KBA CEO LOOKS FORWARD
was becoming increasingly complex. KBA answered this trend with the four-high tower presses Journal and Colora in the early 1990s. Later, they were joined by the single-width four-high tower series Comet and Continent. The less expensive four-high tower design appealed to many new international customers and helped to establish the company as number one in newspaper printing.
KBA has never shied away from the pursuit of new ideas. Already at drupa 1995, an Anilox-Express was demonstrated with automatic plate changing. An imprinter with Scitex inkjet heads in the superstructure added a variable digital caricature to each offset copy. In practice, it was then almost 18 years before the inkjet technology was used in webfed offset. At drupa 2000, a new trend towards compact newspaper presses was heralded by the KBA Cortina, which stood only 4 metres high. Further features new to newspaper offset were the elimination of dampening units, four-high towers that glided apart for easy access, dedicated drives for each cylinder and the ease of operation with automatic plate changing and lifts to the upper couples. The waterless KBA Cortina has remained unique on the newspaper market to this day and is the only coldest press available with varnishing units for high-quality semi-commercial printing.
Despite the much smaller world market for new web presses today and our activities in the digital and packaging markets, KBADigital & Web will continue to develop and deliver state-of-the-art web offset presses to the newspaper industry.
News & Tech: KBA’s revenue increased by over 14 percent in 2016 and the company had a steady backlog of orders into the first quarter of 2017. What are KBA’s factors for success during these challenging economic conditions?
Bolza-Schunemann: At the turn of the century, 60 percent of our turnover from new press sales was generated in market segments that are under pressure from the online media. Printed newspapers, magazines and catalogues suffered most from the media shift. In the last nine years, the world market for new web offset presses (newspaper and commercial presses together) has dropped by more than 80 percent. So we started an extensive Fit@All program in 2013 and implemented fundamental structural changes in 2014 and 2015 to meet the challenges of digitization and globalization in the third century of our company history. Our market-oriented capacity realignment, the introduction of a new group structure with Koenig & Bauer AG as a central holding, and independent business divisions for the sheetfed, digital and web and special applications segments have strengthened our focus on profitable and future-oriented markets. Today, approximately 90 percent of KBA Group turnover is generated by the growth markets digital and packaging printing and by securities printing and only 10 percent by the shrunken web offset segment. However, our huge base of installed web offset presses is still important for our service business and we still offer tailor-made and highly made newspaper presses if they are needed. (For example), we sold two KBA Cortina presses together with a major retrofit of a huge KBA Commander press line to a customer in Belgium.
News & Tech: How has your relationship with newspaper customers changed, especially in the United States?
Bolza-Schunemann: We have still a close relationship with our existing customers, offer the needed services and retrofits for existing press lines and would be more than happy to get new orders for new presses from current or new newspaper customers in North America. However, we have to be realistic. Currently, the willingness of the newspaper industry in the U.S. and other parts of the world to invest in new newspaper printing equipment is not very strong. So we had to extend our activities in growth markets like digital, packaging and functional printing to fill our capacities and ensure a good future for Koenig & Bauer as the oldest press manufacturer in the world.
News & Tech: Characterize KBA’s global business strategies. Where do you see the most growth, and how are you positioning KBA to compete for business?
Bolza-Schunemann: After seven years with declining revenues and earnings in the course of the financial crisis and the media, the KBA Group returned to growth and profitability in 2015. In the 2016 business year, we managed to increase group revenue by 14 percent to €1.167 billion and, compared to the previous business year, almost tripling EBIT to € 81 million. This war far above average of our industry. Profitable growth in markets of the future with a positive contribution of all business segments is our main target. Alongside service growth, our main strategic focus is on packaging and industrial ( functional) printing since these are and will be growth markets for print in the future. With the widest press portfolio in the industry, KBA already covers most segments of the packaging market, but we see still potential for us in the dynamic market segments folding carton, corrugated and flexible packaging. For these segments, we already have new products in the pipeline. The same applies to packaging niche markets like decorating of metal boxes or premium glass containers and industrial mar- kets like decorative printing. In the meantime, KBA offers not only analog but also digital printing technologies for almost all these markets. Besides our own developments, KBA has a successful collaboration with American companies in the growth sector digital printing. KBA-Digital & Web in Wurzburg builds the world’s largest inkjet web press for HP, the HP T1100S for corrugated preprints. For our KBA RotaJET inkjet web, we cooperate successfully with RR Donnelley and for the new KBA VariJET 106 digital sheetfed hybrid press, XEROX is our partner. Because of shorter innovation cycles, collaboration between suppliers will become more important. Both can be competitors in one business area and partners in another. This is already the rule in the automotive industry for many years.
News & Tech: Where do you see KBA positioned in the next five years? Group targets for 2017–2021?
Bolza-Schunemann: Our target is to increase group revenue organically by around 4 percent per year until 2021. More than half of this growth will be generated in packaging printing. Further growth is to be generated by the expansion of the service business in all segments, as well as by market share gains. However, we don’t want growth at any price. What we are seeking is profitable growth. Depending on global economy and end markets, the KBA Group is targeting an EBIT margin of between 4 percent and 9 percent for the period until 2021. In addition, we want to strengthen the group’s stability by reducing volatility and risks. Further targets include a dividend ratio of 15–35 percent of group net profit, an equity ratio of over 45 percent and a working capital target corridor of 20–25 percent of revenue. Based on the widest press portfolio of all manufacturers for almost all printing needs, our many solutions for growth markets like packaging and our financial strength, we see good chances to extend our already strong position in the premier league of our industry even further.
News & Tech: What is KBA’s major focus for Print 17?
Bolza-Schunemann: The Print trade show in Chicago is mainly a trade show for commercial printing. So our main focus will be on our offset and digital press portfolio for this market segment. In addition, folding carton, corrugated and flexible packaging and newspaper printers, looking for proven and future-oriented conventional and digital solutions for their printing needs, will also find competent contact people and helpful information at our booth.
MARY VAN METER