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

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.

Adjustments at web press plants not yet concluded
At the end of March the KBA group’s payroll totalled 6,404. Excluding employees at three newly consolidated sales and service subsidiaries in China and Italy this was 214 fewer than twelve months earlier. With demand for big web presses unlikely to revive in the foreseeable future, management sees a need for further capacity adjustments at KBA’s web press production plants.

Export level remains at record high of 86.5 percent
Domestic sales climbed by 20.4 percent, but the export level remained unchanged at 86.5 percent because foreign sales soared. The contribution from the rest of Europe rose from 27.9 percent to 40.1 percent of group sales following a modest recovery in western and eastern states. However, southern Europe has yet to emerge from the economic crisis. North American sales accounted for just 7.6 percent, down from 15 percent. This historic low reflects a continuing reluctance among US newspaper printers to invest in new kit. While sales to Asia and the Pacific were higher, the regional contribution of 24.3 percent was lower than the previous year (27.7 percent). 14.5 percent of group sales were generated in Africa and Latin America.

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