HEIDELBERG, Germany,
November 12, 2014 /PRNewswire/ --
- Restructuring of Group continued for sustained profitable
growth:
- Postpress business realigned
- Leaner, more flexible production structures in sheetfed
offset equipment sector
- Targeted takeovers to invest in growth areas of consumables
and digital
- Half-year EBITDA, including income from Gallus transaction,
climbs to € 53 million - decline in sales in line with
expectations
- Outlook: Restructuring of portfolio emphasizes target EBITDA
margin of at least 8 percent in financial year 2015/2016
As announced at the Annual Press Conference in June,
Heidelberger Druckmaschinen AG (Heidelberg) is systematically
gearing its portfolio toward profitability and growth. The company
has completed the realignment of its postpress business as planned
and on schedule. At the end of October, Heidelberg signed a
cooperation agreement with Masterwork Machinery Co., Ltd in
China covering postpress packaging
equipment. Under this agreement, the Chinese company Masterwork
will develop and manufacture future products and solutions for this
market segment; marketing and service outside China and Japan will remain in the hands of Heidelberg.
The two companies have also agreed to consider joint production of
components in China. Negotiations
with employee representatives regarding a reduction in the
workforce at the Ludwigsburg site have been completed and agreement
has been reached on the closure of the Leipzig site. The aim is to place postpress on
a profitable footing by focusing on competitive products and to
improve the result by approximately € 30 million from the next
financial year onward by adapting the business model.
Leaner, more flexible structures in sheetfed offset equipment
sector
In new sheetfed offset machinery business, profitability is to
be increased in the near future and this area is to be adapted to
the fluctuations in demand that are typical for the market by
increasing flexibility. To this end, product modularization and
standardization will be advanced further in order to achieve
economies of scale despite the reduced production volume. As part
of these measures, the break-even point for operating profit in
this area is to be lowered further by the end of the year by
adjusting personnel capacity.
Acquisitions in growth areas of consumables and
digital
As previously announced, expansion in the profitable and less
cyclical consumables business area is another key strategic goal
for Heidelberg. The takeover of Belgian consumables supplier
BluePrint Products NV marks an initial step in this direction and
provides Heidelberg with vital know-how in the development and
manufacture of printing chemicals. BluePrint offers a comprehensive
range of dampening solutions and washing agents for presses and has
a highly innovative approach to environmentally friendly products.
Heidelberg has been working with this company for some time and
will be incorporating BluePrint's entire product portfolio into its
global sales network.
"Following the strategic focus on returning to profitability in
the previous financial year, this year will see Heidelberg taking
key steps to enhance its portfolio. This will involve further
expanding growth areas to enhance the company's profitability and
secure it long term," said Heidelberg CEO Gerold Linzbach. "The goal of our active
portfolio management is for our service- and consumables-based
business, which benefits from high margins and is less cyclical, to
account for a share of Group sales of more than 50 percent.
The company is also systematically channeling its energies into
the external growth of its promising digital business, with the
complete takeover of software manufacturer Neo7even in October and
the launch of new digital printing systems with cooperation
partners Fujifilm and Ricoh during the same period. The target is
to generate annual sales of over € 200 million in the digital
sector in the medium term.
Well on track after first half-year of 2014/2015 with EBITDA
increased to € 53 million
The half-yearly figures for financial year 2014/2015
(April 1 to September 30, 2014)
reflect the success of the initiatives to boost efficiency on a
lasting basis but are also influenced by the measures to
restructure the portfolio and the associated
non-recurringeffects.
At € 996 million (HY1-2013/2014: € 1,097 million),
Group sales after six months were in line with
expectations in all regions except Asia. The company saw a particular decline in
new machine sales in China.
As a result of the measures initiated to improve margins and
profitability, the company was nevertheless able to increase both
EBITDA and EBIT, each excluding special items, in the reporting
period year-on-year. In addition to this, the complete takeover of
Gallus in Switzerland resulted in
one-time income of € 18 million. Overall, the half-year EBITDA
excluding special items climbed from € 31 million to € 53
million. EBIT excluding special items for portfolio measures
improved from € -7 million to € 19 million. Special items amounting
to € -18 million (previous year: € -1 million) essentially comprise
non-recurring expenditure for restructuring the Ludwigsburg site
and closing the Leipzig site, and
proceeds from the sale to Müller Martini. The half-year financial
result was € -33 million (previous year € -28 million).
Accordingly, income before taxes improved from € -36 million to €
-32 million and the net result after taxes from
€ -47 million to € -42 million.
"Portfolio management is influencing the profitability of this
financial year, with both positive and significantly negative
non-recurring effects, but the ultimate improvement will be a
lasting one," said Heidelberg CFO Dirk
Kaliebe.
Despite the payments for the Focus efficiency program (€ 20
million), the clearly positive free cash flow in the second
quarter (€ 36 million) improved the half-yearly figure to
€ -30 million (HY1-2013/2014: € 28 million). At € 272 million,
the net financial debt remains at a low level (end of
financial year 2013/2014: € 238 million). Together with the
improvements at operating level, this enabled the leverage
to be maintained at the target level of 2. The equity ratio was
13.3 percent (end of financial year 2013/2014: 16.0 percent).
"The company's low level of debt lays the foundation for
continued restructuring of the Group," stated Kaliebe.
As at September 30, 2014, the
Heidelberg Group had a global workforce of 12,393 plus 550
trainees (previous year: 13,001 plus 615 trainees).
Outlook: Restructuring of portfolio emphasizes target EBITDA
margin of at least 8 percent in financial year
2015/2016
Continued implementation of the portfolio optimization measures
initiated is the key factor determining the development of sales
and earnings for financial year 2014/2015 as a whole. The
reorganization of postpress is expected to lead to lower sales in
this area in the short term until implementation is complete.
Additionally, we will continue to actively reduce low-margin
business. Based on this situation, including the economic slowdown
in China, overall sales in
financial year 2014/2015 are likely to be down around 5 percent
year-on-year.
The portfolio optimization measures initiated will have both a
boosting and a dampening impact on earnings during the current
financial year. Overall, the measures should further improve the
company's operating profitability and help Heidelberg get closer
still to its target of an operating margin of at least 8 percent in
terms of EBITDA.
Adjusted for these non-recurring effects for portfolio
optimizations and cost-cutting measures, the company's continued
aim is to achieve an increase in after-tax earnings.
For additional details about the company and image material,
please visit the Press Lounge of Heidelberger Druckmaschinen AG at
http://www.heidelberg.com.
The report on the first half-year of financial year 2014/2015
can be accessed at http://www.heidelberg.com.
Next reporting date: The figures for the third quarter of
financial year 2014/2015 are due to be published on February 4, 2015.
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(0)6221-92-5900
Fax: +49(0)6221-92-5088
E-mail: thomas.fichtl@heidelberg.com
Investor Relations
Robin Karpp
Phone: +49(0)6221-92-6020
Fax: +49(0)6221-92-5189
E-mail: robin.karpp@heidelberg.com
SOURCE Heidelberger Druckmaschinen AG
