Operational business at Heidelberger Druckmaschinen AG
(Heidelberg) (FWB: HDD) continued to improve throughout the third
quarter of financial year 2010/2011 (October 1 to December 31,
2010). As expected, both incoming orders and sales were again up on
the previous year. Coupled with the achieved efficiency increases
brought about by the reorganization, this upward trend enabled
Heidelberg to achieve a positive operating result before special
items for the first time in the current financial year.
At EUR 684 million, incoming orders in the third quarter
were 12 percent up on the previous year's figure (EUR 609 million),
with exchange rate effects accounting for EUR 44 million of this.
This represents an increase of 5 percent over the previous quarter
(EUR 650 million). All in all, order levels improved by 25 percent
(18 percent after adjustment for exchange rate effects) over the
first nine months, reaching EUR 2,120 million (previous year: EUR
1,693 million).
Sales continued to improve in the third quarter, reaching
the highest level for the current financial year at EUR 687
million. This includes EUR 43 million from exchange rate effects.
As a result, sales revenues for the quarter under review were 19
percent up on the previous year (EUR 578 million) and 9 percent up
on the previous quarter. After nine months, total sales amounted to
EUR 1,883 million – an improvement of 18 percent (11 percent after
adjustment for exchange rate effects) on the previous year (EUR
1,591 million). The order backlog of the Heidelberg Group
increased to EUR 770 million in the third quarter (previous year:
EUR 626 million).
“Thanks to stable growth in the global economy, our incoming
orders increased in all regions and divisions during the third
quarter. Nonetheless, the economic recovery is still marked by
regional differences. While incoming orders are rising steadily in
Asia, Europe, and Latin America, the recovery in the key U.S.
market has been slow to set in,” said Heidelberg Group CEO Bernhard
Schreier. “The positive developments of the past nine months show
that we are on track to achieve our target – a break-even operating
result for the current financial year.”
Positive operating result
As planned, Heidelberg generated a positive result of
operating activities excluding special items of EUR 15
million during the third quarter (previous year: EUR -13 million).
The company benefited from the increased sales revenues brought
about by a more favorable sales mix, from improved market
conditions, and from cost savings achieved through the
reorganization. Over the first nine months, results were up a total
of EUR 115 million on the previous year (EUR -141 million), thereby
reducing the shortfall to just EUR -26 million at the end of the
quarter. After nine months, and following the partial release of
provisions for efficiency improvements recorded the previous year,
special items went positive at EUR 26 million and generated a
break-even operating result including special items.
The financial result in the third quarter was EUR -16
million (previous year: EUR -31 million). Interest saved from the
repayment of financial liabilities and non-recurring earnings from
the sale of a company enabled Heidelberg to significantly reduce
its loss. However, due to high financing costs and non-recurring
expenditures linked to the repayment of financial liabilities, as
expected the overall financial result after nine months was down on
the previous year (EUR -79 million) at EUR -103 million.
The income before taxes improved to EUR -103 million
compared to the previous year
(EUR -201 million). Tax income from a retrospective increase in
the corporate income tax credit sold last year is benefiting taxes
on income. After three quarters, the net loss for the current
financial year is EUR -78 million. A profit of EUR 10 million was
generated in the quarter under review.
Free cashflow was again positive in the third quarter, at
EUR 22 million (previous year: EUR 3 million). Compared with the
equivalent nine months of the previous year, free cashflow improved
to a total of EUR 91 million following a figure of EUR -15 million
in the previous year. This was primarily due to the reduction in
net working capital and the lower annual net loss.
“Because sales revenues continued to grow as expected and
efficiency improvements were also achieved, we generated a positive
operating result before special items for the first time in the
current financial year,” said Dirk Kaliebe, CFO of the Heidelberg
Group. “Thanks to the successful capital increase in September last
year and early repayment of the loan from the Special Program of
the Reconstruction Loan Corporation (KfW) at the end of December,
we were able to further improve our financing structure,
significantly reduce our net debt, and further increase our equity
ratio. All in all, we have thus created solid conditions for future
refinancing.”
Simplified financing structure at Heidelberg
Heidelberg used all the net proceeds from the capital increase
in the second quarter to repay financial liabilities and reduce
existing loan agreements by approximately EUR 400 million. This
reduced the company's future interest expenditure significantly.
During the quarter under review, Heidelberg repaid the remaining
EUR 100 million of the loan from the special program of the KfW in
full and ahead of schedule following reallocation within the
financing structure. With total financing reduced to just under EUR
900 million, the basis for future refinancing at the Heidelberg
Group is considerably improved.
Financial liabilities at the end of the quarter were EUR 369
million. Net financial debt dropped to EUR 220 million in the third
quarter, while the equity ratio increased from around 30 percent in
the previous quarter to approximately 33 percent.
At December 31, 2010, Heidelberg had 15,981 employees
worldwide. During the first nine months of the current financial
year, the headcount dropped by a total of 515.
Business results in the divisions
In the Heidelberg Equipment Division, incoming orders of
EUR 402 million in the third quarter were up on both the previous
year and the preceding quarter. Sales increased again in the third
quarter to EUR 417 million. This high growth is primarily the
result of higher sales of medium- and large-format sheetfed offset
presses. The result of operating activities before special items
improved significantly in the first nine months of the financial
year by around a third to EUR -95 million (previous year: EUR -147
million). In the Heidelberg Services Division, which is less
dependent on the economic climate, incoming orders of EUR 278
million in the quarter under review matched the high level of the
previous quarters. Sales revenues also stabilized at a high level
in the third quarter, at EUR 267 million. After nine months, the
division recorded moderate growth across all services and products
compared to the previous year. Growth was particularly strong in
consumables. Compared to the previous year, the operating result
before special items improved significantly for the first nine
months to EUR 58 million (previous year: break-even operating
result). The Heidelberg Financial Services Division once
again achieved a positive operating result in the quarter under
review. After three quarters, the overall result was EUR 11 million
(previous year: EUR 6 million).
Business developments in the regions
In the third quarter, incoming orders in all regions were
up on the previous year. In the North America region, too, incoming
orders for the third quarter improved over the previous year and
previous quarter. The picture is somewhat different when it comes
to sales revenues, however. While the figures for the first three
quarters showed a clear improvement on the previous year's levels
in Europe, the Middle East & Africa, Eastern Europe, Latin
America, and Asia/Pacific, sales in North America were still below
last year's level after adjustment for exchange rate effects.
Outlook
For the current financial year 2010/2011, Heidelberg continues
to project a modest growth in sales after adjustment for exchange
rate effects. The result of operating activities will benefit from
the increasing profit contributions as well as from the
cost-reduction measures that have been realized so far. Assuming
stable economic developments, the company continues to strive for a
break-even operating result for the current financial year. When
looking at how the economy will develop, the group’s financial year
planning takes into account the respective product mix prevalent in
the individual markets. Heidelberg continues to focus on limiting
the commitment of funds. Nevertheless, the enormous growth in
financing costs and the one-time effects resulting from the
repayment of financial liabilities from the proceeds of the capital
increase will place a heavy burden on the financial result.
However, the repayment of financial liabilities following the
successful capital increase will have a mitigating effect during
the remaining months of the current financial year. For the current
financial year we therefore continue to anticipate a marked net
loss.
For additional details and further information about the
company, please visit the Internet Press Lounge at
www.heidelberg.com.
Other dates:
The scheduled publication date for the preliminary annual
accounts for financial year 2010/2011 is May 11, 2011.
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.
Heidelberger Druckmaschi... (TG:HDD)
Historical Stock Chart
From Dec 2024 to Jan 2025
Heidelberger Druckmaschi... (TG:HDD)
Historical Stock Chart
From Jan 2024 to Jan 2025
