Despite what might appear a poor quarter, with a drop in sales and incepting orders, press manufacturer Koenig & Bauer is not perturbed. Installations planned for the second half of the year will weight the company’s performance more to the back half than previously and will result in the company achieving its financial goals for 2018.
Revenue was down to €217.3 million (€259.1 million) and order intake dropped to €250.9 million (€321.5 million). This was the result of a large order the previous year for security presses CEO Claus Bolza-Schünemann explains, inflating the intake for 2017. The order backlog at the end of March was €648.5 million (€619.9 million).
Packaging continues to dominate, with stronger orders for large format sheetfed presses, and a welcome increase in business for flexo machines. The order intake for sheetfed presses increased 5.3%, despite an announced price increase for these machines. Growth in orders from €152.0 million to €160.1 million balanced a fall in revenue from €150.0 million to €116.8 million. The order backlog grew to 276.8 million ($239.5 million).
However, the delayed deliveries for many machines means that the Ebit figures suffered, down from a positive €5.0 million to a loss of €1.9 million.
The spending in developing its CorruJet inkjet press for corrugated printing, CorruJet and CorruFlex presses for the same sector. A first CorruCut will be installed early next year. Its CS MetalCan press for decorating two-piece cans will also go into field testing before initial commercial shipments at the end of this year.
Packaging accounts for 70% of the business, more than compensating for the decline in sales from newspapers and web offset presses. Likewise demand for digital presses was subdued says the CEO. In contrast, the starters to derive 30% of revenues from service by 2021 is on track. In Q1, revenue from service increased to €71.8 million (€67.4 million).
This helps put the company on course to hit targets for the year. “In the absence of any material deterioration in global economic and political conditions for our international business, we expect to achieve organic growth of 4% in group revenue and Ebit margin of 7% in 2018.”
The CS MetalCan press for decorating two-piece cans will also go into field testing before initial commercial shipments at the end of this year.