12 November 2017 Business

Koenig & Bauer enjoys benefits as packaging grows

K&B is lining up products for the day that packaging switches to digital printing.

Koenig & Bauer is on track to achieve its sales target of €1.25 billion for 2017, with sales reaching €848 million at the nine-month mark.

And it is paving the way for long term revenue growth through the roll out of inkjet technologies across the product portfolio. It has shipped the first MetalDecoJet for the cans sector and more recently the first CorruJet, an inkjet machine for post print corrugated. Its partnership with HP where K&B produces the paper handling and press frame for the PageWide T1100S is also generating revenue growth for the web and digital sector.

Work continues on the Varijet 106, a joint development with Xerox announced at Drupa. This will be a hybrid machine combining digital, litho and finishing capabilities. But there will be no rush to market with it, though chief executive Claus Bolza Schünemann has said prospects will not be waiting for six or seven years.

The company sees the biggest potential in flexible packaging, corrugated board and cardboard production the company told analysts at a presentation of Q3 results. Koenig & Bauer has a 45% share of the global market in folding cartons.

The quarter was marked by a 4% rise in orders to €903 million at the nine-month mark, a 2% rise in revenues and an Ebit of €20.1 million reaching a margin of 6.5% for the quarter. This is inline with the 6% margin the company has set as a target for 2017.

The growth came from healthy packaging business and growing service revenues. It has reported improvements in its flexo press operation which in the previous quarter had been singled out for its relatively poor performance. Interventions and a new management team is having an impact, but combined with a decline in newspaper and commercial web orders, the division recorded an Ebit loss of €3.6 million.

The core sheetfed litho business enjoyed a 11.7% rise in orders over Q3 in 2016 and revenue was up 7% to €474.7 million. It will need to increase again to achieve the end of year target. Bolza Schünemann remains confident. “The numerous press deliveries and service orders in the fourth quarter will trigger a surge in revenue and earnings,” he says.

“In view of this business concentration, which is challenging due to the high capacity utilisation but not unusual, we expect an organic growth of up to €1.25bn in group revenue and an Ebit margin of around 6% in 2017.”

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Koenig & Bauer continues to focus on packaging and inkjet technologies for these applications. It is proving a sound decision as demand for carton presses is increasing.

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