KBA: 2012 'significant year'

KBA president and CEO Claus Bolza-Schünemann shares his views on the market and the company’s performance in 2012 in a letter to shareholders

'2012 is a significant year for KBA, German press manufacturers and the global print media industry.
 
'On May 3, Drupa, the sector's definitive trade fair, opened in Düsseldorf and we are all hoping that it will stimulate demand following some troubled years. But to what extent these hopes will be realized in today’s fraught economic and political climate is hard to predict.
 
'The show is taking place at the right time. The spread of online services not withstanding, print is still the second most popular vehicle for information and advertising, after television. This message has been swamped in recent years by media coverage focusing almost exclusively on the issues confronting the sector. For two weeks every four years, Drupa, which attracts around 400,000 visitors from all over the world, turns the public spotlight on the economic significance and diversity of print. The plethora of innovations unveiled at the fair proves that the sector is squaring up to the challenges posed by media transitions, and in doing so is creating new business applications.
 
'With a raft of new products and processes in just about every segment of our diverse portfolio, our appearance at Drupa could scarcely be more upbeat. We are showing new sheet-fed offset presses boasting some unique features for all the formats we offer, and new web presses for newspapers and commercial applications. Our new digital inkjet press, the RotaJET 76, and KBA-MePrint's new Varius 80 for printing flexible packaging address expanding markets we previously had not targeted. Insofar as we, as an exhibitor, can influence the outcome, we have set the stage for a successful fair generating plenty of orders.
 
'There was a distinct contrast in the performance of our two divisions at the beginning of the year. While there was some evidence of the customary pre-Drupa watching brief among potential buyers, our sheet-fed offset division booked a modest lift in new orders compared to 12 months earlier. But as we had expected, orders for web and special presses were well below the record level of 2011, which was boosted by some major contracts. The Group order intake of just over €236 million for the first quarter thus fell short of our annualized target. Having said that, we are confident that Drupa will have a positive impact in the second and third quarters. And the order backlog of some €800 million at the end of March was around 29 percent above the high prior-year figure.
 
'When it came to sales the situation was reversed, with the web and special press division posting an increase of almost 28 percent and the sheet-fed offset division a drop of some 20 percent on the corresponding period the previous year. This was not unforeseen, and will balance out in the course of the year. As a result Group sales in the first three months were 4 percent up on 2011. What is more important, despite a substantial extraordinary outlay for Drupa, Group pre-tax earnings (EBT) improved to €0.2 million following a €3 million loss the year before.
 
'We shall continue to focus firmly on our objectives for 2012. While growth in the press engineering sector slowed after the first three months, our targeted increase in Group sales to over €1.2 billion remains realistic, as does a better pre-tax result than last year.
 
'We wish to thank you, our shareholders, for the confidence and trust you have placed in us, and shall make every effort to fulfill your expectations.'
 
Claus Bolza-Schünemann, president and chief executive officer of Koenig & Bauer AG
 
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