The meeting was told the revival in the sheetfed business swelled the KBA order backlog at the end of May to €557.1m, up by 10 per cent on the same figure last year of €500.8m.
Helge Hansen, KBA president and CEO, delivering his address at the AGM outlined the cost benefits emerging from the company’s reorganisation. He said that with no bank debts, liquidity remains good. He added, “At present we have no net bank debts. On the contrary, in recent months, we have improved our net financial position to a good €36mi and our operative cash flow is positive. At the end of March our equity ratio stood at 33.9 per cent, well above the norm for the engineering sector.
“In addition to €100m in funds we have a credit line of €160m, of which more than 60 per cent is guarantee credit required to safeguard the customer down payments that are routine in the heavy plant industry. We have applied for a government guarantee effective from April 1 2010. At present such guarantees reflect changes in banks’ risk policies rather than in KBA’s liquidity.”
Hansen also commented that demand for big newspaper and commercial web presses remains unsatisfactory. He said, “While we have increased our share of the global newspaper market to almost 50 per cent, the total volume of new orders booked in the first five months was well below our target for the year. The global recession and financial meltdown continue to impact on demand in the sector, and are now affecting sales of special presses for niche applications. At present the bright spot is the security printing sector.”
KBA says that with limited prospects for growth in print, it will continue to expand its service activities, and is also aiming to expand its consumables business.
Last year, KBA posted group sales of €1.53bn, around €200m below the record €1.74bn for 2006, and this year the figure will shrink by more than €300m to just under €1.2bn.
Hansen added, “We and the other press manufacturers cannot stop the market from shrinking, so to achieve a decent return again as soon as possible we must adjust our capacity accordingly. To achieve the growth KBA undoubtedly requires in the medium term, we must look to high-potential sectors where we can capitalise on our formidable skills in engineering, high-quality machine manufacture and global distribution.
“Two of the sectors we are focusing on are packaging and green energy technology, and here we have already developed specific concepts. Alongside a more customary merger or acquisition we are considering taking a stake in a promising new start-up or entering an alliance with an established player as a means of gaining access to these markets. Our solid balance sheet and finances certainly give us plenty of scope.”
Group sales, at €347.5m, were 34.7 per cent down on the corresponding figure for the previous year and 10 per cent below target. KBA says that meeting the group target for 2009 of around €1.2bn will depend largely on market trends in coming months.
Hansen concluded, “Following last year’s substantial loss we have a real chance of achieving our ambitious goal of posting a balanced result, even if sales are just shy of €1.2 billion.”
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