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Koenig & Bauer AG Reports Good Start to the 2011 Business Year

May 13, 2011
WÜRZBURG, GERMANY—May 13, 2011—Press manufacturer Koenig & Bauer AG (KBA) made a much better start to the business year than in 2010, even though international sales of printing presses were only moderately higher than last year and primarily driven by demand from China and other emerging economies.

Highlights:

• Order intake up 37.4 percent
• Group sales up 20.7 percent
• Order backlog 40 percent higher
• Huge improvement on the prior-year earnings
• Strong cash flow, high liquidity
• Sales and profit projections for 2011 reaffirmed

The group order intake climbed 37.4 percent to €432.1m (2010: €314.4m), with brisk demand for niche products driving up the volume of contracts awarded for KBA’s web and special presses by 42.8 percent to €290.6m. But orders for newspaper and commercial presses stagnated in the wake of structural changes wrought by the spread of e-media. Business was better in the sheetfed sector, where the internet has had less of an impact and packaging printing has helped to fuel growth. The influx of new orders for sheetfed offset presses swelled by 27.6 percent to €141.5m. The group order backlog of €619.6m was over 40 percent bigger than at the end of last year, with web and special presses contributing €441.4m and sheetfed presses €178.2m.

Growth and cost savings improve operating result
First-quarter sales of €253.3m topped the prior-year figure of €209.8m by 20.7 percent. Sheetfed offset presses contributed €126m, a jump of 46.9 percent over the previous year, while web and special presses generated €127.3m. This was just 2.7 percent more than twelve months earlier and resulted from a smaller intake of new web press orders in previous years.

Cost savings and higher profit contributions slashed the group operating loss for the quarter from €19.4m to just €1.8m. A low level of debt and interest charges also helped cut KBA’s pre-tax loss (EBT) from €21.3m to €3.9m. After taxes the group disclosed a net loss of €5.8m, a big reduction on the prior-year loss of €20.2m. Earnings per share improved to –€0.35 (2010: –€1.23).

Bigger cash flow and healthy finances
Despite bigger inventories in preparation for scheduled shipments, cash flows from operating activities rocketed from –€41.3m twelve months earlier to €40.1m, the free cash flow from –€43.4m to €36.3m. This was largely attributable to higher earnings, a rise in customer prepayments and a drop in trade receivables. Funds totalled €127.5m at the end of March, up from €91m at the end of December 2010. Net liquidity of €83.6m was very much better than twelve months earlier (–€16.7m), and KBA has access to ample credit lines. At the end of the quarter equity was worth an above-average 38.2 percent of a higher balance sheet total.
 

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