Koenig and Bauer has released details of its preliminary figures for the last financial year, which show an improvement over the 2022 results and is broadly in line with the company’s forecast for 2023.
Thus the revenue rose from €1,185.7 million to €1,326.8 million, while the Earnings Before Interest and Tax went up from €22 million to €29.9 million, matching the forecast of between €25 million to €35 million. The company attributes this to more efficient handling of inflation-related costs of things such as material, energy and labour, largely by passing these costs on to customers. In addition, Koenig and Bauer also implemented better cost management in the third quarter when it became obvious that demand was not recovering as quickly as hoped, which led to a stronger fourth quarter.
The overall the order intake has slipped back from the higher than usual €1,329.3 million of 2022 to €1,287.9 million in 2023, which the company says was expected. The Sheetfed business unit saw a considerable drop in orders, down to €606.2 million from €813.5 million in 2022, which was largely due to catch up after the pandemic. However, the revenues recovered by 16 percent in the fourth quarter. The Digital and Webfed unit saw its orders improve by 9.9 percent and its revenues by 23.2 percent
The Special business segment recorded slightly lower revenues for 2023 but has higher than usual incoming orders, including an order in the Banknote Solutions business unit received from the United States Bureau of Engraving and Printing in Washington, D.C.
Dr Stephen Kimmich, chief financial officer for Koenig and Bauer, commented: “As we are still operating in an extremely challenging market environment, we have continued on our path aimed at improving operating profit. Nevertheless, we are aware that Koenig and Bauer needs to be more profitable looking forward. Just like our successful customers, we must focus on the value drivers that are spurring our transformation from a printing press manufacturer into a technology company. In addition, we have to address the challenges of a world characterised by rapid and unpredictable change.”
Kimmich himself, as well as being the company’s CFO, was also given the role of Deputy Chief Executive Officer in December 2023 and from 1 April 2024 he will assume responsibility on the Management Board for the Special segment, which was previously held by the Chief Executive Officer, Dr Andreas Pleßke.
As for this year, Koenig and Bauer notes that 2024 is “a challenging macroeconomic environment” with the board expecting the EBIT margins and revenues to remain broadly the same as 2023 and is forecasting operating earnings of between €25m and €40m and revenue of around €1.3bn. That said, the company expects to spend €10 million on Drupa, resulting in an expected EBIT of €15m and €30m.
Koenig and Bauer has also said that it expects printers to hold off on orders this year till after the Drupa show, which will affect sales of sheetfed presses in the first half of 2024. Fortunately, neither the Special segment or the Digital and Webfed business is likely to be affected by this.
The company also took the opportunity of announcing these figures to reiterate that it is in the process of changing from being a printing press manufacturer to a technology company. However, it’s still likely to look like a press manufacturer since the market areas it’s pursuing are digital printing, corrugated board, cardboard packaging and flexible packaging printing, plus also associated postpress equipment. This transformation was set out in 2018 in a program called the 2023 Growth Offensive.
CEO Dr Andreas Pleßke explained: “The old adage that you reap what you sow still applies. We launched the growth initiatives in 2018 with foresight. With this mindset, we have been the market and technology leader in many areas for more than 200 years. And that’s how we want things to stay. We have now almost completed the sowing phase and want to reap the harvest. This will also be aided by the “Spotlight” programme, in which we are prioritising initiatives and business models that boost earnings and financial strength, deprioritising initiatives that do not directly impact earnings and optimising the Group and segment organisation as well as the indirect cost structure to make processes even leaner and more customer-friendly.”
However, the figures also suggest that this planned transformation is unlikely to translate into substantial revenues and profits until 2026, and that the company is foregoing paying a shareholder dividend for the 2023 year. In order to reassure nervous investors, the company has promised to pay dividends in future of around 15 to 35 percent of consolidated earnings, with a minimum dividend of €0.30 per share.
The final audited results will be published at the end of March 2024. In the meantime, you can find more information from koenig-bauer.com.
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