KBA Posts Profit for 2009, Targets Modest Sales Increase in 2010
While prepayments fell, cash inflows from operating activities were relatively high (€29.6m against €34.6m in 2008) thanks to a reduction in working capital. The free cash flow improved from -€9.9m in 2008 to €4.9m. At the end of December liquid assets totalled €76.1m and bank loans €48.3m, resulting in net liquidity of €27.8m (2008: €22.6m). After eighteen months of recession these figures are well above the average for the engineering industry.
The issue of employee shares and income retention increased the corporate equity base from €411.1m the previous year to €419.8m. A big drop in inventories and trade receivables reduced the balance sheet total from €1,181.4m in 2008 to €1,060.4m. The ratio of equity to the smaller balance sheet total climbed to 39.6% (2008: 34.8%), which was also well above the industry average.
Solid finances support innovation
Credit lines totalling some €100m from private banks safeguard liquidity until March 2012. Thanks to its financial stability and fast turnaround following the loss in 2008 KBA has needed no state guarantees or loans from the German Economic Fund. The world’s oldest press manufacturer is drawing on its own resources to complete its realignment to new market realities. And notwithstanding its rigorous cutbacks in expenditure, KBA again invested almost 5% of its total turnover in R&D. And as in previous years it outranked its German and foreign rivals in national and international patent statistics.
Slack demand impacts on order intake and sales
Last year there was no sign of a sustained upturn in the global print media industry, although demand did stabilise in the second six months. Group order intake dropped to €883.9m, 28.8% below the 2008 figure of €1,241.5m. At €464.6m the total volume of sheetfed orders booked was 22.4% down on the prior-year figure of €598.5m. While this was better than the industry average, slack demand for newspaper and commercial presses led to an above-average drop in new orders for big web installations. Some of KBA’s niche markets – metal decorating, industrial coding and UV printing on plastic, film and data storage devices – were adversely affected by banks’ reluctance to provide credit. Another, security printing, held up well and made a significant contribution to group earnings. The total volume of new orders for web and special presses shrank by 34.8% to €419.3m (2008: €643m).