Expected macroeconomic and industry conditions

With respect to 2023, almost all observers and all forecasts assume that the Russian war against Ukraine will have a massive impact and that some of the effects of the global supply chain bottlenecks will ease. However, many experts expect energy and raw material prices to continue to rise or remain very high.

In its latest forecast, the IMF projects growth of 2.9% in global gross domestic product for 2023. This is 0.2 percentage points more than was expected in October 2022. An increase of only 0.1% is projected for Germany. It is estimated that the Eurozone will narrowly hold its ground with an increase of 0.7%, while China is expected to grow by 5.2% due to gradual easing of the Covid policies and catch-up effects after the easing of the supply chain problems, which abounded in 2021. The greatest growth rates will again likely be posted by India (6.1%) and ASEAN (4.3%).

The high uncertainty over the forecast for 2023, which is due to many factors that are difficult to predict, such as inflation expectations and central bank responses, is also reflected in the significant range of differing estimates. In contrast to the IMF, the Kiel Institute for the World Economy projects expansion of 0.3% in gross domestic product for Germany. Nevertheless, the VDMA points out a number of risks that could place a damper on the economic outlook. For example, the pandemic situation and the crisis afflicting the real estate sector could deteriorate in China, while the war in Ukraine could escalate and a debt crisis could break out in emerging and developing countries.

According to the industry association VDMA, mechanical engineering in Germany is facing a challenging year in 2023. The VDMA economists expect real production to contract by 2%. However, this forecast is subject to a high degree of uncertainty as further economic trends hinge on many factors that are currently difficult to estimate. The war is still progressing in Ukraine but appears to have stalled, raising the question as to whether energy supplies in the corporate sector are secure in the coming winter months. Many companies still have a solid order backlog, but this will be run off in part in the course of the year due to a further easing of supply chains together with ordering reticence in the face of numerous uncertainties. The shortage of skilled workers is a particular cause for concern. Many companies want to hire staff but are unable to find sufficient qualified employees. Despite all the adversities, almost half of all companies are optimistic about the coming year, although 38% of respondents also reveal a mixed mood. Only 14% of companies are pessimistic. Source: VDMA, “Situation in the mechanical and plant engineering sector in 2022/Outlook for 2023, 10 February 2023


The expected macroeconomic, political and industry-specific conditions in the markets addressed by the Koenig & Bauer Group provide the basis for the forecast for 2023 (1 January 2023 to 31 December 2023) and subsequent years.

This forecast assumes that there are no further setbacks or tightened restrictions compared with the current situation as a result of the war in Ukraine, the availability of energy supplies, the disruptions to global supply chains and the efforts to contain the pandemic.

Despite this challenging macroeconomic environment, Koenig & Bauer projects Group revenue of around €1.3bn, accompanied by an EBIT margin of roughly 3%, for 2023. For 2023, the company expects the Digital & Webfed segment to make a disproportionate contribution to both EBIT and revenue growth.

Medium-term targets also adjusted for inflation effects
In the medium term, the Koenig & Bauer Group expects Group revenue of around €1.8bn and an EBIT margin of 8 – 9%. A further objective is to reduce net working capital to a maximum of 25% of annual revenue. Revenue of €1.5bn and a EBIT margin of 6 – 7% are to be achieved in 2025. It is expected that the Digital & Webfeed segment will make a disproportionately large contribution to revenue and EBIT growth in 2023.

As no dividend distributions are permitted during the term of the KfW loan, the Management Board and the Supervisory Board will be proposing to the Annual General Meeting that the net profit generated by the holding company Koenig & Bauer AG be retained. For this reason, we aim to discharge the KfW loan as quickly as possible so that we can resume dividend distributions, as Koenig & Bauer attaches great importance to ensuring that our shareholders are appropriately involved in the Company’s success.