Printing press maker Koenig & Bauer AG has announced that, on the basis of its preliminary and as yet unaudited figures, its preliminary group earnings before interest and taxes (EBIT) for 2022 have exceeded its own forecast as well as market expectations.
Despite a challenging environment characterized by supply-chain constraints and an associated increase in material and energy costs, which it was not possible to pass on to customers in full, the EBIT of €22m exceeded the company’s own forecast of €15-20m.
It was additionally spurred by the accelerated implementation of the P24x efficiency improvement program. At €1,186m, Group revenue reached the upper end of the projected range of €1,160 – 1,190m. The operating EBIT margin, therefore, came to 2%. In the previous year, revenue had amounted to 1,115.8m Euros, while EBIT, which had been favorably influenced by the adjustment to the P24x restructuring provisions of around €23m, reached €28.5m.
As chief executive officer Andreas Pleßke stated, “It became clear from the third quarter in particular that we were able to make the right strategy adjustments very quickly in response to the changed market environment. In addition, we intensified our already successful P24x efficiency enhancement program.”
The massive rise in some raw material and energy prices also led to higher material costs in 2022, which it was only possible to pass on in part and with a delayed effect by increasing prices.
In the fourth quarter of 2022 in particular, Koenig & Bauer achieved a significant increase over the same period in the previous year, with revenue coming to 380m Euros (previous year: 328.4m Euros) and EBIT to 25m Euros (previous year: 11.8m Euros).
Digital & Webfed with substantially improved earnings
Digital & Webfed reduced its negative earnings contribution substantially in 2022, posting EBIT of €–19m on revenue of €140m (previous year: €121.4m). By comparison, EBIT had stood at €–38.5m in 2021, reflecting the negative impact of the adjustments of roughly €6m to the P24x restructuring provisions. With its promising business in industrial digital printing, the versatile corrugated board sector and the growing market for flexible packaging, the segment thus achieved a significant improvement in earnings.
Revenue in the Sheetfed segment climbed from €642.4m to €672m, with segment EBIT coming to €19m (previous year: €24.0m), meaning that it is still on a profitable growth trajectory. In the previous year, EBIT had been boosted by around €9m due to the adjustments to restructuring provisions for P24x. The Special segment generated revenue of €417m in 2022 (previous year: €390.2m), achieving EBIT of €23m (previous year: €34.9m). In the previous year, EBIT in this segment had been boosted by around €18m due to the adjustments to the P24x restructuring provisions.
CFO Dr Stephen M. Kimmich says: “The successes, particularly in the last two quarters of 2022, confirm our strategic approach. Accordingly, we consider ourselves to be well and efficiently positioned for 2023 and beyond and are thus taking a major step forward in achieving our medium-term goals.”
Order intake amounted to €1.3bn at the end of 2022 (previous year: €1.29bn), thus meeting expectations. The book-to-bill ratio of 0.8 in the fourth quarter was in line with the company’s own forecast. The order backlog was valued at around €950m at the end of 2022, equivalent to an increase of roughly €807m compared to the previous year.
Forecast for 2023: EBIT margin of roughly 3% on substantially higher revenue
For the current year 2023, the Management Board of Koenig & Bauer expects revenue of around €1.3bn, accompanied by an EBIT margin of roughly 3%. Koenig & Bauer will publish its audited financial statements and annual report for 2022 on 29 March 2023 and also adjusting the medium-term goals defined in 2020 to allow for inflation effects.