KBA's Operating Profit Triples, Special Depreciation Strains as One-off Effect

WÜRZBURG, GERMANY—March 1, 2013—Preliminary figures for 2012 issued by printing press manufacturer Koenig & Bauer AG (KBA) reveal group sales rose by over 10 percent to nearly €1.3bn and a positive operating profit of over €30m before special items, more than triple that of 2011 (€9.9m). Operating and free cash flow were also significantly positive.

Along with the ongoing schemes to reduce costs and increase efficiency, the world’s second-largest press manufacturer profited from its versatile product portfolio. Today over 30 percent of sales come from sectors less effected by the structural shifts in the print media industry. Just yesterday, with the aim of expanding its broad product range, the company announced the planned acquisition of an Italian press manufacturer specializing in flexo presses for flexible packaging.

In the fourth quarter of 2012, the sheetfed division posted a special depreciation of just under €30m. This is a reflection of the management’s strategy to focus on more profitable orders and products. It also mirrors the assessment of changes to market parameters expected in the mid-term and a more results-orientated business strategy for the future. Following this one-off special effect, which did not impact on cash, KBA’s pre-tax profit was slightly higher than the prior-year figure of €3.3m. The group posted a positive net profit for the fourth year in a row.

Shareholders are to participate in the company’s operating success. “Given the strong increase in operating profit before non-recurring items at group level and the net profit at the Parent, in 2012 our shareholders should receive a dividend again,” noted KBA CEO Claus Bolza-Schünemann. “We will provide more details on this once our official figures are released on 22 March.”

Higher demand for sheetfed offset presses in 2012 resulted in a double-digit increase in new orders. The fourth quarter saw a slight operating profit and pre-tax earnings (excluding impairment) in the sheetfed division. In contrast, in the more volatile web and special press division fewer large orders were placed than in the above-average prior year, thus resulting in a 28 percent reduction in group order intake compared to 2011. Nevertheless, order backlog of €650m at year’s end was still higher than in the years from 2008 to 2010. Additionally, strong cash flow boosted funds. Again KBA’s financial figures and balance sheet outperformed other companies in this industry segment.

The number of group employees fell by over 200 to 6,187. Following the extensive adjustments to capacity over the past years, the KBA management board have introduced a further cost-saving scheme to substantially improve the profitability of the sheetfed and web offset divisions by the end of 2014. Along with the new product-house organization and group-wide realignment of purchasing and production activities including the closure of the Trennfeld facility by the end of 2013, amendments to labour contracts have been in effect since the beginning of 2012 at the Würzburg and Radebeul plants. These amendments aim to boost the flexibility and profitability of KBA’s core business.

Source: KBA.