KBA Profits from Strong Standing in Niche MarketsNovember 15, 2011
Higher cash flow and solid finances
Cash flows from operating activities swelled from €11.6 million a year before to €64.6 million following an increase in customer prepayments and a drop in trade receivables. This more than covered cash flows for investing activities and raised the free cash flow to €40.7 million. Funds totalling €128.1 million and ample credit lines, underscore KBA’s strong financial position. Compared to the higher balance sheet total the group’s equity ratio was a sound 36.7 percent.
Targeted reduction in group payroll to 6,000
At the end of September there were 6,446 employees on the group payroll, just a few more than in 2010 even though three subsidiaries were consolidated in January. Once the capacity adjustments at KBA’s web press plants have been completed the group will have a payroll of around 6,000. A new intake of apprentices and student trainees in the autumn raised their number from 419 to 433, and the training ratio from 6.5 percent to 6.7 percent.
Outlook for 2011
Management is confident that a surge in sales of high-margin products in the fourth quarter will enable KBA to post the moderate increase in group sales (2010: €1.18bn) that was projected in the spring. Claus Bolza-Schünemann, KBA’s new president and CEO since 1 November, confirmed that the group is targeting a pre-tax profit for the third year in succession. KBA would thus be the absolute exception in a press engineering sector that is being rocked by wrenching structural change.
However, the group is unlikely to achieve the anticipated modest improvement on prior-year pre-tax earnings of €15.3m. This is because the additional charge for capacity cuts at the group’s web press plants was higher than expected, and the perceptible market slowdown has led to a reassessment of certain items in the accounts.
In view of the challenging business environment and uncertainty concerning investment in print prior to the Drupa trade fair next May, management is issuing no detailed projections for sales and earnings in 2012 until March next year.
The financial statements can be downloaded as a PDF file.