Heidelberger Druckmaschinen:
Cyclical reluctance to invest weighs on start of 2019/20 financial year

07/17/2019 10:09 p.m. CEST

  • Key figures for 1st quarter down year-on-year
  • Sales forecast confirmed, margin target and expected net result after taxes adjusted

The business performance of Heidelberger Druckmaschinen AG (Heidelberg) in the first quarter (April 1, 2019 to June 30, 2019) of financial year 2019/20 was impacted in particular at the end of the reporting period by the increasing reluctance to invest and the corresponding shift in sales due to the economic downturn. In the traditionally weakest quarter of the year, the company recorded sales of € 502 million, compared with € 541 million in the same period of the previous year. Especially in Germany and parts of Europe, it was not possible to repeat the previous year's performance. Demand for contract offerings (service, software and supply contracts for consumables and, in the final stage, subscription contracts including equipment) developed positively, with the proportion of recurring revenues rising by almost 10 percent year-on-year to around € 80 million. Due to the ramp-up, however, it has not yet been possible to compensate for the overall decline in sales.

Despite significantly higher demand in China as a result of the positive outcome of the Print China trade fair, as at June 30, 2019, incoming orders were down on the previous year (€ 665 million) at € 615 million. At around € 14 million (including the IFRS 16 effect of around € 4 million), EBITDA excluding restructuring result was also below the unadjusted prior-year figure of around € 20 million. After taxes, the Group reported a minus of around € 31 million (previous year: € –15 million). In view of the net working capital build-up during the year and investments in the expansion of digital business models, free cash flow was negative at € –83 million (previous year: € –45 million).

For the 2019/20 financial year as a whole, Heidelberg continues to anticipate sales at the previous year's level. Despite the economic downturn and the associated reluctance to invest in the equipment business, the company expects to compensate for this by further stable expansion of the contract business. However, the reluctance to invest is also leading to a product mix with lower overall profitability in the equipment business. The company is therefore adjusting its outlook for the operating result in the current financial year and is assuming a target margin for EBITDA excluding restructuring result in a range of 6.5 to 7 percent of sales (to date 7.5 to 8.0 percent). A break-even net result after taxes is now expected.

Heidelberg will publish the complete interim statement of the 1st quarter 2019/20 as planned on August 6, 2019.

Further information:

Corporate Communications
Thomas Fichtl
Phone: +49 6222 82-67123
Fax: +49 6222 82-67129
E-mail: Thomas.Fichtl@heidelberg.com

Investor Relations
Robin Karpp
Phone: +49 6222 82-67120
Fax: +49 6222 82-99 67120
E-mail: robin.karpp@heidelberg.com

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 macroeconomic 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.

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