Koenig and Bauer has released its audited financial results for 2024, alongside the claim that it has met its financial expectations, though this really isn’t the full picture despite the company having revised those expectations back in November.
The upbeat tone of the accompanying press release is based on the revenue of €1,274.4 million, though this was slightly down on the previous year’s revenue of €1,326.8 million. Inexplicably, the gross profit fell from €347.5 million in 2023 to €295 million in 2024. The operating Earning Before Interest and Taxes was a loss of €35.1 million, though Koenig and Bauer lists this as a profit of €25.8 million once adjusted for extraordinary items, also down on the previous year’s €29.9 million. This translated into Earnings Before Taxes of a loss of €59.2 million, compared with a profit of €13 million in 2023. The final net figure is a significant loss of €69.9 million, especially when considered against the profit of €2.8 million from the previous year.
Koenig and Bauer has blamed most of this loss on relatively weak order intake in Q3 2023 in the Sheetfed segment and issues in the Banknote Solutions business around a lower percentage of completed orders compared to the previous year for delivery-related reasons, adding that this also caused negative volume and product mix effects of €4.2 million. The group also noted that interest rates were higher than the previous year, leading to its interest payments leaping from €16.9 million to €24.1 million.
The adjustments to the operating EBIT include costs of €10.5 million for Drupa and €50.4 million for the ‘Spotlight’ restructuring program. The Spotlight program exceeded its €45 million budget, partly because of the decision to discontinue the CS MetalCan project for two-piece beverage can printing, which had a roughly €5.4 million effect on earnings. Instead, the MetalPrint business will now focus on digital print opportunities.
All the main divisions saw a drop in their profits. The sheetfed division recorded revenues of €734.8 million, down from €779.8 million in 2023, with a drop in the sale of presses but an increase in parts and services. The gross profit fell slightly from €185.7 million to €184 million but the EBIT dropped significantly from €29.8 million to €17.1 million. The figures did improve in the fourth quarter. The sheetfed division in particular saw orders for €220.8 million, up 45.5% year on year.
The Digital and Webfed division recorded revenue of €157.6 million, down from €172.3 million. But the gross profit fell off a cliff, from €21.8 million in 2023 to €1.4 million in 2024, while the EBIT fell from a loss of €23.9 million to a greater loss of €53.3 million. The Digital and Webfed segment struggled from a temporary weakness afflicting the market for corrugated board, though orders more than doubled in the second half of the year.
The Special division recorded revenue of €407.4 million, down from €413.7 million, with a small drop in both presses and servicing but a small increase in spare parts. The gross profit fell from €138.1 milliion in 2023 to €107.4 million in 2024, with the EBIT dropping from a profit of €23 million to a loss of €5.2 million.
However, on the plus side, the group did record orders of €1,402.7 million in 2024, which is an 8.9% increase year-on-year. This meant that the backlog rose to €1,039.8 million, up 14.1% year-on-year, with a book-to-bill ratio of 1.10. However, this is not evenly distributed across all segments, though it is worth highlighting the Special segment, which increased its order intake by 0.6% to €541.9 million. Orders received by Coding, which includes marking solutions for all industries, and Kammann, which covers direct decoration of hollow bodies made of glass and plastic, were lower than in the previous year. On the other hand, the order intake at MetalPrint, for metal packaging, was higher. At Banknote Solutions, which deals with banknote and security printing, the order intake repeated the previous year’s level, which again included tenders from the Bureau of Engraving and Printing in Washington DC. Overall, revenue fell slightly by 1.5% to €407.4 million.
Koenig and Bauer’s Rapida 76 can produce up to 18,000 sheets per hour Photo K&BThe group also realised improved cash flow from its operating activities at €73.4 million, up from a loss of €31.8 million in 2023. This was mainly due to active net working capital management, under which inventories were run off and receivables and other assets reduced. The group ended the year with a net financial debt of €-128.1 million, an improvement on the previous year’s €-147.6 million. The Group has access to syndicated credit facilities of €500 million from a consortium of banks. In addition to a revolving cash facility of €300 million, the syndicated finance includes a guarantee facility of €200 million.
Restructuring program
At the end of 2023 Koenig and Bauer established its ‘Spotlight’ program to focus on specific business areas within the group, in order to optimize their structure and costs to increase their profitability. This program is now examining how to optimize the group’s overall organizational structure.
Koenig and Bauer has a decentralised structure, made up of a holding company with 37 subsidiary companies. Up until the end of 2024, these companies were split across three main divisions: Sheetfed, Digital and Webfed, and Special.
The new structure that has emerged at the end of 2024 will see this cut to two main divisions. Thus the Sheetfed division was folded into a new Paper & Packaging Sheetfed Systems (P&P) segment. This includes the joint venture with Durst as well as moving the Celmacch Chroma series from Digital & Webfed. The rest of the Digital & Webfed portfolio will be combined with the Special segment to form a new Special & New Technologies (S&T) segment. This also includes all the newspaper printing as well as the partnership with the Volkswagen subsidiary PowerCo for the development of dry coating for battery cell production.
At the same time, the New applications unit, which includes inspection systems and product safety, will be spun off from security printing into an independent Vision & Protection business unit. Also, the Digital Unit, which was previously organized as a cross-sectional function within the holding company, will operate as an independent business unit called Kyana inside the S&T segment. This business unit will thus be home to the digital solutions of the two former Digital & Webfed and Special segments including the Kyana portal.
CEO Dr Andreas Pleßke commented, “For Koenig & Bauer, 2024 was a year of change and opportunities – and this transition is currently continuing. For over 200 years, Koenig & Bauer has been combining innovativeness with a strong market position to tackle new challenges, drive innovation and seize opportunities continuously.”
Future outlook
Sales in most regions were down in 2024, particularly in Europe, China and the rest of Asia, with only North America bucking the trend. In 2024, Koenig & Bauer generated around 29% of its revenue in North America, up from 23% in 2023. According to the financial report, the group continues to view the North American market as strategically important. The report points out that although the US tariffs will affect it, most of its competitors are also based in Europe and subject to the same tariffs.
The report notes that the Eurozone saw weak growth, particularly in manufacturing and exports. It states that there’s a general lack of consumer confidence, due to the ongoing war in Ukraine and the escalation of the conflict in the Middle East, which continue to weigh on the European economy.
Koenig and Bauer MetalPrint has developed this MetJet One using a Durst UV LED inkjet system Image K&BKoenig and Bauer is now concentrating on exploiting AI technology to optimise its operations, as well as on opening up new markets, including converting more analog markets to digital. The main focus continues to be on packaging printing. The report notes, “On average, global packaging printing is growing at an annual rate of around 4% according to various industry studies, with higher growth rates being registered for flexible packing and boxes.”
Once again, Koenig and Bauer is not planning on paying a share dividend for 2024, citing the earnings performance and persistent market weakness. In order to reassure nervous investors, the company has promised to pay dividends in future of around 15 to 35% of consolidated earnings. However, this is the same promise that was made when the 2023 figures were published, when the company also opted against paying a share dividend.
For 2025, the group is forecasting a slight increase in revenue to €1.3 billion with a higher operating EBIT between €35 million and €50 million but with the caveat that this depends on the geopolitical situation, which is anything but stable at the moment. Nonetheless, Koenig and Bauer continues to believe that it can reach revenues of roughly €1.5 billion in 2026, with an operating EBIT margin of around 6%.
Overall the report comes across as trying a little bit too hard to reassure investors for it to really succeed in this. Nonetheless, Koenig and Bauer is in a reasonably strong position thanks to its high order backlog and diversified portfolio, though it is also carrying a large amount of debt. You can find more information on this company from the investors page at koenig-bauer.com.
First posted by the Printing and Manufacturing Journal on 17th April 2025. Republished by permission.
