figure of 177.3m. All three segments posted considerable gains in sales, with new presses for growth market packaging printing climbing to over 70% of the total. Incoming orders of 266.3m were slightly higher than revenue this quarter. Accordingly, order backlog at the end of March stood at 582.4m, an increase on the figure from the start of the year of 574.9m.
Optimisation measures take hold
Continuing solid capacity utilisation at the groups sites, cost savings from the group realignment, price adjustments and structural changes to the product portfolio have a positive impact on earnings. KBA president and CEO Claus Bolza-Schünemann: “Numerous optimisation measures are taking effect as planned. This quarter we thus improved earnings by over 18m to +2.1m (EBIT) or +0.6m (EBT) year-on-year.”
The groups gross profit margin rose from 20.6% to 29.8%. EBIT this quarter came to +2.1m. In the first quarter of 2015 there was still a loss of 16.2m. A slightly negative interest result of -1.5m led to a group pre-tax profit this quarter of 0.6m compared to -17.7m the previous year. After deducting income tax expenses, group net profit at 31 March was 1.6m (2015: -16.9m). This corresponds to earnings per share of 0.11 (2015: -1.01).
Strong cash flow and high net liquidity
Cash flows from operating activities in the first quarter were clearly positive at 15.4m (2015: -29.3m) as was the free cash flow at 11.3m compared to -31.1m the year before. Funds at the end of March 2016 came to 195.6m. Less bank loans, net liquidity was 179.8m. A lower discount rate for pensions reduced the equity ratio to 25.3% (end of 2015: 26.5%).
Growth in all three segments
The KBA Groups largest segment, Sheetfed, is still on the right track with a 41% rise in revenue, a quarterly profit of 5.7m (2015: -2.7m) and a high order backlog of 264m. In the run-up to the industrys leading trade show, Drupa, beginning at the end of May and given longer lead times, incoming orders of 135.7m in this segment were below the unusually high order intake of 174.7m in the first quarter of 2015 as expected.
The volume of new orders in the Digital & Web segment rose by 23% year-on-year and revenue more than doubled to 27.9m. The segment loss of -1.8m improved greatly compared to twelve months ago (2015: -8.7m). The KBA management board expects positive earnings for the entire year given the growth in order backlog to 77m.
At 115.1m (2015: 117.4m) the volume of incoming orders in the Special segment was roughly the same as the previous years figure (2015: 117.4m). Revenue grew by some 40% to 88.6m. At 0.2m the quarterly profit was below the prior year (1.2m), whereby the project execution of a security press order led to delays impacting on profit. Earnings are expected to improve further over the coming quarters as planned given the strong order backlog.
High export level with fewer employees
The groups export level rose from 80.1% in 2015 to 85.4%. 28.8% of deliveries went to other parts of Europe, 18.7% to North America, 25% to the region Asia and the Pacific and 12.9% went to Latin America and Africa.
5,216 employees were on the group payroll at the end of March, 105 fewer than the previous year. Excluding apprentices, trainees, employees exempted from their duties and staff on phased retirement schemes the group workforce sank to 4,714.
Positive outlook for 2016 unchanged
In its outlook for 2016 the management board confirms the statements made in its annual report for 2015 published on 24 March. KBA president and CEO: “Despite economic problems in key sales markets I remain confident that group revenue will rise to around 1.1bn in 2016 and that we will achieve the EBT margin of 3 to 4% announced. The substantial cut in cost base after completing the group restructuring, improved capacity utilisation, implemented price adjustments and a stronger footing in less price-sensitive growth and special markets will be beneficial.”
At the upcoming Drupa the KBA Group will be presenting innovative press concepts for analogue and digital printing as well as own finishing technology for the first time. The focus will be on the growing packaging and digital printing markets. In addition, new service offerings and workflow solutions will be showcased under the brand KBA 4.0.
After the realignment is complete, the KBA management board will focus again on generating growth in existing and new packaging markets, on industrial applications in digital web printing and expanding the service business. The group pays special attention to robust earnings in all segments and strengthening the companys financial power for strategic Options.