Heidelberg achieves targets for 2018/19 – growing economic risks slow down growth
- Provisional group sales of €2,490 million for 2018/19 approximately 3 percent up on previous year
- EBITDA margin of 7.2 percent within target range and slightly up on previous year
- Cautious outlook for 2019/20 – sales and profitability forecast at previous year’s level
- Deterioration in underlying conditions delay medium-term growth targets
- New digital business models, industrial digital print and sustainable cost efficiency to be vigorously pursued
Following a strong end to financial year 2018/19 (April 1, 2018 to March 31, 2019), Heidelberger Druckmaschinen AG (Heidelberg) achieved its operating targets. After submitting preliminary figures that have yet to be audited, group sales were reported at €2,490 million, or approximately 3 percent higher than the previous year (€2,420 million). Furthermore, the company’s operating profit margin based on EBITDA excluding restructuring result was within the target range, at 7.2 percent (previous year 7.1 percent). According to these preliminary figures, absolute EBITDA was €180 million (2017/18: €172 million). Generating post-tax profits of €21 million, Heidelberg achieved an increase on the previous year (€14 million), as had been anticipated. Free cash flow in the fourth quarter was positive and, as expected, at €–93 million for the year as a whole, was lower than the previous year’s figure of €–8 million. In the past financial year, investments were made in particular in digital projects, the development of new business models and the new Innovation Center at the Wiesloch-Walldorf site. Following a capital increase, the net financial debt was €250 million (March 31, 2018: €236 million) and, at 1.4, leverage remained well below the target value of 2.
“As planned, we have ended financial year 2018/19 with moderately improved sales and results. Our core business exhibited positive development and the company’s digital transformation is making good progress,” commented Heidelberg CEO Rainer Hundsdörfer.
Looking forward, despite growing weakness in the global economy towards the end of the financial year, Heidelberg expects to see a stable development in its core business and growth in the digital subscription model. However, with underlying economic conditions making companies more reluctant to invest in new technologies, expectations regarding a ramp-up in digital printing will need to be more conservative than originally planned. Postpress sales will grow less due to the antitrust authorities’ decision to block the takeover of MBO. Furthermore, the decline in the retail business with consumables is likely to be larger than anticipated.
“This development makes us all the more determined to pursue the Group’s reorganization vigorously. The expansion of the digital business models and the associated higher proportion of recurring contract sales will make us less susceptible to economic fluctuations in the future,” Hundsdörfer explains.