Operational business at Heidelberger Druckmaschinen AG (Heidelberg)
continued to improve throughout the third quarter of financial year
2010/2011 (October 1 to December 31, 2010). As expected, both
incoming orders and sales were again up on the previous year.
Coupled with the achieved efficiency increases brought about by the
reorganization, this upward trend enabled Heidelberg to achieve a
positive operating result before special items for the first time
in the current financial year.
At EUR 684 million, incoming orders in the third quarter were
12 percent up on the previous year's figure (EUR 609 million),
with exchange rate effects accounting for EUR 44 million of this.
This represents an increase of 5 percent over the previous quarter
(EUR 650 million). All in all, order levels improved by 25 percent
(18 percent after adjustment for exchange rate effects) over the
first nine months, reaching EUR 2,120 million (previous year: EUR
continued to improve in the third quarter, reaching
the highest level for the current financial year at EUR 687
million. This includes EUR 43 million from exchange rate effects.
As a result, sales revenues for the quarter under review were 19
percent up on the previous year (EUR 578 million) and 9 percent up
on the previous quarter. After nine months, total sales amounted to
EUR 1,883 million - an improvement of 18 percent (11 percent after
adjustment for exchange rate effects) on the previous year (EUR
1,591 million). The
of the Heidelberg Group increased to EUR 770
million in the third quarter (previous year: EUR 626 million).
"Thanks to stable growth in the global economy, our incoming
orders increased in all regions and divisions during the third
quarter. Nonetheless, the economic recovery is still marked by
regional differences. While incoming orders are rising steadily in
Asia, Europe, and Latin America, the recovery in the key U.S.
market has been slow to set in," said Heidelberg Group CEO Bernhard
Schreier. "The positive developments of the past nine months show
that we are on track to achieve our target - a break-even operating
result for the current financial year."
Positive operating result
As planned, Heidelberg generated a positive
result of operating activities excluding special items
EUR 15 million during the third quarter (previous year: EUR -13
million). The company benefited from the increased sales revenues
brought about by a more favorable sales mix, from improved market
conditions, and from cost savings achieved through the
reorganization. Over the first nine months, results were up a total
of EUR 115 million on the previous year (EUR -141 million), thereby
reducing the shortfall to just EUR -26 million at the end of the
quarter. After nine months, and following the partial release of
provisions for efficiency improvements recorded the previous year,
special items went positive at EUR 26 million and generated a
break-even operating result including special items.
in the third quarter was EUR -16 million
(previous year: EUR -31 million). Interest saved from the repayment
of financial liabilities and non-recurring earnings from the sale
of a company enabled Heidelberg to significantly reduce its loss.
However, due to high financing costs and non-recurring expenditures
linked to the repayment of financial liabilities, as expected the
overall financial result after nine months was down on the previous
year (EUR -79 million) at EUR -103 million.
income before taxes
improved to EUR -103 million compared to
the previous year (EUR -201 million). Tax income from a
retrospective increase in the corporate income tax credit sold last
year is benefiting taxes on income. After three quarters, the net
loss for the current financial year is EUR -78 million. A profit of
EUR 10 million was generated in the quarter under review.
was again positive in the third quarter, at
EUR 22 million (previous year: EUR 3 million). Compared with the
equivalent nine months of the previous year, free cashflow improved
to a total of EUR 91million following a figure of EUR -15 million
in the previous year. This was primarily due to the reduction in
net working capital and the lower annual net loss.
"Because sales revenues continued to grow as expected and
efficiency improvements were also achieved, we generated a positive
operating result before special items for the first time in the
current financial year," said Dirk Kaliebe, CFO of the Heidelberg
Group. "Thanks to the successful capital increase in September last
year and early repayment of the loan from the Special Program of
the Reconstruction Loan Corporation (KfW) at the end of December,
we were able to further improve our financing structure,
significantly reduce our net debt, and further increase our equity
ratio. All in all, we have thus created solid conditions for future
Simplified financing structure at Heidelberg
Heidelberg used all the net proceeds from the capital
increase in the second quarter to repay financial liabilities and
reduce existing loan agreements by approximately EUR 400 million.
This reduced the company's future interest expenditure
significantly. During the quarter under review, Heidelberg repaid
the remaining EUR 100 million of the loan from the special program
of the KfW in full and ahead of schedule following reallocation
within the financing structure. With total financing reduced to
just under EUR 900 million, the basis for future refinancing at the
Heidelberg Group is considerably improved.
Financial liabilities at the end of the quarter were EUR 369
million. Net financial debt dropped to EUR 220 million in the third
quarter, while the equity ratio increased from around 30 percent in
the previous quarter to approximately 33 percent.
At December 31, 2010, Heidelberg had 15,981
worldwide. During the first nine months of the
current financial year, the headcount dropped by a total of 515.
Business results in the divisions
Division, incoming orders of EUR 402
million in the third quarter were up on both the previous year and
the preceding quarter. Sales increased again in the third quarter
to EUR 417 million. This high growth is primarily the result of
higher sales of medium- and large-format sheetfed offset presses.
The result of operating activities before special items improved
significantly in the first nine months of the financial year by
around a third to EUR -95 million (previous year: EUR -147
million). In the
Division, which is less dependent on the
economic climate, incoming orders of EUR 278 million in the quarter
under review matched the high level of the previous quarters. Sales
revenues also stabilized at a high level in the third quarter, at
EUR 267 million. After nine months, the division recorded moderate
growth across all services and products compared to the previous
year. Growth was particularly strong in consumables. Compared to
the previous year, the operating result before special items
improved significantly for the first nine months to EUR 58 million
(previous year: break-even operating result). The
Division once again achieved a positive operating
result in the quarter under review. After three quarters, the
overall result was EUR 11 million (previous year: EUR 6 million).
Business developments in the regions
In the third quarter, incoming orders in
were up on the previous year. In the North
America region, too, incoming orders for the third quarter improved
over the previous year and previous quarter. The picture is
somewhat different when it comes to sales revenues, however. While
the figures for the first three quarters showed a clear improvement
on the previous year's levels in Europe, the Middle East &
Africa, Eastern Europe, Latin America, and Asia/Pacific, sales in
North America were still below last year's level after
adjustment for exchange rate effects.
For the current financial year 2010/2011, Heidelberg
continues to project a modest growth in sales after adjustment for
exchange rate effects. The result of operating activities will
benefit from the increasing profit contributions as well as from
the cost-reduction measures that have been realized so far.
Assuming stable economic developments, the company continues to
strive for a break-even operating result for the current financial
year. When looking at how the economy will develop, the group's
financial year planning takes into account the respective product
mix prevalent in the individual markets. Heidelberg continues to
focus on limiting the commitment of funds. Nevertheless, the
enormous growth in financing costs and the one-time effects
resulting from the repayment of financial liabilities from the
proceeds of the capital increase will place a heavy burden on the
financial result. However, the repayment of financial liabilities
following the successful capital increase will have a mitigating
effect during the remaining months of the current financial year.
For the current financial year we therefore continue to anticipate
a marked net loss.
For additional details and further information about the
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The scheduled publication date for the preliminary annual
accounts for financial year 2010/2011 is May 11, 2011.
For further information, please contact:
Heidelberger Druckmaschinen AG
Corporate Public Relations
Phone: +49 (0)6221 92 5900
Fax: +49 (0)6221 92 5069
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.