Sales of the 74 Karat digital offset press in the second quarter were much firmer than in the first three months of the year. Karat's integration into the KBA organisation is already showing benefits in the form of increased market share In the first half-year the Koenig & Bauer group, the world's no. 3 manufacturer of printing systems and peripherals, continued the dynamic growth of the past three years, bucking the current economic downturn. Sales of sheetfed and web presses for commercials, newspapers, packaging and securities totalled 619m euros (2000: 473.5m). Net income soared 75.8% to 36.4m euros, from 20.7m euros in the first six months of 2000. Earnings per share more than doubled to 1.37 euros (30.06.2000: 0.61 euros). With a further increase in shipments slated for the second half-year, KBA is confident of achieving its annual targets of 1.25bn euros for group sales and 80m euros for earnings. New Orders Continue to Climb On June 30 the volume of new orders stood at 737.5m euros, 2.1% below the previous year's figure (752.9m euros). It includes 130.1m euros for the consolidation of two acquisitions, KBA-GIORI S.A. and HGO. The order backlog climbed 10.2% to 1,370.5m euros, with acquisitions contributing 123.1m euros. The high level of plant utilisation, and the addition of the new subsidiaries, which employ a total of 173 people, increased the KBA group payroll to 7,400 on June 30, 782 more than at the same time last year. Business Divisions At 312.3m euros and 306.7m euros respectively the two business divisions, sheetfed (offset and security presses) and web (newspaper, commercial offset and publication rotogravure presses) contributed to half-year sales in roughly equal parts. The volume of new orders booked from January to the end of June totalled 350.2m euros for web presses and 387.1m euros for sheetfed presses. This is slightly down on the previous year, the figures for which were boosted by strong sales at the Drupa international trade fair in May 2000. Stripping out this additional stimulus, order intake matched the high level of 1999, despite the fact that capital investment has slowed in North America and Western Europe on the back of the economic downturn. By June 30 the order level for sheetfed presses had climbed 26.5% to 394.9m euros, including 123.1m euros attributable to the increase in consolidated companies. The backlog of orders for web presses rose 4.8% to 975.6m euros. This means that sheetfed press production facilities will be running at full capacity until the end of the current year, web press facilities until well into 2002. Growth through Acquisitions As reported at the AGM on June 28, and with retroactive effect from April 1, 2001, Koenig & Bauer has taken over its long-time Swiss partner in security press sales, Lausanne-based De La Rue Giori S.A., and changed the company's name to KBA-GIORI S.A. Following a rump financial year from April 1 to December 31, 2001, KBA-GIORI S.A. will be fully consolidated into the KBA group in the 2002 accounts. The acquisition, effective retroactively from January 1, 2001, of Dutch press retailer Holland Graphic Occasions B.V. in Wieringerwerf represents a strategic upgrade of KBA's sheetfed activities. KBA is confident that the two new subsidiaries will strengthen its market position in sheetfed offset and complete its transition to systems provider in security printing.