Germany’s Koenig & Bauer has decided to suspend the dividend payment for the financial year 2019 and carry forward the profit generated by the holding company Koenig & Bauer AG to new account.
“With a large majority, the shareholders confirmed the management and supervisory boards’ proposal to suspend the dividend payment for the financial year 2019 and to carry forward the retained profit generated by the holding company Koenig & Bauer AG to new account,” the company said.
The announcement was made during the company’s first virtual annual general meeting. In addition to details of the group’s business performance in 2019 and in the first quarter of 2020, the numerous product innovations and the successfully launched offensive for digitisation were the main topics were the topic of discussion during the AGM.
The management board reported that the coronavirus pandemic, which has been spreading rapidly since January, has already had a considerable impact on revenue and earnings in the current financial year.
“Our broad product portfolio with a significant share of revenue in system-relevant packaging printing, the robust, increasingly digital service business and our sound balance sheet with a high equity ratio limit the risk potential. With the corona crisis management established in March, we are working to actively counter this extraordinary situation,” CEO Claus Bolza-Schünemann said.
He said that the company’s action plan focuses on reliable customer support, cost and investment discipline and securing liquidity. “There were almost no restrictions on the supply chain. Short-time working has, however, been in place at different locations since 1 April 2020 due to capacity utilisation. Under the currently uncertain general conditions, the impact on revenue and earnings in the 2020 financial year cannot yet be quantified.”
Performance 2024 efficiency program is flanked by applying for a KfW loan
Bolza-Schünemann said that in parallel to the corona crisis management, Koenig & Bauer is working intensively on the Performance 2024 efficiency program, evaluating various scenarios.
In addition, improvements in working capital and cash flow are at the top of the agenda alongside the strategic focus on packaging printing and digital services, he said. To strengthen the stability and strategic flexibility of the group, the management board and the supervisory board decided to apply for a flexibly repayable KfW loan with a volume of up to €120m to supplement the existing syndicated credit lines (Direct Participation in Syndicated Loans).
“Among others, no dividend distributions are permitted during the term of the KfW loan. After the plans for increasing the operating profitability and performance of the group have been adopted, we will report promptly on the targets and costs of the Performance 2024 efficiency programme,” he said.