KBA sales drop despite rising orders

KBA has reported its figures for the first quarter of 2015, which show orders for sheetfed offset and special presses of €306.7m, a 27% rise on the previous year. However, despite this welcome good news, the group sales and earnings came to just €177.3m, down 16.9% on 2014. Not surprisingly, group earnings before taxes (EBT) of –€17.7m were also lower than the prior-year figure of –€12.1m. KBA has attributed this mismatch to the delivery structure and capacity under-utilisation at its German web press sites, which have now been rescaled.

This loss includes a significant drop in revenue from €41.5m to €13.3m for the Digital & Web Solutions segment despite a slight rise in the volume of new orders. But the KBA press release says that restructuring will improve this and that “promising strategic opportunities have opened up for this new segment through addressing new business fields for KBA RotaJET presses and the alliance with HP in the digital corrugated printing market”. Indeed, the HP Inkjet web press is being manufactured in Würzburg and will be unveiled to the industry in the fourth quarter.

Claus Bolza-Schünemann, KBA’s president and CEO, still believes that the company can turn this around: “KBA will generate far more than 50% of group sales in the second-half of the year with corresponding positive effects on earnings. In light of the solid number of new projects I am confident that we will be able to achieve our group sales target for 2015 of over €1bn with a better EBT than in 2014 and an EBT margin of up to 2% of sales in spite of a weaker Q1 and Q2 this year.”

KBA is also going to adopt a new structure, which will be retroactively applied from 1st January at the next AGM on 21st May. Thus the Sheetfed Solutions in Radebeul and Digital & Web Solutions in Würzburg are to be spun-off as autonomously operating business units. Group-wide production (KBA-Industrial Solutions) and security press activities in Würzburg (KBA-NotaSys) are expected to form further legal entities.

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