Koenig & Bauer AG has announced that it has exceeded its own forecast for preliminary Group earnings before interest and taxes (EBIT) for 2021. This report is on the basis of its preliminary and as yet unaudited figures.
Despite the ongoing pandemic in 2021 and a challenging procurement environment, EBIT of around €29m was achieved through the acceleration of the savings effects in the P24x efficiency programme and the more efficient implementation of the related personnel measures. This was also due to a high earnings contribution from the Special segment in the fourth quarter in particular.
What in some cases was an explosive rise in raw material and energy prices led to higher material costs in a high single-digit million euro range in 2021, which it was only possible to absorb with a delayed effect and partially by means of price increases during the year.
Andreas Pleßke, chief executive Officer at Koenig & Bauer AG said, “This demonstrates that we have made good progress with our efficiency programme despite the ongoing pandemic situation and a challenging procurement environment. This is our road back to the planned group growth in the medium term. To this end, we are focusing on packaging and a portfolio strategy in attractive markets, on synergistic effects in production and on the further development of our service business to improve our customers’ total cost of ownership”.
Improved operating earnings in the individual segments
Compared to the other segments in the Koenig & Bauer Group, the Sheetfed segment tends to be early-cyclical due to its shorter production and supply chains. As a result, the improvement in operating earnings during the year had already started to emerge in the fourth quarter of 2020 and increased sequentially. EBIT rose year-on-year by around €52m to roughly €24m and was positively impacted by the adjustment of the restructuring provisions for P24x by around €9m.
Despite the continued noticeable interest in the innovative solutions for corrugated board and digital printing in Digital & Webfed, the segment was still impacted by start-up costs and investments in further product development in addition to the customers’ pandemic-related purchasing restraint in 2021. At around €-33m, EBIT was around €7m down on the previous year’s figure of €-25.5m.
In total, the adjustment of the restructuring provisions for P24x had a negative impact of around €6m on the segment result. By contrast, the Special segment recorded an increasing contribution to earnings from the second quarter of 2021 and especially in the final quarter. EBIT increased from €-31.8m in the previous year to around €35m in the year under review and was positively influenced by the adjustment of around €18m to the P24x restructuring provisions.
8.5% increase in revenue to roughly €1,116m in 2021 within the forecast range
Group revenue reached the forecast range of €1,100 – 1,135m in 2021, coming to around € 1,116m. This corresponds to an increase of around 8.5% compared to the previous year (€1,028.6m). In the fourth quarter alone, revenue rose very significantly from €264.1m in the same quarter of the previous year to around €328m, underpinned in particular by the Sheetfed and Special segments.
Order intake stood at around €1,291m at the end of the year, up roughly 32% on the previous year (€974.7m). In the final quarter, customer orders were worth some €312m, almost 19.0% more than in the same quarter of the previous year.
Medium-term targets confirmed: EBIT margin of more than 7.0% on revenue of €1.3bn
Koenig & Bauer confirms its medium-term targets of revenue of €1.3bn, an EBIT margin of at least 7% and a reduction in net working capital to a maximum of 25% of full-year revenue, which is to be achieved after the completion of the P24x efficiency programme.
“Adopted in December 2021, our Exceeding Print strategy, which, as the name suggests, goes beyond the “printing process”, will also contribute to this. We are deliberately focusing on the three strategic fields of action in order to become even more sustainable, more digital and more modular,” added Pleßke.
The company plans to publish its forecast for 2022 together with the presentation of its audited annual financial statements and the annual report for 2021 no later than on March 30, 2022.