A look at the recent results of the major offset equipment makers confirm that life continues to be difficult for the industry.  While the cost reduction efforts appear to pay some dividends, the overall market continues to be in a continuing decline.  Last year's DRUPA effect was dampened by the continuing weakness of the Chinese and Brazilian markets.

Manroland Sheetfed recently communicated upbeat news, but the 33% drop in backlog compared to 2015 suggests that orders dropped from Euro 323 million to below Euro 290 million in the DRUPA year, about half of what Heidelberg typically books in a quarter. 

Heidelberg's equipment segment saw quite a bump at DRUPA, but the next two quarters were business as usual, at best.  The chart below compares quarterly orders for equipment and services.  
It is no secret that all manufacturers are looking to increase their services segment to reduce cyclicality and a look at operating performance shows the struggles Heidelberg still has to make money with its machines, despite its leading market position.  
The Euro 60 million peak in Q1/15 (Q4 of HD's fiscal year) was driven by blow-out sales of Euro 518 million, followed by average quarterly sales of Euro 309 million for the following seven quarters, leading to the not-so-special insight that manufacturing volume is the key to profitability.  Given an even better backlog position than at the end of 2014, another big fourth fiscal quarter (followed by the usual trough) is certainly possible, however the question remains if the equipment segment can generate performance if quarterly sales settle in at Euro 300 million or below in the future.

KBA's fourth quarter results are not yet available, but comparing the last four quarters at the end of Q3 with the same period a year earlier, sheetfed and web orders dropped some Euro 90 million each, or 15% for sheetfed and 41% for web orders, another sign that the market was challenging in 2016.  Once the full year numbers become available I will update the overall comparison of the major offset players. 

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