Würzburg. KBA, the world's no. 3 press manufacturer, maintained its dynamic performance in the third quarter. At an extraordinary shareholders' meeting convened on November 22 to vote on the conversion of preference shares into ordinary shares, KBA president Reinhart Siewert announced that the group is on track to post the highest turn-over and profit in its184-year history. Bucking the current economic trend and the aftermath of events in the USA, KBA will hit its pre-tax earnings target of 80m euros and may well surpass its sales target of 1.25bn euros for the year. At 948.7m euros, group turnover was 31.5% up on the corresponding figure for the previous year (721.7m euros), split more or less evenly between sheetfed and web. Boosted by a higher turnover and lower expenses, the results from ordinary activities to September 30 almost doubled - from 33.1m euros last year to 62.6m euros - as did net income, which jumped from 32.1m euros to 60m euros and thus surpassed the figure for the entire 2000 business year (52.6m euros). Earnings per share, at 2.32 euros, were more than twice as high as for the same period in 2000. Despite a big increase in shipments, the backlog of unfilled orders on September 30 stood at 1,156.6 euros, just 4.8% below the exceptionally high figure for the previous year (1,215.3m euros), which means that KBA is well placed to achieve its 2002 turnover targets, especially for web presses. At the end of the third quarter the volume of new orders totalled 853.1m euros. Though down on the previous year's high figure of 973.1m euros, which was boosted by the Drupa trade fair, this is still 10.5% up on the figure for 1999. KBA believes that its strategy of providing customised installations and addressing niche markets (eg publication rotogravure and security presses) helps it weather downturns better than competitors who rely more heavily on serially produced presses. The fact that the world's first and oldest press manufacturer is still thriving in such an export-intensive industry is convincing evidence. The growth in turnover was reflected in personnel. On September 30 there were 7,574 people on the KBA payroll, 719 more than at the same time last year. This substantial increase was primarily due to the acquisition of KBA-GIORI and Holland Graphic Occasions (HGO) in the first half-year. The extraordinary shareholders' meeting on November 22 voted overwhelmingly to convert nonvoting preference shares into ordinary voting shares at a ratio of 1:1. The conversion is scheduled for December 14. This will enhance the liquidity - and thus the appeal - of Koenig & Bauer's shares in the market. A larger free float will also broaden the options for institutional investors and increase the weighting of KBA shares in the midcaps index. The adoption of the "one share, one vote" principle brings the group in line with corporate governance regulations. The major shareholders will, however, continue to hold 40%-plus of the 16 million shares, which promotes stability ad continuity and supports the long-term strategic alignment appropriate to the engineering sector. Following the conversion, in the first half of 2002 the parent company is planning to introduce an employee share scheme in order to enhance staff loyalty and identification with the group's ambitious performance goals. Outlook for 2001 and 2002 KBA looks set to continue its strong performance in the fourth quarter. With a large backlog of orders keeping the sheetfed division busy until the end of the first quarter and the web press division until the end of the year, the KBA group, which has posted dynamic growth rates over the past few years, anticipates a moderate improvement in turnover in 2002. KBA is confident that the sheetfed and newspaper presses it will be launching in the first half-year, coupled with new advances and the recent addition to its product range of the 46 Karat digital offset press, which takes it into the popular B3 market, will enable it to expand market share even if the downturn continues. To strengthen its activities in the key digital print sector KBA is planning to merge its DI subsidiary, Karat Digital Press GmbH, with the parent company at the beginning of 2002. The accounts for the coming year will be drawn up in accordance with international accounting standards (IAS). Although optimistic on the outlook for 2002, in view of the abovementioned organisational changes due to be implemented in the first quarter of 2002 Reinhart Siewert is unwilling to quote specific figures at this stage but will wait until the press conference on financial statements slated for April 16.