- Pressemitteilung BoxID 60729
Sales and earnings still below target
Half-year figures for Koenig & Bauer
- Drupa contracts not yet booked in full
- Financial crisis hits customer financing
- Earnings per share 42 cents
- Sales growth anticipated in second half-year
- Spring projections reaffirmed
While the Drupa international trade fair in late May and early June stimulated investment in new kit, and new products brought in contracts for KBA worth hundreds of millions of euros, by the end of June funding for some of them had still not been secured as the negative impact of the financial crisis became apparent. As a result the group order intake slipped by 2.4% to €708.8m (2007: €726.3m). Following slack pre-Drupa demand the volume of new orders booked by KBA's sheetfed division also slipped by 2.4%, from €375.7m to €366.8m. In the web and special press division, a double-digit leap in new orders for newspaper presses failed to outweigh softer demand for commercial web and security presses, resulting in a 2.5% drop in the order inflow to €342m (2007: €350.6m).
The group order backlog was trimmed to €844.6m (2007: €880.1m). While the volume of orders on hand for web and special presses, at €565.9m, was only marginally lower than twelve months earlier (€573.4m) and will keep the relevant production plants busy for the rest of the year, the same cannot be said of the backlog of orders for sheetfed presses, which shrank from €306.7m to €278.7m. A big increase in firm bookings from the contracts signed at or after Drupa is needed in the third quarter to maintain production for the fourth quarter and beyond.
Weak sales impact on earnings
Group sales totalling €656.1m for the first six months were 17.5% below last year's above-average figure of €794.9m, with sales of web and special presses down at €346m from €420.5m, a drop of 17.7%. Sheetfed sales of €310.1m were 17.2% below the €374.4m posted the previous year. This shortfall in sales and the extraordinary expense associated with the Drupa trade fair caused the operating profit to slump from €27.2m last year to €4.7m this year. A financial loss of €2.3m was accompanied by a plunge in earnings before taxes (EBT) to €2.4m, from €25.6m the previous year. KBA closed the period with a net profit of €6.8m (2007: €19.1m) and proportional earnings per share of 42 cents (2007: €1.17). Sales and earnings will receive a boost from the increased shipments scheduled for the second half-year.
Positive cash flow and solid financial cushion
Despite a temporary jump in inventories, cash flows from operating activities swelled to €34.2m from €23.1m twelve months earlier. The free cash flow came to €12.9m, while funds ebbed from €134m at the end of December to €119.7m at the end of June. Equity represented 37.3% of the balance sheet total.
At the end of June KBA's payroll totalled 8,098, or 143 fewer than at the same time last year (8,241).
No improvement anticipated in North America
Domestic sales climbed 5.6% to €101.2m, reducing the export level from 87.9% to 84.6%. The proportion of group sales generated by the rest of Europe remained stable at 53.7% (2007: 53.8%), underscoring the historically significant role this region plays as the prime market for KBA presses. While the percentage contributed by Asia and the Pacific was higher (17.8% compared to 15.6% in 2007), a floundering economy and fallout from the mortgage meltdown precipitated a decline in North American sales from 10.5% to 7.6%, well below the historic average of 15 to 18%. The proportion of sales generated in Latin America and Africa fell from 8% to 5.5%.
Prospects for second half-year not entirely risk-free
Notwithstanding the deteriorating economic climate, which is now impacting on other sectors, and the shortfall in new orders for sheetfed presses, which must soon be made good if KBA is to meet its annuals targets, management stands by its prognosis for 2008. Says KBA president and CEO Albrecht Bolza-Schünemann: "Future currency movements and energy prices, and their impact on the global economy, are notoriously hard to predict. Against this backdrop, meeting the annual group targets we projected in the spring, of sales in the region of €1.6bn and a pre-tax profit close to last year's level, poses something of a challenge. But as long as there is a real chance to reach our targets we see no reason to lower our sights. Any significant deviations will be made public without delay."
The projections contained in this press release were founded on data available at the time of issue. While management believes them to be accurate, the impact of external factors beyond its control, such as changes in the economy, exchange rates and the print media industry, may give rise to a different outcome from that projected. Koenig & Bauer therefore accepts no liability for transactions based upon these projections.
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