Metamor[e]phosis
Statement | First Quarter 2024
Statement Q1 2024
Index
3 Q1 at a glance
4 Group figures
5 Business environment
6 Earnings, finances and assets
11 Performance of the segments
12 Risks and opportunities
13 "Spotlight" focus programme
15 Outlook
16 Additional information
2
Statement Q1 2024
Q1 at a glance: Koenig & Bauer reporting its figures for the first quarter of 2024 and announcing further details of the "Spotlight" focus programme
• As expected, Group revenue of €253.2m (previous year: €281.0m) and EBIT of €-10.2m (previous year: €-3.2m) in the first quarter of 2024 lower than in the previous year in a challenging market environment
• Sheetfed with an encouraging sequential improvement in order intake, Digital & Webfed
with a slight increase in revenue, Special set to benefit from a high order backlog asthe year continues
• "Spotlight" focus programme particularly aims at enhancing earnings and efficiency in the Digital & Webfed and Special segments and requires governance adjustments
• Further "Spotlight" measures planned for Group-wide projects and at the Holding
• Improvement in free cash flow achieved
• At €242.9m as of 31 March 2024, order intake was 19.4% below the previous year'sfigure, in line withexpectations
• Strong order backlog of €901.2m (previous year: €970.6m) provides a solid basis for further growth in 2024
• The overall book-to-bill ratio stood at 0.96 in the first quarterof 2024, just belowthe previous year's figureof1.07
• Outlook for 2024 confirmed: operating EBIT margin and revenue stable at the previous year's level; "Spotlight" will also help the Group achieve its EBIT margin target of 6-7% by 2026 on Group revenue of €1.5bn
3
Statement Q1 2024
Group key figures
in €m | Q1 2023 | Q1 2024 | Change |
Order intake | 301.2 | 242.9 | -19.4% |
Revenue | 281.0 | 253.2 | -9.9% |
Earnings before interest and taxes (EBIT) | -3.2 | -10.2 | -218.8% |
EBIT margin | -1.1% | -4.0% | |
Net group loss | -5.7 | -16.6 | -191.2% |
Earnings per share in € | -0.34 | -1.01 | -197.1% |
Free Cashflow | -33.4 | -3.2 | 90.4% |
in €m | 31.03.2023 | 31.03.2024 | Change |
Order backlog | 970.6 | 901.2 | -7.2% |
Net Working Capital | 342.5 | 362.1 | 5.7% |
Net financial position | -99.8 | -148.6 | -48.9% |
Employees | 5,542 | 5,673 | 2.4% |
in €m | 31.12.2023 | 31.03.2024 | Change |
Balance sheet total | 1,427.1 | 1,456.6 | 2.1% |
Equity | 410.0 | 393.7 | -4.0% |
Equity ratio | 28.7% | 27.0% | |
4
Statement Q1 2024
Business environment
The global economy remains remarkably resilient, with growth remaining stable, while inflation is returning to target levels, writes the International Monetary Fund (IMF) on 16 April 2024 in its latest global economic out- look. Despite many "gloomy forecasts", the world has been spared a reces- sion, the IMF's chief economist comments, while also referring to lasting problems. "Inflationary trends are encouraging, but we are not yet where we need to be," says Pierre-Olivier Gourinchas, adding that, on a positive note, the high inflation did not trigger an uncontrolled wage-price spiral. Nevertheless, global economic growth is historically weak according to the IMF. This is due, for example, to short-term factors such as higher borrow-
ing costs and the ongoing fallout from the war in Ukraine as well as the
pandemic. However, the IMF also sees risks that may place a damper on
growth. New price increases in the wake of geopolitical tensions could lead
to permanently higher key interest rates. The IMF also warns that mount-
ing geopolitical fragmentation across supply chains could result in both
lower growth and higher inflation. If growth in China stalls permanently,
this could also have an adverse effect on the country's trading partners, according to the fund.
The IMF forecasts global growth of 3.2% this year, citing, among other
things, the resilience of the economy in the United States and in a num-
ber of emerging markets as reasons. It has thus revised its global growth
forecast slightly upwards since January. For Germany, the IMF forecasts
the weakest growth of all the leading western G7 industrialised countries
this year. Leading economic research institutes expect even slower growth of 0.1% for Germanyin the current year.
IWF: Year-on-year gross
2023 | 2024 | Deviation to | |
Country/region | Estimate | January 2024 | |
Global | 3.2 | 3.2 | 0.1 |
Developed economies | 1.6 | 1.7 | 0.2 |
Eurozone | 0.4 | 0.4 | -0.1 |
Germany | -0.3 | 0.2 | -0.3 |
France | 0.9 | 0.7 | -0.3 |
Italy | 0.9 | 0.7 | 0.0 |
Spain | 2.5 | 1.9 | 0.4 |
United Kingdom | 0.1 | 0.5 | -0.1 |
United States | 2.5 | 2.7 | 0.6 |
Japan | 1.9 | 0.9 | 0.0 |
Emerging markets and developing countries | 4.3 | 4.2 | 0.1 |
ASEAN* | 4.1 | 4.5 | -0.2 |
Brazil | 2.9 | 2.2 | 0.5 |
China | 5.2 | 4.6 | 0.0 |
India** | 7.8 | 6.8 | 0.3 |
Russia | 3.6 | 3.2 | 0.6 |
*) Indonesia, Malaysia, Philippines, Thailand, Vietnam. **) Fiscal year from 1 April to 31 March
VDMA: Order intake and revenue printing presses
20 | |||||
10 | |||||
0 | |||||
-10 | |||||
-20 | |||||
Order | Germany | Foreign | Revenue | Germany | Foreign |
intake | countries | countries |
% Change to previous year
5
Statement Q1 2024
According to the German Mechanical and Plant Engineering Association (VDMA), plant and machinery orders declined by 13% in price-adjusted terms in the first three months of 2024 compared to the corresponding period of the previous year, with revenue in the mechanical engineering sector falling 8% short of the previous year's figure. "At the moment, order intake is still mostly in the doldrums. Economic researchers are expecting a turnaround in the second half of the year. However, as mechanical engineering is a late cyclical, it may take a while for the slump in orders to be overcome," explains VDMA chief economist Ralph Wiechers. "On a positive note, inflation rates are currently falling further and further," he adds.
Order intake in the printing press segment fell 5% short of the previous
Order backlog Order intake per quarter
1200
1000
800
600
400
200
€m
year in the first three months of 2024. Revenue, on the other hand, increased by 2%.
Earnings, finances and assets
Earnings
At €242.9m as of 31 March 2024, order intake was 19.4% below the previous year's figure of €301.2m, in line with expectations. As forecast, the Sheetfed segment in particular saw a further sequential improvement following the muted order intake in the third quarter of 2023. Order intake in
Q1 22 | Q2 22 | Q3 22 | Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
Revenue per quarter
€m
500
400
300
200
100
Q1 22 | Q2 22 | Q3 22 | Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
the Digital & Webfed segment reflected the current temporary weakness in the market for corrugated board. Following the orders received in the Banknote Solutions business unit in the fourth quarter of 2023 from the United States Bureau of Engraving and Printing, order intake in the Special segment was significantly lower.
EBIT per quarter
30
15
-0
-15
€m
Q1 22 | Q2 22 | Q3 22 | Q4 22 | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
6
Statement Q1 2024
Group revenue came to €253.2m in the first quarter of 2024, thus falling 9.9% short of the same period in the previous year (€281.0m). This was particularly due to reduced order intake in the Sheetfed segment in the third quarter of 2023 as well as a lower percentage of completion (POC) achieved in production in the Banknote Solutions business unit compared to the previous year. As a result, revenue was down on the previous year's figures in the Sheetfed and Special segments but was slightly higher in the Digital & Webfed segment compared with the same period of the previous year. In 2024, 36.6% of revenue was generated from service business (previous year: 31.4%).
The Group export ratio contracted slightly from 88.7% to 86.8%, with the share of business in Asia/Pacific falling to 17.2% (previous year: 18.8%) and
Group income statement
in Latin America and Africa to 9.8% (previous year: 16.0%). The proportion
of revenue accounted for by Germany (13.2%, previous year: 11.3%), the
rest of Europe (32.1%, previous year: 28.5%) and North America (27.7%,
previous year: 25.4%) was up on the previous year.
At €901.2m as of 31 March 2024, order backlog was 7.2% below the good figure of €970.6m recorded in the previous year, dropping by 1.1% over the end of 2023 and providing a solid basis for further growth in 2024. Gross profit fell by 13.0% to €66.9m in the period under review, resulting in a gross margin of 26.4% (previous year: 27.4%). At €16.0m, R&D expenses were exactly the same as in the previous year. Selling expenses dropped slightly to €37.3m (previous year: €37.6m).Administrative expenses increased marginally by €0.6m to €25.6m. Net other incomecame to
First Quarter | |||
in €m | 2023 | 2024 | |
Revenue | 281.0 | 253.2 | |
Cost of sales | -204.1 | -186.3 | |
Gross profit | 76.9 | 66.9 | |
Research and development costs | -16.0 | -16.0 | |
Distribution costs | -37.6 | -37.3 | |
Administrative expenses | -25.0 | -25.6 | |
Other income and expenses | -1.5 | 2.1 | |
Other financial results | - - | -0.3 | |
Earnings before interest and taxes (EBIT) | -3.2 | -10.2 | |
Interest result | -3.3 | -6.6 | |
Earnings before taxes (EBT) | -6.5 | -16.8 | |
Income tax expense | 0.8 | 0.2 | |
Net loss | -5.7 | -16.6 | |
attributable to owners of the Parent | -5.6 | -16.7 | |
attributable to non-controlling interests | -0.1 | 0.1 | |
Earnings per share (in €, basic/dilutive) | -0.34 | -1.01 |
7
Statement Q1 2024
€2.1m, compared with net other expenses of €-1.5m in the previous year. Among other things, this was due to currency-translation effects. Overall, earnings before interest and taxes (EBIT) fell by €7.0m over the same period in the previous year to €-10.2m (previous year: €-3.2m), yielding an EBIT margin of -4.0% (previous year: -1.1%). This was particularly due to the aforementioned decline in order intake in the third quarter of 2023, which also led to negative volume and mix effects (around €10.5m). Both margin effects (around €2.0m) and functional cost effects (around €2.0m) improved. After net interest expense of €-6.6m (previous year: €-3.3m),earnings before taxes (EBT) came to €-16.8m (previous year: €-6.5m). After income taxes of €0.2m, the Group thus posted a net loss of €-16.6m in the first quarter of 2024 (previous year: €-5.7m). This translates into proportionate earnings per share of €-1.01 (previous year: €-0.34).
Group cash flow statement
Finances
Cash flow from operating activities amounted to €5.9m (previous year: €-22.9m). This mainly reflected the slower increase in inventories compared to the same period in the previous year as well as a sharper decrease in receivables. Prepayments received rose at a slower pace than in the same period in the previous year. At €-9.1m, cash flow from investing activities was slightly up on the previous year's figure of €-10.5m.
On balance, free cash flow amounted to €-3.2m (previous year: €-33.4m).Net working capital stood at €362.1m as of 31 March 2024 (previous year: €342.5m). Cash flow from financing activities came to €22.7m (previous year: €-16.4m) and was also affected by changes in the syndicated loan. At the end of March 2024, cash and cash equivalents were valued at €116.9m (previous year: €81.8m). Adjusted for bank liabilities of €265.5m, net financial debt stood at €-148.6m (previous year: €-99.8m), compared to €-147.6m at the end of 2023.
First Quarter
in €m | 2023 | 2024 |
Earnings before taxes (EBT) | -6.5 | -16.8 |
Non-cash transactions | 15.7 | 15.2 |
Gross cash flow | 9.2 | -1.6 |
Changes in inventories, receivables and other assets | -52.9 | -9.8 |
Changes in provisions and payables | 20.8 | 17.3 |
Cash flows from operating activities | -22.9 | 5.9 |
Cash flows from investing activities | -10.5 | -9.1 |
Free cash flow | -33.4 | -3.2 |
Cash flows from financing activities | -16.4 | 22.7 |
Change in funds | -49.8 | 19.5 |
Effect of changes in exchange rates | -0.6 | 1.0 |
Funds at beginning of period | 132.2 | 96.4 |
Funds at end of period | 81.8 | 116.9 |
8
Statement Q1 2024
Assets
A total of €12.5m (previous year €7.8m) was spent on property, plant and equipment and intangible assets in connection with construction and IT projects in the period under review. Capital spending includes capitalised development costs of €1.1m (previous year: €1.1m). This was accompanied by depreciation and amortisation expense of €10.3m (previous year: €10.5m). All in all, intangible assets and property, plant and equipment increased slightly from €411.1m as of 31 December 2023 to €411.9m. Non-currentassets decreased by €5.1m to €543.1m compared to the end of 2023, mainly due to the reduction in financial assets and other financial receivables. Current assets increased by €34.6m over 31 December 2023 to €913.5m (previous year: €878.9m). At the same time, inventories
rose by €26.5m, other assets by €24.6m and cash and cash equivalents by €20.5m. On the other hand, trade receivables dropped by €34.6m. At €1,456.6m, the Group's total assets exceeded by €29.5m the figure of €1,427.1m recorded at the end of 2023. The Group net loss contributed significantly to a reduction in equity to €393.7m. Reflecting this, the equity ratio contracted to 27.0% (previous year: 28.7%). Provisions for retirement benefits dropped slightly from €104.8m as of the end of 2023 to €103.8m as of 31 March 2024 due to the slight increase in the discount rate for domestic retirement benefits from 3.41% as of 31 December 2023 to 3.49% as of 31 March 2024. Non-currentliabilities rose by €39.9m, mainly due to increased financial liabilities. Current liabilities climbed by €5.9m, primarily as a result of the higher prepayments received.
9
Statement Q1 2024
Group balance sheet
in €m | 31.12.2023 | 31.03.2024 |
Assets | ||
Non-current assets | ||
Intangible assets, property, plant and equipment | 411.1 | 411.9 |
Investments and other financial receivables | 25.2 | 19.7 |
Investments accounted for using the equity method | 15.1 | 14.7 |
Other assets | 3.6 | 3.2 |
Deferred tax assets | 93.2 | 93.6 |
548.2 | 543.1 | |
Current assets | ||
Inventories | 426.8 | 453.3 |
Trade receivables | 156.2 | 121.6 |
Other financial receivables | 41.3 | 38.7 |
Other assets | 154.3 | 178.9 |
Securities | 3.9 | 4.1 |
Cash and cash equivalents | 96.4 | 116.9 |
878.9 | 913.5 | |
Balance sheet total | 1,427.1 | 1,456.6 |
in €m | 31.12.2023 | 31.03.2024 | |
Equity and liabilities | |||
Equity | |||
Share capital | 43.0 | 43.0 | |
Share premium | 87.5 | 87.5 | |
Reserves | 278.0 | 261.6 | |
Equity attributable to owners of the Parent | 408.5 | 392.1 | |
Equity attributable to non-controlling interests | 1.5 | 1.6 | |
410.0 | 393.7 | ||
Liabilities | |||
Non-current liabilities | |||
Pension provisions and similar obligations | 104.8 | 103.8 | |
Other provisions | 37.0 | 36.7 | |
Bank loans | 191.2 | 231.1 | |
Other financial payables | 26.0 | 24.1 | |
Other liabilities | 5.4 | 6.0 | |
Deferred tax liabilities | 71.5 | 74.1 | |
435.9 | 475.8 | ||
Current liabilities | |||
Other provisions | 89.7 | 83.7 | |
Trade payables | 79.3 | 83.4 | |
Bank loans | 52.8 | 34.4 | |
Other financial payables | 85.8 | 98.2 | |
Other liabilities | 273.6 | 287.4 | |
581.2 | 587.1 | ||
Balance sheet total | 1,427.1 | 1,456.6 |
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KBA - Koenig & Bauer AG published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 05:22:04 UTC.