With its strategic focus on the growth market of packaging, Koenig & Bauer is on track to reduce the dependency on politically volatile and lumpy security printing business by increasing revenue and earnings in this area. Through the acquisition of Iberica and Duran, the joint venture with Durst as well as various partnerships in the software field, the portfolio for packaging printing markets was expanded further.
Following a testing phase of the CorruCUT sheetfed flexo press for analogue direct printing on corrugated board, the prestigious pilot customer and development partner Klingele accepted the newly developed machine after a demanding factory acceptance test. The machine is now producing in two shifts at the Klingele plant in Delmenhorst near Bremen, Germany. With the CorruFLEX order from Thimm Packaging Systems, Koenig & Bauer received a strategically important follow-up order in corrugated board printing. Interprint ordered the third RotaJET for digital decor printing. After the sixth press sale for digital decor printing and the key order from Tetra Pak for digital full-colour beverage carton printing, the RotaJET digital printing platform is particularly successful in the market. The service initiative launched in 2016 is also bearing fruit. The service revenue share in the Koenig & Bauer group increased significantly from 25.9% in the previous year to 28.2%.
CEO Claus Bolza-Schünemann, said, “The end markets we address are fundamentally intact with packaging printing showing good structural growth. However, growth requires normal business years. Due to the increasing economic uncertainty, we decided to invest significantly in reducing manufacturing costs and to join forces more strongly within the group. With these measures, we aim to position ourselves to a greater extent independent of the economy and more competitively for the future.”
Dr Andreas Pleßke, the Management Board member responsible for the Performance 2024 programme explains further details, “With the Performance 2024 programme, we are currently targeting reducing costs by over €70m by 2024 with one-off costs of €30m to €40m. We expect the package of measures to be expanded further. The focus of the various projects aimed at optimising group-wide structures and processes is on considerably reducing manufacturing costs to achieve a significant improvement in the earnings situation in the new machine business. This includes design-to-cost projects, purchasing optimisations and some further measures. Bundling tasks as shared services as well as the reduction of holding costs and SG&A expenses are also on the agenda.”
CFO Dr Mathias Dähn adds, “In addition to the cost-cutting projects, the efficiency programme aims to reduce lead times in assembly and accelerate customer acceptance. In addition to shorter delivery times, this will lead to a drop in working capital and a cash flow improvement. Moreover, we work with further activities and a sophisticated controlling of all measures with permanent monitoring on the significant reduction in working capital. We see considerable potential for improvement, particularly in security printing in terms of inventories and receivables through optimised sales management and stepping up export financing. The comprehensive package of measures also aims at a more even distribution of revenue over the year in the Sheetfed segment.”