KBA is riding high on its sheetfed litho division, increasing orders by 12.2% to €326.3 million in the first half of the financial year. And this is thanks to growing demand across the spectrum in packaging.
It has shown new technology at Print China, at Interpack and at MetPack where it showed a new way to print two piece metal cans. “These successful fair activities contributed to a substantial year on year increase in order intake in the packaging markets for cardboard, metal decorating, marking and coding an hollow container printing,” says CEO Claus Bolza-Schuenemann in the company’s interim report.
The one blot was its Digital & Web division, where Italian subsidiary KBA-Flexotecnica reported a €3.1 million loss, leading the division to report a €2.8 million loss. “Without the flexo activities, Digital & Web posted a clear improvement in earnings,” says Bolza Schünemann. It is working to turn around the Italian subsidiary to catch the wave of growth in flexible packaging.
The sheetfed business was boosted by demand for B1 machines aided by growth from the Ibera flatbed die cutters. Profit in the division rose to €12.1 million (€8.6 million) on a 5.5% increase in sales to €307.8 million (€291.7 million). The company is turning its attention to increasing sales of B2 machines.
The combined effect across sheetfed, digital & web and is special segment was an order intake of €601.9 million for the first six months, slightly behind the Drupa inflated €618.8 million reported a year ago. In terms of sales recorded, KBA was also slightly behind the same period a year ago with €538.9 million (€553.9 million) and Ebit at €16.3 million (€20.7 million). A year ago, this figure had been boosted by the completion of a large security print project.
There remains a good pipeline of projects in security printing and demand from the packaging market is increasing the company says, but a real driver of revenue growth will come from its service business, much of which falls under the KBA 4.0 label.
Development and deployment of digital networking solutions for a future networked printing factory and autonomous printing under the ErgoTronic AutoRun concept, a remote press monitoring through the Rapida LiveApp, are the focus of much work in R&D.
KBA aims to secure 30% of revenue through the service business by 2021. In the period under review, it increased service revenue from €129.5 million to €145.7 million, a 23.4% share to 27% of revenue.
The company generates the bulk of sales in the second half of the year and, barring international events having a significant impact, is expecting to grow sales to €1.25 billion with an Ebit margin of 6% for the year.
KBA needs to work on its Italian Flexotecnica business to stem losses and bring that company in line with the success that other divisions, notably sheetfed litho, are enjoying thanks to orders from packaging companies.
