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KBA Reports Q1: 46% more revenue and EBT up €18m Year Over Year

Thursday, May 12, 2016

Press release from the issuing company

  • 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 group’s 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 group’s 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 Group’s 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 industry’s 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 year’s 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 group’s 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 company’s financial power for strategic Options.

Full Release

 

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