The annual financial statements of Koenig & Bauer AG were prepared in accordance with the provisions of the German Commercial Code (HGB).

As a holding company Koenig & Bauer AG also conducts operating business and performs central and strategic functions for the Group. Central functions performed for the Koenig & Bauer Group include compliance/auditing, controlling, corporate development, innovation promotion, investor relations, corporate responsibility, accounting, purchasing, IT, corporate
accounting, patent and licensing, human resources, legal and insurance, tax and central marketing/corporate communications. In addition, Koenig & Bauer AG provides IT hardware and operates the computer centre for Group tasks and grants licences and brand rights to the subsidiaries. The number of employees on the reporting date, 31 December 2023, excluding apprentices, was 479 (previous year: 423).

In addition to income from the services recharged to the Group companies and the fees for the use of licences and brand rights, Koenig & Bauer AG’s business performance depends on the dividend income and profit transfers received from the subsidiaries and, hence, their business performance. The direct and indirect investments held by Koenig & Bauer AG are shown in a list in the notes to the consolidated financial statements. The economic environment in which Koenig & Bauer AG operates is essentially the same as the Group’s as described in detail in the business report.

Earnings

At €112.0m, revenue was slightly above the previous year’s figure of €98.9m and chiefly comprised income from transfer pricing for shared services provided by Koenig & Bauer AG for the operating Group companies and fees for the utilisation of licences and brand rights as well as land and buildings. Despite the reduced gross margin, gross profit increased by €1.3m to €29.9m due to the higher revenue. Compared with the previous year, the cost of sales increased by €11.8m to €–82.1m (previous year: €–70.3m). The gross margin thus contracted to 26.7%, down from 28.9% in the previous year. General administrative expenses increased by €15.1m to €43.1m (previous year: €28.0m). The other operating income of €6.0m (previous year: €2.3m) mainly reflects the reversal of provisions. The other operating expenses of €1.9m (previous year: €11.5m) result from expenses from general allowances on receivables from non-consolidated companies and third parties. On balance, this resulted in operating earnings of €–9.0m, compared with €–8.5m in the previous year.

Net investment income consists of dividend distributions (2023: €16.9m; 2022: €6.1m), income from profit transfer agreements (2023: €38.2m; 2022: €16.8m), impairments of financial assets (2023: €–17.9m; 2022: €–10.6m), fair-value remeasure gains on financial assets (2023: €1.3m; 2022: €7.9m) and loss absorption expenses (2023: €–7.5m; 2022: €–2.4m) from subsidiaries. It increased by €13.3m to €31.1m as of 31 December 2023 (previous year: €17.8m).

The financial result amounted to €14.2m (previous year: €11.3m) mainly due to the increased income under profit transfer agreements and from interest income. Net interest expense came to €–16.9m as of 31 December 2023 (previous year: €–6.5m). Income taxes amounted to €0.6m (previous year: €–0.1m). This resulted in net profit for the year of €5.8m (previous
year: €2.6m). Including the profit carried forward of €1.3m and the retained amount of €4.2m, the unappropriated surplus stands at €2.9m.

The Management Board and the Supervisory Board acting in accordance with Section 58 of the German Stock Corporation Act have passed a resolution to retain an amount of €4.2m. The Management Board acting with the Supervisory Board’s approval proposes that the unappropriated surplus of €2.9m be retained.

Assets and finances

As of 31 December 2023, Koenig & Bauer AG had total assets of €761.7m, up from €741.2m in the previous year. Non-current assets fell by a total of €17.3m to €532.1m (31 December 2022: €549.4m). This decrease is mainly due to impairments and systematic depreciation and amortisation. As of the reporting date, financial assets were valued at €407.4m, compared
with €423.3m in the previous year. The increase in intangible assets from €53.8m to €56.1m, which was mainly due to prepayments on intangible assets, was accompanied by a decline in property, plant and equipment from €72.4m to €68.6m as a result of systematic depreciation and amortisation as well as asset disposals. The increase in current assets from €189.3m to €227.0m was mainly due to higher receivables from affiliated companies. They include receivables under loans to affiliated companies of €47.6m (31 December 2022: €25.0m), receivables from offsetting cash flows of €96.5m (31 December 2022: €58.5m) as well as trade receivables of €14.9m (31 December 2022: €19.1m). In addition, receivables from associates rose from €13.6m to €20.8m. Cash in hand and at banks fell from €64.2m to €45.1m.

At the end of 2023, equity amounted to €314.9m (31 December 2022: €309.1m). This translates into an equity ratio of 41.3% relative to the increased total assets (31 December 2022: 41.7%). Provisions fell slightly from €110.5m in the previous year to €107.6m. The tax provisions of €0.1m and the other provisions of €29.3m were lower. By contrast, provisions for
retirement benefits and similar obligations increased slightly to €78.2m. All told, liabilities climbed from €320.7m to €338.5m as of 31 December 2023. Liabilities to banks increased from €186.2m to €235.4m mainly due to drawing on the syndicated loan. Trade payables also increased year-on-year, while other liabilities were lower. Liabilities to affiliated companies fell from €125.9m to €94.9m.

Risk report

Koenig & Bauer AG is exposed to the risks of its subsidiaries. The extent of such exposure depends on the size of its share in the respective company. Reference should be made to the Group’s risk report on pages 35ff for further information. In addition, strain may arise from the contingent liabilities in existence between Koenig & Bauer AG and its subsidiaries.

Forecast

Koenig & Bauer AG’s future economic performance is closely linked to the Group’s operating performance. The opportunities report on page 45 et seq. and the forecast on page 48 et seq. provide information on our prospects and plans for operating business.

Financial and non-financial performance indicators and, hence, a forecast of these in accordance with DRS 20, play a subordinate role for Koenig & Bauer AG as a single entity. However, this does not prejudice compliance with the requirements of company law.