KBA Halves Loss with Spike in Press Orders
Higher level of plant utilisation
The backlog of unfilled orders at the end of June was worth €541.1m, a good €100m more than at the end of March and higher than the prior-year figure of €537.8 million which included web press contracts booked prior to the financial crisis. KBA’s sheetfed plants returned to full-time work in June as production was cranked up again. Short-time schemes were also scaled back at its other factories and are likely to be terminated – at least provisionally – this autumn as work is distributed among group operations to maintain employment, and web press business gathers momentum.
Notwithstanding an increase in inventories of around €30 million, in preparation for higher shipments in the second half-year, the operative cash flow improved from -€41.3 million at the end of March to -€18.1 million at the end of June. In his letter to shareholders in the half-yearly report KBA president and CEO Helge Hansen emphasised that the operative cash flow in the heavy engineering sector is prone to periodic fluctuations but should improve as sales pick up still further in coming months. Funds at the end of June totalled €45.8 million and KBA’s net financial position was positive, while its equity ratio of 37.5% compares well with the rest of the sector.
Consolidation on course
At the end of June the KBA group employed a total of 6,445 people, almost 1,000 fewer than at the same time last year (7,411) and 1,700 below the pre-crisis peak in summer 2008. Existing redundancy and phased-retirement schemes will reduce the total by approximately 300. By the end of the year the personnel cuts initiated in spring 2009 will be largely completed, leaving a payroll of around 6,100.
86.2% export level
A 10% drop in domestic sales pushed the export level up from 83.9% to 86.2%. Shipments to the rest of Europe fell from €176.7 million to €139.7 million as the recession impacted on sales in key print markets. So after exceeding 50% on a regular basis, the proportion of Group sales generated in Europe almost halved to 29.5%. Brisk demand boosted earnings in Asia and the Pacific from €101.2m to €127.6m and the proportion of Group sales from 22.3% to 27%. However, the proportion booked in North America, where the economy has yet to revive, sank to 11.6%. The contribution from Africa and Latin America soared to 18.1% – well above the historic average.