• Print Innovation Asia

Koenig & Bauer achieves more than €1bn in 2020

Koenig & Bauer announces that it achieved group revenue of €1,029m in the 2020 financial year.

On the basis of its preliminary and as yet unaudited figures, earnings before interest and taxes (EBIT) were -€68m. Adjusted for special items, preliminary consolidated EBIT stands at a loss of €19m.

With the announcement, the revenue is more than the initial 2020 forecast issued, which had indicated a figure of between €900 and 950m.

Koenig & Bauer was able to achieve the higher revenue due to adjustment to the group’s internal revenue recognition policy. Under the revised policy, revenue from new printing presses is predominantly not recognised until the presses are placed in operation.

“We expect to reduce volatility in revenue recognition of our new printing press business with the new accounting policy. This should also permit more balanced budgeting in the future. The retrospective adjustment gives us improved transparency and comparability with previous years,” said CFO Dr Stephen Kimmich.

As a result of the adjustments, group revenue increased by around €51m net and consolidated EBIT by around €8m in 2020.

In addition, the reported consolidated EBIT for the 2020 financial year includes other non-recurring effects that have already been communicated: exceptional expenses in connection with the “P24x” efficiency programme (-€58m) and exceptional income from the successful outcome of a legal dispute (€4m) and from the sale of real estate in Frankenthal (€5m).

Announced at the end of September 2020, the “P24” efficiency programme aims to achieve increasing annual cost savings in the order of more than €100m by 2024 – while continuing and accelerating all innovation processes as well as new process and product developments. The current focus is on the staff layoffs defined under P24x, which will affect 700 to 900 jobs in the short and medium term.

Despite the still limited forward visibility with respect to the Covid-19 pandemic on the Koenig & Bauer Group’s business environment and the travel restrictions currently in place due to the pandemic, the company anticipates slight growth in business in 2021. This projection is based on the assumption that progress made in vaccinations will lead to a lifting of Covid-19 restrictions.

Against this backdrop, Koenig & Bauer projects slight organic revenue growth of around 4% to €1,070m in 2021. On the earnings side, it expects to break even at the EBIT level in 2021 following the successful launch of the P24x efficiency programme and the planned savings effects.

That said, reimposed travel restrictions due to the pandemic will continue to exert pressure in the first quarter of 2021.

As forecast, the implementation of the P24x programme will leave traces on free cash flow in 2021, resulting in a negative free cash flow in the mid double-digit millions.

After implementing the measures planned for 2021, Koenig & Bauer anticipates that a good 60% of the total cost savings will take effect in 2022. Following that, some 90% of the total targeted cost savings should be noticeable in 2023.

“P24x is our road back to the planned group growth in the medium term. We are focusing on packaging and a portfolio strategy in attractive markets, on strong research and development, on synergistic effects in production and on the further development of our service business to improve our customers’ total cost of ownership,” said Dr Andreas Pleßke, spokesman for Koenig & Bauer’s Management Board.

The group’s audited year-end results will be published in March.

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