02.15.21
COVID-19 had a major impact on printing equipment sales, Heidelberger Druckmaschinen AG (Heidelberg) has come through the pandemic well. While sales are down approximately $500 million, the company EBIDTA margin is higher and it has positive cash flow.
Seeing growing demand from China and, since the third quarter, from Europe, Heidelberg is raising its target operating return for financial year 2020/21 as a whole. The company notes that print volumes among Heidelberg customers have almost reached the levels of the previous year, with the packaging sector exceeding last year’s numbers.
As a result, the company anticipates that its EBITDA margin excluding restructuring will grow to approximately 7%, even though the coronavirus pandemic may lead to a sales decline of around €450 million to €500 million compared to the previous year (previous year’s sales: €2,349 million) for the year as a whole. Previously, Heidelberg had anticipated an EBITDA margin that would, at its lowest, equal that of the previous year at 4.3%.
“The successful roll-out of the transformation measures has enabled Heidelberg to achieve a clearly positive operating result, despite the huge pressures caused by COVID-19. When it comes to both our finances and our balance sheet, we have done our homework. Signs of recovery are now emerging on the markets in China and Europe that are important to us. That is why our EBITDA target margin excluding restructuring result is being increased to around 7%,” said Heidelberg CEO Rainer Hundsdörfer.
“All in all, we have made much faster and more successful progress with our company’s transformation than previously reported,” added CFO Marcus A. Wassenberg. “We have raised more than €450 million in liquidity, reduced debt by approximately €260 million, moved away from loss-makers and will reduce costs by more than €170 million a year on a sustainable basis. We are therefore confident we will return to attractive profitability in the medium term.”
After nine months of 2020/21 (April 1, 2020 to December 31, 2020), sales were at €1,289 million, approximately 24% below the same period of the previous year (€1,690 million). At €1,421 million, incoming orders were 25% below the previous year (€1,900 million). However, the shortfall was lower in the third quarter, at just 12%, and, in the month of December, incoming orders were back above the previous year’s figure for the first time in this financial year. The order backlog rose by €55 million compared with the previous quarter, reaching €682 million.
Due to the conversion of securities into cash and cash equivalents and inflows from the aforementioned portfolio measures and improvements in net working capital, free cash flow was improved in the period under review by €63 million to €–10 million. A positive figure of €42 million was achieved in the third quarter.
Following the comprehensive debt relief measures, net financial debt is €127 million and thus €262 million below the comparable figure from the previous year. Against this backdrop, leverage (the ratio of net financial debt to EBITDA excluding restructuring result from the last four quarters) dropped to 1.0 (previous year: 1.9).
Seeing growing demand from China and, since the third quarter, from Europe, Heidelberg is raising its target operating return for financial year 2020/21 as a whole. The company notes that print volumes among Heidelberg customers have almost reached the levels of the previous year, with the packaging sector exceeding last year’s numbers.
As a result, the company anticipates that its EBITDA margin excluding restructuring will grow to approximately 7%, even though the coronavirus pandemic may lead to a sales decline of around €450 million to €500 million compared to the previous year (previous year’s sales: €2,349 million) for the year as a whole. Previously, Heidelberg had anticipated an EBITDA margin that would, at its lowest, equal that of the previous year at 4.3%.
“The successful roll-out of the transformation measures has enabled Heidelberg to achieve a clearly positive operating result, despite the huge pressures caused by COVID-19. When it comes to both our finances and our balance sheet, we have done our homework. Signs of recovery are now emerging on the markets in China and Europe that are important to us. That is why our EBITDA target margin excluding restructuring result is being increased to around 7%,” said Heidelberg CEO Rainer Hundsdörfer.
“All in all, we have made much faster and more successful progress with our company’s transformation than previously reported,” added CFO Marcus A. Wassenberg. “We have raised more than €450 million in liquidity, reduced debt by approximately €260 million, moved away from loss-makers and will reduce costs by more than €170 million a year on a sustainable basis. We are therefore confident we will return to attractive profitability in the medium term.”
After nine months of 2020/21 (April 1, 2020 to December 31, 2020), sales were at €1,289 million, approximately 24% below the same period of the previous year (€1,690 million). At €1,421 million, incoming orders were 25% below the previous year (€1,900 million). However, the shortfall was lower in the third quarter, at just 12%, and, in the month of December, incoming orders were back above the previous year’s figure for the first time in this financial year. The order backlog rose by €55 million compared with the previous quarter, reaching €682 million.
Due to the conversion of securities into cash and cash equivalents and inflows from the aforementioned portfolio measures and improvements in net working capital, free cash flow was improved in the period under review by €63 million to €–10 million. A positive figure of €42 million was achieved in the third quarter.
Following the comprehensive debt relief measures, net financial debt is €127 million and thus €262 million below the comparable figure from the previous year. Against this backdrop, leverage (the ratio of net financial debt to EBITDA excluding restructuring result from the last four quarters) dropped to 1.0 (previous year: 1.9).
