KBA reports rise in sales

KBA has reported an 8.5 percent rise in sales to €791.8m with its Q3 figures for this year. The increase in sales, the expanded service business and cost savings achieved resulted in an operating profit of €7m. This was an improvement of approx. €18m. The group posted a pre-tax profit (EBT) of €1.2m after nine months compared to a loss of €16.3m year-on-year.

Group results came in at –€2.3m after tax deductions and corresponds to earnings per share of –€0.12. Over the next quarters the management board expects a further reduction in costs and improvement in earnings from the Fit@All restructuring program.

However, group order intake fell 5.8 percent to €668.7m compared with last year’s Q3 figure of €709.6m. The sheetfed offset segment had a strong third quarter so that after nine months this segment is down only 1.9% year-on-year to €449.9m. In contrast, compared to 2013 orders for web and special presses fell by 12.9% to €218.8m. Bookings for newspaper and commercial web presses remained far below KBA’s low expectations and new orders for banknote printing presses have only been placed hesitantly despite a raft of projects. At the end of September group order backlog came to €437.4m, substantially lower than a year earlier (2013: €627.7m). KBA has blamed this on everything from economic recession through to fears over Ebola.

Nonetheless, sales of sheetfed offset presses increased by 6.5% to €406.3m compared to €381.4m twelve months ago. The rise in sales, cost savings and slightly better prices triggered an operating profit in this segment of €2.8m (2013: –€7.8m). In the web and special press division higher revenue in banknote and special packaging printing led to a 10.6% climb in sales to €385.5m compared to 2013 (€348.5m). Notwithstanding poor capacity utilisation at KBA’s web press facilities the web and special press division posted an operating profit of €4.2m, an improvement on last year’s loss of €2.9m.

Elsewhere in the figures, cash flow was strong, though KBA notes that customers are less willing to  make payments up front. Export orders have been fairly strong, particularly in Europe, which accounted for 35.8% of group sales (2013: 25.2%) and deliveries up by 54.2%. Sales attributable to Asia and the Pacific were down year-on-year at 24.2% (2013: 28.9%) as a result of economic slowdown in China. North America contributed 10.1% to the group total, and Latin America and Africa generated 15.2%.

The head count has fallen to 4,907 and will fall further to 4,500 by 2016.

President and CEO Claus Bolza-Schünemann said that the company was on track to achieve group sales of more than €1bn and at least balanced group earnings before taxes (EBT) in 2014. He added: “Following high provisions made in the financial statements for 2013 we expect only limited special expenses for Fit@All which impact on earnings. In contrast, cost savings from the restructuring measures implemented will become noticeable.”

 

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