Letter to the shareholders

Dear shareholders, 

The 2025 financial year marks a significant turning point for Koenig & Bauer. It was characterised by the consistent implementation of the Group focus initiated in the previous year and the strategic realignment driven by “IMPACT”.

The organisational structure was streamlined from three to two segments: With Paper & Packaging Sheetfed Systems (P&P) and Special & New Technologies (S&T), Koenig & Bauer is now operating under an operational structure that reflects its business models more precisely and enables even closer alignment with the needs of customers worldwide. In addition, the composition of the Executive Board was aligned with the current target structure as part of the gradual generational transition. For me personally, the 2025 financial year entailed a special responsibility with my transition to the role of Chief Executive Officer following the Annual General Meeting in June. Together with my fellow board member Dr Alexander Blum – and in collaboration with Dr Andreas Pleßke, who supported the transition until his departure at the end of 2025 – we look back on a year in which Koenig & Bauer demonstrated operational resilience despite trade policy uncertainties and geopolitical crises and achieved its targets for the year with pinpoint accuracy.

After the previous year had reached a high level due to the ‘drupa effect’ and major orders at Banknote Solutions, the order situation normalised as expected, resulting in an order intake of €1,233.2m (previous year: €1,402.7m). A glance at the revenue and earnings performance shows how this operational resilience is reflected in the figures.

Revenue growth and operating profitability – efficiency increase shows effect  

With revenue growth of 2.2% to €1,302.4m, as planned, we are fully in line with our forecast of slight growth compared with the previous year. Both segments contributed to the revenue growth, with the S&T segment delivering a clear increase of +6.8% to €596.0m and P&P posting a solid +0.9% rise to €741.5m.

At the same time, the results for 2025 prove the effectiveness of the measures to increase efficiency and thus mark progress in operational earning power. Operating EBIT was almost doubled compared to the previous year at €36.6m, which corresponds to an operating EBIT margin of 2.8% (previous year: 1.2%). We have thus landed squarely within the lower half of our forecast corridor of €35m to €50m. Extraordinary items were also significantly reduced in the 2025 financial year to just €5.3m (previous year: €50.4m) and include the final scheduled expenses for the “Spotlight” focus programme. Consequently, EBIT improved significantly by +€66.4m to €31.3m (previous year: €-35.1m).

In the final quarter, an operating EBIT of €30.2m (previous year: €46.5m) was achieved. Flanked by an already strong operational performance in the third quarter of €16.0m (previous year: €-21.7m), a reduced full-year dependency in terms of intra-year revenue and earnings distribution was achieved, especially compared to the previous year. Due to the strong cash inflow in the final quarter of €69.1m, a positive free cash flow of €7.2m resulted for the year as a whole, although it had still been negative at €-61.9m in the first nine months.

Financially, the Koenig & Bauer Group is well positioned with a Group equity ratio of 24.0% and more than €150m in freely available cash and cash equivalents. Active net working capital management also contributed to this in the period under review. This solid financial foundation is essential as Koenig & Bauer operates in an environment that is undergoing profound change and demands new answers.

New market realities: Seizing opportunities in a volatile world 

Koenig & Bauer today operates in a market environment characterised by increasing volatility. Trade restrictions and protectionist tendencies – particularly with a view to US customs policy, which will also accompany us in 2026 – demand a significantly higher resilience of the global organisation. At the same time, a significant shift in global demand is to be observed: By 2033, Asia is expected to account for over 46% of the global market volume in the packaging printing sector. India, Latin America and the Middle East, in particular, are driving this global trend. These markets increasingly demand solid mid-tech products where economic efficiency, productivity, and reliability are decisive – a segment that is being consistently opened up through tailor-made solutions. In parallel, industrial inkjet printing is developing into a substantial part of the market, while AI and automation provide the necessary answers to the global shortage of skilled workers.

To actively meet these challenges in an increasingly volatile global economy, Koenig & Bauer adopted the new strategic framework “IMPACT” at the end of December 2025.

“IMPACT”: Strategic framework for the next decade  

With “IMPACT”, Koenig & Bauer is driving forward the transformation from a classic plant manufacturer to an integrated technology provider that delivers hardware, software, and AI-supported process optimisation from a single source. “IMPACT” thus replaces the previous “Exceeding Print” strategy (2021–2025) and realigns priorities for the coming decade. With a clear focus on technological intelligence, operational excellence, and proactive adaptability, Koenig & Bauer is actively shaping the future of the printing industry and securing its competitiveness in the long term. In challenging times, the company does not rely on the markets calming down but uses available market data as a guide. The consistent realisation of the resulting opportunities remains a matter of entrepreneurial responsibility – even in a volatile environment. The strategic framework comprises six pillars that work together as an integrated system and ensure that we provide the technological solutions demanded by the market today and in the future:

Intelligence: Pioneer in AI and automation 

Koenig & Bauer integrates artificial intelligence holistically into its processes and products. With the already established ‘AI Empower’ programme, the company is driving a massive cultural and technological change.
The focus is on increasing the efficiency of its own processes through software, AI, and automation and simultaneously creating digital ecosystems for customers, such as myKyana. In this way, Koenig & Bauer is gradually transforming from a pure machine manufacturer into a comprehensive technology provider that delivers hardware and AI-supported process optimisation from a single source.

Go-to-Market: Scaling and opening up new growth markets 

Koenig & Bauer has the broadest product portfolio in the printing industry and is now focussing on its rapid scaling. Products such as the RotaJET and VariJET in digital printing, state-of-the-art solutions in the post-press area, high-performance CI-flexo systems, and a complete product portfolio for the corrugated board industry have been successfully introduced to the market in recent years and are now ready for worldwide expansion. A key growth driver is the targeted opening up of global growth markets such as Asia, India, Latin America, and the Middle East. In order to also gain market share in the high-volume and cost-conscious mid-tech segment, Koenig & Bauer is expanding its range to include suitable product variants.

People: Competence and speed as success factors 

The foundation of the claim to technological leadership is formed by the worldwide teams of Koenig & Bauer. The company is investing massively in modern, digital working tools and is focussing on the qualification and further training of its employees. Furthermore, it aims to optimise its customers’ success through a tailored training programme. Beyond the mere provision of hardware, Koenig & Bauer provides intensive support to its customers to ensure they can utilise the full capabilities of the machines and products and thus achieve the best possible results. At the same time, the “P” also stands for ‘Pace’ (speed) and ‘Performance’. Through lean organisational structures and smart processes, the company is significantly increasing its reaction speed to market changes in order to serve customer requirements worldwide even more efficiently.

Adaptability: Resilience in a volatile world 

In order to significantly increase resistance to global economic fluctuations, Koenig & Bauer is adapting its value chain. The company is moving away from rigid capacity limits towards a flexible model with stable basic capacity utilisation at its own plants. This is supplemented by local procurement and assembly strategies to reduce dependencies in the supply chain. In addition, the profitable service business, which already accounts for around 30 percent of Group revenue, functions as a strong financial anchor and is to be consistently expanded further.

Competitiveness: Cost excellence at all levels 

Technological advantage must go hand in hand with economic strength. In view of enormous global cost pressure, new customs barriers, and intense competition, Koenig & Bauer is working with the highest priority on optimising its manufacturing costs. Through cross-divisional cost-reduction programmes, improved make-or-buy decisions, and global procurement strategies, the company is securing its excellence. The goal is to appear absolutely competitive in all addressed markets – from high-end to the mid-tech segment – not only technologically but also economically.

Technology: Digitalisation and software as the soul of the machine 

Technological leadership remains the DNA of Koenig & Bauer. The company is rapidly expanding its range in the fast-growing industrial digital printing sector – including the VariJET and RotaJET. At the same time, authentication and quality systems are gaining massively in importance: With innovations such as the security systems from Koenig & Bauer Vision & Protection or with the digital packaging platform AURAVEO, Koenig & Bauer provides answers to the growing global demand for product protection, error prevention, and direct end-customer communication. In doing so, Koenig & Bauer underscores its technology leadership in traditional offset printing through continuous innovation and sets new standards in digital networking and machine intelligence with the AI-based customer portal myKyana.

“IMPACT” is driven by I ACT: The attitude behind the action 

Behind all these figures and strategic course-settings are the people who make up Koenig & Bauer. It is the commitment and expertise of the global workforce that makes it possible to stay on course even in challenging times. With “I ACT”, which is literally laid out in the strategic framework “IMPACT”, the six strategic thrusts are translated into the determined action of every single individual. In this context, “IMPACT” is far more than a name for Koenig & Bauer – it is a shared attitude. All employees are called upon to ask themselves in their daily actions: Are we really creating the kind of “IMPACT” that truly drives Koenig & Bauer and its customers forward? Only through this shared alignment will the future be shaped successfully. This future is not only defined qualitatively but is underpinned by a clear economic target.

Strategic target “IMPACT” 

“IMPACT” sets the direction until 2030 and beyond in order to increase operational resilience and consistently secure the market position. As part of this strategic vision, Koenig & Bauer sees a strategic revenue potential of €1.5bn with an operating EBITDA margin of at least 8% (excluding one-off effects such as drupa), which the company aims to realise in the medium term by scaling up innovative solutions in its key global markets. The realisation of this potential is being driven forward by the consistent optimisation of the Group footprint and the Group structures. Building on measures already initiated – such as the strategic review of Koenig & Bauer Coding GmbH started in July 2025 – the closure of the Albert-Frankenthal GmbH operations decided in January 2026 forms a consistent next step towards further Group focussing and securing long-term competitiveness. While the view is fixed on these medium-term goals, the present demands full attention and maximum flexibility.

The “new normal”: Actively steering geopolitical challenges  

While this report is being finalised in March 2026, the company again sees itself confronted with a worsening of the geopolitical situation. The latest developments in the Middle East since the end of February are a clear reminder that volatility has long since become the “new normal”. For Koenig & Bauer, this specifically means: Uncertainty in the energy markets and potential logistical challenges are being closely monitored. Even if current travel warnings can occasionally make the dispatch of specialists more difficult, this underlines the necessity of high organisational responsiveness. These challenges confirm the experience since the pandemic and the beginning of the Ukraine war: Stability is no longer a static condition that can be waited for. Instead, agility must function as a fixed component of the company DNA. Koenig & Bauer addresses this situation with the “Adaptability” defined within the framework of “IMPACT”, a solid order backlog of €970.6m, and the experience in flexibly adapting processes to the respective situation. Against the backdrop of these ongoing uncertainties, short-term plans and the dividend policy were weighed with great care.

Outlook for 2026: Stable business performance expected in a volatile environment – Guidance shifted to operating EBITDA 

In view of the earnings performance in 2025 and the persistently challenging global economic environment, the Executive Board and the Supervisory Board will be proposing 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.

For the 2026 financial year, a continuation of operational stability is expected. At the beginning of the year, it was decided to shift the guidance from operating EBIT to operating EBITDA, also in order to take account of the pursued focus on operational cash generation. Provided that demand stimuli remain stable and prompt clarity on US import tariffs is reached, the Executive Board forecasts Group revenue at the previous year’s level as well as an operating EBITDA of approximately €80m for 2026, consistent with the previous year. For the current financial year, for example, non-operating positions could result from the strategic review of Koenig & Bauer Coding GmbH or the closure of Albert-Frankenthal GmbH operations decided in January 2026. Thus, the operating business continues to be reported transparently from such special effects.

Due to the latest geopolitical developments, the forecast is subject to the provison that there is no temporally extended military confrontation in the Middle East, no long-lasting interruption of international trade routes, no permanent energy price crisis, and no significant clouding of the global investment climate. Independent of these external factors, however, there is one reality that must be addressed holistically by ourselves and that awakens ambition daily.

Effect through movement: “IMPACT” 

Part of the reality, however, is also: The share price performance does not live up to Koenig & Bauer’s expectations. Four decades on the capital market are both an obligation and a mandate – this applies more than ever in the year of our 40th stock exchange anniversary. The current valuation reflects neither the technological substance nor the earnings potential of the company. Consistently closing this discrepancy and making the true value visible again is the daily drive for our actions.

To make this true value visible again, more than just a rigid plan is required in today’s world. Strategy requires continuous movement. Koenig & Bauer is not a static industrial company but a dynamic company. Movement is the binding principle of this Group: it is found in the cross-section of the precisely rotating printing cylinders of the machines just as it is in billions of flying ink droplets in digital printing and the target-accurate digital impulses.

For this reason, the sphere was chosen as the elementary form of the new strategic framework. A sphere is never static. It embodies the potential to roll, to absorb forces, and to carry the effect further. The sphere stands for movement – and that is exactly where “IMPACT” begins.

Real “IMPACT” only arises through acceleration, contact, and compression – technologically in the machine, strategically in the market, and entrepreneurially in the decision. Koenig & Bauer translates this principle into its new strategic framework:

Every decision sets something in motion.
Every movement follows a clear direction.
And every direction generates measurable impact for the customers and for you, the shareholders.

Your loyalty to the company and the tireless commitment of the worldwide teams deserve our sincere thanks. Let us continue this dynamic cycle together. Precision in movement. Impact with substance.

Würzburg, 18 March 2026
The Executive Board of Koenig & Bauer AG

Dr. Stephen Kimmich
Chief Executive Officer