Ad hoc: Koenig & Bauer AG: Koenig & Bauer AG: Cost savings will boost results in subsequent quarters

Koenig & Bauer AG / Quarterly report / Ad hoc: Koenig & Bauer AG: Cost savings will boost results in subsequent quarters Ad hoc announcement according to §15 WpHG processed and transmitted by Hugin. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- -------------- Following slack demand in the final quarter of 2008, the first quarter brought little relief to the printing press sector. The group order intake for Koenig & Bauer AG (KBA) totalled EUR219.5m, a drop of 40.7% from the prior-year figure of EUR370.3m. However, this was better than the industry average, largely thanks to KBA's broad product range addressing both volume and niche markets. While orders for web and special presses were down 28.7% at EUR142.2m (2008: EUR199.3m), the knock-on effects of the financial and economic crisis caused demand for sheetfed presses to shrink by more than half to EUR77.3m (2008: EUR171m). The impact on sales, which declined by 27% to EUR220.2m (2008: EUR301.7m), was equally disparate. A relatively moderate drop of 9.1% to EUR143.4m (2008: EUR157.7m) in the web and special press division, where production cycles tend to be much longer, contrasted with a plunge of 46.7% to EUR76.8m (2008: EUR144m) in the sheetfed division. The group order backlog of EUR500.8m at the end of the quarter was roughly the same as at the beginning, but was 41.8% below the corresponding figure for the previous year of EUR860.5m. Web and special presses accounted for almost four-fifths of unfilled orders. The savings in personnel expenses delivered by short-time work at all KBA's production plants failed to offset the revenue lost through slower sales. Management anticipates a substantial reduction in personnel and material costs in coming months following the implementation of the scheduled capacity adjustments, for which ample provision was made last year. These entail extensive job cuts at the sheetfed factories. A first-quarter operating loss of EUR32.7m (2008: EUR-5m) and pre-tax loss of EUR35.2m (2008: EUR-6.4m) were in line with expectations. The net loss came to EUR33.2m (2008: EUR-1m), resulting in earnings per share of EUR-2.03 (2008: -6 cents). Cash flows from operating activities were positive, totalling EUR19.2m (2008: EUR88.6m). This was largely due to a substantial drop in trade receivables. The free cash flow came to EUR13.5m (2008: EUR73.7m). Liquid assets swelled from EUR85.8m at the end of December to EUR99.4m at the end of March, and the net financial position improved from EUR22.6m to EUR36.6m over the same period. Despite the quarterly loss, the equity ratio of 33.9% was higher than the industry average. At the end of March there were 7,646 employees on the group payroll, 535 fewer than twelve months earlier and 192 fewer than at the beginning of the quarter. KBA president and CEO Helge Hansen says: "In the current market environment, our March prediction of a 20% decline in sales is fairly optimistic, as is the balanced pre-tax result we are targeting. We shall therefore continue to devote all our energies to pursuing these goals. We are currently in the process of adjusting capacities to a smaller market volume, and this will materially improve our profitability by the end of the year. The total package aims for savings of several hundred million euros in personnel and material costs by 2011. We'll keep you posted on progress in our interim reports." --- End of Message --- Koenig & Bauer AG Friedrich-Koenig-Straße 4 Würzburg Germany WKN: 719350; ISIN: DE0007193500; Index: SDAX; Listed: Freiverkehr in Börse Stuttgart, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Börse Berlin, Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in Börse Düsseldorf, Regulierter Markt in Bayerische Börse München, Regulierter Markt in Frankfurter Wertpapierbörse;