Koenig & Bauer is enjoying a rise in orders, particularly for sheetfed and corrugated board presses, but cannot commit to meeting delivery dates due to continuing supply chain disruption.
The company’s interim report for 2022 shows a steep rise in incoming orders of €892.9 million, which is 12.6% higher than at the same time in 2021. This has also resulted in an increased order backlog of €1007.9 million (€754.1 million). This bodes well for keeping its plants busy for the remainder of the year and endorses the strategy of focusing on growing markets for packaging.
However, uncertainty at every point in these supply chain, from shipping containers, to globally sourced components to availability of energy, is creating greater uncertainty for the business.
This has resulted in “additional or retro work on systems and presses” after they have been shipped. This is disruptive on costs and the business remains in negative territory, albeit reduced from a year ago, once extraordinary gains are discounted.
The biggest beneficiary is the sheetfed division where orders have increased 22% to €458.4 million (€374.7 million). Its operating loss was just €1.1 million.
The digital and web division, which includes corrugated presses, reported a bigger percentage rise in orders to €93.1 million (€47.6 million) thanks to demand for corrugated presses and for the Rotajet inkjet machine. The operating loss was €12.7 million.
Service revenues have increased from 30% to 33.2% as a proportion of the €493.2 million revenue for the first six months. This is slightly down on the €493.2 million recorded last year, due on the main to difficulties in installing machines.
Any relief the company may have hoped for through a price rise imposed during the year has been wiped out by continuing increases it has to deal with, posing challenges for the sales teams around the world.
The company has taken action to protect itself against Russian threats to close gas pipelines to Germany. It is no longer reliant on grid gas to run production operations and will be free from gas needed for heating from September. However, it cannot run out being affected if electricity supply is affected over the winter.
However, on the demand side the company is optimistic that requirements for food and pharmaceutical packaging provided by its customers will hold up.
CEO Andreas Pleßke says: “Despite all the current uncertainties and temporary effects, we are well positioned in multiple respects and are continuing to strategically align our business model along the growing market for packaging. Our end markets, which primarily address the food, beverage, pharmaceutical, and cosmetics sectors, are healthy”.
