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KBA Reports 2003 Loss, New orders up by 15.8%

Press release from the issuing company

April 5, 2004 -- The group figures for 2003 published on 5 April reflect the glacial climate in the print media industry over the past three years. However, a 15.8% jump in new group orders to €1,255.8m gives promise of an upturn in the market for the first time since 2000. Both our sheetfed offset (+14.5%) and its web and special press division (+17.2%) booked big increases in orders. A pre-Drupa preview of the new sheetfed presses KBA will be exhibiting at Drupa drew a staggering total of 1,400 customers from 38 countries to our facility in Radebeul near Dresden at the end of March. At €1,231.8m (2002: €1,353.8m), group sales were just 9% below the previous year’s record level. Despite the slide in the dollar, sales of sheetfed offset presses stood at €617.5m, roughly on a par with the previous year (€619m). These contrasted with a 16.4% drop in web press sales to €614.3m (2002: €734.8m). The group order backlog on the balance sheet date of 31 December totalled €856.9m (2002: €832.9m), a 2.9% increase on the previous year. Although the volume of orders on hand for sheetfed offset presses swelled by 19.4%, a drop in new orders for security presses caused the order level for web and special presses to shrink by 2.9% to €597.3m. On the whole the level of plant utilisation at our newspaper, commercial and gravure facilities in west Germany has improved substantially since summer 2003 and is now much higher than in the previous year, when short-time work was introduced on a prolonged but temporary basis. High restructuring costs at web press facilities In 2003 the KBA group posted a loss for the first time since acquiring Planeta in 1993. The main causes were the slump in web press sales, currency losses in North America caused by the massive devaluation of the dollar relative to the euro, intense pricing pressures in the market and the heavy costs incurred in downsizing capacity at the group’s web press production plants. A €1.9m operating loss and a one-off expense of €45.1m from the closure of two minor assembly plants and redundancies at our main factories in Würzburg and Frankenthal resulted in negative earnings before interest and taxes (EBIT) of -€46.1m (2002: +€46.3m) and a €49.6m loss from ordinary activities. After factoring in deferred taxes the KBA group posted a net loss of €30m for 2003 (2002: net profit of €28.1m). Earnings per share of €1.75 for 2002 were transformed into a €1.86 loss for 2003.