Cyclical reluctance to invest weighs on start of 2019/20 financial year – sales forecast confirmed, margin target 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).