Our quarterly operating result was again in the black beginning in the third quarter of the financial year. Contributing to this were the gratifying increase in sales and the lower fixed cost basis, which we realized thanks to our cost reduction measures. Although the result of operating activities excluding special items was positive, as expected, we suffered a substantial net loss because the financial result continued to present a heavy burden.
Whereas the result of operating activities excluding special items was still in the red for the first half-year, in the second half of the year we were successful in generating a positive operating result, and were able to compensate for the loss of the first half-year. For the first time since the beginning of the economic crisis in financial year 2008/2009, we thereby again exceeded the operating break-even point for the year as a whole. The result of operating activities excluding special items of € 4 million as well as EBITDA of € 104 million were considerably higher than in the preceding year and in line with our expectations.
Various developments contributed to this. Due to the – albeit slow – upswing of the printing industry, net sales adjusted for exchange rate effects grew modestly and generated higher profit contributions. Moreover, the Heidelberg Equipment Division benefited from increasing demand not only in the newly industrializing countries, but in the industrialized countries as well, where the share of sales accounted for by highly automated printing presses with higher profit margins is greater. In the Heidelberg Services Division, the market environment resulted in greater demand for consumables as well as a favorable trend with remarketed equipment. The share of sales fell in this segment, which has rather low profit margins. Moreover, demand and prices for remarketed equipment rose again.
In the Heidelberg Equipment Division, we thereby succeeded in reducing the previous year’s loss by a third. The result of operating activities excluding special items improved from € - 153 million the previous year to € - 98 million. In the Heidelberg Services Division, following income of € 12 million the previous year, we generated an operating result of € 84 million. Although the financing volume of Heidelberg Financial Services fell again during the financial year, this division’s result of € 18 million was again favorable.
We were successful in boosting Heidelberg’s total operating performance by 19 percent. The cost of materials increased in line with the marked growth in sales. Because the share of sales accounted for by printing presses with special features increased, the ratio of the cost of materials to total operating performance rose slightly from 47.3 percent to 47.5 percent. We continue to work on expanding our purchasing operations in foreign currencies in order to reduce risks from exchange rate fluctuations.
staff costs increased slightly in absolute terms. The consequences of our cost-reduction measures can be easily seen in the staff cost ratio in total operating performance.
We had cut back investments to a minimum and adjusted them to the reduced business volume during the previous year. We were able to increase them again somewhat during the financial year. depreciation and amortization fell somewhat compared with the previous year due to the low level the previous year.
When other operating expenses are considered in relationship to the total operating performance, our sustained cost-cutting measures become noticeable here as well, with this ratio decreasing from 23.4 percent the previous year to 20.2 percent.
We booked income from special items of € 2 million during the financial year. We were able to release part of the provision for boosting efficiency that we had carried the previous year. Compensation payments in connection with last year’s staff reductions were lower than had been expected. These reversals contrasted with expenses that largely included provisions for costs that will accrue due to the concentration of our business activities, including office space reductions, the concentration of production sites, and ongoing optimization measures.
|Figures in € millions
|Change in inventories / Other own work capitalized||- 128||- 31|
|Total operating performance||2,178||2,598|
|Result of operating activities1)||- 159||6|
|Financial result||- 127||- 149|
|Income before taxes||- 286||- 143|
|Taxes on income||- 58||- 14|
|Net loss||- 229||- 129|
The financial result of € - 149 million was below the previous year’s figure of
We reported tax income of € 58 million for the past financial year; during the reporting year tax income amounted to € 14 million. Our overall tax rate accordingly fell from 20 percent the previous year to 10 percent during the reporting year. Overall, as expected we again suffered a substantial net loss, which amounted to € - 129 million during the financial year. This nevertheless represented a considerable improvement over the previous year. Earnings per share thereby amounted to € - 0.83, compared with € - 2.94 the previous year.
|Figures in € millions
|Result of operating activities2)||362||268||- 49||- 130||4|
|– in percent of sales||9.5||7.3||- 1.6||- 5.6||0.2|
|Special items||–||–||- 179||- 28||2|
|Financial result||- 62||- 69||- 119||- 127||- 149|
|Net profit/loss||263||142||- 249||- 229||- 129|
|– in percent of sales||6.9||3.9||- 8.3||- 9.9||- 4.9|