Koenig & Bauer has announced its Q1 financials for 2020, with the company stating that its financials has been impacted by the COVID-19 pandemic.
The company achieved a group order intake of €271.5 million in the first quarter of 2020, a group revenue 25.3 per cent lower than in the prior year at €172.4 million and an EBIT loss of €34.9 million.
According to the company, restrictions in travelling initially imposed in China and then gradually in many parts of the world had a significant impact on order and project processing for the delivery, assembly and installation of machines for its international customers.
Koenig & Bauer president and CEO Claus Bolza-Schünemann said the economic consequences of the corona crisis pose major challenges for the group.
“Our broad product portfolio with a significant share of revenue in system relevant packaging printing, the robust, increasingly digital service business and our sound balance sheet with a high equity ratio limit the risk potential,” he said.
“With the corona crisis management established in March, we are working to actively counter this extraordinary situation. The health and safety of our employees, customers and suppliers is our top priority.
“Our action plan focuses on reliable customer support, cost and investment discipline and securing liquidity. Short-time working has been in place at different locations since 1 April due to capacity utilisation.”
In its sheetfed segment, increased orders in large format as well as sales of folder gluer systems contributed to its order intake of €160.1 million from €174.2 million the year before. For reasons related to delivery and the pandemic, revenue of €68.2 million was well below the prior-year figure of €113.7 million.
Despite declining service business with web offset presses, order intake for its Digital & Web division was €43.6 million – significantly higher than the prior-year figure of €31.9 million. In addition to increased orders in flexible packaging printing, follow-up orders received in corrugated board and digital decor printing were the main reason for this growth, said the company.
However, as a result of corona-related restrictions at its Italian subsidiary Flexotecnica, revenue of €28.1 million was lower than in the previous year (€32.4 million).
Lower orders in security, coding and glass direct printing contributed to the decline in order intake in the Special segment from €80.4 million to €73.5 million.
As a result of the uncertainty caused by the coronavirus around future developments and a serious concern about a deep global recession, Koenig & Bauer chief financial officer Dr Stephen Kimmich said many of its customers are reluctant to make new investments, even though packaging printers for food, beverages and pharmaceuticals as well as for online retailing are currently operating at particularly high capacity utilisation.
“Considering the high volatility and the tremendous uncertainty about the severity and duration of the coronavirus pandemic as well as the success of health and economic policies, the impact on revenue and earnings in the 2020 financial year cannot yet be quantified,” he said.
“Because of the drastic effects that are already apparent, our planning for 2020 is no longer achievable. Accordingly, corona crisis management currently has the highest priority so that we can master the challenges that lie ahead and be prepared for the period after the COVID-19 pandemic.
“In addition to the Performance 2024 efficiency programme, the strategic focus on packaging printing and digital services is to be stepped up again afterwards.”
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter