Würzburg. At a packed shareholders' meeting in Würzburg, Reinhart Siewert, president of Koenig & Bauer AG (KBA), reported an outstanding performance in 2000, with a 14.5% increase in group sales to 1,087.4m euros, a 31.8% jump in order bookings to 1,375.7m euros and an 18.5% improvement in the results from ordinary business activities to 52.6m euros compared to 1999, and announced continued double-digit growth in sales and profits for the current business year. He also confirmed an announcement made at the press conference on financial statements on April 10, to the effect that major holders of ordinary shares are ready to convert the more liquid preference shares into voting ordinary shares in a ratio of 1:1 in preparation for the conversion of the DAX indices to a free float, scheduled for June 2002. At an extraordinary shareholders' meeting scheduled for November 22, 2001, holders of ordinary and preference shares must vote on this milestone resolution in the 184-year history of the world's first press manufacturer. Approval would not only mean conversion from a listed family business to a family-run public company, but would also mean that in future the proportion of ordinary shares on the open market would increase to around 70%, share liquidity would greatly improve and thus also their appeal for domestic and foreign institutional investors. The anticipated approval has already been tabled at an extraordinary meeting of a share index working group attached to the German stock exchange, and the acceptance of Koenig & Bauer shares in the MDAX segment resolved with effect from September 21, 2001, pending the success of a takeover bid by Allianz for Dresdner Bank, and by Münchener Rück for ERGO. Reinhart Siewert said: "This will raise Koenig & Bauer up into the second league in German share indices and, after the top 30 DAX evaluations, place us among the 70 key listed companies in Germany." In this connection Reinhart Siewert also announced the introduction of an employee share plan. The aim of giving employees a stake in productive capital is to enhance their identification with group targets. A motion will be tabled at the extraordinary shareholders' meeting in November to create the necessary approved capital with the cancellation of pre-emption rights on issues of new shares. The president of KBA emphasised the above-average performance of KBA's ordinary and preference shares during the past 18 months. Since the beginning of the current year KBA's ordinary shares have gained more than 60% in value, while S-DAX and MDAX have virtually stagnated, the DAX has fallen slightly and the Nemax 50 has lost more than 70% of its value. The performance of KBA preference shares, which have a wider spread, was similar. Reinhart Siewert commented: "During the past year there has been a fundamental change in thinking among investors, who have rediscovered the values of 'old economy' players. KBA shares have profited from this shift thanks to our solid corporate values and favourable price-earnings ratio." In the current business year, despite the economic downturn perceptible in North America and, to a lesser extent, in Germany and key markets in western Europe, the Koenig & Bauer group continues to climb a growth curve. In the first five months - the half-yearly report will be published at the end of August - the volume of orders received by the parent company remained at a high level, totalling 502.1m euros, though this was 6.5% lower than in the same period last year (536.8m euros). The previous year's figures were, however, boosted by the Drupa 2000 international trade fair in Düsseldorf last May, which brought KBA orders worth more than 300m euros. Koenig & Bauer has posted some big sales in the US newspaper market in past months. The photo shows a KBA Comet press recently commissioned at the Standard Examiner in Ogden, Utah In the first five months of the current year the total operating performance of the parent company, Koenig & Bauer AG, rose to 486.7m euros, a 15.4% improvement compared to 2000, with the sheetfed offset division posting a disproportionately large gain. Shipments of web presses, on the other hand, will have to increase sharply in the second half of the year. Nonetheless, in his prognosis Reinhart Siewert reaffirmed the KBA group's ambitious goals for 2001, in the form of a further double-digit increase in sales to around 1,250m euros, a 6.5% return on sales, and earnings per share of 3 euros (2000: 1.90 euros). The number of subsidiaries consolidated for the first time in the books has expanded during recent weeks. On May 30 Koenig & Bauer acquired its long-established Swiss associate De La Rue Giori S.A. in Lausanne, the leading sales consultancy for security printing in the international marketplace. The new subsidiary, which with effect from June 11 bears the name KBA-GIORI S.A., will be in charge of all activities in the banknote and security printing market, which has traditionally held a key position in the Würzburg press manufacturer' corporate strategy. KBA is confident that the move will streamline the development of new products and enhance the group?s systems competence in all stages of production, a vital consideration in the sensitive banknote market. In order to address the rapid growth in secondhand presses, which has been driven by the boom in new sheetfed offset sales, Koenig & Bauer recently acquired a 100% interest in Holland Graphic Occasions B.V., a Dutch company of international repute. Although it will be consolidated in the group accounts, the new subsidiary will function as a standalone operation. Sheetfed offset presses are manufactured at KBA's facility in Radebeul near Dresden. The photo shows a world first: a Rapida 105 medium-format press for five-colour perfecting and inline perfect coating Reinhart Siewert reported a high level of capacity utilisation at the group's manufacturing subsidiaries in Berlin, Austria and the USA until well into 2002. Market share has been increased in both the sheetfed and web press markets in North America. For example, Koenig & Bauer is now one of the top two suppliers of newspaper presses in the USA and, despite the weakened economy there, has sold a string of new presses in the past few weeks. A new subsidiary in Fairfield, New Jersey, has been established for sales and service of the 74 Karat digital offset press in the USA. The sales and service network in the Far East has been expanded with additional outlets in China (including Hong Kong) and by enlarging an existing subsidiary, KBA Asia Pacific in Kuala Lumpur. At the beginning of 1998 KBA and Scitex Corp. of Israel set up a joint venture for the development, production and marketing of the 74 Karat digital offset press. In his speech Reinhart Siewert announced that, as a result of changes in corporate strategy at Scitex following a merger with Creo, both parties have agreed to terminate the joint venture. With effect from May 1, 2001 CreoScitex Corp. based in Herzlia, Israel, is in charge of all future developments of the imaging technology for the 74 Karat, including the relevant software, and has also taken on the competent staff from Karat LP. This alliance with the global market leader in imaging and pre-press systems will furnish KBA with the planning security and innovative prowess necessary in this key sector. Production of the 74 Karat digital offset press with inline imaging at KBA's subsidiary Karat Digital Press in Radebeul near Dresden KBA took over the development, production and marketing activities for the 74 Karat some months ago. Since the press was launched on the market, more than 30 units have gone into operation and for the current year KBA is targeting sales of more than 40 units. KBA, like other leading press manufacturers, is confronted with high R&D and marketing costs for digitally integrated printing systems, which means that for the current year it is reckoning with a loss at Karat Digital Press GmbH in Radebeul. However, this loss will be lower than in the previous year (12.5m euros) as the company becomes more closely integrated into KBA's conventional sheetfed facility, also located in Radebeul, with joint utilisation of resources. For the year 2002, provided there are no economic upsets, KBA is targeting a balanced result in this product division and is also planning to merge Karat Digital Press GmbH with the parent company. For KBA the 74 Karat represents a broadening of activities in the digital print sector in the medium term.