Koenig & Bauer (SKB) Q3 2024 earnings summary

Executive summary

• Order intake rose 18.9% year-over-year to €988.1 million for the first nine months, with a record order backlog of €1,080.0 million, providing a strong foundation for Q4.

• Revenue for the first nine months was €819.6 million, down 8% year-over-year, mainly due to prior year order weakness and lower production progress in Banknote Solutions.

• Operating EBIT for the nine months was -€20.7 million, impacted by €34.9 million in special effects, including €24.4 million from the Spotlight program and €10.5 million from drupa, but sequential improvement was seen in Q3 with positive €4.2 million.

• Free cash flow improved to -€35.8 million from -€74.7 million year-over-year, with net working capital and inventory management showing positive trends.

• Guidance for 2024 confirmed: revenue target of €1.3 billion and operating EBIT at the lower end of €25–40 million range, with a strong Q4 expected.

Financial highlights

• Order intake up 18.9% year-over-year to €988.1 million; order backlog up 21.3% to €1,080.0 million, highest in company history; book-to-bill ratio at 1.21.

• Revenue for nine months at €819.6 million, down €72 million from prior year; gross margin at 22.9% (down from 27.0%).

• Operating EBIT at -€20.7 million, with special effects from Spotlight (€24.4 million) and drupa (€10.5 million); group EBIT at -€55.6 million (margin -6.8%).

• Net loss after nine months at -€77.3 million (EPS: -€4.69), impacted by higher interest rates and special expenses.

• Free cash flow after nine months at -€35.8 million, expected to turn positive in Q4.

Outlook and guidance

• 2024 guidance confirmed: revenue of €1.3 billion and operating EBIT at lower end of €25–40 million.

• Q4 expected to deliver nearly €480 million in revenue and €45 million in operating profit, one of the strongest Q4s in a decade.

• Midterm guidance for 2026 reaffirmed: 6% profit margin and €1.5 billion turnover; medium-term targets: revenue of €1.8 billion and EBIT margin of 8–9%.

• Spotlight program to deliver €60–70 million gross annual savings by 2026, with €15–20 million EBIT effect in 2024 and €40–50 million in 2025.

• Outlook depends on stable geopolitical conditions, no further escalation in Ukraine or Middle East, and no unexpected inflation spikes.