Koenig & Bauer Durst enjoyed success visiting with show-goers at SuperCorrExpo, one of the most influential corrugated packaging-focused trade shows in the Western Hemisphere, which was held at the Orange County Convention Center in Orlando in August. The firm’s experts were on hand to answer prospective customer questions and provide information on its latest products and developments for the corrugated market.

“We were excited to join this event and visit with attendees who came to our booth to explore how Koenig & Bauer can support their corrugated printing needs,” said Jürgen Gruber, Product Manager Digital & Corrugated Printing Technology for Koenig & Bauer US. “Our new CorruCUT HQPP brings a maximum production output of 12,000 boards per hour, including setup while running, integrated remote maintenance for the ultimate uptime, and the easiest machine to operate. It generated a lot of interest at our booth due to its revolutionary new innovations. We are deeply committed to our corrugated customers and are supporting them with our complete portfolio of corrugated products.”

The booth drew attendees who were especially keen to learn more about the inkjet products from Koenig & Bauer Durst, especially its CorruJET 170 and Delta SPC 130 FlexLine Automatic corrugated production press.

Developed specifically for the corrugated industry, the brand new CorruJET provides digital direct printing on corrugated board sheets. The CorruJET is engineered for the highly efficient production of corrugated sheets with top-quality digital printing. Operating with a maximum production speed of 5,500 sheets/hour, the CorruJET can process corrugated board up to a thickness of 8 mm.

The Koenig & Bauer Durst Delta SPC 130 FlexLine Automatic corrugated production press adapts single-pass technology for the corrugated industry. This combines a well-engineered mechanical design with easily accessible sub-assemblies and selected components to guarantee durable quality, high performance and reliability. The Delta SPC 130 is equipped with Durst’s SPC drop-on-demand print head technology and has a non-hazardous ink system and an IR/UV drying process designed for high productivity.

The Delta SPC 130 can be configured with up to six colors, printing any length of corrugated cardboard or paper media of up to 12mm in thickness. The printing system offers unrivaled versatility, low maintenance requirements and 24/7 dependability.

“We were pleased to display our joint venture between Koenig & Bauer and Durst at SuperCorrExpo and allow attendees to learn about our all-encompassing portfolio,” says Oliver Baar, senior product manager at Koenig & Bauer Durst. “We had some great conversations with everyone who visited our booth and it was clear that automation and productivity are key talking points in our industry.”

More information on www.koenig-bauer-durst.com

Over the past year Superior Lithographics, a Los Angeles-based large format printing specialist of litho sheets and top sheets for the corrugated box industry as well as printing and converting folding cartons, has seen impressive improvements in many vital areas including product quality and data on product consistency stemming from state-of-the-art color and quality measuring systems outfitted on its new Koenig & Bauer Rapida 145 seven-color 57-inch press.

“Since our new Koenig & Bauer Rapida 145 57-inch seven color press was installed last summer, we’ve seen incredible improvements within our facility,” says Jeff Ku, Vice President of Operations for Superior. “Our data has shown a 32% increase in overall sheet throughput. We’ve also seen an impressive 25% decrease in make-ready time. All this has resulted in our company experiencing an overall growth in business.”

In addition to obtaining the highest quality print for its customers, Superior Lithographics also has a passion for sustainability that they pursue by utilizing recycled materials, solar panels, and new press technology that has reduced its waste production by 25%.

Catering its folding cartons to a mix of well-known regional retail food vendors, Superior has adapted to the trend toward short orders and a premium on color consistency. An important consideration on the new Rapida is its 100% inspection system, which “can catch errors that an operator can’t catch between press pulls and ensures that all sheets are alike,” explains Ku. Having the new Rapida 145 designed as Superior’s first seven-color press, the firm’s sales force can offer new products and increase its production flexibility.

“Speed, quality, and consistency are our calling cards,” says Ku. “That’s what has propelled our sales to grow by 16% in one year and find ourselves at capacity even with production running 24/7. We’re seeing growth in both of our main sectors; our existing corrugated market remains strong with 60% of our business even as we push further into the folding carton segment, which makes up 40% of our production.”

In addition to the general investment restraint on the part of many customers in the corona crisis, travel bans, lockdowns and other restrictions significantly affected the business figures of the Koenig & Bauer group in the first half of 2020. The restrictions caused by the Covid-19 pandemic particularly impeded deliveries of the presses to the international customers as well as the worldwide deployment of the assembly staff and service technicians. At €480.2m, orders were 16.2% lower than in the previous year, although this was better than the sector trend for printing presses published by industry association VDMA. At €404.5m, revenue fell short of the previous year by 20.1%. On the cost side, massive measures were taken to address the effects of the crisis, introducing short-time working from 1 April 2020 alongside other steps. EBIT improved substantially from –€34.9m in Q1 to –€6m in Q2. For the first half of the year, EBIT was –€40.9m after €0.6m in the previous year. At –€44.2m, net earnings as of 30 June corresponds to earnings per share of –€2.68.

Despite substantially lower trade receivables and higher customer prepayments, the half-year loss and the increase in inventories had major impacts on cash flows from operating activities, which came to –€68.6m (2019: –€96.5m). The equity ratio stood at 32.2% at the end of June 2020.

Segment performance

Despite the substantial gains with large-format sheetfed offset presses and folder gluers, order intake in the Sheetfed segment declined by 12.9% over the previous year’s figure of €330.6m to €288m due to lower orders for medium and half-format presses. Revenue of €205.5m was 20.6% lower than the previous year’s figure (€258.9m) for delivery-related reasons and due to the effects of the pandemic. With the book-to-bill ratio coming to 1.4, order backlog rose from €261.6m to €265.9m. Due to lower revenue, EBIT of –€17.4m was below the previous year (–€1.3m).

Order intake in the Digital & Web segment came to €56.7m, down from €89.9m in the previous year, due to lower orders in the web offset press business and for flexible packaging printing. At €51.6m, revenue was down on the previous year (€64.5m). The order backlog contracted from €111.2m to €71.2m. The lower revenue had a significant impact on the EBIT of –€12.1m (2019: –€10.8m).

The decline in order intake in the Special segment from €175.3m to €150.7m reflects lower orders for security printing, marking and coding as well as glass direct printing. In metal decorating, there was an increase in new business. Revenue fell from €204.9m to €160.1m. The order backlog reached €278.1m after €316m in the previous year. After €6.3m in the previous year, EBIT came to –€10.3m in the first half of 2020 for revenue-related reasons.

Outlook

CEO Claus Bolza-Schünemann: “In view of the high volatility and the great uncertainties surrounding the severity and duration of the coronavirus pandemic and the success of health, economic and monetary policies, the further global economic development is uncertain. Given these uncertain underlying conditions, it is currently not yet possible to issue any revenue and earnings guidance for 2020 for our group. The management board is working intensively on the Performance 2024 efficiency programme to increase the operating profitability. We have applied for a KfW loan to supplement the existing syndicated credit facilities. In addition, improvements in working capital and cash flow are at the top of the agenda together with the strategic focus on packaging printing and digital services.”

Figures at a glance

The financial statements can be downloaded as a PDF file from here.

With its strategic focus on the growth market of packaging, Koenig & Bauer is on track to reduce the dependency on politically volatile und lumpy security printing business by increasing revenue and earnings in this area. Through the acquisition of Iberica and Duran, the joint venture with Durst as well as various partnerships in the software field, the portfolio for packaging printing markets was expanded further. Following a testing phase of the CorruCUT sheetfed flexo press for analogue direct printing on corrugated board, the prestigious pilot customer and development partner Klingele accepted the newly developed machine after a demanding factory acceptance test. The machine is now producing in two shifts at the Klingele plant in Delmenhorst near Bremen, Germany. With the CorruFLEX order from Thimm Packaging Systems, Koenig & Bauer received a strategically important follow-up order in corrugated board printing. Interprint ordered the third RotaJET for digital decor printing. After the sixth press sale for digital decor printing and the key order from Tetra Pak for digital full-colour beverage carton printing, the RotaJET digital printing platform is particularly successful in the market. The service initiative launched in 2016 is also bearing fruit. The service revenue share in the Koenig & Bauer group increased significantly from 25.9% in the previous year to 28.2%.

CEO Claus Bolza-Schünemann: “The end markets we address are fundamentally intact with packaging printing showing good structural growth. However, growth requires normal business years. Due to the increasing economic uncertainty, we decided to invest significantly in reducing manufacturing costs and to join forces more strongly within the group. With these measures, we aim to position ourselves to a greater extent independent of the economy and more competitively for the future.”

Dr Andreas Pleßke, the Management Board member responsible for the Performance 2024 programme explains further details: “With the Performance 2024 programme, we are currently targeting reducing costs by over €70m by 2024 with one-off costs of €30m to €40m. We expect the package of measures to be expanded further. The focus of the various projects aimed at optimising group-wide structures and processes is on considerably reducing manufacturing costs to achieve a significant improvement in the earnings situation in the new machine business. This includes design-to-cost projects, purchasing optimisations and some further measures. Bundling tasks as shared services as well as the reduction of holding costs and SG&A expenses are also on the agenda.”

CFO Dr Mathias Dähn adds: “In addition to the cost-cutting projects, the efficiency programme aims to reduce lead times in assembly and accelerate customer acceptance. In addition to shorter delivery times, this will lead to a drop in working capital and a cash flow improvement. Moreover, we work with further activities and a sophisticated controlling of all measures with permanent monitoring on the significant reduction in working capital. We see considerable potential for improvement, particularly in security printing in terms of inventories and receivables through optimised sales management and stepping up export financing. The comprehensive package of measures also aims at a more even distribution of revenue over the year in the Sheetfed segment.”

Business performance in 2019 in the Koenig & Bauer group

Not all expected orders in security printing and metal decorating were awarded in 2019, therefore order intake and order backlog of €1,141.3m and €533.7m respectively were below the figures for the prior year (€1,222m and €610.9m respectively) favoured by the major Egyptian order. With €1,218.5m, group revenue reached the level of the prior year (2018: €1,226m). Earning were burdened by high investments in the growth offensive 2023. While a lack of profit contributions due to delayed or shifted contract closings and higher costs in order processing further reduced earnings, one-time income had a positive effect. On balance, a margin of 4.6% was achieved with EBIT of €56m (2018: €87.4m and 7.1% respectively). At €38.4m, group net profit (previous year: €64m) translates into earnings per share of €2.31 in 2019 (2018: €3.86). In view of the significantly increased uncertainties caused by the corona crisis, the Management Board and Supervisory Board will propose to the annual general meeting to suspend the dividend payment for the financial year 2019 and to carry forward the retained profit generated by the holding company Koenig & Bauer AG to new account. The fundamental policy of distributing 15% to 35% of group net profit remains unaffected.

Business performance in 2019 in the segments

In addition to the strong service business, more orders for large- and medium-format presses led to growth in order intake in the Sheetfed segment of 8.9% to €625.3m (2018: €574.3m). Compared to 2018 (€615.9m), revenue increased by 2.6% to €631.8m. The slightly lower order backlog of €183.4m compared to the previous year (€189.9m) remained at a good level. Due to the product and regional mix and higher order processing costs, EBIT of €19.4m was below the figure from the prior year (€35.4m).

In Digital & Web, order intake of €144.9m was 18% below the prior-year’s figure of €176.6m. In addition to the shrinking web offset service business, lower orders in flexible packaging printing were the main reason for this decline. Revenue increased by 7.4% from €153.3m to €164.6m. On balance, the order backlog decreased from €85.8m to €66.1m at the end of 2019. The EBIT of –€16.5m (previous year: –€10.2m) was burdened by high market-entry and growth-related expenses as well as the negative result in flexible packaging printing.

In the Special segment, order intake of €406.7m was below the prior-year’s figure of €505.1m, which was impacted by a major order in security printing. After €491.5m in the previous year, revenue of €463.9m was achieved. Order backlog at the end of 2019 was €287.3m (31 December 2018: €344.5m). As a result of the lower revenue, product mix and unexpected project expenses for the major security printing order, EBIT amounted to €43.9m after €48.2m in the previous year despite one-time income.

Above-average balance sheet ratios

In addition to the high investment expenditures and the dividend payment, cash flows were influenced by one-time effects such as the significant capital lock-up resulted from the major Egyptian order. Accordingly, cash flows from operating activities of –€7.9m and free cash flow of –€52.3m were below the prior-year figures (€66.3m and –€19.5m respectively). The long-term credit facility syndicated by renowned banks is strengthening the group’s stability. In terms of balance sheet ratios, the Koenig & Bauer group is well-positioned with an equity ratio of 34.3%.

Guidance for 2020

CFO Mathias Dähn: “Even before the outbreak of the coronavirus, global economic conditions were demanding. Given the daily worsening global economic situation due to the coronavirus, the impacts on our company and the achievement of our planning are currently completely open. For 2020, we are planning to achieve a largely stable group revenue compared to the previous year and the prior year's EBIT level without the around €10m in special expenses from the efficiency programme. Managing the possible consequences of the corona crisis is currently a top priority.”

Figures at a glance

The Annual Report can be downloaded as a PDF file from here.  

Koenig & Bauer Flexotecnica recently launched a brand new high performance compact CI flexo press---the Evo XC---to join its well-established line of Evo models. The eight-color press offers one of the smallest footprints in the industry and is available in two different versions with a maximum repeat length of up to 850 mm and printing speeds up to 400 m/min.

“This press represents state-of-the-art technology for newcomers as well as experienced printers (e.g. from the rotogravure industry) who want to enter the CI flexo market in a budget-friendly way,” says Preston Neetzel, sales director-flexo  of the Web & Specialty Press Division at Koenig & Bauer Flexotecnica. “We developed the Evo XC to enable efficient printing with environment-friendly water-based inks not only on paper, but also on plastic films. The Evo XC is aimed at flexible packaging printers who are seeking a space-saving solution and considerable energy savings at the same time. This small-sized machine can be an additional press to an existing wide-web machine converter in order to achieve a new level of cost-efficiency.”

Wrapped in the iconic Koenig & Bauer design, the Evo XC features traditionally solid machine engineering in combination with the intuitive HMI, a completely new dryer concept as well as the latest digital Industry 4.0 features, which herald a new era in terms of output efficiency, production uptime and operator-friendliness.

Its key features include:

·       Iconic machine design: the clear and minimalist design concept of this printing press increases safety while reducing failures in operator workflow due to a new level of accessibility.

·       Human machine interface: a new intelligent HMI with large 24-inch touch screens has been introduced to promote simple and intuitive job data input and control of the press functions.

·       PrintTronic automatic impression settings: this proven technology ensures automatic control of print impression positions with minimized material waste and increased production uptime. Integrated in the HMI, PrintTronic delivers practical benefits such as quicker printing impression adjustment on all printing decks at once, no requirement for video cameras or additional external equipment, no need for dedicated marks or RFID imbedded sleeves, no ink consumption during the process and compatibility with any type of material, plates or inks.

·       Doctor blade chamber: this system achieves outstanding printing results because adjustments are made automatically for accurate and fast job changeovers. A fast clamping system and extra long-lasting doctor blades provide easy operation and low maintenance. An optimized interior geometry of the chamber with a reduced volume results in additional ink savings and ensures smooth operation with hardly any ink spitting

·       DryTronic: In order to meet the demands for efficient drying of solvents and water-based inks for both inter-deck as well as final dryer stages, Koenig & Bauer has introduced an enhanced inter-color drying system for efficient heat transfer to the web while at the same time reducing heat loss. Due to an optimized configuration, the dryers generate effective airflow – even at high printing speeds – to promote homogeneous drying. Accurate temperature control of the system ensures constant drying and low energy consumption without sacrificing print quality or damaging the web. An important benefit of the novel drying system between colors is its compact and ergonomic design that improves operator-friendliness for maintenance and cleaning.

·       WashTronic: The WashTronic system optimizes the inking supply and allows the ink to be changed more quickly. Due to less ink in the circuit, a higher productivity level can be achieved, especially with increasingly shorter jobs. The integrated arrangement of the system reduces the total footprint of the press while remaining ergonomic for the operator at the same time.

The new Evo XC from Flexotecnica made its maiden debut at the K2019 fair in Düsseldorf, Germany, where it drew crowds to view its several live demonstrations each day and will next appear at the Koenig & Bauer booth at Drupa 2020 in Düsseldorf.

Koenig & Bauer (US) is located in Dallas, Texas and a member of the Koenig & Bauer Group, which was established over 200 years ago in Würzburg, Germany. Koenig & Bauer’s claim, “We’re on it.” gets to the heart of Koenig & Bauer’s values and competencies for all target groups. The group's product range is the broadest in the industry; its portfolio includes sheetfed offset presses in all format classes, post press die cutting, folder gluers, inkjet presses and systems, flexographic presses, commercial and newspaper web presses, corrugated presses, special presses for banknotes, securities, metal-decorating, glass and plastic decorating. For more information visit the company's web site at www.koenig-bauer.com.

On a busy street in a bustling industrial office park, it would be easy to miss a gray unobtrusive one-story manufacturing facility without a second glance. But enter the doors at the Carlson Print Group’s headquarters in Eden Prairie, south of Minneapolis, visitors will find some of the most eye-popping customized print pieces produced by a well-positioned leader in specialty print products for some of the most recognizable brands in the world.

“We’ve developed a well-earned reputation in the industry to design and produce some of the coolest and most inventive work for our wide variety of nationwide clientele in the Fortune 100 to 500 list of businesses who want to stand out and are willing to invest in award-winning attention-grabbing projects,” says Darren Carlson, chief executive officer of Carlson Print Group. “Gaining the new Koenig & Bauer Rapida 105 PRO 41-inch six-color press this fall with all of its bells and whistles will provide our clients with bold, unique products and help us to increase our capacity as we continue to expand our business.”

Ever since it was established the Carlson Print Group has set itself apart by offering specialized print techniques to some of the most exclusive brands in the country. Its goal is to deliver added value to a client’s brand and products with unique mediums in print that differentiate them in their market and above their competition. Carlson uses a wide array of specialty print and coatings techniques in this endeavor, such as its Cast n’ Cure, lenticular, texture/soft touch, motion coat, pearlescent, color foil, reticulating varnish, and Chrome FX. It offers extensive pattern options to add prisms of color on any print or packaging piece. Lately, its clients have been increasingly requesting the ability to involve the senses through eyesight and touch, which might involve special raised coatings.

Having this palette of choices available to its customers, Carlson chose the popular medium-sized Rapida 105 PRO to give it the ability to run these complicated jobs faster through the plant, using less makeready, and ultimately provide on-demand solutions. Press operators are eagerly awaiting the arrival of the new press because its new, intuitive operating concept allows all functions to be controlled via touchscreen.

“Internally, we have performed in-depth analysis and found that the Rapida 105 PRO will increase our productivity,” says Earl Guinter, Carlson’s sales manager. With a larger standard sheet format of 29 x 41 in and reaching speeds of 17,000 sph, the latest model at Carlson will give them the size and speed to increase its growing capacity needs. One of the Rapida 105 PRO’s key features, which addresses this concern, is the full preset capabilities from the feeder through the printing units to delivery. All of the settings at the feeder and delivery can be stored according to job type, which can be leveraged with repeat jobs or orders printed on the same substrate.

The highest quality color is one of Carlson’s biggest targets that always requires its greatest attention, says Guinter. For example, a new account in the high-end cosmetic market that demands super critical color for its print projects will be a perfect fit for the new press, he says. Equipped with a trio of superior color control systems--- ErgoTronic Color Control, ErgoTronic LAB, QualiTronic Color Control---the new Rapida 105 PRO will provide Carlson’s press operators with color control that insures that their printed product maintains superior color consistency from the beginning of their production run to the end. These systems will also give Carlson the ability to measure print quality and execute automatic color correction with QualiTronic ColorControl inline measuring equipment. This new holistic color control will be ideal for ensuring perfect customer press checks.

To better answer its clients’ ideas and requirements, Carlson has become a leading expert in printing on the latest substrates, and using a variety of inks, coatings and finishes to allow them to create beautiful, customized print pieces. One of its many highlights is its ability to print lenticular, in which special lenses are used to produce printed images with an illusion of depth, or the ability to change or move as the image is viewed from different angles, which clients use as a powerful tool to reach out and demand attention. Giving it maximum ability and flexibility to use these different substrates is a Koenig & Bauer exclusive package for board, plastic, and lightweight on the new Rapida 105 PRO. Operators will enjoy the press’ gripper systems that do not need adjusting even when making extreme substrate changes.

With this ability to print on a variety of substrates, Carlson specified that the new Koenig & Bauer Rapida 105 PRO be equipped with LED-UV lamps. “LED-UV is ideal for all of our applications. We look forward to enjoying all of its many benefits,” says Guinter. “Our firm prides itself on being technically relevant with the latest trends, all in an effort to meet the demands of our customers. Having the press equipped with LED-UV lamps enables us to continue to use different substrates, such as plastics, that will provide amazing results and won’t be prone to drying or distortion.”

Behind the creative and unique printed pieces, Carlson Print Group has assembled a dedicated team of over 100 employees to produce its award-winning work. No stranger to the award’s stage, Carlson recently won two Gold Ink awards for its Marvel Universe Live Program and its annual calendar, which Carlson uses to showcase its specialized printing and finishing techniques. Previous calendars have utilized inline cold foil, Cast n’ Cure coating, Soft Touch gloss, texture coatings, embossing, and matte varnishes.

Once the new Koenig & Bauer Rapida 105 PRO is operational this fall at Carlson’s 74,000 sq ft facility, management believes it will open doors to even more high-end packaging opportunities.

“What really made a difference in our decision to partner with Koenig & Bauer for the first time were the similarities between our two companies,” recalls Guinter. “Both of our firms have expanded into new exciting markets. Both of our companies keep up-to-date on the latest trends and technical solutions that help us become more competitive and profitable in our businesses.”

Carlson Print Group is pioneering new dimensions in print with the latest in imaging and finishing technologies. The Eden Prairie, MN firm prints on virtually any substrate, from the lightweight paper publication grades to a variety of synthetics including various forms of plastic. No matter what the job, from short run digital solutions to large-scale litho print projects, the quality of its work is matched only by its dedication to service. 

Koenig & Bauer (US) is honored to learn that its Rapida LiveApp has been selected by an independent panel of judges for the prestigious Printing Industries of America (PIA) 2018 InterTech Technology Award. The Rapida LiveApp, the first of its kind in the industry, was one of twelve of the 29 entries to be chosen to receive an InterTech Technology Award. It was deemed by the judges as meeting the award criteria of being truly innovative and expected to have a major impact on the graphic communications industry. The InterTech Technology Award will be presented before an audience of industry leaders during the 2018 Premier Print Awards and InterTech Technology Awards Reception & Ceremony, Sept. 30 at the J.W. Marriott in Chicago during the Print 18 trade fair.

“The Rapida LiveApp shows the power of apps to add value in the pressroom,” said Jim Workman, vice president of PIA’s Center for Technology and Research. “The judges found the entire app innovative, especially noting its ability to track and communicate maintenance issues and provide easy access to training resources.”

The Rapida LiveApp demonstrates how Koenig & Bauer Sheetfed embodies its corporate vision of setting industry standards in terms of customer focus, innovative solutions, and proactive services. The app provides printers with state-of-the-art tools for a wide range of sheetfed offset applications.

Comprehensive range of functionalities

The Rapida LiveApp offers dual functionality. On the one hand, press operators can start or stop their Rapida sheetfed offset press from a mobile location, adjust settings and perform operational tasks as well as obtain information on press status and print jobs. The maintenance manager displays a list of pending maintenance tasks and simplifies these tasks by providing relevant instructions and videos. Successful maintenance can be confirmed and commented upon interactively.

On the other hand, the app includes a powerful tool for warehouse management and control, including batch recording and tracking. Inks, coatings and printing aids used can also be clearly assigned to the respective print jobs. Ordering processes are automatically triggered when minimum quantities are not met.

“We are honored to be chosen for this prestigious award from PIA,” says Thomas Göcke, head of marketing and CRM at Koenig & Bauer Sheetfed. “With the Rapida LiveApp we are the first in the graphic arts industry to offer our users a completely new experience when it comes to the operation of sheetfed offset presses. We are delighted that print users and independent institutions appreciate this so much. It is truly an innovative operating concept.”

Eric Frank, senior vice president of marketing and product management at Koenig & Bauer (US) adds: “The special added value provided by the app lies in the mobile operation and the maintenance manager, which explains the necessary maintenance tasks step-by-step and documents these tasks at the same time.”

Project manager Stefan Singer, head of electrical engineering at Koenig & Bauer in Radebeul, is impressed by the success of the product: “It fills my colleagues and I with pride that the app is so well received by the industry.”

The Rapida LiveApp has also received several awards in Europe, including the German Design Award in the category "Excellent Communications Design - Apps" and the "automation award". The InterTech Technology Award is the first prize in recognition of this pioneering operating philosophy for sheetfed offset presses in the U.S., from the world's largest printing association.

Since 1978, the InterTech™ Technology Awards have honored technologies predicted to shape the future of print and graphics communications. Past honorees have introduced entirely new products and services that have revolutionized ways of working and enabled printers to operate more efficiently. 

Koenig & Bauer (US) is located in Dallas, Texas and a member of the Koenig & Bauer Group, which was established 200 years ago in Würzburg, Germany. Koenig & Bauer’s claim, “We’re on it.” gets to the heart of Koenig & Bauer’s values and competencies for all target groups. The group's product range is the broadest in the industry; its portfolio includes sheetfed offset presses in all format classes, post press die-cutters, inkjet presses and systems, flexographic presses, commercial and newspaper web presses, corrugated presses, special presses for banknotes, securities, metal-decorating, smart cards, glass and plastic decorating. For more information visit the company's web site at www.koenig-bauer.com.

With order intake reaching a particularly high €454.4m in the second quarter and the order backlog rising to €805.8m at the end of the first half, the Koenig & Bauer Group is on track to meet its targets for 2018. Strong security business and more orders in packaging printing caused order intake to rise by 17.2% to €705.3m in the first half of 2018 (2017: €601.9m). Driven by the good Q2 figure of €297.1m, group revenue came to €514.4m but fell short of the previous year’s figure of €538.9m due to the even greater accumulation of delivery dates in the second half of the year. This was also reflected in EBIT, which at €10.6m was lower than in 2017 (€16.3m).

Sheetfed expands market leadership in large-format

The Sheetfed segment reached a strong order intake of €326.3m, exactly matching the previous year’s figure, which had been influenced by the Print China fair. President and CEO Claus Bolza-Schünemann: “Substantial growth was achieved in large-format cardboard printing. As the world market leader in folding carton printing, we are benefiting from heightened capital spending of the international packaging printers.” EBIT of €7.7m was below the previous year’s figure (€12.1m) due to the delivery-related decline in revenue from €307.8m in 2017 to €283m.

Despite the encouraging growth in new business in flexible packaging, orders in Digital & Web (€84.7m) were slightly down on the previous year (€85.7m) due to fewer orders for newspaper web presses and services. In addition to the market-entry costs for corrugated and flexible packaging in particular, EBIT was significantly burdened by the decline in revenue from €68.3m to €55.8m. CFO Mathias Dähn: “This was materially due to the decline in revenue from digital printing presses as a result of subdued demand. However, we see significantly greater short and medium-term potential in the large corrugated and foil printing markets, which are expanding at above-average rates. The targeted expenses required for future growth will leave traces on our cost position, exerting pressure on segment earnings.”

Driven by large orders in security printing and growth in marking and coding, order intake in the Special segment rose by 52.8% to €330.6m (2017: €216.3m). With revenue rising slightly from €189.2m to €195m, EBIT came to €14.4m, thus matching the previous year’s figure (€14.6m). President and CEO Claus Bolza-Schünemann: “With the major order received from Giesecke+Devrient for the delivery of several press lines for the production of ultra-secure banknotes in Egypt, we have a high degree of capacity utilisation in security printing until well into 2019.”

Strong financial and balance sheet profile

Cash flows from operating activities rose substantially over the previous year (€–20m) to €17.4m. The free cash flow was burdened by the final payment instalment of €34.8m made in Q1 for the external funding of a part of the pension provisions. In addition to net liquidity of €48.1m and securities of €14.6m that can be liquidated at any time, the group also has access to syndicated credit facilities. The equity ratio stood at 35.6% at the end of the first half of 2018.

Group targets for 2018

In 2018, the management board expects to achieve organic growth of around 4% in group revenue and an EBIT margin of around 7%. With many projects still in the pipeline in all business fields, the forecast is based on the high order backlog of €805.8m as of the end of the first half year together with further progress being made in the group-wide service initiative and the cost-cutting projects in security printing, purchasing and production. These projects should cause earnings to rise by €70m over 2016 by 2021.

CFO Mathias Dähn: “The achievement of the targets 2018 requires the execution of orders on time in the second half of the year and particularly in Q4 with the accumulation of press installations. Given the high capacity utilisation and external and internal delivery bottlenecks in parts, this is a challenging task to which we pay particular attention. However, we consider it to be particularly important to utilise the opportunities for growth being offered by the market in new press business in order to widen the installed base as the foundation for further growth in service business.”

Medium-term goals until 2021

Depending on global economy, end markets and the necessary investments in growth, management is targeting a group-wide organic revenue growth rate of around 4% p.a. and an EBIT margin of between 4% and 9% by 2021. Product innovations in corrugated printing and 2-piece can decorating are not included in the medium-term targets, neither revenue nor costs. President and CEO Claus Bolza-Schünemann: “In addition to our printing, finishing, coding and postpress solutions for cardboard, banknotes, cans, glass and hollow containers and other products, we are particularly focusing on corrugated board and flexible packaging. With the focus on the growing packaging printing, we want to boost our revenue and profitability as well as the stability of our business on a sustained basis.”      

Figures at a glance 

The financial statements can be downloaded as a PDF file from here

en/investor-relations/financial-reports/

After fully achieving and even exceeding its guidance last year thanks to strong revenue and earnings performance in the fourth quarter, the Koenig & Bauer group remains on track to meet its targets for 2018, underpinned by a high order backlog and a well filled project pipeline. In addition to good group-wide capacity utilisation, the progress that has been made in the projects for achieving further EBIT gains by 2021 is providing a solid basis. Service revenue climbed from €67.4m in the previous year to €71.8m in the first quarter of 2018.

At €250.9m, group order intake in the first three months of 2018 was down on the previous year’s figure of €321.5m, which had been influenced by a major security project. CEO Claus Bolza-Schünemann: “Alongside our expansionary service business, we made further progress in the flourishing packaging printing. With our customer-centric solutions, we were able to increase order intake in cardboard and film printing, metal decorating, marking and coding printing. As expected, demand for digital printing presses was subdued.” Group revenue (€217.3m) and EBIT (–€1.9m) were down on the previous year (€259.1m and €5m, respectively) in Q1. CFO Mathias Dähn: “Due to the delivery dates requested by our customers, press installations in 2018 will be concentrating on the second half of the year and particularly Q4 to an even greater extent than last year.”

Order gains in packaging printing

Order intake in the Sheetfed segment, which is dominated by packaging printing, rose by 5.3%. Ralf Sammeck, the management board member responsible for this segment: “After widening our share of the global market across all format classes in 2017, we expanded our market leadership in large formats in Q1 2018.” Sheetfed EBIT was down on the previous year due to the delivery-related decline in revenue. Despite the growth in new business for flexible packaging, Digital & Web order intake fell short of the previous year as fewer orders were received for digital and newspaper web presses. With revenue up slightly, EBIT came under pressure from the low revenue level and R&D expenses as well as expenses on future growth. Despite the significant growth in metal decorating and marking and coding, order intake in the Special segment fell short of the previous year, which had included a large order for a security printing press. CEO Claus Bolza-Schünemann: “With a good project pipeline in security printing, the booking of the usually large orders is not spread evenly over the individual quarters.” EBIT in the Special segment was also slightly lower than in the previous year due to the delivery-related decline in revenue.

Balance sheet strengthened substantially

Cash flows from operating activities rose substantially over the previous year (–€14.9m) to €20.3m. The free cash flow was burdened by the final payment instalment of €34.8m for the external funding of a part of the pension provisions. CFO Mathias Dähn: “Following the transfer of our reinsurance claims against the insurer to the beneficiary active employees, we netted the financial receivables against the pension provisions. This reduced the balance sheet total by €59.9m, causing the equity ratio to rise to 37.9%.”

Group targets for 2018: revenue growth of around 4% and an EBIT margin of around 7%

Looking ahead over the next few quarters, the management board expects a positive order development thanks to the ongoing expansion of the service business, growing demand in the packaging markets and expected new orders in security printing alongside the high order backlog. CFO Mathias Dähn: “The significantly increasing revenue momentum in the second half of the year together with further progress made by the cost-cutting projects in security printing, purchasing and production will lead to a clear improvement in group earnings. In the absence of any material deterioration in global economic and political conditions for our international business, we expect to achieve organic growth of around 4% in group revenue and an EBIT margin of around 7% in 2018. This will put us on track to achieving our EBIT margin target of 9% and an organic revenue growth rate of around 4% p.a. by 2021.”

Progress made in projects for additional profitable growth

Koenig & Bauer is working intensively on further applications in packaging, digital and industrial printing to achieve additional profitable growth beyond its medium-term goals. CFO Mathias Dähn: “One focus is the large and significantly growing market for analogue direct printing on corrugated board, for which we have developed the CorruFLEX and CorruCUT sheetfed flexo presses, both of which have a number of unique features. An important milestone was reached with the first CorruCUT order from the renowned pilot customer Klingele. After the completion of initial testing at our new demonstration centre in Würzburg, the CorruCUT will be installed on the first customer’s premises at the beginning of 2019. As a globally leading supplier of presses for 3-piece can decorating, we want to expand our profile by entering the 2-piece can market. The newly developed CS MetalCan offers users decisive advantages. Following two contract signings at the end of last year, we will be commencing intensive field-testing shortly with the target of sales launch at the end of 2018.”

Figures at a glance 

The financial statements can be downloaded as a PDF file from here

en/investor-relations/financial-reports/

Driven by strong revenue and earnings in the fourth quarter, Koenig & Bauer fully achieved or exceeded its guidance for 2017. The printing press manufacturer’s consolidated figures show that with the increase in revenue, earnings and order intake achieved last year it is well on track towards achieving its medium-term targets by 2021.

Growth in the packaging markets and service business, further market share gains

With security business remaining strong, Koenig & Bauer achieved growth in the packaging markets for cardboard printing, metal, glass and hollow container decorating and coding as well as with new products such as rotary and flatbed die-cutters. Market share was widened in all business fields. CEO Claus Bolza-Schünemann: “In addition to the market success of the rotary die-cutter, the sharp rise in new contracts for flatbed die-cutters over the previous year exceeded our expectations substantially.” Moreover, the group’s revenue and earnings growth was particularly underpinned by expansion in service business. Thus, the proportion of group revenue generated by service business widened from 23.5% in the previous year to 25.6%. CFO Mathias Dähn: “This shows that the group-wide service initiative launched at the beginning of 2016, with which we want to widen the share of service business in group revenue step by step to 30% by 2021 in the interests of greater earnings potential and stability, is now beginning to bear fruit. We want to create satisfied and loyal customers by offering excellent service. At the same time, rising service revenue is an important measure of customer satisfaction for us.”

Progress made in projects for additional profitable growth

Koenig & Bauer is working intensively on further applications in packaging, digital and industrial printing to achieve additional profitable growth beyond its medium-term targets. One key aspect is corrugated board printing, which is flourishing at above-average rates thanks to long-term trends such as home-shopping as well as more sophisticated and colourful outer packaging. CEO Claus Bolza-Schünemann: “We have already started marketing the sheetfed flexo presses CorruFLEX and CorruCUT (with an integrated rotary die-cutter), both of which have been developed with a number of unique features. In early 2019 we will be installing a CorruCUT system at the pilot customer Klingele.” A further target market is 2-piece can printing. Explains CFO Mathias Dähn: “As a globally leading supplier of presses for 3-piece can printing, we want to expand our profile by entering the 2-piece can market. Presented in May 2017 with a number of important advantages for users, the newly developed CS MetalCan press for 2-piece can decorating met with strong customer interest. Following two contract signings, we are now able to commence intensive field-testing with the target of sales launch at the end of 2018.” In digital printing, Koenig & Bauer sees an additional growth option as digitisation no longer poses any substitution risks in the markets addressed by the company.

Good group business performance in 2017

At €1,217.6m, group revenue reached the target corridor of up to €1.25bn defined in the guidance. With revenue up 4.3% over the previous year (€1,167.1m), Koenig & Bauer fully achieved its mid-term organic revenue growth rate of around 4% p.a., thus more than making up for the further decline of €25m in revenue from newspaper and commercial web presses. The group’s new orders rose substantially by 10.1% over 2016 (€1,149.7m) to €1,266.3m. With orders up 29.7% over the previous year, the fourth quarter was particularly strong. The book-to-bill ratio came to 1.04, while order backlog stood at €606.2m, up 8.7% on the previous year.

EBIT margin of 6.7% exceeded guidance of around 6% for 2017

The increased revenue in tandem with more service business across the Group caused the profit rise. In addition to expenses for portfolio additions, new products and IT systems, earnings came under strain from production service provider KBA-Industrial Solutions and the measures to optimise flexible packaging printing. Adjusted for the non-recurring income in the previous year, EBIT climbed from €62.9m to €81.4m. Driven by the positive earnings development and outlook for the group, a tax income of €12.7m arose again from the recognition of deferred tax assets. At €81.1m, group net profit (previous year: €82.2m) translates into earnings per share of €4.91 in 2017 (2016: €4.98).

Dividend of €0.90 per share proposed

“Thanks to the positive earnings performance and the retained profit generated by the holding company Koenig & Bauer AG, we are able to continue our dividend policy with a distribution rate of between 15% and 35% of the group’s net profit,” said CEO Claus Bolza-Schünemann. Accordingly, the Management Board and the Supervisory Board will be asking the shareholders to approve a dividend of €0.90 per share at the annual general meeting on 9 May 2018. This is equivalent to a dividend ratio of 18.4% of Group net profit.

Order and earnings momentum continuing for Sheetfed

Driven by innovative, bespoke solutions for folding carton and commercial printing as well as a broader sales and service footprint in the markets of the future, order intake in the Sheetfed segment, which as the largest segment is dominated by packaging printing, rose by 15.2% over the previous year (€569.7m) to €656.2m. Revenue climbed by 7.3% over 2016 (€615m) to €660.2m. EBIT increased from €31.3m in the previous year to €37.5m, with the EBIT margin widening from 5.1% to 5.7%.

Digital & Web investing in the markets of the future

Digital & Web order intake and revenue fell short of the previous year primarily as a result of the expected further decline in orders for newspaper and commercial web presses. Segment earnings came under strain from optimisation efforts for flexible packaging printing as well as R&D expenses, resulting in an EBIT of –€4.3m, down on the previous year’s figure of €0.5m. CFO Mathias Dähn: “With the measures taken in flexible packaging printing, a turnaround is apparent, although it will be important to continue to take the right actions to close the gap between our company and the successful leaders of this attractive market.”

Order intake, revenues and profit up in the Special segment

Growth in orders for security printing, metal and glass/hollow container decorating as well as coding boosted order intake by 16.1% to €533.7m (2016: €459.7m). Revenue grew by 5.3% from €444.3m in the previous year to €467.9m. Following a segment profit of €44.3m in the previous year, EBIT of €53.7m was recorded in 2017.

Stronger balance sheet and financial power

Cash flows from operating activities increased slightly from €21.9m in the previous year to €23.8m despite the higher net working capital. Following the successful efforts to reduce working capital in large parts of the group, the measures already taken to optimise receivables and inventories in security printing will not have short-term effects. The free cash flow of –€59.6m (2016: €2.3m) was burdened by high investments (€48.5m) and payment instalments (€36.8m) made for the external funding of a part of the pension provisions. As well as the internal liquidity generated by operating business, the group has access to credit facilities provided by a syndicate of renowned banks. In addition to a guarantee facility of €200m, the syndicated finance includes a revolving cash credit facility of €150m with an option to increase it by €50m. The facilities have a term of five years plus two one-year renewal options up until December 2024. The solid balance-sheet structure was additionally improved with the increase in the equity ratio from 31.1% to 36.4%.

Group targets for 2018: revenue growth of around 4% and an EBIT margin of around 7%

In the absence of any material deterioration in global economic and political conditions for our international business, Management Board expects to achieve organic growth of around 4% in group revenue and an EBIT margin of around 7% in 2018.

CFO Mathias Dähn: “In addition to the favourable global economy and the outlook for the consistently growing packaging and industrial printing industry, our forecast is based on the 10.1% increase in order intake and the further gains in market share achieved in all business fields. A strong basis is also provided by the 8.7% rise in the order backlog to €606.2m and the progress made in the €70m EBIT increase projects by 2021. The incremental growth in the revenue share of service business to 30% and the performance improvement project in security printing should each contribute around €20m and the integrated production network and strategic purchasing each around €15m to earnings growth. At the same time, we will be raising the prices of our entire product range by 3.7% effective 1 April 2018 in response to rising costs. Even so, the targeted growth investments are leaving traces on our cost position. Our guidance for 2018 put us on track to achieving our EBIT margin target of 9% and an organic revenue growth rate of around 4% p.a. by 2021. We would expect to reach the lower edge of our EBIT guidance of between 4% and 9% in the event of more adverse conditions in the global economy and the end markets, particularly as a result of volatile security printing business.”

In the first quarter of 2018, Koenig & Bauer will be completing the partial external funding of its pension provisions commenced in 2017 and initially planned for a period of five years. The final payment will be in the same amount as all the previous payments made in 2017. At the time of transfer of the claims to the beneficiaries, the reinsurance claims recognised within financial receivables will be netted against pension provisions. This reduction in the balance sheet will additionally improve the equity ratio and will bring it closer to the target of over 45%.

Figures at a glance 

The financial statements can be downloaded as a PDF file from here