Koenig & Bauer’s customers are showing none of the nervousness that has afflicted customers buying from other businesses in Germany’s engineering sector. Consequently the press and printing equipment supplier has booked a 22.1% increase in orders in the first three months of the year compared to an average of 7.2% across members of the VDMA.
The rise in orders is being led by its core sheetfed business and has boosted the order backlog to €917.5 million (€674.5 million in 2021), a 36% increase.
“Koenig & Bauer thus stood its ground in a gloomy economic environment in the first quarter of 2022”, says CEO Andreas Pleßke. “Our order intake, which rose by around 22%, shows that, contrary to the assessment of our industry association, the German Mechanical and Plant Engineering Association (VDMA), we have not yet experienced any general purchasing restraint on the part of nervous customers. Together with our historically high order backlog, we see ourselves favourably positioned for the rest of 2022.”
This is not yet resulting in increasing profits, though the Ebit loss is shrinking thanks to its P24X efficiency programme. The loss at the Earnings before Interest and Tax level was €8.5 million compared to a loss of €8.9 million. With interest at the same level the pretax loss was €10.9 million (€11.4 million). The company had to absorb a €6 million increase in material and energy costs in the quarter as well as booking higher inventory costs as it gears up to deliver on the rising order book, reducing available working capital compared to 2021.
The sheetfed sector, while booking an increase in orders of 25.4% to reach €242.1 million, recorded a slight increase in the Ebit loss to €3.6 million (€3.1 million loss) as sales slipped 12.4% to €127.4 million (€145.5 million). Supply chain issues have had an impact.
Continuing start up costs have had an impact in the digital and webfed segment where demand for corrugated board presses helped push order intake to €30.8 million, a 31% rise over the previous year. The order backlog grew by a third to €91.3 million (€60.6 million) as converters invest in additional corrugated print capacity.
Orders for its banknote presses increased in the specials segment with both an increase in sales and the order backlog, to €81.7 million and €268 million respectively.
While the order backlog will keep the business busy for the remainder of the financial year, Koenig & Bauer is not confident enough to deliver a full year forecast, beyond a slight improvement on sales and profitability incline with the mid term goals of sales reaching €1.3 billion and a 7% Ebit margin.
