Koenig & Bauer outlines efficiency programme to gear up for future
Further group development defies the tense global economic situation
To reinforce the company’s position as the leading supplier of press and post-press solutions for packaging, industrial and security printing applications, and to boost the earning power of the Koenig & Bauer Group, the management board has been working intensively on developing and expanding the “Performance 2024” efficiency programme over the past months.
There are also plans to realise annual cost saving effects which will then amount to more than €100 million and continue increasing until 2024, while maintaining and, in fact, accelerating all innovation, process and product developments. The non-recurring costs in the mid two-digit million Euro range this makes necessary will be recorded in the group results for the business year 2020 as expenditure realised as a provision.
The principal market segments addressed by Koenig & Bauer, such as the structurally expanding areas of packaging and industrial printing, remain fundamentally intact. This is clearly demonstrated by the good levels of capacity utilisation currently reported by printers of packaging for food products, beverages, and pharmaceuticals, as well as the booming online trade. Even so, customers are postponing new investments due to all the uncertainty brought by the Covid-19 pandemic.
The primary objective of the four-year, multi-pronged programme is to strengthen the company’s competitiveness for the long term. A range of measures aims to ensure further development of the product range in accordance with market needs, to continue with the digitalisation of processes, and, at the same time, achieve reductions in manufacturing costs.
The programme adopted provides for the following:
• Supply chain reorganisation effected by changes group-wide structures, purchasing arrangements and production processes within the framework of one organisation, as well as innovative approaches to part and component optimization
• Adjustments to cost and personnel structures, and improvements in productivity based on process streamlining and standardization
• Increased effectiveness and efficiency in development and design by implementing measures targeting product, process and organisational optimisation, such as design-to-cost projects
• Continuation and acceleration of the development of new products and solutions for the fields of sheetfed and webfed packaging printing by means of conventional and digital printing technologies, hollow container decoration, post-press and banknote production
• Reduced administration costs by continued pooling of specific tasks as shared services, as well as changes to sales and service structures
• Optimisation of the production and assembly factories, including internal pooling within the group, and the relocation and realignment of production and assembly facilities.
In addition to the effects of the measures already being implemented, such as cutting back on overtime and subcontracted labour, a hiring freeze and short-time working, the group-wide measures approved today will affect between 700 and 900 jobs in the short and medium term. The changes will be discussed and negotiated with employee representatives and social partners over the coming months. Along with implementing the necessary measures in a socially acceptable manner, the objective is to achieve a return to the planned level of group growth in the medium term by taking innovative approaches.
“Today, we have made far-reaching decisions for Koenig & Bauer, made necessary by negative global economic developments in tandem with ever-changing customer needs and demands. They are also associated with painful cuts for the workforce. These difficult and challenging steps were not easy to take, but they are imperative to safeguarding the long-term future of our 203-year-old company,” as President and CEO Claus Bolza-Schünemann explained.