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Koenig & Bauer expects to break even in 2021

With a solid order backlog of more than €630m, Koenig & Bauer expects to achieve organic revenue growth of around four per cent and break even at the EBIT level in 2021.

The Koenig & Bauer Group achieved revenue of €1.0bn in 2020 (2019: €1.2bn) despite the challenges posed by the Covid-19 pandemic. The 17.4 per cent decline in revenue reflects the measures adopted by governments worldwide in 2020 to halt the spread of the Covid-19 pandemic. Travel restrictions in particular hampered international sales activities as well as order and project execution. Service business accounted for about 30 per cent of the group’s revenue in 2020 against the backdrop of the pandemic. This means that the target of 30 per cent was reached, albeit on the basis of lower new press business than in the previous year. The 14.6 per cent decline in order intake to €975m (2019: €1.1bn) is also due to Covid-19-related constraints on global economic activity and customers’ reluctance to invest in view of reduced forward planning visibility.

However, the decline in Koenig & Bauer’s revenue and order intake in 2020 was much less pronounced than for the printing press industry as a whole (24.2% decline in revenue; 21.9% decline in order intake), according to figures released by industry association VDMA (German Machinery and Plant Manufacturers’ Association). Koenig & Bauer’s order backlog as of 31 December 2020 was valued at €632m, down 7.9 per cent on the previous year (31 December 2019: €686m).

Dr Andreas Pleßke, CEO of Koenig & Bauer AG, explains, “Looking at order intake, we can see that the Koenig & Bauer Group held up better in the difficult year of 2020 than our industry as a whole. Despite all due caution given the still very uncertain economic conditions, we take this as a sign that we are focusing on the right end and future markets with our range of presses and services. For example, corrugated-board printing could experience a significant boost in the coming years given the growth in e-commerce. Packaging printing for food, cosmetics and pharmaceutical products, for example, is also proving to be an intact and growing market.”

Despite the still limited forward visibility with respect to the impact of the Covid-19 pandemic on the Koenig & Bauer Group’s business environment and the travel restrictions currently in place in this connection, the Company anticipates slight growth in business in 2021. This projection assumes that progress made in vaccinations that also provide protection from the Covid-19 virus mutations will allow the restrictions to be lifted.

Against this backdrop, Koenig & Bauer projects slight organic revenue growth of around four per cent to €1.07bn in 2021.