KBA Q1 Report: Earnings Hit by Behind-Schedule Sales
WÜRZBURG, GERMANY—May 14, 2013—Given the current economic uncertainty, global investment restraint in printing presses already visible towards the end of last year continued in the first quarter of 2013. Koenig & Bauer (KBA) disclosed a 15.5 percent reduction in the group’s new orders to €200m (2012: €236.6m). Group sales of €190.7m were also below last year’s figure of €263.5m due to shipments postponed by customers and more deliveries planned in the second half of the year. On March 31, group order backlog of €657.3m was slightly higher than at the beginning of the quarter, but still 17.7 percent lower than the prior-year figure of €798.8m.
Improvement in sheetfed earnings
At €132.8m the volume of new orders in our sheetfed offset division failed to reach last year’s €152.9m by 13.1 percent, which benefited from a very successful pre-drupa event. Whereas revenue of €98.2m from sheetfed offset presses was roughly level with the previous year (€100.9m), the volume of unfulfilled orders for sheetfed offset presses rose by 3.4 percent to €207.8m. Weak sales accounted for an operating loss of €5.9m, which due to cost-savings and increased efficiency is nevertheless a significant improvement on last year’s figure (–€13.3m). The same is true of our gross margins.
Volatile demand for web and special presses
New orders for web and special presses came to €67.2m (2012: €83.7m) in the first quarter as awaited contract conclusions were postponed time and again by customers. At €92.5m sales failed to reach last year’s figure of €162.6m by more than 40 percent affected by usual fluctuations in the project business. At the end of March the volume of unfulfilled orders in this segment which is characterized by large press sizes stood at €449.5m.
Quarterly loss due to a slide in contributions
Lower quarterly sales inevitably strained contribution margins and earnings. In addition, there were fewer special press deliveries with better margins. To sum up we posted an operating loss of €16.9m. Following a modest financial loss of €1.9m we made a pre-tax loss of €18.8m, compared to –€0.4m in 2012. On March 31, group results came to –€18.5m (2012: –€1.3m). This corresponds to earnings per share of –€1.12 (2012: –€0.08).