Koenig & Bauer is adjusting its medium term plans in the wake of the global pandemic, stressing that a focus on packaging will remain the core driver of revenue for the duration of its Performance 2024 project.
It is to pursue inkjet for post print corrugated with vigour and will sharpen design and manufacturing processes, with a greater emphasis on standardisation and sharing of components. It will move some some operations to make better use of space and save €100 million a year by 2024.
This will involve the loss of between 700-900 positions, achieved in consultation with employee bodies.
R&D expenditure will be protected as will activity in packaging, which is seen as the future for the business. “We are accelerating all innovation, process and product developments,” the company said on a conference call presentation last week.
The aim is to strengthen competitiveness for the the long term. New processes and a shared components approach will reduce the need for personnel, as will the relocation of some manufacturing and assembly units.
With the reduction in the market, especially in web offset, the company has excess space at its main facilities in Radebuel for sheetfed and in Würzburg for web, digital and security press production. It has separate factories for coding, special presses and metal decorating in Germany and retains an address for Albert Frankenthal, even though gravure presses are just a memory.
There are also factories in Spain for platens, Turkey for folder gluers and Czech Republic for half sheet format low cost presses.
All current products will remain in the portfolio, the company says, but there is no other reference to commercial or newspaper web offset, divisions where substantial investment projects are few.
“Koenig & Bauer continues to focus on end to end system solutions and optimisation of the total cost of ownership for the customer,” the company says, without further explanation.
Packaging customers around the world have been busy during the pandemic, but there has been a delay to incoming orders which will be seen in the final two quarters of the financial year.
This will also show the effects of a chance in practice to recording revenue on the sheetfed division. The revenue will now be take in full once a press has been delivered and is in place rather than in segments from order to installation. This brings Koenig & Bauer in line with modern accounting practice.
The security and banknote printing division, which has continued under the KBA brand, has been renamed Koenig & Bauer Banknote.
The implications of Covid are that Koenig & Bauer’s revenue target for 2024 has been cut to €1.3 billion from €1.5 billion. Claus Bolza-Schünemann, CEO and president, says: “Today, we have made far reaching decisions for Koenig & Bauer, made necessary by negative global economic developments in tandem with ever changing customer needs and demands. They are also associated with painful cuts for the workforce. These difficult and challenging steps were not easy to take, but they are imperative to safeguarding the long term future of our 203-year-old company.”
Koenig & Bauer is changing to cut costs and promote efficiency in order to maintain mid term growth plans and achieve a revenue of €1.3 billion by 2024.
