Heidelberg on Track to Meet Medium-term Targets – Expected Stable Development in 2017/2018

HEIDELBERG, Germany, May 8, 2018 /PRNewswire/ --

- Significant progress with digital transformation thanks to:

  - successful launch of subscription model and   
   - start of series production for digital presses 

- Path to medium-term targets taking shape:  

   - Group sales set to increase to around €3 billion and 
   - net result after taxes to > €100 million 

- Specified targets for financial year 2017/2018 achieved:  

   - despite significant negative foreign currency effects,  Group sales of €2,420 million and
    - EBITDA of €172 million  

Heidelberger Druckmaschinen AG (Heidelberg) made significant progress with the Group's targeted digital transformation in financial year 2017/2018 (April 1, 2017 to March 31, 2018). A number of customers have already opted for the new subscription model that offers Heidelberg products and services under a usage-based all-in contract running over several years. The total of more than 30 contracts targeted for the new financial year 2018/2019 are set to generate a business volume of some €150 million over the term of the standard five-year models.

In addition, the series production of digital presses for packaging and label printing (Primefire and Labelfire), which also started in financial year 2017/2018, will have an increasingly positive impact on sales. Heidelberg is thus on course to meet the medium-term targets communicated in the summer of 2017. These include an increase in Group sales to around €3 billion, an operating result (EBITDA) of €250 to 300 million, and a net profit after taxes of over €100 million.

"Heidelberg made excellent progress with its digital transformation in 2017/2018. Both our new subscription model and the new digital presses are in high demand. Given that this will be reflected in the company's sales and result to an ever greater extent in the years ahead following the current start-up phase, our medium-term targets will be increasingly within our grasp," CEO Rainer Hundsdörfer, commented on the developments.

Operating targets for financial year 2017/2018 achieved 

Based on provisional figures that have yet to be audited, Heidelberg has achieved the targets it set itself with Group sales of €2,420 million. The shortfall compared with the previous year's figure of €2,524 million is mainly the result of negative currency effects and the deliberate avoidance of trading activities in low-margin remarketed equipment amounting in total to over €100 million. Despite the negative currency effects in the period under review, incoming orders were at a very encouraging level for a post-drupa year at €2,588 million (previous year: €2,593 million). The demand in the final quarter of the year was substantially up on the figure for the same quarter of the previous year - €676 million compared to €603 million - among other things due to the full order volume of subscription contracts being taken into account. This contributed to a significant increase in the order backlog at the end of the financial year.  

EBITDA excluding the restructuring result totaled €172 million in the reporting period (previous year: €179 million). This meant the resulting EBITDA margin of 7.1 percent (previous year: 7.1 percent) was within the expected range. The restructuring result amounted to around €-16 million in 2017/2018 (previous year: €-18 million). Lower interest costs resulted in a further significant improvement in the financial result to €-48 million (previous year: €-56 million). Without the tax burden from the American subsidiaries due to the U.S. tax reform, this would have led to a comparable net result after taxes of €39 million (previous year: €36 million). Due to the above-mentioned tax burden, however, the total net profit after taxes was around €14 million.

As expected, the free cash flow was slightly negative at €-8 million (previous year: €24 million) in the period under review due to acquisitions and investments associated with the construction of the new innovation center in Wiesloch. The net financial debt fell to €236 million in the reporting period (March 31, 2017: €252 million) and the leverage remained well below the target value of 2 at 1.4.

"Our growth initiatives are accompanied by a new financing framework that also enables us to further accelerate the digital transformation through targeted acquisitions," said, CFO Dirk Kaliebe.

Next important date:  

Heidelberg will be publishing the audited financial statements for financial year 2017/2018 and the outlook for 2018/2019 at the Annual Accounts Press Conference on June 12, 2018 in Frankfurt.

For additional details about the company and image material, please visit the Press Lounge of Heidelberger Druckmaschinen AG at http://www.heidelberg.com.

Heidelberg IR now on Twitter: 

Link to the IR Twitter channel: https://twitter.com/Heidelberg_IR

On Twitter under the name: @Heidelberg_IR

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 macro-economic 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.

Further information: 
Heidelberger Druckmaschinen AG

Corporate Public Relations
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