Koenig & Bauer AG - Becoming a Global Leader after 1967

Becoming a Global Leader after 1967

In the last three decades of the 20th century, Koenig & Bauer evolved from an export-oriented German family business into an international family of businesses that became one of the world's major players in the printing machine industry. This transformation was led by Hans B. Bolza-Schünemann, who succeeded Hans Bolza as CEO in 1971. However, his first major task was crisis management. When offset printing, a technology that used films of text and images instead of lead plates and was therefore much cheaper, rapidly replaced letterpress printing within just five years, Koenig & Bauer invested huge sums to develop their own range of offset printing presses. This investment, combined with the cost of building new production lines, significantly drained the company's financial resources. Only with the help of foreign investors was Bolza-Schünemann able to rescue the company from bankruptcy and from being taken over by a competitor at a time of increasing industry consolidation. In 1985, Koenig & Bauer went public, although the Bolza-Schünemann family still held a controlling interest in the company.

Koenig & Bauer's growth through acquisition began in the late 1970s. In December 1978, one year after the company had regained a majority stake in its Austrian subsidiary, Koenig & Bauer bought a 49.9 percent share in Albert-Frankenthal AG.

Founded in 1873 in Frankenthal by a former Koenig & Bauer employee, the state-owned company was the worldwide leading manufacturer of publication rotogravure presses, a product line that perfectly complemented Koenig & Bauer's. In 1988, Koenig & Bauer increased its shareholding in Albert-Frankenthal to 74.99 percent and took over the remaining shares from the Rhineland-Palatinate Ministry of Finance two years later. From then on, the company presented itself to the public as the Koenig & Bauer-Albert group—in short KBA. Finally, in 1995 Koenig & Bauer merged with Albert-Frankenthal into Koenig & Bauer-Albert AG (KBA).

In 1979, Koenig & Bauer took the first step towards establishing a foothold in the United States with the acquisition of Indianapolis-based Egenolf & Rasdall, a company that specialized in the rigging and repair of printing presses. Renamed Koenig & Bauer/Egenolf Machine Inc., the company was used as a sales and service support center for Koenig & Bauer customers in the United States. Nine years later, the company bought a 20 percent stake in Dallas, Texas-based Publishers Equipment Corporation (PEC). In 1990, Koenig & Bauer took over the U.S. manufacturer of web-fed gravure presses and folders Motter Printing Press Company, located in York, Pennsylvania. Koenig & Bauer renamed the company KBA-Motter Corp. and transferred all of their U.S. activities to its facilities, while the association with Koenig & Bauer/Egenolf was discontinued.

In the same year that the Berlin Wall fell, 1989, an East German printing machine manufacturer, Planeta Druckmaschinenwerke, was founded near Dresden. In 1991, Koenig & Bauer acquired a majority holding in the company, which had already become a leading international producer of high-tech sheet-fed offset presses and had acquired Royal Zenith Corp. in the United States in 1990. Planeta Druckmaschinenwerke was renamed KBA-Planeta AG. In 1994, Koenig & Bauer bought the remaining shares in KBA-Planeta and merged with it to create Koenig & Bauer AG (KBA) four years later. Besides these major acquisitions Koenig & Bauer conquered other new markets, such as Japan and Russia, through licensing agreements with local manufacturers. The acquisitions of Albert-Frankenthal and Planeta catapulted Koenig & Bauer into the top global league of printing press manufacturers. However, the integration of the company's new subsidiaries took a considerable amount of cash and effort. Albert-Frankenthal, Planeta, and Motter posted losses which in turn resulted in net losses for the KBA group well into the 1990s.

In 1995, Hans B. Bolza-Schünemann was succeeded by his long-time right-hand man and CFO Reinhart Siewert as CEO. Under his leadership, KBA launched a rigid reorganization, rationalization, and cost-cutting program. However, not until 1997 did Planeta finally come out of the red. While this was mainly due to a vastly oversized workforce and huge reorganization cost, another reason for the company's slow recovery was the fact that a growing number of competitors in the industry were offering ever-lower prices in order to lure a decreasing number of customers. In 1996, after a complaint by U.S. printing press maker Rockwell International about unfairly low-priced competition from Germany and Japan, the U.S. Department of Commerce threatened Koenig & Bauer with a heavy 46 percent anti-dumping import duty. However, the company successfully defended itself, and the case was finally settled six years later. The combination of global overcapacities and stagnating markets in Western Europe, the United States, and Asia resulted in a steep 30 percent drop in price levels. The worldwide printing press industry, including Koenig & Bauer, went through waves of crises during the 1990s and into the early years of the 21st century.

In 2000, the Koenig & Bauer group's turnover passed the EUR 1 billion mark for the first time. In 2001, the Bolza-Schünemann family gave up its majority stake in the company. To increase KBA's capital base, the company transformed its preferred shares into ordinary shares with voting rights, which increased the number of free-floating shares from one-third to almost 60 percent. In mid-2001, KBA shares were listed on the German MDax stock market index. In the same year, the company acquired its long-time business partner, Swiss security-printing specialist De La Rue Giori. Two years later, KBA took over two other German business partners: metal-decorating press manufacturer Bauer + Kunzi and Metronic, a producer of UV offset systems for printing CDs, CDRs, DVDs, and plastic cards. These acquisitions followed the company's group strategy to venture into promising niche markets. Other areas for potential future growth were "74 Karat" digital offset presses for short runs of color publications and the "Rapida" line of super-large sheet-fed offset presses. In mid-2003, Hans B. Bolza-Schünemann's oldest son Albrecht, who had managed the restructuring of the Planeta division in the 1990s, took over as Koenig & Bauer's CEO. His younger brother Claus Bolza-Schünemann was appointed deputy president.