Frankfurt/Würzburg 04/18/01 - At a press conference on financial statements in Frankfurt am Main KBA president Reinhart Siewert revealed a strong performance in 2000, which continued in the first quarter of the current year. Despite an economic downturn in major markets such as North America, Siewert anticipated double-digit growth once again in turnover and earnings in the current year. As announced in mid-March, group turnover in 2000 rose 14.5% to 1,087.4m euros, new orders soared 31.8% to 1,375.7m euros and the KBA group started the current year with the biggest backlog in its 184-year history - 1,252.2m euros or 29.9% higher than at the end of 1999. Despite a special expense of 18m euros for the 74 Karat digital offset press developed jointly with Scitex, and a high outlay for the Drupa 2000 international trade fair, the KBA group posted an 18.5% improvement in the results from ordinary activities to 59m euros. The parent company, Koenig & Bauer AG, increased its net earnings to 56.7m euros, 13.6% up on the figure for 1999. Earnings per share rose from 1.63 to 1.90 euros. The consolidated annual surplus rose by a disproportionately low 2.9% to 52.6m euros due to a one-off tax expense from a tax audit for previous years. At the parent company this tax expense reduced net income by 2% to 50.2m euros. However, Reinhart Siewert pointed out that net profits for 2001 would be virtually free of taxes on earnings thanks to a loss carryforward, which has not yet been exhausted, from the 1997 merger with former subsidiary KBA-Planeta AG. Following the transfer of 25.1m euros from the company surplus to other revenue reserves the executive and supervisory board will table a motion at the shareholders' meeting on June 28 in Würzburg to reinvest 12.69m euros from the remaining profit of 25.09m euros and to pay out the balance of 12.4m euros (1999: 10.2m euros) as dividends, with shareholders profiting from the company' s fine performance  in the form of a bonus. So each KBA preference share would attract a dividend of 0.67 euros plus a bonus of 0.13 euros, each ordinary share a dividend of 0.62 euros plus a bonus of 0.13 euros. Based on the closing prices for KBA shares at the end of the year this is equivalent to a dividend yield of 3.3% on ordinary and 3.9% on preference shares. If the proposal for the utilisation of net profits is approved by the AGM, Koenig & Bauer' s equity will increase to 305m euros, group equity to 322.4m euros. This would boost the parent company' s capital-to-assets ratio to an above-average 45.9% (1999: 42.9%). Order bookings and sales in KBA' s two business divisions, sheetfed and web, were driven up by brisk demand in the international newspaper industry and from sheetfed offset printers. The Drupa 2000 trade fair, at which KBA secured orders worth more than 300m euros, stimulated trade in all sectors of the market. In 2000, KBA' s web press division took advantage of a buying spree by the international newspaper industry to book a record volume of new orders The sheetfed division, which embraces sheetfed offset and security presses, achieved a 34.7% leap in new orders to 613m euros, despite lacklustre movement in the security sector, and boosted the order backlog 42.9% by year' s end. Once again, exports accounted for more than 80% of sales, which rose 14.1% to 516.9m euros. KBA' s deputy president Albrecht Bolza-Schünemann, who is in charge of the (ex-Planeta) sheetfed offset facility in Radebeul, was justifiably proud of the dynamic growth rates posted since it was taken over by Koenig & Bauer in 1991. Extensive investment at every level, and the rejuvenation of the entire product line between 1995 and 2000, enabled the company to triple its sales from 149m euros in 1992 to 447m euros in 2000. For the current year its target is 500m euros or more. In addition to its global lead in large-format sheetfed offset presses KBA has substantially expanded its share of the medium- and small-format market, and with around 10% of sales currently ranks among the top four manufacturers. At 57.1m euros, group investment in tangible and intangible assets in 2000 outstripped depreciation (337m euros) by almost 70%. Investment in the Würzburg, Frankenthal and Radebeul plants focused on enhancing core competences and expanding the island system in the web press production halls as part of a move to decentralise the factory structure, with the key aims of improving productivity and cutting lead times. KBA has invested more than 28m euros in two high-automation logistics centres which will come on stream in Würzburg and Radebeul in mid-2001, streamlining the materials flow and the supply of spare parts to customers worldwide. Koenig & Bauer started the new year with a flourish. According to the preliminary figures issued, new orders in the first quarter soared to 389m euros, a staggering 77% up on the corresponding period in 2000. Turnover, at 222m euros, was 7.5% below the previous year' s figure due to a drop in shipments. For the year to December 31 KBA is aiming for a 15% boost in turnover to 1,250m euros, and a hefty 36% jump in the results of ordinary activities to 80m euros. Reinhart Siewert quoted an earnings per share target of 3.00 euros (2000: 1.90 euros). Despite a perceptibly slower rate of economic growth in general, the outlook for KBA is bright, especially in its rapidly expanding sheetfed offset division and its publication rotogravure division, which in the first two months of the year booked orders for five presses - more than in the whole of 2000. Reinhart Siewert pointed out, however, that with a smaller number of big projects up for tender, and longer delivery times, the newspaper press division would be unlikely to match, let alone surpass, its exceptionally strong performance of the previous year. Taking Control of Karat Digital Press Karat Digital Press GmbH, an associated company, is unlikely to move into the black this year. Like other press manufacturers in the potentially high-growth market for digitally integrated printing systems with on-press imaging, KBA has had to invest heavily in developing the 74 Karat to serial maturity and launching it on the market. Following an operating loss of 12.5m euros in 2000, which exceeded calculations, Karat Digital Press looks set to reduce the loss to less than 10m euros in the current year. In the spring of last year Scitex Corporation in Israel and Creo Products in Canada revealed that they were uniting their prepress activities. KBA' s deputy president Albrecht Bolza-Schünemann explained that, as a result of this merger, the joint venture contract KBA signed with Scitex in 1998 will shortly be terminated and Karat Digital Press GmbH will become a full subsidiary of Koenig & Bauer AG. KBA had already taken over the development, marketing, sales and service activities for the 74 Karat some months ago. Integrating the 74 Karat into KBA' s global sales and service network will shorten decision-making paths and enhance customer proximity. Integrating Karat Digital Press more closely into KBA' s huge sheetfed offset facility in Radebeul, which it adjoins, will enable existing or-ganisational, engineering and service resources to be pooled, bringing substantial bottom-line benefits. The imaging technology and related software will continue to come from Israel. Details are currently being negotiated with Scitex. Since the 74 Karat was launched on the market at Drupa 2000 in May, 45 presses have been sold in Western Europe and North America, and 28 of these have come on stream. There are plans to boost sales further with successive launches in other markets in the second half of the current year and in 2002.