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Heidelberg Increases Profitability Significantly


Net profit remains target for financial year 2013-2014

Heidelberger Druckmaschinen AG significantly improved profitability in the second quarter of financial year 2013/2014 (July 1-Sept. 30, 2013). As expected, the operating result (EBITDA) in the second quarter was clearly above the previous year's figure. EBITDA for the first half of the year also improved considerably and was positive overall. Net financial debt fell slightly due to the positive free cash flow.

"We have succeeded in improving profitability significantly in the first half of the year," said Heidelberg CEO Gerold Linzbach. "Given regional and exchange rate constraints, we even exceeded our expectations, having made major progress toward achieving our target for the year of a net profit. Our confidence that we will be able to further build on this significantly in the next financial year is growing in light of the improvements at all levels."

Consolidated net sales in the second quarter were €593 million after €697 million in the same period the previous year, which was influenced by the drupa trade show. As expected, sales rose by around 18% on the previous quarter (€504 million). At €1,097 million, they were around 10% lower in the first half of 2013/2014 than in the equivalent period of the previous year (€1,217 million). Due to the substantial weakening of individual major foreign currencies, negative exchange rate effects amounted to €30 million in the second quarter alone, with a total of €42 million in the first half of the year. This currency weakness also led to considerable reluctance to invest in regions such as Brazil.

As expected, all KPIs affecting the results improved significantly in the second quarter on the same period of the previous year thanks to sustained savings from Focus 2012 and measures to increase margins. EBITDA excluding special items rose considerably from €13 million in the same quarter of the previous year to €33 million in the quarter under review. After six months, a clearly positive result of €31 million was achieved following a figure of €-34 million in the same period of the previous year. The operating result (EBIT) excluding special items in the second quarter was also in the black at €13 million (previous year: €-7 million). The half-yearly figure improved from €-75 million in the previous year to €-7 million.

The positive trend in free cash flow continued and was €28 million in the second quarter, improving by around €31 million on the same quarter the previous year thanks to the increased operating result and the freeing up of net working capital. After six months, it had improved by €143 million to €28 million on the same period the previous year.

As a result, net debt fell year-on-year to €239 million (same quarter of previous year: 357 million). Despite further payments for Focus 2012 amounting to € 12 million, debt continued to fall in the quarter under review compared with March 31, 2013 (€261 million).

"The measures taken in asset and net working capital management to sustainably cut net debt at Heidelberg as planned are increasingly having an impact," said Heidelberg CFO Dirk Kaliebe. "Our financing structure is on a sound footing in light of our successful issue of a convertible bond and our bond maturing in April 2018."

As planned, the workforce fell to 13,616 as of September 30, 2013 (same quarter of the previous year: 14,745).

The outlook for the 2013 / 2014 financial year and the aim of generating a consolidated net profit remain unchanged. In past quarters, Heidelberg has increasingly geared its strategy towards improving profitability in order to become more independent of general economic conditions. Given the measures initiated and in light of the positive trend already seen in the first two quarters, Heidelberg continues to strive for a consolidated net profit in the 2013 / 2014 financial year.