The world’s second-largest press manufacturer reports making significant third-quarter progress in achieving its sales and earnings targets for 2014. The company saw group sales to 30 September up by 8.5 per cent to €791.8m ($1267m). The increase in sales, expanded service business and cost savings achieved resulted in an operating profit of €7m, an improvement of around €18m. Over the next quarters the management board expects a further reduction in costs from its Fit@All programme with positive effects on earnings. Claus Bolza-Schünemann, chief executive and president of KBA, says, “A lot is happening at KBA to secure the company’s profitability in the long term. “Nevertheless, from today’s point of view we will achieve group sales of more than €1bn and at least balanced group earnings before taxes (EBT) in 2014.
Claus Bolza-Schünemann, CEO of KBA
“Following high provisions made in the financial statements for 2013 we expect only limited special expenses for Fit@All which impact on earnings. “In contrast, cost savings from the restructuring measures implemented will become noticeable.” Overall, KBA says the economic climate in key threshold countries and in parts of Europe has worsened, and it has yet to overcome the impacts of the financial crisis. It cites military conflicts and concerns about Ebola causing dampened expectations for the future and acting as a brake on new orders. The group posted a pre-tax profit (EBT) of €1.2m after nine months, compared to a loss of €16.3m year-on-year. The group order intake of €668.7m was 5.8 per cent less than the prior-year figure, however, both segments declined to a different extent. Order intake in the sheetfed offset segment after nine months was down only 1.9 per cent year-on-year owing to the strong third quarter but, compared to 2013, orders for web and special presses fell by 12.9 per cent. Bookings for newspaper and commercial web presses remain far below KBA’s low expectations and new orders for banknote printing presses have only been placed hesitantly despite a raft of projects. Sales of sheetfed offset presses increased by 6.5 per cent. The rise in sales, cost savings and slightly better prices triggered an operating profit in this segment of €2.8m. In the web and special press division, higher revenue in banknote and special packaging printing led to a 10.6 per cent climb in sales. Notwithstanding poor capacity utilisation at KBA’s web press facilities the web and special press division posted an operating profit of €4.2m, an improvement on last year’s loss of €2.9m.
The company reached an export level of 85.3 per cent: 35.8 per cent of group sales generated in other parts of Europe, and deliveries to this previously dominant KBA market rose by 54.2 per cent; sales attributable to Asia and the Pacific were down year-on-year at 24.2 per cent as a result of economic slowdown in China; while North America at 10.1 per cent; and Latin America and Africa generated 15.2 per cent. Operating cash flow at €32.9m driven came from the improvement in earnings and lower trade receivables, although customer prepayments sank and funds flowed out for job cuts. KBA says the management board has seen its efforts to reduce working capital pay off. Free cash flow increased funds and net liquidity stood at €184.7m, with an equity ratio of 23.7 per cent. At the end of September KBA had 5930 employees on group payroll, including 429 apprentices and trainees. Without taking into account apprentices and trainees, redundancies, temporary employees and staff on phased retirement schemes, and not including the newly consolidated companies KBA-Kammann and KBA-Flexotecnica the Group workforce sank by 445 to 4,907. The total will fall to below 4,500 by 2016 with the further implementation of Fit@All. KBA adds that, along with the success already achieved by expanding the service business, the expansion of activities in growth markets, such as digital and special packaging printing, is aimed at contributing to stronger group earnings.
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
