Koenig & Bauer is refusing to be drawn into a price war with competitors in press supply. In his letter to shareholders with the release of half-yearly results. Koenig & Bauer CEO Claus Bolza-Schünemann says: “We believe that price cuts to expand or maintain market share in limited markets, which can at most be subject to macro economic fluctuations, is the wrong concept.”
He names Heidelberg, Komori and Bobst as the culprits, companies that Koenig & Bauer is putting under pressure. In the same set of results, the company says it has been successful with flexo machine sales. Companies ought to restructure in order to achieve margins, he says.
However, this response is not followed by Manroland Sheetfed where chairman Tony Langley records that the company’s sales have been affected by the same price war. “Manroland Sheetfed, our German printing press producer, had a relatively poor first half, due largely to lack of volume as a result of aggressive competitor price pressure. I have given leave for the company to respond and as Manroland is far leaner than its competitors, burdened by neither bloated cost structures or exorbitant finance costs, I am confident that volumes will be more than regained in the second half.”
As Manroland Sheetfed is relatively inactive in the UK market for new presses, the major battles of the press price war are being fought elsewhere, mostly in China where the trade war with the US is eating as an unexpected brake on the economy.
While sales for Koenig & Bauer are down in the first half, the company says that this is distorted by the major currency press order received from Egypt in the same period 12 months ago. Thus order intake fell from €705.3 million in 2018 to €573.3 million.
Orders in the sheetfed segment were higher by 4.8% thanks in the main to business at the Print China show. These came in at €329 million (€313.8 million). However the costs associated with participation and shifts in product mix depressed margins so that a positive Ebit of €8.1 million became negative at -€2.1million.
The company received an order for a RotaJet in the six months, its fifth, which along with orders for flexible packaging machines, more than compensated for the continuing drop in revenues from web offset presses, and now from service revenues as newspapers and commercial printers are closing down.
The focus on all types of packaging continues with a broad product spread from sheetfed flexo for corrugated, two-piece can decoration, flexible packaging and with digital starting to make an impact, the company is set on a course to accelerate growth in the years to 2023.
By Gareth Ward