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KBA looks to packaging as sales dip

Wednesday, 22 August 2018
By Wayne Robinson
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Global press manufacturer KBA is looking to packaging to drive its growth, as its latest figures show sales slipped by five per cent while profit slumped by 50 per cent in the first half of this year.

Net profit for the world’s second biggest press manufacturer came in at €6.7m, decreasing 56 per cent from €15.2 in the pcp, on sales down to €514.4m, a drop of five per cent from €538.9m for the same period last year.

On the bright side order intake  reached €705.3m, increasing by 17.2 per cent from €601.9m in last year’s first half results.

The Asia Pacific region saw the biggest growth, and now represents 27.1 per cent of the company’s total sales, up from 24.6 per cent last time out.

In its outlook, KBA expects organic growth of around four per cent in its Group revenue and an BIT margin of about seven per cent for the full year.

While other regions dropped in revenue, except for Germany, which the company classifies as apart from the rest of Europe, the Asia/Pacific area grew, increasing to 27.1 per cent of the group’s revenue, from 24.6 per cent the year before. The rest of Europe excluding Germany remained the highest source of income, although it dropped, making 33.8 per cent of the company’s total revenue in the half from 35.7 per cent the year before.  

Claus Bolza-Schünemann, CEO KBA

Claus Bolza-Schünemann, CEO of KBA, says, “With order intake reaching a particularly high €454.4m in the second quarter and the order backlog rising to €805.8m at the end of the first half, the Koenig & Bauer Group is on track to meet its targets for 2018. This year, we expect to achieve organic growth of around 4 per cent in Group revenue and an EBIT margin of around 7 per cent.

“Strong security business and more orders in packaging printing caused order intake to rise by 17.2 per cent to €705.3m in the first half of 2018. Driven by the good Q2 figure of €297.1m, Group revenue came to €514.4m, but fell short of the previous year’s figure of €538.9m due to the even greater accumulation of delivery dates in the second half of the year.”

The Sheetfed segment reached a revenue of €283m for the half, down 8.1 per cent from €307.8m in the pcp. The sector’s EBIT of €7.7m saw a 37 per cent decrease from the year before.

Digital & Web saw its revenue decline by 19 per cent  to €55.8m in H1 from €68.3m the year before, with its EBIT coming in at -€9.1m for the half, compared with -€2.8m in the pcp.

The Special segment saw its revenue rise to €195m, up three per cent from €189.2m in the pcp, while EBIT came to €14.4m, down two per cent from €14.6m.

Bolza-Schünemann says, “Order intake in our sheetfed segment exactly matched the previous year’s good figure influenced by the Print China fair. Substantial growth was achieved in large-format cardboard printing. As the world market leader in folding carton printing, we are benefiting from heightened capital spending of the international packaging printers. EBIT was down on the previous year due to the delivery related decline in revenue.

“Despite the progress in flexible packaging printing, new orders in Digital & Web were slightly down on the previous year due to fewer orders for newspaper web presses and services. In addition to the growing market-entry costs particularly for corrugated and flexible packaging, EBIT was significantly burdened by lower revenue.This was materially due to the decline in revenue from digital printing presses as a result of subdued demand.

“We are concentrating on digital printing applications for packaging and industrial printing offering our customers a sustained business model for smaller print runs, greater format flexibility and heightened personalisation. However, we see significantly greater short and medium-term potential in the large corrugated and foil printing markets, which are expanding at above-average rates. We want to accelerate the pace of growth in analogue direct printing on corrugated board. This also applies to flexible packaging printing following the successful realignment of this business.”

Bolza-Schünemann says, “In addition to our printing, finishing, coding and postpress solutions for cardboard, banknotes, cans, glass and hollow containers and other products, we are particularly focusing on corrugated board and flexible packaging. With the focus on the growing packaging printing, we want to boost our revenue and profitability as well as the stability of our business on a sustained basis.”

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