Koenig & Bauer is not concerned about its sheetfed division despite a drop in revenue in the first quarter of 2024 compared to last year. This is in contrast to its digital and web division and special presses, both of which are subject to special Spotlight measures.
The company notes that there has been an “encouraging” sequential improvement in orders in Q1 compared to the final quarter of last year.
Overall revenue dipped from €281.0 million (€253.2 million), which was expected. So too was a fall in incoming orders to €242.9 million (€301.2 million) amounting to a 19.4% decline. The order backlog remains strong at €901.2 million (€970.6 million) providing the basis of confidence that Koenig & Bauer will hit revenue targets for 2024.
However, it feels it needs to take action in the two divisions that are not performing as well. The Spotlight programme will tighten up performance, ensure that development milestones are hit and will focus on activities that are accretive to revenues and not those that have no impact on finances.
While revenue in digital and web rose in Q1 to €38.0 million (€35.5 million), incoming orders dropped from €41.1 million to €24.5 million. The pending mega mergers in the corrugated market have had an impact on demand for equipment.
CEO Andreas Pleßke will take personal charge of the Spotlight work in this sector. The focus will be to tackle the start up costs for product launches in digital and corrugated areas. There will be streamlining for value adding and non value adding structures and processes.
Within the special products area, under the control of CFO Stephan Kimmich, the currency print activities at Modling in Austria and Lausanne in Switzerland will be shaken up. The company adds that it plans to accelerate the launch of technologies developed in the special segment over the past five years.
Across the business there will be actions to compensate for the increase in costs through inflation driven wage increases and materials costs through adjustments to administrative structures.
The key sheetfed sector escapes these actions for now, mostly because the company wants to assess the €10 million it will spend on Drupa. It anticipates that growth in orders will continue as a result of the show.
Pleßke sums up the approach: “Against the backdrop of the many geo-economic uncertainties, we find ourselves in a challenging environment. Under the Spotlight focus programme, Koenig & Bauer is working on measures to enhance revenue in profitable areas and on efforts to restructure areas that are currently not profitable.
“A lot also depends on the impetus generated during and after Drupa, which is taking place again for the first time after an eight-year hiatus.”
