Profitable KBA press orders up 23%

After KBA was the only profitable leading press manufacturer in 2009, president and chief executive officer, Helge Hansen, said it is in the best position to capitalise on an upturn.

Following KBA's announcement that it was the only leading press manufacturer to make a profit in 2009, the company's president and chief executive officer, Helge Hansen, said the business is in the best position to take advantage of a perceptible upturn in the printing press sector.

At KBA's 85th annual shareholders' meeting, he reported that year-on-year orders were up by nearly a quarter on the back of a strong uplift in demand for both sheetfed and web presses since March.

Preliminary figures showed the order intake was EUR500m for the first five months of the current business year - almost 23 per cent higher than the previous year and since the start of 2010 the order backlog has increased by EUR160 million to almost EUR500m.

That was despite KBA's sales for the first five months of the year - at EUR332m - falling well short of group targets, although that was in line with the rest of the engineering sector.

However, Hansen said the company is confident that lost ground can be regained in the second half-year.

KBA believes that such positive figures build on the stable foundation created by its action to cut material and personnel costs by EUR110m last year.

That resulted in KBA's position as the only manufacturer among the world's leading German, Japanese and US press manufacturing operations to buck the industry crisis to and a pre-tax profit of EUR2.7m.

Hansen added that savings are expected to top EUR582m by the end of 2012.

KBA said that despite a big reduction in capacity over the past 12 months, it is aiming for a modest lift in sales from EUR1.05 billion in 2009 to just over EUR1.1bn.

By the end of May the group payroll had been trimmed to 6,465 people and measures being implemented in the web press division will help reduce it to 6,100 exmployees by the end of the year.

The company added that with slower sales and the bigger inventories built up for increased shipments in the second half-year having an impact on earnings, the operating cash flow and liquidity, a pre-tax loss is likely for the six months to 30 June even though earnings will improve compared to the previous year.

At the same time Hansen expects to achieve the target set for a moderate increase in sales and pre-tax earnings.

Hansen added that he was pleased with attendance figures and the investment climate at the Ipex 2010 exhibition and at the CHIPF packaging exhibition earlier this month in Beijing, China.

Most of the contracts signed at those two shows were for sheetfed presses.

So far this year KBA has sold 20 large-format presses to book and packaging printers in China alone.

The company claimed that as the market leader in newspaper presses and specific niche markets, such as metal decorating and security presses, last year the company boosted its domestic and its international standing in the biggest sector of all, sheetfed presses.

KBA added that it has also booked some major web press orders from commercial and newspaper printers in Europe and the Middle East.

One example Hansen mentioned was an order from the UK's Express Newspapers for two web presses with a total of 22 towers.

Hansen has also dismissed merger rumours and commented: 'While we are always open to constructive approaches for resolving the industry's problems, our primary focus is on pursuing an independent course.

Mergers or acquisitions without consolidation do nothing to resolve capacity issues, but individual companies can make a signal contribution by rigorously adjusting their resources.

In this respect KBA has done more than many others.

Referring to the group's intention, expressed last year, of boosting earnings, growth and employment by entering a new line of business, Hansen said that print-related packaging technology and digital print will provide the most opportunities.

He explained: 'Having made some promising contacts in these two fields and short-listed a number of projects, we are now screening potential acquisitions or alliances.

I am confident that we shall soon be able to reveal further details.

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