Heidelberger Druckmaschinen AG (Heidelberg) has started the new 2017/18 financial year (April 1 to June 30, 2017) with an increase in sales and earnings. That means it is on course to achieve its annual targets. After initiating a raft of measures, Heidelberg has already sharpened its strategic focus in the first quarter on the key areas of technology leadership, digital transformation, and operational excellence. The company is underscoring its ambitions to consolidate a new corporate culture and return to growth with the motto “Heidelberg goes digital”.
“We are making good progress in transforming Heidelberg into a digital company,” said Rainer Hundsdörfer, CEO of Heidelberg. “We have already had our initial successes in the first quarter, thanks to our new digital presses and two constructive acquisitions. We want to become even faster and more efficient in the future and are continuing to reconfigure company structures to that end.”
During the first quarter of the current financial year, Heidelberg showcased itself as an industry pioneer for digitization at the key China Print trade fair. Customers showed a great deal of interest in this forward-looking topic, which translated into positive devel-opments in incoming orders in this important market. Heidelberg has encountered strong customer demand for the “Primefire”, the first industrial digital packaging print-ing press, and order books are full for the next two years. By taking over software supplier DOCUFY, the company is reinforcing the new digital platforms business area and expanding its Industry 4.0 portfolio. In the growth segment of consumables, business with coatings and pressroom chemicals has been further expanded in the EMEA region following the acquisition of this area from Fujifilm. Additional measures relating to operational excellence include efficiency improvements on all levels, such as higher efficiency in logistics achieved by the optimization of the tariff model in this sector and by acquiring the logistics center. The digitization strategy at Heidelberg has also been rewarded on the capital markets. For example, at the end of the period under review, a convertible bond was converted to equity almost in its entirety, which will see interest costs drop by approximately €5 million a year.
As indicated, net sales and the net result in the first quarter of the year under review have improved over the same quarter of the previous year. For example, sales rose compared to the previous year, reaching €495 million (same quarter of previous year: €486 million). This was attributable primarily to Western Europe and China. As anticipated, at €629 million, incoming orders were below those of the same quarter of the previous year (€804 million), which saw a particularly high level of incoming orders from the drupa trade show. The order backlog increased by over 20 percent from €497 million at the end of the financial year to €603 million as at June 30, 2017.
Profitability, as expressed in EBITDA and EBIT, increased in the quarter under review compared to the previous year’s values. At €14 million, EBITDA was far better than in the same quarter of the previous year (€1 million), while EBIT amounted to €–3 million (previous year: €–16 million). Due to lower financing costs, the financial result improved to €–13 million (same quarter of previous year: €–16 million). Including income taxes, the net result after taxes of €–16 million was a significant improvement over the previous year’s figure (€–37 million).
As a result of company and real estate acquisitions and payments for portfolio optimization, free cash flow in the first three months was negative, at €–13 million (previous year: €6 million). Compared to the financial year-end, shareholder’s equity increased to €382 million on the balance sheet date (previous year: €167 million). This increase is largely due to the almost complete conversion of the convertible bond into Heidelberg shares and a slight increase in the actuarial interest rate for pensions in Germany. The equity ratio as at June 30, 2017 was approximately 17 percent. Financial liabilities dropped significantly, largely due to the almost complete conversion of the convertible bond, and net financial debt shrank to €234 million (previous year: €263 million).
“The almost complete conversion of a bond into shareholder’s equity is further evidence that our digitization strategy is being acknowledged on the capital markets. The repayment of the convertible bond has brought us closer to our goal of achieving a sustainable improvement in net interest income. We want to reduce interest costs, which currently stand at €34 million, to €20 million annually in the future,” says Dirk Kaliebe, CFO at Heidelberg, commenting on developments.
more details at: https://www.heidelberg.com/global/en/company/press_1/press_release/press_release_details/press_release_77697.jsp