KBA HAS PLUNGED INTO THE red in 2013 reporting an operating loss of €130.7 million compared to an operating profit of €13.7 million during 2012, and the company says it expects 2014 to continue to show a loss.
The reason for the turnaround is a reassessment of the company’s prospects, the shape of the printing industry and its decision to implement at Fit@All programme to cut the workforce from 6,400 to around 5,000. The company has already shed 25% of the headcount employed by KBA at its peak.
JUST UNDER HALF THIS number, 710 jobs, will go from the key Radebuel and Würzburg factories, the remainder from its other plants including in Austria and Czech Republic as well as Germany. In 2013 much of the operating loss was down to impairment charges on assets. In 2014 the impact of redundancies will be felt.
However, there will be clear improvements in 2015 and a return to sustainable levels of profitability by 2016 says CEO Claus Bloza-Schünemann in the KBA annual report. The company aims to be profitable on sales of €1 billion. This is well below the record year in 2006 when it reached €1.74 billion in sales and below 2013 even.
SALES FELL IN 2013 TO €1,099.7 million from €1,293.0 million in line with a market that the German engineering federation says was 10% down in the year. Sheetfed fared better than the web business with a drop from €643.2 million to €571.9 million, while web offset across commercial and newspapers dropped €650.7 million to €527.8 million. The company says that sales of sheetfed presses rose during January and February this year, but is not taking this as sign of any sustained recovery.
KBA now anticipates the worldwide sheetfed market to settle at around €2.5 billion in sales a year, half of the pre crash level and slightly down on the current market of €2.6 billion. In the annual report the company admits: “We have realised that we underestimated the size and momentum of structural shifts in the print media industry and that our planning has been too optimistic in some segments.”
IN HIS ADDRESS TO SHAREHOLDERS, Bolza-Schünemann goes further: “Capacity utilisation of our traditional web press business in particular is unstable and inefficient despite the raft of counter measures implemented, The same is true of our earnings which are completely unsatisfactory. Clearly we have a lot oc catching up to do.”
The Fit@All process is intended to redress the balance. As well as cutting the value of its assets and redundancy programme, the company is shifting to a four division structure covering sales and support for sheetfed presses, web presses and speciality presses with production across all three areas as the fourth division. This will be able to call on the facilities of any factory to support the sales of the different product areas. It is not promising to keep all these factories in operation noting that sale of closure of sites cannot be ruled out.
THE COMMITMENT. TO R&D continues, as it does to the litho printing process despite the impact on smaller format presses from the rise of digital printing. The first deliveries of the KBA Rotajet 74 will be made this year. “Inline processes are the key to keeping offset attractive,” says the report. It is also emphasising the packaging sector, which takes half the B1 and larger presses produced at Radebuel. During 2013 KBA bought Kammann which produces machines for printing direct to glass and flexo press producer Flexotecnica.
