Koenig and Bauer has released its figures for the first half of this year, which show a significant decline in revenue, but also indicate improvements in the second quarter when the impact from the virus should have been at its worst.
Thus the revenue for the first half was down 20.1 percent, compared against H1 2019, to €404.5 million but nonetheless this represents a slight improvement over the first quarter of the year, which saw revenues down 25.3 percent over the previous year. The net earnings showed a loss in the first half of €44.2m but this includes a loss of €36.2m just from the first quarter. For reference, the first quarter of 2019 showed a net loss of €4.9m, which had reduced to a net loss of €2.4m for the first half of 2019.
Naturally, Koenig and Bauer blames this on the “general investment restraint on the part of many customers in the corona crisis, travel bans, lockdowns and other restrictions” and says that “the Covid-19 pandemic particularly impeded deliveries of the presses to the international customers as well as the worldwide deployment of the assembly staff and service technicians.”
Not surprisingly, the overall figure for orders is down but Koenig and Bauer continues to see lower orders for its web offset presses, which means that the Digital and Web division has been particularly badly hit with orders worth just €56.7m for the year’s first half, down 36.9 percent from the previous half of €89.9m though the worst of this mostly seems to have occurred in the second quarter. In contrast, the orders for sheetfed presses were up 1.6 percent to €265.9m for the first half of this year though the actual revenues from the sheetfed division were down 20.6 percent to €205.5m. Interestingly, most of the damage seems to have taken place in Europe, with revenues actually rising in North America and the Asia Pacific region.
However, Koenig and Bauer did take several steps to alleviate the situation, including introducing short time working from 1st April, and the company booked a one-off payment of €4.2m following the resolution of a legal dispute. The company has also applied for a flexibly repayable KfW loan of up to €120m to supplement its existing syndicated credit facilities though this means that there won’t be any dividend distributions during the term of the KfW loan.
At the same time, Koenig and Bauer has set up a Performance 2024 efficiency programme, to make improvements in working capital and cash flow and to shift the strategic focus to packaging printing and digital services.
CEO Claus Bolza-Schünemann commented: “In view of the high volatility and the great uncertainties surrounding the severity and duration of the coronavirus pandemic and the success of health, economic and monetary policies, the further global economic development is uncertain. Given these uncertain underlying conditions, it is currently not yet possible to issue any revenue and earnings guidance for 2020 for our group.”