Heidelberg Announces Q1 Results

Heidelberger Druckmaschinen AG said it has significantly improved its operating result in the first quarter of financial year 2013/2014 (April 1 to June 30, 2013), which puts it on the right track for meeting its target of a positive net result for the year.

“The substantial increase in our operating result makes us confident that we will record a profit for the year as a whole,” saidHeidelberg CEO Gerold Linzbach. “In order to achieve this, we are systematically pressing ahead with our strategic reorganization so as to further improve our margins for new machine sales in the future and adapt our cost structures to the market situation on an ongoing basis.”

Group sales in the first quarter were in line with expectations at €504 million, despite being around 3% down on the figure for the same quarter of the previous year (€520 million). Sales fell slightly in all three segments – equipment, services and financial services. In most regions, they matched the previous year’s level. In the South America region, however, Brazil’s continuing economic difficulties hit business hard.

As expected, results improved significantly in the first quarter thanks to sustained savings from Focus 2012 and higher profit contributions for new equipment. What’s more, the previous year’s results had been burdened by trade show expenditures. EBITDA excluding special items improved considerably from €-47 million to €-2 million. At €-20 million, the result of operating activities (EBIT) excluding special items clearly surpassed the previous year’s figure of €-67 million. Special items in the reporting period totaled €1 million (previous year: €6 million).

At €-12 million, the financial result for the first quarter remained stable at the previous year’s level. Accordingly, the pre-tax result improved significantly from €-85 million to around €-33 million. Overall, the net loss in the first quarter of 2013/2014 was halved from the previous year’s figure of €-76 million to €-38 million.

Incoming orders amounted to €643 million in the reporting period. The far higher order volume of €890 million in the same quarter of the previous year can be explained by the industry trade show drupa, which took place in May 2012. The China Print trade show in May this year went well, but coincided with a reluctance to invest in the Europe, Middle East and Africa region and the South America region, especially in Brazil. At €602 million, the order backlog at June 30, 2013 was 20% up on the figure for the previous quarter (€502 million).

Regarding FY2013-14, the company said, “The outlook for financial year 2013/2014 and the subsequent years remains unchanged. Economic uncertainties and risks persist, especially in the emerging markets of China and Brazil that are important to Heidelberg. As in previous years, Heidelberg is expecting its sales to pick up in the second half of the financial year. Accordingly, the company’s aim is to match the previous year’s Group sales in financial year 2013/2014 as a whole. The expected distribution of sales between the first and second half of the year will also influence the operating result in the course of the year. This was still negative in the first quarter but nevertheless was a big improvement on the figure for the previous year. The company expects the result of operating activities excluding special items to continue to improve over the coming quarters and be considerably higher for the year as a whole than in the previous year. Further one-time expenses for Focus 2012 will be incurred during the current financial year. The financial result will be slightly better than in the previous year. With the measures it has introduced, the company still aims at achieving a net profit in financial year 2013/2014.”