Metamor[e]phosis
In the last annual report, we focused on the mor[e] in metamor[e]phosis and looked at how Koenig & Bauer has continued to evolve over a history stretching back more than 200 years, focusing very specifically on the 2022 financial year. This time, we are going a little beyond this and also taking one step back. Welcome to the meta level!
But what does ‘meta’ actually mean, what image does this conjure up in your mind? Meta is a topic that everyone’s talking about – not least because of the social media company of the same name that continues to grow and expand. And we encounter ‘meta’ in many places. For example, in the form of metaphors, which are linguistic expressions whose original meaning is applied to different contexts. Or as metadata, which is structured data that contains information about aspects of other data. Metaphysics deals with everything that defines the natural world we can perceive with our senses. And we are of course familiar with metamorphosis, which is the transformation from a current state into the fundamentally (pre-)determined, fully developed form. Meta is a space, sometimes meaning something hidden and in some cases meaning something superior. Each methodology is based on a view ‘from above’, detached from the process itself, in order to achieve a defined objective [metá from Greek (μέτα, μετά) in the middle, between, with, after, behind + hodós from Greek (òδός) way].
The moment when we decided to go beyond mere printing with Exceeding Print and incorporate sustainability, digitalisation and modularity into our corporate strategy was also when we took the first step on the path to the meta level. It is one of many steps and our path will not be straight by any means. This is because developments – including those that are methodically planned and controlled – are subject to external dynamics beyond our control. Koenig & Bauer’s development from a traditional printing press manufacturer into an agile tech company is already starting to bear fruit, yet it is more important than ever to stay focused on the big objective.
Wars, social and economic uncertainties, the aftermath of the COVID pandemic, fluctuations in the international currency market, the challenges posed by climate change, the growing possibilities that artificial intelligence offers and the risks associated with this, etc. – the list of challenges facing society and businesses is long and seems to be growing longer by the day. Global developments do not currently provide the most stable foundation and yet they also demand agile, effective solutions that can be implemented quickly. How do we want to continue to work in the future, and how can we achieve this? How can we link printing to the digitalised world? We are living through a period of change, with some people even calling it a new epoch. Many things are impossible to predict, and this is precisely why it is so important to be bold, to explore different paths and to dare to seize new opportunities with an open mind. Adaptability has been a hallmark of our company from day one, and there have been numerous occasions when this attribute has proven its worth – including, or especially in, tough times.
Just as ‘meta’ simultaneously describes something superior and something inherent – that is to say, something universal, in our company’s recent past we have embraced Exceeding Print and ventured into previously unknown areas of business that have not only opened completely new doors for us, but have also boosted our core business by providing new ideas. What we can say today with absolute certainty is that in 2021 the Exceeding Print strategy was based on the notion that, both today and in the future, printing needs to be sustainable, digital and modular to succeed.
We can achieve this because we look at the value chain in its entirety and spare no effort when it comes to ensuring a complete circular economy in which all processes are connected. Instead of focusing exclusively on our business, our machines, we try to keep everything in mind – from the requirements of the brand owners, suppliers and different printing technologies as well as substrates, to the end customers and returning products to the cycle by implementing recycling measures. We combine all the essential areas and with an export ratio of over 80 per cent we see ourselves as a global player – un:iversal.
This is why this annual report contains a practical application case for each pillar of our Exceeding Print strategy. The compostable packaging will deliver a lasting benefit to the environment, and the forget-me-not in the little pack of flower seeds will put a smile on your face. All you need to do is dampen the substrate tray, sow the seeds and keep them moist. As proof of concept, you can also bury the compostable packaging in the soil. To bridge the gap to the digital world, in addition to topic-specific content outlining the progress made on digitalisation at Koenig & Bauer, you can once again access the whole of this year’s annual report online. And just as modularity is defining and driving the (further) development of our products, this annual report – from the front cover to the last full stop – shows that the whole, the universal cycle, is more than the sum of its parts and that everything really is connected.
Metamor[e]phosis through Sustainability
…because sustainability ist the meta-topic of the future.
In order to meet the increasing demands of climate protection and make our own active contribution to it, we have championed the Green Energy project. The aim is not just to reduce our dependence on fossil fuels, but also to achieve our sustainability goals. By 2025, we are aiming to reduce CO2 emissions (Scope 1 and 2) in our production plants by 75 per cent compared to the reference year of 2019. Green Energy provides a package of measures that we want to implement in order to optimise our energy demand and supply. These include energy-efficiency measures such as measures to reduce and optimise the amount of energy required in production.
To make sure this transformation is also sustainable, we particularly need to expand our supply of energy from renewable sources. This means we need to use solar energy and other green energy sources and storage systems. At some of our sites, huge progress has already been made when it comes to sustainability: for example, the Mödling site is aiming to achieve carbon neutrality by as early as 2028.
What’s more, a major measure has already been implemented at the company’s headquarters in Würzburg. By modernising our foundry smelting operations, we have achieved significant cost savings while increasing our earnings. This optimisation will result in annual electricity savings of roughly 3,200 MWh in the smelting process and the recovery of waste heat, which will enable us to reduce our gas consumption significantly. In addition, we will save a third of the water consumed annually at the Würzburg site, which is a major benefit at a time when water is in short supply.
We are currently in the third sustainability wave – the most effective so far. The causes are obvious: the ever-increasing pace of climate change and the increasing amount of global waste pose a huge challenge for the whole world. This is why sustainability is the central, un:iversal topic of today and the future – and this for the printing and packaging industry as well. As a printing press manufacturer and a provider of digital solutions and services, we experience first-hand the concerns of printers (our customers) in relation to climate developments. How will the legislation evolve? Which investments make sense; which are unavoidable? How can they ensure their production remains stable during this period characterised by crises? Unfortunately, there is no all-encompassing solution, but we do at least do everything we can to use innovative approaches to support our customers.
For example, digital printing from Koenig & Bauer – with the RotaJET, the VariJET and also with Kammann – using water-based inks offers a particularly sustainable option. Demand-based production can help reduce waste and resource consumption throughout the entire life cycle of the print product. Digital solutions such as our VisuEnergy X energy management system enable customers to reduce their production costs and work more efficiently, which in turn can contribute to climate protection.
The downstream side, where the products are used, contributes more than 90 percent to Koenig & Bauer’s Scope 3 footprint. This is why reducing the energy consumption of the products by increasing their energy efficiency, expanding digital services for optimum press capacity utilisation, and making customers aware of the switch to green electricity is a high priority.
We recognise visionary leaders from the printing industry who display outstanding sustainability activities with our specially created Green Dot Award.
Metamor[e]phosis through Digitalisation
… because digitalisation means taking the analogue world meta.
Digitalisation – with all its opportunities and risks, its limitations and options – is becoming increasingly important in almost all areas of life. This certainly became evident with the release of AI-based tools such as ChatGPT, which gives everyone the opportunity to make use of artificial intelligence – as we did to produce the image on the cover of this annual report. We have long been focusing on how to make the transition from the analogue printing industry to the digital world. Since the start of 2022, a specially established digital unit has been exploring how we and our customers can benefit from digital, data-based solutions.
At a time when data provides a robust business model, Koenig & Bauer is using the triad of myKyana, Kyana Connect and Kyana Data to set new standards in the print and packaging industry. The market launch of these three innovations is just one milestone on a comprehensive digital roadmap that aims to improve machine efficiency and the customer experience.
myKyana is the higher-level portal into which all digital solutions from Koenig & Bauer are pooled. This is where, in future, users will find everything they need to ensure smooth operation of their machines – from service tickets to the management of software subscriptions and user administration, along with direct purchase options and access to digital services and products that they subscribed to. It is also where existing digital solutions will find a new home. myKyana is our customers’ gateway to the extensive digital world that we offer to supplement our innovative printing and packaging technologies.
The IIoT gateway Kyana Connect provides the technical basis for all data-based products and forms the decisive link between our customers’ machines and the Koenig & Bauer cloud. Machine, sensor and job data are pre-processed directly at the source and uploaded to our cloud in a secure and standardised format. This opens up whole new dimensions in data analysis for the users of data-based solutions.
Kyana Data is the first digital product that directly accesses the data provided by Kyana Connect. The production data analysis tool will offer real-time views of key performance indicators in future, as well as uncovering previously hidden potential to improve efficiency in the production process.
The name Kyana will become a byword for the entire digital product portfolio offered by Koenig & Bauer, and stands for our spirit of innovation as a catalyst for digital transformation in our industry.
The three tools are currently in an intensive beta phase during which they are undergoing extensive testing by selected, strategically important customers. This phase is crucial in order to adapt the products to specific needs of the market and to ensure that they can be rolled out to customers all over the world from spring 2024 on.
As well as focusing on the (further) development of digital solutions for our customers, we as a company naturally also want to become more digital and fully exploit the associated potential to optimise our processes. Digital solutions are now an indispensable tool, especially when it comes to the transparent configuration of our supply chains, so we can guarantee reliable procurement and make deliveries on schedule.
In addition, we are directing a keen focus on automating processes in our production facilities – using robotics, artificial intelligence and autonomous, driverless transport systems. This will enable us to boost our productivity and, among other benefits, it will help us deal with the increasing shortage of skilled workers.
From the development of digital solutions for our machines and customers to digitalisation at Koenig & Bauer itself – we are taking big steps in the right direction. This is not about replacing printing, but making it as smart as possible by adopting digital applications.
Metamor[e]phosis through Modularity
… because modularity means agility.
When we launched our Exceeding Print strategy in the 2021 financial year, it was not apparent at the time how highly relevant the modularity pillar would become in such a short space of time. We originally chose to focus on this topic because the megatrend of individualisation in our industry is resulting in increasing complexity, and this demands a higher degree of standardisation. The geopolitical events of 2022 and the resulting energy problems, along with disruption to global supply chains, have clearly shown how quickly supposedly stable systems and processes can start to topple. A global shortage of chips led to bottlenecks in the production of critical components. This is why it was so important for us to work through these new experiences and initiate measures so we can be even more proactive in responding to unexpected events in future. Making investments to ensure the resilience of our supply chains is essential as the level of global disruption continues to increase. It is becoming apparent that we will have to expect disruption to supply chains from time to time. In our globalised world, international business relations are an established part of commercial operations. For all the benefits that this brings, developments such as Russia’s war of aggression on Ukraine and the Hamas terrorist attack on Israel show how rapidly the world order can change. This does, of course, also have an impact on economic relationships and supply chains.
Group-wide supply chain management, which is responsible for planning and monitoring right along the value chain, is therefore essential. This organisation expediting the following primary tasks:
- Identifying and eliminating risks in complex supply chains at an early stage
- Ensuring a reliable supply through central purchasing and order management
- Devising creative solutions when there is disruption in the market
Making scheduled deliveries to our customers by monitoring and tracking our value chain from start to finish
The development of our modular automation building kit (MAB) is right on track – also thanks to strategic partnerships, including one with Siemens – and the first prototype is set to be released with real ambition. The MAB framework will be raised to a new level and create a solution that not only meets but exceeds our expectations. The modular automation platform will make it possible to record standardised printing press and operating data, making it easier to scale Koenig & Bauer’s digital business models in the next stage of the digital transformation process.
Establishing end-to-end digital business processes is another key aspect of standardisation. This is why the platform architecture of the Rapida product family is currently being analysed and the modular automation building kit is now being developed to set the company on course for modular machine configuration. The number of product variants is being reduced, and modules and features are being standardised. At the same time, we are developing a design guide that defines the design of Koenig & Bauer machines to enable platform thinking and modular design.
To continue to champion productivity in the area of value creation, the Operational Excellence (Opex) department is working continuously to provide lean management methods and practices so that all of Koenig & Bauer’s business operations are able to implement an efficient value creation process. One highlight during 2023 was the project to optimise the end-to-end process for the Digital & Webfed division. All the key stakeholders involved in assembly, which stands at the centre of value creation, were incorporated in order to optimise the processes from order intake to final assembly by reducing costs and lead times.
The innovative strength of the Koenig & Bauer team has always been one of the company’s driving forces. To promote this, in addition to the core Opex team, the company has set up special technical committees with participants from all its divisions who define the requirements for future topics and devise standards. This allows it to develop vital solutions cost effectively, such as ones in the areas of robotics and automation, which can then be used in production and assembly across all business units.
In all projects and activities, it is evident – especially as the sum total of its parts – that the focus on modularity is helping us make great strides in many areas. In this context in particular, there is a need to keep an eye on the big picture and remain open to new perspectives because, just as the methodology requires us to take a step back from the specific application, modularity requires a process of analysis, evaluation and sorting of all the existing elements in order to bring together what unites us un:iversally.
Metamor[e]phosis through Partnerships & Business Models
… new ways often lead to the best results.
Koenig & Bauer has been synonymous with innovative printing technology for more than two centuries. We want to continue to meet this high standard in future and so we continuously strive to optimise our product portfolio. We offer the right solution for almost any printing application and strategic modernisation allows us to ensure that we and our customers can meet tomorrow’s requirements when it comes to digitalisation and sustainability. One of the ways we do this is by relying on strategic partnerships and close collaboration with our system suppliers. In 2022, we saw how this enabled us to identify bottlenecks in the supply chain really quickly and take prompt action to rectify the situation.
In our core business, mechanical engineering, the latest relationships with Celmacch and SEE were real drivers of innovation in the 2023 financial year, together with our long-standing partnerships with Durst and HP. The existing partnership with Sealed Air Corporation (SEE) is opening up new options in digital web printing. The aim of the partnership is to increasingly connect physical packaging with the digital world, and this is already established on the market under SEE’s own ‘prismiq™’ brand. This strategic partnership will entail the two companies’ hardware and software components being developed together in the future. This will allow brand owners to promote their products by connecting with consumers using digitally enhanced packaging.
Koenig & Bauer’s partnership with Celmacch was able to present a very special innovation in 2023: printing on the inside and outside in one pass for processing corrugated board. Printing both sides in one single work step not only makes it possible to boost efficiency significantly; it also allows production costs to be reduced considerably. Koenig & Bauer Celmacch has thereby responded to the increasing needs of customers in this market. It should be possible to ‘amaze’ end customers and offer fast, cost-effective printing. The presettable die-cutting unit for the Chroma X Pro series and top-bottom printing on Chroma High Tech and Chroma Smart machines cater to all the latest trends and requirements. The new Chroma 2S high board line solution manufactures at a maximum speed of 10,000 sheets per hour. The printing unit for printing on the inside is also equipped with the already established automation systems from the Chroma High Tech or Chroma Smart series.
As part of the Koenig & Bauer Durst joint venture, which was set up around five years ago, we intend to continue to make investments so we can take advantage of the great opportunities that exist in the folding carton and corrugated board sectors. The new activities we are planning involve the site at Radebeul in Germany.
Koenig & Bauer Durst is the global market leader for digital single-pass sheetfed printing systems as well as software services for the folding carton and corrugated board industries. The company utilises the expertise and know-how of the two parent companies to offer an unrivalled range of digital printing presses. These include the CorruJET and Delta SPC 130 for the corrugated board market and the jointly developed VariJET 106 printing press for the folding carton market. These machines use water-based, food-safe inks and coatings that satisfy all legal requirements.
Other partnerships, such as those with Google and HYBRID, enable us to continue to drive forward and accelerate progress in the field of digitalisation. One of the things that digitalisation means to us is being open-minded to see what we can learn from our printing machines. What does this mean? In very simple terms, focusing more on the data that is also produced on a daily basis whenever the machines operate – but has so far gone relatively unnoticed. To take full advantage of this huge potential, we chose Google Cloud as an innovative partner to manage and process this data. With a heavy focus on the manufacturing industry and dedicated industry solutions, the cloud provider should be an important element when it comes to making the world of printing and packaging fit for the future.
A demonstration of the first working prototype (MVP) of the new Kyana Data product was given at the Google Cloud stand at the Hannover Fair in April 2023. This powerful analysis tool seamlessly combines data from multiple sources, such as machine log files and data from existing MES and MIS systems. It enables users to create complex evaluations in a very simple way so they can gain a holistic understanding of their production processes. The partnership with one of the world’s leading AI specialists and the number one cloud provider in the field of industrial manufacturing will pave the way to Koenig & Bauer becoming a holistic solutions provider for its customers. Kyana Data is designed to enable users to identify patterns, trends and anomalies in production processes and take action before they escalate into bigger problems. The aim is for as many machines as possible to achieve almost 100 per cent productivity. The focus is on the Manufacturing Data Engine (MDE) from Google Cloud, which makes it possible to consolidate data silos and gain insights from manufacturing data in order to boost efficiency and productivity.
To further optimise the digital workflows between pre-press and printing on the sheetfed offset presses from our Rapida series, the basis for a partnership with HYBRID Software was established in 2023. This means that with PrintFusion, we can now jointly offer an exclusive product for the packaging workflow on Rapida sheetfed offset presses. Acting as a gateway, PrintFusion manages Koenig & Bauer’s printing presses using the pre-press software PACKZ and the production workflow suite CLOUDFLOW from HYBRID Software. Parallel to plate creation, all relevant job data is delivered securely and efficiently to the Rapida presses. Users benefit from this automation with faster makeready times and greater efficiency between job changes. What’s more, printing parameters are convenient to save with the remaining job data and then recall for subsequent repeat jobs. This end-to-end packaging workflow solution boosts efficiency through the automatic retrieval of job data from connected MIS/ERP systems. PrintFusion maximises press and substrate utilisation and continually optimises print quality. The Rapida sheetfed offset presses run with fewer operator interventions and with a substantially reduced risk of errors.
In the area of Banknote Solutions, the strategic partnership with GIETZ is set to be used to improve and develop OVD (Optically Variable Devices) application platforms for banknote printers. The combination of technology, expertise and research in this area creates a unique opportunity for both companies to discover new ways of adding value for customers while maintaining the highest OVD application standards that are essential to the banknote industry. Furthermore, the intention is to jointly develop and market a high-speed application platform that will cater to future requirements. The technologies that are developed as part of this new partnership will be sold worldwide (with the exception of Japan) by Koenig & Bauer Banknote Solutions.
All these partnerships show how we can accelerate innovations and explore new opportunities by pooling the energy of experts from the Koenig & Bauer Group and external specialists. What we achieve together is more than the sum of its parts. This is because every innovation can spark more synergies within the Group, taking the whole company to the next level.
Our consistent spirit of innovation is also opening up completely new areas in which Koenig & Bauer’s expertise is not just capable of being used but can be expanded. We are embracing new business models to tap into areas that we have not previously exploited, and to emphasise what we can already do really well.
An excellent example of this is the cooperation with the Volkswagen subsidiary PowerCo SE to collaborate on developments in the area of sustainable battery cell production. The new facility will be used for the industrial powder coating of electrodes. Dry coating, which is a sub-process within multi-stage battery cell production, does not require any complex, energy-intensive drying of wet-coated electrodes. Koenig & Bauer plans to cover most of the development outlay by using its own engineering resources. Based on current plans, the development phase is scheduled for the period up to the end of 2024. If the development goals are achieved, Volkswagen will have the exclusive right to use or distribute the Koenig & Bauer systems itself for a period of seven years.
The Vision & Authentication department, which focuses on optical measuring and control systems and authentication solutions, also demonstrates in impressive style how Koenig & Bauer’s enormous know-how can be implemented successfully in new business areas. The team develops and produces high-performance electronics, camera technology, complex image processing systems and data processing solutions. The modular solutions can be used for various applications right across the Group. One example is our MetalControl solution for MetalPrint, which recently won the Metpack Innovation Award. We now also offer components of these solutions to users outside the Koenig & Bauer Group, for example in battery cell manufacturing. In February 2024, we unveiled a strategic partnership with Mitsubishi Electric with the aim of offering standardised, high-quality components for industrial image processing in the field of electrode manufacturing for battery cells.
Following the success of the ValiCash™ app for checking the authenticity of banknotes, we are now taking the next step. What we have been able to achieve for banknotes is set to be implemented for all types of print products. What is special about this is that the solution does not require any specific elements to be added, but instead just reads the unique characteristics that are created with every print but are invisible to the human eye. This means we are setting a new ‘Secure at Print’ standard and are stepping up our efforts in offering digital authentication services in order to use new business models to meet the challenges of our time and the developments in the world market.
This also demonstrates that Koenig & Bauer is very well positioned at the meta level with all its divisions and segments and that the synergies can be optimally exploited within the Group.
Metamor[e]phosis through Our Employees
… because people are our greatest asset.
The needs of employees have changed along with the whole of society and our company as well. Workers from the 19th century would probably barely be able to contain their joy if they were confronted with modern working conditions, and yet the labour market seems to be awash with a general dissatisfaction among workers. There is more disharmony than ever between generations, whose views could hardly be more different.
From a business perspective, the retirement of the baby-boomer generation from 2025 on represents a really major challenge that we need to start addressing now in order to fill the significant gap they will leave behind. One important way to produce the next generation of highly skilled workers is for each company to train them in-house. This is why 168 apprenticeship places, almost twice as many as last year, were advertised and filled at the company’s sites in Germany and Austria in 2023. More than anything, this unwavering commitment to vocational training is also an investment in the future of our company – and the best way to respond to the shortage of skilled workers that will be felt even more acutely in the years ahead. Thanks to our vocational training school and a clear focus on ensuring the right balance between theoretical training and practical application, the apprentices can receive the very best training so they know the specific characteristics of the Group.
In addition to recruiting more apprentices, we also view the further training of our own employees as a useful tool for meeting the challenges of the labour market. Investing in their specialisation and skills enables them to work more efficiently. In 2022, we again greatly expanded and optimised the courses on offer to employees at the Koenig & Bauer Academy. The comprehensive and diverse training courses are designed so that quite literally every employee – from the shop floor to the management offices – will find the perfect tools to match their needs.
In addition, wherever possible, we already rely on automation in our processes and workflows. This enables us to actively mitigate the losses in productivity caused by demographic change as much as we can.
The fact that we are thinking about the future is also reflected in an award that we are particularly proud of: our vocational training school in Würzburg was awarded the accolade ‘Climate School’ for the sustainable way the school operates and the way it has gradually managed to save CO2. As well as sending a signal to current and future generations, we see this as a great opportunity to identify specific areas in which we can potentially make savings and give the next generations a comprehensive understanding of sustainable production in the process. The ‘Climate School’ project involves both teachers and students in equal measure. There are a total of eight action areas (waste, purchasing, nutrition, communication & networking, compensation & carbon bonding, mobility, electricity, heat) in which potential savings are identified and implemented.
Finally, we are also continuing to champion the measures we have already initiated so we can enhance Koenig & Bauer’s attractiveness as an employer. It has been shown that being open to new concepts such as mobile working, individual working time agreements, sabbaticals, job sharing and the like is very attractive to (potential) employees and that these concepts can be integrated into the company and production structures efficiently at the appropriate point.
A good example showing that Koenig & Bauer is still an attractive employer at its various locations is the twin anniversary that we celebrated in 2023: 175 years in Mödling and 125 years in Radebeul. The sense of belonging among employees was a key element at both events.