Among the figures released by the sheetfed and webfed press manufacturer were:
- Record sales of €1.74bn
- Slide in orders for multi-unit web presses
- Pre-tax profit almost doubles to €47.4m
- Proposed dividend 50 cents per share
- Outlook similar for 2007
Group sales climbed 7.5 per cent to €1,741.9m (2005: €1,621m), the highest level in KBA’s 189-year history. While a total of €1,649.7m for new bookings represented a double-digit improvement on 2004, which had been boosted by the drupa trade fair, it was 6.7 per cent down on the record figure for 2005 of €1,768.9m. KBA attributed this to the smaller number of major newspaper and gravure contracts put up for tender. An increase in shipments trimmed the order backlog to €948.7m at the end of the year, from €1,040.9m in 2005.
A high level of capacity utilisation at KBA’s production plants and efficiency gains from restructuring the web press division enabled the group to boost operating profit from €33.3m in 2005 to €46.2m. While the financial profit was no more than modest, pre-tax earnings (EBT) soared to €47.4m (2005: €25.8m), net group profit to €34.3m (2005: €18.5m). Earnings per share thus came to €2.11 (2005: €1.14). Although the export level of 82.7 per cent was marginally higher than in 2005 (81.9 per cent), group profitability in the fiercely competitive global press market was hit by the weakness of the Japanese yen, the US dollar and the Swiss franc against the euro, by higher steel and energy prices and by an increase in unit labour costs, which together wiped out some of the cost savings and productivity gains made.
KBA’s sheetfed offset division lifted sales by 6.5 per cent to €870.6m (2005: €817.6m) just under half of the group total. KBA-Grafitec, a Czech subsidiary acquired in 2005, posted double-digit sales growth with its small-format presses. The volume of incoming orders, including those booked by KBA-MetalPrint, a new subsidiary consolidated in the second half of the year, came to €864.3m, 4.2 per cent up on the previous year (€829.5m). But despite a raft of cost-cutting initiatives, earnings by the sheetfed division were below target at €5m (2005: €2.7m). Margins were hit by price erosion in press markets and the cost of optimising new products.
As in 2005, the web and special press division, which includes systems built by subsidiaries KBA-GIORI, KBA-Mödling and KBA-Metronic, made the bigger contribution to group profit with earnings of €41.2m (2005: €30.6m) on sales of €871.3m, 8.5 per cent above the prior-year figure of €803.4m. However, the volume of new bookings shrank to €785.4m (2005: €939.4m), primarily due to a dearth of contracts up for tender in the newspaper press market and softer sales of gravure presses following heavy investment in recent years.
Once again, the rest of Europe was KBA’s biggest market, taking 49.3 per cent of group sales (2005: 44.3 per cent). Germany accounted for 17.3%, down from 18.1% the previous year. Asia and the Pacific moved up into third place in the regional sales statistics, with 16.4 per cent of the group total (2005: 15.5 per cent). A drop in shipments of web presses meant that just 12 per cent of group sales went to North America (2005:15.9 per cent), though sheetfed business thrived. The figure for Africa and Latin America, where volumes are generally smaller, was 5 per cent (2005: 6.2 per cent). However, there was a welcome lift in demand for sheetfed presses in Egypt and other North African markets.
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