Koenig & Bauer Ag · XETR:SKB
Koenig & Bauer — Q3 2011 Earnings Presentation
38 slides from Koenig & Bauer's earnings presentation, Dec 9, 2011
Slide 1: KBA financial press conference
People & Print KBA financial press conference 9 December 2011 in Frankfurt am Main
Slide 2: Programme
Programme • Opening address Claus Bolza-Schünemann, president & CEO, Koenig & Bauer AG • Current market situation and perspectives Claus Bolza-Schünemann • KBA’s business activities and outlook Dr Axel Kaufmann, CFO, Koenig & Bauer AG • KBA’s strategies Claus Bolza-Schünemann © KBA 2
Slide 3: Current market situation and perspectives
People & Print Current market situation and perspectives Claus Bolza-Schünemann, president & CEO
Slide 4: Developments in print markets
Developments in print markets • Industrialised countries: stagnation or decline in classic print media following growth of online market • Threshold countries: rising levels of literacy and prosperity are driving demand for print (China, India, Brazil etc.) • Packaging, label and film printing are c
Slide 5: Global press market is stagnating
Global press market* is stagnating Normal pre-crisis level approx. €9bn p.a. Market volume in 2010 approx. €4.4bn Web offset Web offset Sheetfed offset Flexo, gravure, other Newspaper Commercial approx. €420m approx. €270m €3bn €730m Market volume in 2011 approx. €4.6bn Web offset Web offset Sheetfe
Slide 6: Situation in the sheetfed offset press market
Situation in the sheetfed offset press market • The sovereign debt crisis is hampering investment and financing in Europe (especially in southern Europe) • More restrictive monetary policies are slowing demand in dynamic markets like China, though there are recent indications of an upturn • US print
Slide 7: Global market shares – sheetfed presses
Global market shares – sheetfed presses Chinese Chinese Other vendors vendors Japanese Other vendors Japanese 10% KBA vendors 10% KBA 17% 18%*** 7% 9% Komori Komori 14% 2010 13%** 2011 Heidelberg Heidelberg 40% 41%**** Manroland Manroland 12% 9%* * Loss of market share is contributing to manroland’s
Slide 8: Market forecast – sheetfed offset presses to 2014
Market forecast – sheetfed offset presses to 2014 6 5.5 5.3 5 5 4.8 4.4 4.4 4 3.8 3.7 3.7 3.4 €m 3 3.2 3.0 2.6 2 1 • Post-2012 growth largely depends on Drupa boosting demand, a political resolution of the sovereign debt issues, and the global economy 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2
Slide 9: Situation in the web offset press market
Situation in the web offset press market* • Global orders for newspaper presses in 2011 are over one-third down on 2010 • Demand for commercial presses is marginally higher than in 2010 • The web offset market in 2010 was over 60% smaller than before the financial crisis, and just one-fifth the size
Slide 10: Market share – web offset presses
Market share – web offset presses* Other 8% Other 20% KBA KBA 30% 32% Goss 25% 2010 2011 Goss 22% Manroland Manroland 28% 35% KBA’s and manroland’s shares of the newspaper and commercial web offset market are roughly equal. KBA has been the no. 1 vendor of newspaper presses for some years, manroland
Slide 11: Market forecast – web presses to 2014
Market forecast – web presses to 2014* 2500 2358 2130 2000 1907 1864 1677 1500 1562 €m 1000 1070 780 730 680 690 620 630 500 • Post-2012 growth largely depends on Drupa boosting demand, a political resolution of the sovereign debt issues, and the global economy 0 2002 2003 2004 2005 2006 2007 2008 2
Slide 12: Situation in the special press market
Situation in the special press market • KBA’s strong standing in less volatile sectors such as security printing, metal decorating and coding devices distinguishes it from its main rivals • High-growth, profitable niche activities help to stabilise sales and profits at KBA and enabled the group to r
Slide 13: Security printing
Security printing • Technology and market leader • Specialised printing presses (steel-plate engraving, intaglio etc.) for printing banknotes • Specialised security technology and systems for pre-press, quality inspection, finishing • Banknote design service © KBA 13
Slide 14: Metal decorating
Metal decorating • Systems provider for printing, coating and drying metal sheets, complete with logistics systems • Air-purification systems • Main applications are for food, cosmetics (Nivea tins) and cigar packaging etc. • Global leader in premium-grade printing and coating systems © KBA 14
Slide 15: Marking and coding
Marking and coding Technology includes - inkjet - laser - hot stamping - thermal transfer on diverse substrates such as synthetics, plastic film, glass, ceramics, board etc. © KBA 15
Slide 16: KBA's business activities and outlook
People & Print KBA’s business activities and outlook Dr. Axel Kaufmann, CFO
Slide 17: Key data for third quarter 2011
Key data for third quarter 2011 €m Q3 Q3 2010 2011 Change Order intake 321.9 472.8 +46.8% Sales 298.9 276.0 -8.3% Book-to-bill ratio 1.08 1.71 +58.3% EBT 15.3 -15.6 -€30.9m Free cash flow 0.4 40.7 +€40.3m © KBA Group as per IFRS 17
Slide 18: Nine-month figures for the KBA Group 2011
Nine-month figures for the KBA Group 2011 • New orders up 15.4% • Sales up on prior year • Order backlog above €800m for the first time since mid-2008 Order intake Sales Order backlog 01.01. - 30.09. 01.01. - 30.09. 31.12.10/30.09.11 €m 1,155.7 Sheetfed Offset presses 1,200 +15.4% Web and special pr
Slide 19: Q3 had detrimental impact on nine-month figures
Q3 had detrimental impact on nine-month figures • Personnel provisions, up-front outlay for Drupa, project delays • By the end of September we had only achieved around 60% of our annual sales target Q1 - Q3 Q1 - Q3 2010 2011 Gross profit margin 27.1% 22.5% Operating loss -€2.0m -€20.4m Earnings befo
Slide 20: Emerging markets dominate order intake
Emerging markets dominate order intake Regional breakdown of sales Order intake by region 30.09.2011 30.09.2011 Africa/ Latin America Germany Germany 10% 11.4% 15.4% Africa/ Latin America 30% Rest of Asia/Pacific Europe 26.7% 27% Rest of Europe 36.1% Asia/Pacific North 26% North America America 10.4
Slide 21: KBA Group maintains a strong financial profile
KBA Group maintains a strong financial profile 31.12.2010 30.09.2011 Change Above-average equity ratio 39.6% 36.7% -2.9% Bank debts reduced €43.1m €36.2m -16% Liquid assets substantially higher €91m €128.1m +40.8% Comfortable net liquid balance +€47.9m +€91.9m +91.9% Free cash flow doubled €20.4m €4
Slide 22: Excellent free cash flow (FCF) performance
Excellent free cash flow (FCF) performance 50 40 36.3 40.7 30 20.4 15.4 20 13.5 10 4.9 -1.1 0.4 €m 0 -10 -4.6 -20 -23.5 -30 2009 -43.4 2010 -40 2011 Q1 Q2 Q3 Q4 -50 © KBA Group figures as per IFRS 22
Slide 23: Restructuring programme on schedule
Restructuring programme on schedule (current status) Immediate redundancies, Personnel cuts cancellation agreements Σ Impact on 49.21 30.81 earnings Phased retirement in €m contracts ~700 Medium-term relocation, reduction 250 485 Immediate 2482 redundancies Frankenthal 500 Phased retirement Würzburg
Slide 24: Group prognosis for 2011
Group prognosis for 2011 • Strong fourth quarter in sales and income expected, lost ground will be regained, particularly in our project business • Moderate lift in Group sales compared to prior year is realistic • Sales in volume markets are below target, but niche markets are making a substantial
Slide 25: KBA: strong position among press manufacturers
KBA: strong position among press manufacturers 2010 or 2010/11 Earnings Earnings Free cash Equity Net financial business year per share before taxes flow ratio position €0.76 1,3% €20.4m 39,6% +€47.9m -€0.83 -5,4% €75m 32,9% -€247m -€0.80 -7,4% -€58m 77,0% +€343m €0.24 2,2% €6.3m 50,0% -€5.9m €0.37
Slide 26: KBA share performance, SDAX, MDAX and DAX
KBA share performance, SDAX, MDAX and DAX 01.01.2009 to 07.12.2011 SDAX and MDAX: virtually identical course KBA shares DAX © KBA 26
Slide 27: Outlook for 2012
Outlook for 2012 • Moderate organic growth in volumes and orders with a book-to-bill ratio of >1 • Modest lift in revenue, notwithstanding pricing pressures and restructuring costs • Our short- and medium-term view of revenue is based on a profitable product mix and the positive impact on opex of ca
Slide 28: KBA financial calendar 2012
KBA financial calendar 2012 • One-on-one discussions with investors 1Q • February: preliminary figures for 2011 • 30 March: publication of 2011 financial statements • 15 May: first-quarter report 2012 2Q • 15 May: press conference for analysts at Drupa • 14 June: AGM • 14 August: half-yearly report
Slide 29: KBA's strategies
People & Print KBA’s strategies Claus Bolza-Schünemann, president & CEO
Slide 30: KBA: premier innovator in press engineering
KBA: premier innovator in press engineering • The latest Industry Scorecard issued by the US Patent Board™ for Heavy Industrial Equipment was published in the Wall Street Journal on 9 September • Of the 119 plant manufacturers in the USA that were listed, KBA ranked 21st • The highest ranking of all
Slide 31: Group realignment is progressing well
Group realignment is progressing well • Spreading risk by diversifying into volume and niche markets has paid off • KBA was the only German press manufacturer to weather the crisis with no state aid or external funding • Innovative products and a skilled workforce ease entry into new lines of busine
Slide 32: New business lines: high-performance digital presses
New business lines: high-performance digital presses • Under the agreement with RR Donnelley we shall develop, manufacture and distribute our own brand of digital presses • The aim is to integrate offset and digital systems more closely • Primary targets: midsize and larger printing plants • Focus o
Slide 33: KBA on current events in the German press sector
KBA on current events in the German press sector • Consolidation among press vendors worldwide has failed to eliminate excess capacity in offset • The overhang in web press capacity is larger than in sheetfed because demand has declined more sharply • Not all vendors have downsized sufficiently • KB
Slide 34: Diversification into new business lines
Diversification into new business lines • After careful scrutiny we have discarded two business lines – water conditioning and solar technology – which we had previously contemplated • Another, digital printing technology, was adopted in March • Manufacturing presses for printing packaging has long
Slide 35: KBA's strategy in China
KBA’s strategy in China • Strong position in two premium markets – packaging and book printing – with our powerful medium- and large-format Rapidas • Presence in high-performance commercial sector with new Rapida 105 and Rapida 75E • 2010: acquisition of Mabeg Shanghai, a manufacturer of press compo
Slide 36: Service and consumables still offer potential for growth
Service and consumables still offer potential for growth • There is still plenty of untapped sales and earnings potential in after-sales service and consumables • Our programme for exploiting this potential includes: - Retrofits, upgrades, maintenance and service contracts - Online facility for orde
Slide 37: KBA at Drupa 2012 from 3 to 16 May in Düsseldorf
KBA at Drupa 2012 from 3 to 16 May in Düsseldorf • 3,400m² stand, as in 2008 • New sheetfed offset presses in all formats • Hybrid offset/digital systems • New commercial and newspaper web presses • Launch of the inkjet web press developed in association with RR Donnelley • We shall be the only clas
Slide 38: Koenig & Bauer AG www.kba.com
People & Print Koenig & Bauer AG www.kba.com