PRESS MANUFACTURERS ARE CONTINUING to grapple with uncertain markets, reflected in KBA issuing a warning that it will miss its sales target for the year by as much as €200 million, while Heidelberg’s interim figures show a 10% fall in sales against the first half of 2012/13 financial year where the result was boosted by Drupa business.
Both German manufacturers are suffering the consequences of a fall in orders. The German engineering federation had expected a growth in business in the first half of the year, but overall sales were down 7% on the previous year and incoming orders are down 12%. The change in exchange rates against the dollar and especially against the Yen are blamed.
THERE IS EVIDENCE FOR THIS in Komori’s half year results which show the Japanese company beating its own targets for sales and orders. Sales are up to ¥40.9 billion (£258 million) from ¥29.7 billion (£188 million) and generating a pretax profit of ¥4.2 billion (£27 million) rather than a loss of ¥4.7 billion (£30 million).
Komori’s orders from China almost doubled, while those from Europe fell back, although sales to Europe were higher than in the previous year. It has negligible business in Brazil, a country which Heidelberg fingers as being a cause for its fall back in sales thanks to a weakening economy. Sales to North America and Asia were hit by currency effects it says.
SALES IN THE EMEA REGION also fell back. The company points to a fall in comparison to last year in German sales, which had been boosted by Drupa, and to the UK for this. The outlook remains uncertain and the company will push for more flexibility in working hours to compensate. It has shed 600 staff in the last six months and will lose a further 700 at least by the middle of next year as part of the Focus 2012 measures.
Nevertheless Heidelberg says it remains on course to record a consolidated net profit for the end of the financial year in March 2014. At the half year stage Ebitda was positive at €31 million compared to a loss of €34 million at the same point a year ago. However with extraordinary items included the net result remains in loss with Heidelberg reporting a loss of €47 million at the interim stage compared to a €108 million loss last year.
HEIDELBERG CEO GEROLD LINZBACH says: “We have succeeded in improving profitability significantly in the first half of the year. Given regional and exchange rate constraints, we even exceeded our expectations, having made major progress toward achieving our target for the year of a net profit. Our confidence that we will be able to further build on this significantly in the next financial year is growing in light of the improvements at all levels.”
The company warns that “the operating break even point may need to be adjusted further” if sales continue to fall. Incoming orders, which last year were boosted by Drupa, stood at €1,257 million (€1,558 million).
KBA ANTICIPATES FURTHER EXTRAORDINARY costs from a further restructuring of the business to bring it in line with market conditions. In its third quarter statement there are no details but CEO Claus Bolza-Schünemann says that further information will come by the end of the year after the board has approved the concept plan.
Changes are necessary because order intake is down, especially in the web and security divisions. Overall orders were up for the quarter, helped by a rise in sheetfed orders, but are still well below the Drupa enhanced figure from 2012, leaving year to date orders 14.1% down on last year. Group sales also fell to €729.9 million (€916.2 million at the three quarters stage thanks to the postponement of special press shipments. While KBA has sold the RotaJet 76, it has not declared sales locations.
The net result is that despite strong cash flow and improvements in the sheetfed division, the group posted a loss of €20.2 million after a €4.5 million profit at this point. The operating result is still positive at €10.8 million and this will continue for the full year. Sheetfed orders have been boosted by strong sales in Germany and from its position in carton and metal decorating.
