HEIDELBERG, Germany, August 10, 2016 /PRNewswire/ --
- Successful realignment: Customers invest in industrial print production and digitization
-
Business development in first quarter of 2016/2017 shaped by drupa industry trade show:
- Incoming orders of € 804 million boost order backlog by 67 percent
- Net sales (€ 486 million) and operating result (EBITDA € 1 million) below that of
previous year - restrained investment activity ahead of drupa and trade show costs impact quarterly
result (net result after taxes € -37 million)
- Positive free cash flow of € 6 million
- Year-end and medium-term targets in reach
As expected, the first quarter of financial year 2016/2017 (April 1, 2016 to June 30, 2016) at Heidelberger
Druckmaschinen AG (Heidelberg) was shaped by the industry trade show drupa, which took place in late May/early June. Under its
"Simply Smart" motto, Heidelberg took the industry's digitization and thus the company's strategic realignment to the next level.
The new products and solutions resulted in a high demand for all the company's offerings related to industrial print production
and digitization. Accordingly, incoming orders rose to € 804 million as at June 30. Compared
to the previous quarter, the order backlog, which is a measure of the Group's future operational development, increased by 67
percent from € 460 million to € 768 million. This strong demand is a solid basis for achieving the targets for the year
as a whole.
"Thanks to a good showing at drupa, Heidelberg has made a solid start to the new financial year. The high level of incoming
orders at the trade show is particularly strong evidence of this," said Heidelberg CEO Gerold
Linzbach. "Our innovations have set new standards for industrial printing in the digitized era. The high level of
acceptance on the market gives us a very optimistic outlook for the future."
Business development in first quarter of 2016/2017 shaped by drupa industry trade show
As expected, the usual restrained investment activity ahead of the trade show saw net sales in the first quarter
drop in comparison to the previous year to € 486 million (previous year: € 563 million). The loss of profit
contributions due to this drop, drupa costs of approximately € 10 million, and higher personnel costs due to collective wage
agreements all had a negative impact on the result in the period under review, as anticipated. Consequently, EBITDA
excluding special items was € 1 million (previous year: € 46 million). The previous year's figure also included a
positive non-recurring effect of € 19 million from the initial consolidation of Printing Systems Group (PSG). At € -3
million, special items were only low (previous year: € -15 million) and the negative financial result was slightly higher
than the previous year's level due to the early repayment of the 2011 corporate bond. At the end of the quarter, Heidelberg had a
net result after taxes of € -37 million (previous year: € -4 million).
Positive free cash flow of € 6 million in first quarter
Despite payments for portfolio optimization and the necessary accumulation of inventories for drupa orders, free cash
flow improved in the quarter under review from € -35 million in the previous year to a positive figure of € 6
million. Compared to the end of financial year 2015/2016, shareholder's equity dropped to € 167 million, primarily due to
the lower actuarial interest rate used to value pension obligations. Consequently, the equity ratio on the balance sheet date was
8 percent, compared to 13 percent in the previous quarter. The net debt was at a low level of € 263 million
(March 31, 2016: €281 million) and the leverage continued to be below the target value of 2 at
1.8.
"We want to grow this year, too, and achieve a moderate increase in net profit after taxes," said Dirk
Kaliebe, CFO. "The balanced financing framework also gives us the freedom to further strengthen the business model through
targeted acquisitions."
Successful realignment: Customers invest in industrial print production and digitization
The feedback from customers about the repositioning of Heidelberg was extremely positive. Heidelberg used drupa to unveil its
"Fire" digital printing portfolio, which attracted a great deal of attention among visitors to the show and recorded sales
success across all product categories. In industrial digital printing, Heidelberg joined forces with Fujifilm to set a new
benchmark for packaging printing with the world premiere of the Heidelberg Primefire 106. The success of the launch was
underlined by the numerous sales concluded with companies in Europe, the United States, Brazil, China, and
Japan. Heidelberg sold the 1000th Versafire - its solution for digital commercial printing - at
drupa. The number of these digital systems sold at the trade show alone matched the total for the whole of financial year
2014/2015. In the label market, which is enjoying strong growth, the Gallus Labelfire digital press attracted a great deal of
interest from visitors. Further sales concluded during the show confirmed the success of the digital label printing solutions.
Thanks to the Fire family, the company has established its position on the market as a digital print supplier.
Through the concept of autonomous printing, Heidelberg is also leveraging the opportunities presented by digitization and
sparking a paradigm shift in industrial print production with sheetfed offset presses. The investments made by customers confirm
the industry shift towards greater automation and productivity, and towards software-based integration. The flagship press - the
Speedmaster XL 106 - turned out to be the most sold machine at the show. Long perfectors and models for the packaging market,
which is continuing to grow, were in particular demand.
The backbone for new service portfolios is the Heidelberg cloud, which records and analyzes data from over 10,000 networked
machines and 15,000 Prinect software linkups. On this basis, for example, Heidelberg offers its customers preventive service
programs to improve machine availability and boost the productivity of the entire print shop.
"Our showing at drupa confirmed that we're on the right track with our strategic realignment based on the growth segments of
digital and services. We're focusing on the right areas to achieve our future objectives," summed up Linzbach.
Year-end and medium-term targets in reach
Thanks to strong incoming orders and the increase in the order backlog, Heidelberg has its sights set firmly on its year-end
targets for 2016/2017. Consequently, it is still forecasting a growth in sales of up to 4 percent. Despite the inputs
associated with the accelerated expansion of digital and service business, the EBITDA margin before special items is expected to
remain at the level of the previous year. At the same time, the company is looking to improve the financial result by reducing
the interest burden. With this, Heidelberg is aiming for a moderate increase in its net result after taxes against the previous
year. In the medium term, the successful reorganization of Heidelberg is set to enable growth in Group sales of up to 4 percent
per year, taking the total to some € 3 billion. This includes a high profitability level with an EBITDA margin in the
range of 7 to 10 percent.
The interim report for the first quarter of financial year 2016/2017, image material, and additional information about the
company are available in the Press Lounge of Heidelberger Druckmaschinen AG at http://www.heidelberg.com.
Next date on company calendar:
The figures for the first half of financial year 2016/2017 are due to be published on November 9, 2016.
Important note:
This press release contains forward-looking statements based on assumptions and estimations by the Management Board of
Heidelberger Druckmaschinen Aktiengesellschaft. Even though the Management Board is of the opinion that those assumptions and
estimations are realistic, the actual future development and results may deviate substantially from these forward-looking
statements due to various factors, such as changes in the macro-economic situation, in the exchange rates, in the interest rates
and in the print media industry. Heidelberger Druckmaschinen Aktiengesellschaft gives no warranty and does not assume liability
for any damages in case the future development and the projected results do not correspond with the forward-looking statements
contained in this press release.
Contacts for further details:
Heidelberger Druckmaschinen AG
Corporate Public Relations
Thomas Fichtl
Phone: +49-6222-82-67123
Fax: +49-6222-82-67129
E-mail: Thomas.Fichtl@heidelberg.com
Investor Relations
Robin Karpp
Phone: +49(0)6222-82-67120
Fax: +49(0)6222-82-99-67120
E-mail: robin.karpp@heidelberg.com