Incoming orders and sales recorded by Heidelberger
Druckmaschinen AG (FWB: HDD) in financial year 2010/2011 (April 1,
2010 to March 31, 2011) were up on the previous year. After two
years in the red, the operating result improved significantly,
moving back into the black. Heidelberg has therefore met its own
forecasts.
“We achieved our targets in financial year 2010/2011 and
Heidelberg is now back on a growth path. This once again proves
that we have adopted the right strategy – competitive products and
services, a strong presence on emerging markets, a commitment to
less cyclical areas such as services and consumables, and an
expansion of business with packaging print shops. We will continue
to systematically implement this successful strategy during the
current financial year and gradually build up to our medium-term
target of sales exceeding EUR 3 billion and a return on sales of
more than 5 percent,” said company CEO Bernhard Schreier.
At a total of EUR 2.757 billion, incoming orders were up
around 16 percent on the previous year's figure of EUR 2.371
billion. Some EUR 140 million of this increase were linked to
exchange rate movements. Trade show success at ExpoPrint in Brazil
and IPEX in the United Kingdom led to above-average incoming orders
in the first quarter. Consequently, incoming orders were slightly
higher in the first half-year than in the second. They exceeded the
previous year's figure in all regions but grew more strongly on
emerging markets than in industrialized countries.
Heidelberg Group sales climbed by around 14 percent to
EUR 2.629 billion (previous year: EUR 2.306 billion). This includes
approximately EUR 135 million from exchange rate movements.
The highly dynamic emerging markets paved the way for strong growth
in the print media industry there. As a result, these markets once
again increased their total share of sales – from 42 percent the
previous year to around 45 percent at the end of the year under
review. Brazil played a major part in this increase, as did China
thanks to strong growth. China's share of sales is now around 16
percent, followed by Germany with 15 percent.
The operating result improved significantly due to higher profit
contributions and the savings made during the financial year. The
result of operating activities excluding special items rose
to EUR 4 million at the end of the financial year (previous year:
EUR -130 million). Special items in the financial year just closed
totaled EUR 2 million. This resulted in a result of operating
activities including special items of EUR 6 million.
At EUR -149 million, the financial result was once again
below the previous year's figure of EUR -127 million. This was
caused by high financing costs, and by the one-off expenditure
associated with the repayment of financial liabilities and the
restructuring of financing. The capital increase and the early
repayment of financial liabilities helped to compensate.
Due to the financial result still having a very negative impact
on the result before taxes, the company recorded an annual
loss of EUR -129 (previous year: EUR -229 million). A proposal
will therefore be put to the Annual General Meeting not to pay a
dividend for the year under review.
The free cash flow was much better than expected. Despite
high restructuring costs in the year under review, it reached EUR
75 million and was thus EUR 137 million better than the previous
year's figure of EUR -62 million. The greatly reduced annual loss
and the successful management of net working capital played a major
part in this improvement.
Thanks to the capital increase and the much reduced annual loss,
Heidelberg achieved a equity ratio of 32.9 percent in
relation to the balance sheet total at the end of the reporting
period. On the balance sheet date of the previous year, the equity
ratio was only 20.1 percent. At the same time, the net financial
debt fell by just under two-thirds, from EUR 695 million in the
previous year to EUR 247 million.
“Heidelberg has once again secured its medium- to long-term
financing. We have diversified our financing sources and made great
strides in optimizing the maturity profile of loans. Thanks to our
comprehensive cost-cutting measures, we have also further reduced
the operating break-even threshold as planned. This will
significantly improve our earnings situation in the future, too,”
said Heidelberg CFO Dirk Kaliebe.
Results in the Equipment, Services, and Financial Services
divisions
In the Equipment Division, orders were 24 percent up on
the previous year at EUR 1,642 million. After adjustment for
exchange rate movements, this represents an increase of around 19
percent. The division's sales also grew significantly, climbing 19
percent to EUR 1,516 million. This equates to a 14 percent
increase after adjustment for exchange rate movements. The
operating result excluding special items improved from the previous
year's figure of EUR -153 million to EUR -98 million. The growth of
sales, the resultant profit contributions, and the savings made all
had a positive impact on the result.
In the Services Division, incoming orders were up 6
percent at EUR 1,099 million. The division's sales climbed by 8
percent to EUR 1,097 million, a 1 percent increase after adjustment
for exchange rate movements. Sales of consumables in particular
grew much more strongly than during the previous year. The
division's result of operating activities excluding special items
benefited noticeably from the savings achieved through the
reorganization, improving from EUR 12 million in the previous year
to EUR 84 million.
In the Financial Services Division, sales dropped to EUR
16 million (previous year: EUR 19 million). Improved
underlying conditions in the sector combined with intensive
management of accounts receivable increased the division's
operating result excluding special items to EUR 18 million
(previous year: EUR 11 million).
Overall, the workforce fell by 668 in the year under
review. As of March 31, 2011, the Heidelberg Group had a workforce
of 15,828 worldwide (previous year: 16,496). Over the course of the
year, short-time working was used to compensate excess capacity.
Continued use will be made of flexible working time instruments to
manage capacity during the current financial year, too.
Outlook: Break-even pre-tax result targeted for financial
year 2011/2012 provided macroeconomic developments remain
stable
The annual sales target, which Heidelberg intends to achieve
within the next two or three years, has been set at over EUR 3
billion. Assuming that the economic environment will continue to be
generally stable, the company expects to gradually approach this
target during the current and next financial year. Due to drupa
2012 and the ongoing upswing in the print media industry, the
increase in sales in the next year should be greater than in the
current financial year. As during the reporting year, growth in the
Heidelberg Equipment Division will presumably be stronger than in
the less cyclically sensitive Heidelberg Services Division. The
company intends to keep its directly financed portfolio in the
Heidelberg Financial Services Division as low as possible.
Heidelberg was successful in drastically reducing its operating
break-even point in recent years, and thereby in generating an
operational break-even result of operating activities before
special items during the reporting year. Assuming that the volume
of business will increase, we therefore expect the operating result
to improve during the current and the next financial year. In the
medium term, Heidelberg is striving for a return on sales of over 5
percent with sales exceeding EUR 3 billion. Thanks to the large
reduction in debt, the financial result will have a substantially
less dampening effect than during the reporting year.
Assuming a stable development of overall economic conditions and
of our industry, we are striving for a balanced pre-tax result in
financial year 2011/2012 on the basis of a higher operating
result and lower financing expenses. If favorable trends continue
into the year of the drupa trade show, we expect our after-tax
result to be in the black in financial year 2012/2013.
Additional details on the company can be found at
www.heidelberg.com.
The 2010/2011 Annual Report can be accessed at 7.00 a.m. on June
16, 2011 at www.heidelberg.com.
Other dates:
Publication of the figures for the first quarter of financial
year 2011/2011 is scheduled for August 9, 2011.
Important note:
This publication contains forward-looking statements which are
based on assumptions and estimates of the management of
Heidelberger Druckmaschinen Aktiengesellschaft. Even though the
management believes these assumptions and estimates to be correct
the actual future development and the actual future events can
substantially deviate from these assumptions and estimates due to a
variety of factors. For instance, these factors can include a
change of the economic framework, the exchange rate or the interest
rates as well as changes within the graphic arts industry.
Heidelberger Druckmaschinen Aktiengesellschaft assumes no warranty
or liability that the future development and the actual results
achieved in the future will match the assumptions and estimates
expressed in this press release.
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