Although Koenig & Bauer was able to achieve a sound group order intake of €271.5m in the first quarter of 2020, the coronavirus pandemic has already had a considerable impact on revenue and earnings. With group revenue 25.3% lower than in the prior year at €172.4m, EBIT was –€34.9m. Restrictions especially in travelling initially imposed in China and then gradually in many parts of the world are having a significant impact on order and project processing for the delivery, assembly and installation of the machines at customers. The effects are also being felt in the services area. Despite the significant drop in trade receivables and increased customer prepayments, substantially higher inventories as a result of pandemic-related delivery delays had a major impact on cash flows from operating activities of –€15m (2019: –€30.6m).
In the Sheetfed segment, primarily increased orders in large format as well as pleasing sales of folder gluer systems contributed to the solid order intake of €160.1m (2019: €174.2m). For reasons related to delivery and the pandemic, revenue of €68.2m was well below the prior-year figure of €113.7m. With a book-to-bill ratio of 2.35, order backlog increased from €250.5m to €275.3m. EBIT of –€18.6m was below the prior-year figure (–€3m) as a result of the substantial drop in revenue.
Despite declining service business with web offset presses, order intake at Digital & Web of €43.6m was significantly higher than the prior-year figure of €31.9m. In addition to increased orders in flexible packaging printing, follow-up orders received in corrugated board and digital decor printing were the main reason for this growth.
President and CEO, Claus Bolza-Schünemann, said, “The economic consequences of the corona crisis pose major challenges for our group. Our broad product portfolio with a significant share of revenue in system relevant packaging printing, the robust, increasingly digital service business and our sound balance sheet with a high equity ratio limit the risk potential. With the corona crisis management established in March, we are working to actively counter this extraordinary situation. The health and safety of our employees, customers and suppliers is our top priority. Our action plan focuses on reliable customer support, cost and investment discipline and securing liquidity. Short-time working has been in place at different locations since 1 April 2020 due to capacity utilisation.”
CFO, Dr Stephen Kimmich, said, “Given the uncertainty regarding future developments and the serious concern about a deep global recession, many of our customers are reluctant to make new investments, even though packaging printers for food, beverages and pharmaceuticals as well as for online retailing are currently operating at particularly high capacity utilisation. Considering the high volatility and the tremendous uncertainty about the severity and duration of the coronavirus pandemic as well as the success of health and economic policies, the impact on revenue and earnings in the 2020 financial year cannot yet be quantified. Because of the drastic effects that are already apparent, our planning for 2020 is no longer achievable. Accordingly, corona crisis management currently has the highest priority so that we can master the challenges that lie ahead and be prepared for the period after the Covid-19 pandemic. In addition to the Performance 2024 efficiency programme, the strategic focus on packaging printing and digital services is to be stepped up again afterwards.”
