Koenig & Bauer beats target with €1bn sales

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German press manufacturer Koenig & Bauer exceeded its own forecast for 2020, with sales keeping above €1bn, although they were 20 per cent down on the prior year.

Ahead of forecast: Koenig & Bauer

On the basis of its preliminary, and as yet unaudited figures, it achieved group revenue of €1.03bn. Preliminary consolidated earnings before interest and taxes (EBIT) were €68m in the red in the 2020 financial year. Adjusted for special items, preliminary consolidated EBIT stands at a loss of €19m.

On the basis of its preliminary figures, Koenig & Bauer registered a full-year order intake of around €975m in the 2020 financial year, 14.5 per cent lower than in 2019 (€1.14bn). The decline was thus less pronounced than the 21.9 per cent drop in order intake for printing presses published by industry association VDMA. Order intake in the fourth quarter came to €262m, continuing the recovery that had emerged in the second half of 2020.

This means that Group revenue is significantly above the forecast issued for the 2020 financial year, which had indicated a figure of between €900m and €950m. Adjusted EBIT was also better than the forecast negative EBIT before special items of a figure in the mid-double-digit millions.

Despite the still limited forward visibility, with respect to the Covid-19 pandemic on the Koenig & Bauer Group’s business environment and the travel restrictions currently in place due to the pandemic, the company anticipates slight growth in business in 2021. This projection is based on the assumption that progress made in vaccinations that also provide protection from the Covid-19 virus mutations will lead to a lifting of Covid-19 restrictions. The lower decline in order intake in 2020 compared to the industry as a whole is seen as a solid starting point for the new financial year under the prevailing Covid-19 conditions.

Against this backdrop, Koenig & Bauer projects slight organic revenue growth of around four per cent to €1.07bn in 2021. On the earnings side, it expects to break even at the EBIT level in 2021 following the successful launch of the P24x efficiency programme and the planned savings effects. That said, the reimposed travel restrictions – not least of all due to the emergence of mutations of the Covid-19 virus – will continue to exert pressure in the first quarter of 2021.

As forecast, the implementation of the P24x programme will leave traces on free cash flow in 2021, resulting in a negative free cash flow in the mid double-digit millions.

Koenig & Bauer confirms its medium-term targets of revenue of €1.3bn, an EBIT margin of at least seven per cent and a reduction in net working capital to a maximum of 25 per cent of annual revenue, which is to be achieved after the completion of the P24x efficiency programme.

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