01/20/2020 8:06 p.m. CET
Based on preliminary financial figures, Heidelberger Druckmaschinen AG (WKN: 731400 / ISIN: DE0007314007) announces that its development in the first nine months (April 1 to December 31, 2019) of financial year 2019/20 has been stable overall in terms of sales and incoming orders. However, the persistently difficult market environment led to a decline in sales and operating result in the third quarter.
At EUR 1,900 million after nine months, order intake was on a par with the previous year (previous year: EUR 1,912 million). At EUR 636 million, incoming orders in the third quarter were up on the previous year's figure of EUR 606 million. Order volumes increased in China and the USA in particular, while business in Germany and other parts of Europe remains weak. At EUR 1,690 million after nine months of the fiscal year, sales were still at the previous year's level (previous year: EUR 1,693 million). However, sales in the third quarter of the current fiscal year were lower than expected at EUR 567 million due to the reluctance to invest in Germany, Great Britain and the rest of Central Europe as a result of the economic situation, and were below the previous year's figure of EUR 579 million.
EBITDA excluding the restructuring result was EUR 47 million in the third quarter (October 1 to December 31, 2019), compared with EUR 39 million in the prior-year quarter. The third quarter of the current fiscal year includes a positive one-time gain of around EUR 25 million from the sale of Hi-Tech Coatings. The lower volume, pressure on margins in the trading business with consumables and regional shifts with a less favorable product mix had a particularly negative impact. At the same time, high upfront investments in the area of digital printing still faced insufficient sales.
The development in the third quarter and the expectation of a continued low propensity to invest in key European markets means that even in the traditionally strong fourth quarter of the current financial year, sales and earnings are expected to be down on the previous year, with implications for the annual forecast. The Management Board now expects full-year sales to be slightly below the previous year's level of around EUR 2.490 billion. Until now, the company has assumed a stable sales trend. EBITDA excluding the restructuring result and the one-off income from the sale of Hi-Tech Coatings is expected to be in a range of 5.5 to 6.0 percent of sales (previously 6.5 to 7.0 percent) due to the lower sales expectation, declining trade margins and the unfavorable region and product mix. Earnings after tax will accordingly be slightly negative (previously: balanced after tax).
As announced, Heidelberg is in an advanced stage of developing a comprehensive package of measures to improve profitability over the long term, due to the massive changes taking place throughout the industry. The aim is to streamline the product portfolio, sell non-core businesses as announced, make organizational structures and processes more efficient, optimize the international production network, and significantly reduce the overall cost base. The aim is to focus on customer-centric solutions and to further drive forward the digital transformation. The company will provide comprehensive information as soon as the planning for this package of measures has been completed and the responsible committees have decided on its implementation.
The company will publish the complete interim report for the third quarter 2019/20 on February 11, 2020 as planned.
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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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