04 August 2018 Business

Orders up, sales down as Koenig & Bauer remains confident

A dip in sales and growth in incoming orders underlines how investment and installations are tilted towards the back of the year, with the potential for bottlenecks for Koenig & Bauer.

Koenig & Bauer is taking measures to ensure that it can meet delivery and installation dates for the second half of the year following a boom in orders in the second quarter.

The year had started with a sluggish quarter, but “particularly high” orders totalling €454.4 million in the three months from April to June has set the company on track to meet full year objectives with an order back log of €805.8 million at the six-month stage. After six months order intake had reached €705.3 million (€601.9 million), but with a focus on second-half delivery sales became €514.4 million compared to €538.9 million.

This is having an impact. CEO Claus Bolza-Schünemann warns that “the execution of orders on time in the second half of the year and particularly Q4 with the accumulation of press installations… is a challenging task to which we pay particular attention.”

It is not, however, turning away business as any sale offers the opportunity to widen the installed base and as the basis for growth in its service business. The demand has come from machines in packaging, matching last year’s order intake for sheetfed presses, without the boost of the Print China exhibition. Orders in the digital and web division were slightly down as web offset business continues to be hard to come by and its digital press offering is at the more rarefied end of the market in packaging and industrial printing.

“We see significantly greater short- and medium-term potential in the large corrugated and foil printing markets,” he says. “We want to accelerate the pace of growth in analogue direct printing on corrugated board. This also applied to flexible packaging printing following the successful realignment of this business.”

The company’s medium term sales targets do not take account of any business from corrugated printing nor from two-piece metal can decoration, a sector where two customers are testing the new CS Metal printer. These targets are looking for annual growth rate of 4% and Ebit margin between 4-9%, led by growth in packaging which in turn is linked to demographics shifts towards urbanisation and smaller households ordering more and more food online.

A large order from German security printer Giesecke + Devrint for press lines to print bank notes in Egypt will keep security press production busy well into 2019.

The impact of the fall in sales has been felt on the bottom line where a pretax profit of €15.9 million after the first six months of 2017 has become a pretax profit of €8.5 million in 2018.

Gareth Ward

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Sheetfed orders steady

Sheetfed orders steady

In coming orders for sheetfed presses are at the same level as last year, while orders overall increased. This will put pressure on deliveries and installations towards the end of the year the company says.

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