Nov 20, 2006 -- In the third quarter the KBA group more or less wiped out a shortfall from the first half-year with an order intake worth Euro 527.3m - the highest in any quarter in its history. New orders for the nine months to 30 September totalled Euro 1,246.6m, just 4.8% below last year's figure of Euro 1,309.9m, which was boosted by a number of big contracts. Sales climbed 8.9% from Euro 1,107.3m to Euro 1,205.5m. The Euro 1,082m backlog of unfilled orders was roughly the same as in 2005 (Euro 1,095.6m). Group operating profit almost doubled to Euro 30.1m (2005: Euro 16.1m), and pre-tax earnings (EBT) more than trebled to Euro 30.4m (2005: Euro 8.9m). Net profit, at Euro 22.4m, was more than five times the prior-year level of Euro 4m. Earnings per share improved accordingly from 25 cents in 2005 to Euro 1.38. KBA management reaffirmed its spring prognosis of annual sales in excess of Euro 1.7bn and a pre-tax profit substantially higher than the Euro 25.8m reported in 2005. Higher earnings increased equity to Euro 465.4m at the end of September (31.12.2005: Euro 449.4m). Since the balance sheet total increased mainly as a result of the first-time consolidation of a new Stuttgart-based subsidiary, KBA-MetalPrint, the capital-to-assets ratio, which is already high for the engineering industry, remained virtually unchanged at 32%. The substantial lift in earnings, a Euro 123.1m reduction in trade receivables and a larger volume (Euro 32.6m) of customer down payments caused cash flows from operating activities to swell from Euro 74.1m the year before to Euro 93.9m, despite an Euro 83.3m increase in inventories in preparation for higher turnover in the fourth quarter, and a Euro 55.9m reduction in other current financial payables. The free cash flow rose to Euro 66m (2005: Euro 58.2m). Funds stood at Euro 192.5m, Euro 63.5m higher than the year-end figure of Euro 129m. On 30 September the Group workforce totalled 8,307 (2005: 7,866). The additional 441 staff included 375 from the consolidation of subsidiaries KBA-MetalPrint (297), KBA (UK) (43) and KBA-France (35), and 66 hired by KBA's Radebeul (Germany), Austrian and Czech production plants. Sheetfed and web divisions diverge Following a slow half-year the sheetfed division picked up speed in the third quarter, bringing in new orders worth Euro 299.7m. The Euro 664.4m order intake for the full nine months was a modest improvement on the high figure for 2005 of Euro 661.8m. Sheetfed sales, at Euro 563m, were roughly on a par with the previous year (Euro 561.4m). A Euro 413.1m backlog of orders will keep production humming at KBA's sheetfed plant in Radebeul until well into the spring. However, the order intake of Euro 582.2m for web and special presses was 10.2% below the prior-year figure of Euro 648.1m. While the volume of orders for security presses even surpassed last year's high level, new bookings for newspaper, commercial and publication rotogravure presses were down compared to 2005. Sales climbed 17.7% to Euro 642.5m (2005: Euro 545.9m), reducing the backlog of unfilled orders to Euro 668.9m (2005: Euro 695.4m). Commenting on the interim figures, KBA president and CEO Albrecht Bolza-Sch¸nemann said: "Steady growth by our specialist subsidiaries in the security press and electronic data media sectors was accompanied by increased revenues in our web press division and at our Czech subsidiary, KBA-Grafitec. However, earnings by our sheetfed offset division were below target, primarily due to a lag in turnover that will be made good in the fourth quarter." Export level exceeds 82% again Export level exceeds 82% again Although domestic sales of sheetfed presses firmed, there were fewer installations of web presses. As a result the export level climbed to 82.5% (2005: 80.2%). KBA's biggest foreign market was the rest of Europe, which generated 47.3% of group sales (2005: 45.9%), followed by Asia and the Pacific with 18.5%, North America with 11.1% and Latin America/Africa with 5.6%. While the demand for printing equipment in Europe, the Middle East and emerging markets such as China remained firm, elsewhere it softened, though this may only be temporary. In view of current uncertainties regarding exchange rates, the US economy, commodity and energy prices and the impact on the German economy of the imminent increase in VAT, KBA's prognosis for the 2007 business year will not be issued until March.