Heidelberg Lowers Expectations for Its Current Financial Year
HEIDELBERG, GERMANY—Oct. 24, 2011—Based on preliminary calculations, Heidelberger Druckmaschinen AG (Heidelberg) generated incoming orders of €668 million and sales of €636 million in the second quarter of financial year 2011/12 (July 1 to Sept. 30, 2011). As a result, preliminary incoming orders were slightly higher than in the same quarter of the previous year (€650 million). As expected, preliminary sales were higher than in the previous quarter and match the previous year's level (€633 million).
The preliminary operating result (EBIT) excluding special items for the second quarter is slightly positive at €5 million, an improvement on the same quarter of the previous year (€-6 million). Preliminary free cash flow is €-12 million (previous year: €6 million).
“Business development in the past quarter was in line with our expectations,” said Dirk Kaliebe, CFO at Heidelberg. “We achieved a positive operating result in the second quarter. Thanks to consistent asset management, free cash flow exceeded expectations.”
Heidelberg now anticipates that economic uncertainties will have a dampening effect on investment behavior in the sector during the second half of the financial year. Due to the turbulence on the capital markets and the weaker macro-economic situation, uncertainty about future economic developments increased significantly again compared to the first quarter of 2011/12.
According to the VDMA (German Engineering Federation), incoming orders have fallen right across the printing and paper technology sector. In the period June to August 2011, they were down 10 percent compared to the same three months of the previous year. The order situation at Heidelberg continues to vary from region to region and is influenced, on the one hand, by the ongoing economic uncertainties in the United States, Japan and the Mediterranean countries and, on the other hand, by positive development in China and South America.
In view of the economic outlook, it is likely that demand in the second half of the financial year will be lower than expected, that sales and the operating result will not reach the level Heidelberg has been aiming for, and thus that the target of a break-even, pre-tax result is unlikely to be achieved.
In an endeavor to increase operating profitability in the current financial year, measures relating to non-personnel costs and the human resources area that can be implemented quickly have been introduced. The company expects that the operating result for financial year 2011/12 will be noticeably better than that of the previous year.
“We will stick to our medium-term profitability targets, even if the planned increase in sales to over €3 billion takes longer to achieve due to weakness in demand,” said Bernhard Schreier, CEO of Heidelberg. “We will take all the measures needed to achieve these objectives.”
Heidelberg will publish further details and an explanation of the figures for the second quarter of financial year 2011/12 on Nov. 8, 2011.