Outlook
Expected macroeconomic and industry conditions
The International Monetary Fund (IMF) forecasts global economic growth of 3.3% in 2025 (0.1 percentage points more than in 2024; historical average 3.7%) and a decline in global inflation. The individual countries and regions will continue to diverge in 2025. At 2.7%, growth momentum in the United States is likely to be significantly greater than in the Eurozone (+1.0%) and Japan (+1.1%). The heaviest economic strain on the Eurozone comes from Germany and France, where, among other things, domestic political uncertainties are holding back the economy. In the rest of the Eurozone, on the other hand, the economy is continuing to expand moderately. Higher US tariffs could have an increasingly adverse impact on the European economy. With expansion of 0.3%, the German economy is likely to grow for the first time after two years of recession. Thus, the IMF again forecasts the weakest growth for Germany of any of the leading western G7 industrialised countries. The reasons cited for this are the muted state of industry and high energy prices, which are impeding the economic recovery. In the emerging markets and developing countries, the pace of growth is expected to reach 4.2%, thus matching the previous year. China (+4.6%) and India (+6.5%) will continue to grow at above-average rates, although China will also lose some momentum and higher US tariffs will leave negative traces.
In a brief statement, the VDMA points out that the announced tariff increases of 10 to 20% on European products and 60% on Chinese imports could pose significant challenges for German industry. It also notes that it is necessary to take into account the fundamental stance of the Trump administration, which could generate domestic economic growth.
According to the IMF, downside risks for the macroeconomic forecast lie in a tightening of protectionist policies and growing geopolitical tensions. Increased trade policy uncertainty could dampen investment in advanced economies, with the exception of the United States. In the United States, supply-side shocks such as a decline in migration could permanently reduce production potential and spur inflation. However, the US economy could also perform better than forecast if fiscal policy is eased and a possible boom-bust momentum (triggered by an excessive reduction in regulations to curb risk-taking) materialises. A further appreciation of the US dollar could trigger capital outflows from the emerging markets and developing countries, pushing up risk premiums and causing growth in these countries to fall short of the forecast. The IMF emphasises that the extent of the inflationary effect of tariffs is particularly uncertain.
Source: IMF World Economic Outlook Update January 2025 & VDMA publication 01/25 – Free trade instead of trade barriers: German machine and plant manufacturers in the United States
The VDMA industry association expects a price-adjusted decline of 2% in mechanical engineering output in Germany in 2025 – after an estimated decline of 8% in 2024. However, this forecast is subject to a high degree of uncertainty as future economic trends hinge on many factors that are currently difficult to estimate. Sentiment in mechanical engineering companies remains depressed, as shown by the results of the VDMA Q4/2024 economic survey and the ifo business barometer. Mounting protectionism around the world is likely to leave traces on global trade and hit export-oriented German mechanical and plant engineering particularly hard.
Source: VDMA, “Maschinenbaukonjunktur 2024/Ausblick 2025” dated 13 February 2025
Forecast
The expected macroeconomic, political and industry-specific conditions in the markets addressed by the Koenig & Bauer Group provide the basis for the forecast for 2025 (1 January 2025 to 31 December 2025) and subsequent years.
The estimates made are based on the assumption that external conditions do not significantly worsen over the current situation. The following external factors play a decisive role:
- Geopolitical developments: No further escalation or tighter restrictions in connection with the war in Ukraine, the Middle East conflict or other geopolitical tensions liable to affect supply chains, production processes or sales markets.
- Trade policy uncertainties: Continued international trade conflicts, in particular the announcement of trade tariffs – for example by the Trump administration – and possible protectionist measures that could trigger spending restraint or higher costs along the supply chain.
- Underlying macroeconomic conditions: No unexpected re-emergence of higher inflation, interest rate trends or an economic slowdown that could impact demand in central markets.
In addition, the forecast is tied to the company’s own business performance and the successful implementation of strategic initiatives.
Outlook for 2025: Higher profitability on a slight increase in revenue
Despite difficult and uncertain global economic and geopolitical conditions, Koenig & Bauer sees itself well positioned for 2025. Thanks to a historically high order backlog and additional savings under the “Spotlight” focus programme, the Executive Board anticipates a slight increase in revenue to €1.3bn, accompanied by higher operating EBIT in a corridor of €35 – 50m. Within this corridor, target achievement is highly dependent on actual global economic and geopolitical developments over the next few months.
Both the Paper & Packaging Sheetfed Systems (P&P) and the Special & New Technologies (S&T) segments are expected to make a slightly greater contribution to revenue. Compared to 2024, the P&P segment should make a slightly larger contribution to operating EBIT in 2025, while the S&T segment should make a significantly larger contribution to operating EBIT in 2025 due to the “Spotlight” measures initiated.
In view of the earnings performance in 2024 and the persistently challenging global economic environment, the Executive Board and the Supervisory Board will be proposing at the annual general meeting that a dividend be omitted for the financial year as a result of the net loss reported by Koenig & Bauer AG. As Koenig & Bauer attaches great importance to ensuring the appropriate participation of its shareholders in the company’s success, the dividend policy provides for the distribution of a dividend of 15 – 35% of consolidated earnings, with a minimum dividend of €0.30 per share, subject to profitable business performance during the year.
Target achievement in 2026 highly dependent on global economic and geopolitical developments
Koenig & Bauer continues to project Group revenue of roughly €1.5bn in 2026, accompanied by an operating EBIT margin of around 6%. Due to the global economic and geopolitical uncertainties and, resulting from this, the limited forward planning visibility, Group revenue is currently expected to come to between €1.4bn and €1.5bn, with the operating EBIT margin reaching 5-6%.