K&B achieves or exceeds 2022 guidance
Driven by stiff revenue and earnings in the fourth quarter, Koenig & Bauer fully accomplished or exceeded its guidance for 2017. The printing press manufacturer's consolidated figures prove that with the increase in acquirement, earnings and club intake achieved concluding year, it is well on track towards achieving its medium-term targets past 2021.
Growth in packaging and service, further market share gains
With security business remaining potent, Koenig & Bauer accomplished growth in the packaging markets for cardboard press, metal, drinking glass and hollow container decorating and coding as well every bit with new products such equally rotary and flatbed diecutters. Marketplace share was widened in all business fields. According to Claus Bolza-Schünemann, chief executive officer, "In addition to the market success of the rotary diecutter, the sharp ascent in new contracts for flatbed diecutters over the previous year exceeded our expectations substantially." Moreover, the group's revenue and earnings growth was specially underpinned by expansion in service business. Thus, the proportion of group revenue generated by service business widened from 23.5% in the previous year to 25.6%. Mathias Dähn, chief fiscal officer adds, "This shows that the group-wide service initiative launched at the beginning of 2016, with which we want to widen the share of service concern in group acquirement stride by step to xxx% by 2022 in the interests of greater earnings potential and stability, is now beginning to bear fruit. Nosotros desire to create satisfied and loyal customers by offering excellent service. At the same time, ascension service revenue is an important mensurate of customer satisfaction for us."
Progress in projects for boosted profitable growth
Koenig & Bauer is working intensively on further applications in packaging, digital and industrial printing to achieve additional profitable growth beyond its medium-term targets. One key aspect is corrugated lath printing, which is flourishing at to a higher place-boilerplate rates thanks to long-term trends such as domicile-shopping too as more sophisticated and colorful outer packaging. Bolza-Schünemann says, "Nosotros have already started marketing the sheetfed flexo presses CorruFLEX and CorruCUT (with an integrated rotary die-cutter), both of which take been developed with a number of unique features. In early 2019, we will exist installing a CorruCUT organization at the airplane pilot customer Klingele." A further target market is 2-piece can printing. Dähn explains, "Equally a globally leading supplier of presses for 3-piece tin printing, nosotros want to aggrandize our profile by entering the ii-piece can market. Presented in May 2022 with a number of important advantages for users, the newly adult CS MetalCan printing for two-piece can decorating met with strong client involvement. Following ii contract signings, we are now able to embark intensive field-testing with the target of sales launch at the finish of 2018." In digital press, Koenig & Bauer sees an additional growth option every bit digitization no longer poses any commutation risks in the markets addressed by the visitor.
Adept group business performance in 2017
At € i,217.6 one thousand thousand, the grouping revenue reached the target corridor of upwardly to € 1.25 billion defined in the guidance. With acquirement upward 4.3% over the previous year (€ one,167.1 one thousand thousand), Koenig & Bauer fully achieved its mid-term organic acquirement growth rate of around 4% p.a., thus more than making upwards for the further decline of € 25 million in revenue from paper and commercial web presses. The group'due south new orders rose substantially by x.1% over 2022 (€ i,149.7 meg) to € i,266.3 meg. With orders up 29.7% over the previous year, the 4th quarter was specially strong. The volume-to-bill ratio came to ane.04, while order excess stood at € 606.2 million, upwards 8.7% on the previous yr.
EBIT margin of 6.7% exceeded 6% guidance for 2017
The increased acquirement in tandem with more service concern across the group caused the turn a profit rise. In improver to expenses for portfolio additions, new products and IT systems, earnings came under strain from production service provider KBA-Industrial Solutions and the measures to optimize flexible packaging press. Adjusted for the non-recurring income in the previous yr, EBIT climbed from € 62.9 meg to € 81.4 1000000. Driven past the positive earnings evolution and outlook for the group, a tax income of € 12.7 million arose again from the recognition of deferred tax assets. At € 81.ane million, group net turn a profit (previous year: € 82.ii million) translates into earnings per share of € 4.91 in 2022 (2016: € 4.98).
Dividend of € 0.90 per share proposed
"Thanks to the positive earnings performance and the retained profit generated past the property company Koenig & Bauer AG, nosotros are able to continue our dividend policy with a distribution rate of betwixt 15% and 35% of the group's net profit," says Bolza-Schünemann. Accordingly, the management lath and the supervisory board will be asking the shareholders to approve a dividend of € 0.90 per share at the annual full general meeting on 9 May 2018. This is equivalent to a dividend ratio of 18.iv% of group net profit.
Order and earnings momentum standing for sheetfed
Driven by innovative, bespoke solutions for folding carton and commercial printing equally well every bit a broader sales and service footprint in the markets of the future, order intake in the sheetfed segment, which as the largest segment is dominated past packaging press, rose by fifteen.2% over the previous year (€ 569.7 million) to € 656.ii million. Revenue climbed past vii.3% over 2022 (€ 615 million) to € 660.two million. EBIT increased from € 31.3 1000000 in the previous yr to € 37.5 million, with the EBIT margin widening from 5.1% to five.7%.
Digital & web investing in the markets of the future
Digital and spider web lodge intake and revenue fell short of the previous year primarily as a result of the expected farther refuse in orders for newspaper and commercial spider web presses. Segment earnings came under strain from optimization efforts for flexible packaging printing equally well every bit R&D expenses, resulting in an EBIT of € 4.iii meg, downwards on the previous year's effigy of € 0.5 1000000. Dähn states, "With the measures taken in flexible packaging printing, a turnaround is apparent, although it will be important to continue to take the right actions to close the gap between our visitor and the successful leaders of this attractive market."
Lodge intake, revenues and profit up in the special segment
Growth in orders for security printing, metal and glass/hollow container decorating besides as coding boosted gild intake by 16.1% to € 533.seven meg (2016: € 459.7 million). Acquirement grew by 5.3% from € 444.iii one thousand thousand in the previous year to € 467.9 million. Following a segment profit of € 44.3 million in the previous year, EBIT of € 53.vii million was recorded in 2017.
Stronger residual canvass and fiscal power
Cash flows from operating activities increased slightly from € 21.9 million in the previous year to € 23.8 million despite the higher cyberspace working upper-case letter. Post-obit the successful efforts to reduce working majuscule in large parts of the group, the measures already taken to optimize receivables and inventories in security press will not have short-term effects. The free cash flow of –€ 59.6 1000000 (2016: € 2.3m) was burdened past loftier investments (€ 48.5 million) and payment instalments (€ 36.8 million) made for the external funding of a office of the pension provisions. Equally well as the internal liquidity generated by operating business organisation, the group has access to credit facilities provided by a syndicate of banks. In addition to a guarantee facility of € 200 meg, the syndicated finance includes a revolving cash credit facility of € 150 million with an pick to increase it by € 50 million. The facilities have a term of five years plus 2 one-twelvemonth renewal options upward until December 2024. The solid balance-sheet structure was additionally improved with the increase in the equity ratio from 31.1% to 36.4%.
Group targets for 2018: Revenue growth of around 4% and EBIT margin around vii%
In the absence of whatsoever material deterioration in global economic and political weather condition for its international concern, K&B's Management Lath expects to achieve organic growth of around 4% in group revenue and an EBIT margin of effectually 7% in 2018.
As per Dähn, "In add-on to the favorable global economy and the outlook for the consistently growing packaging and industrial printing manufacture, our forecast is based on the 10.1% increase in lodge intake and the further gains in market share accomplished in all business fields. A potent basis is also provided past the 8.7% rise in the order backlog to € 606.2 meg and the progress made in the € 70 million EBIT increase projects past 2021. The incremental growth in the revenue share of service business to 30% and the performance comeback project in security printing should each contribute around € 20 million and the integrated production network and strategic purchasing each around € fifteen meg to earnings growth. At the same fourth dimension, we will be raising the prices of our entire product range past 3.7% effective 1 April 2022 in response to ascension costs. All the same, the targeted growth investments are leaving traces on our cost position. Our guidance for 2022 put us on track to achieving our EBIT margin target of 9% and an organic acquirement growth rate of around 4% p.a. by 2021. We would wait to accomplish the lower edge of our EBIT guidance of betwixt 4% and 9% in the issue of more than adverse conditions in the global economy and the end markets, particularly as a result of volatile security printing business."
In the first quarter of 2018, Koenig & Bauer will be completing the fractional external funding of its pension provisions commenced in 2022 and initially planned for a menstruum of five years. The final payment will exist in the same corporeality as all the previous payments made in 2017. At the time of transfer of the claims to the beneficiaries, the reinsurance claims recognized within fiscal receivables will exist netted confronting alimony provisions. This reduction in the balance sheet will additionally amend the equity ratio and will bring it closer to the target of over 45%.
Source: https://packagingsouthasia.com/packaging-production/k-b-achieves-or-exceeds-2017-guidance-2/
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