Koenig & Bauer turned in results for 2020 that were “significantly above the forecast” despite losses reaching €68 million.
The press manufacturer reported sales of €1,029 million having forecast that they would be in the range of €900-950 million. The discrepancy is put down to changes in when sales are booked rather than to any surge in business towards the end of last year. Orders in the final quarter were up on Q3, but not enough to affect the end result as dramatically.
Koenig & Bauer’s orders for the pandemic year fell 14.5% compared to 2019 to €975 million. But this was better than the overall market. Industry association the VDMA estimates that orders for printing press dropped 21.9% during 2020. The company’s order intake of €262 million in the final three months showed a lower decline than in previous quarters.
Revenue is now recognised when the customer has signed off on an installation and paid in full, rather than in tranches from deposit to sign off. This means that some sales move forward into the subsequent year, something that has benefitted the last two years. Revenue which had been recorded as €1,219 million for 2019 has been reset at 1,246 million and 2020 came in at €1,029 million when it would otherwise have been €978 million. This is still above the company’s initial forecast for the year.
The breakdown of how and where the money was earned will not be available until the annual report is published later this month.
Likewise the loss was not as severe as it would have been under the previous accounting method. That would have resulted in a deficit of €76 million at the Ebit level. There was some early impact from the current P24X efficiency drive, though most of its benefit will be seen in 2022 with the savings coming through in 2023. There were also extraordinary gains of €5 million from sale of land in Frankenthal and of €4 million from a legal dispute in Switzerland.
The company focus, under new leader Dr Andreas Pleßke (the CEO title has been dropped with the retirement of Claus Bolza Schünemann at the end of the year), is on P24X. This is about trimming costs and shaping the business in light of market conditions and was underway before Covid hit.
In the short term, between 700 and 900 jobs will be lost with the aim to break even at the current level of sales by cutting €100 million from annual costs by 2024. “P24X is our road back to the planned group growth in the medium term. We are focusing on packaging and a portfolio strategy in attractive markets, on strong research and development, on synergistic effects in production and on the further development of our service business to improve our customers’ total cost of ownership,” says Pleßke.
The medium term target is a sales revenue of €1.3 billion and a 7% margin on that. It is forecasting a modest growth in 2021 of around 4% to €1,070 million.
