Heidelberg Records Incoming Order Increase, Sales DeclineAugust 9, 2011
At €-22 million, the financial result in the period under review improved over the same period of the previous year (€-35 million) due to the lower financing costs resulting from the successful refinancing measures in the first quarter. Income before taxes improved from €-56 million in the same quarter the previous year to €- 47 million in the first quarter of 2011/2012. Income after taxes was €-46 million (previous year: €-52 million).
As a result of the successful capital increase in the past financial year and the improved operating result, the net financial debt fell considerably from €629 million in the previous year to €260 million and remained stable in comparison to the previous quarter (€247 million). Supported by consistent cash management, free cash flow in the quarter under review more or less balanced out at €-6 million despite one-off refinancing costs.
“The significantly reduced net financial debt and our refinancing operation concluded in spring are evidence that Heidelberg is on a stable financial footing,” said Heidelberg CFO Dirk Kaliebe. “We will forge ahead with our successful strategy, particularly through consistent cost and asset management.”
The workforce fell by a further 110 in the first quarter of 2011/2012. As at June 30, 2011, the Heidelberg Group thus had a workforce of 15,718 worldwide (previous year: 16,218).
Business results in the divisions
In the Heidelberg Equipment Division, incoming orders in the first quarter amounted to €404 million, up 11 percent on the previous quarter (€365 million). As expected, the high figure for the same period the previous year (€501 million) achieved as a result of high incoming orders at last year’s IPEX and ExpoPrint trade shows could not be repeated. At €300 million, sales matched the level of the same quarter the previous year. After adjustment for exchange rate effects, this is equivalent to a rise of 5 percent. Although there was almost no change in sales, the result of operating activities excluding special items improved by 19 percent from €-48 million to €-39 million.
In the Heidelberg Services Division, incoming orders amounted to €258 million, a drop of 8 percent compared to the previous year’s figure for this period (€280 million). At €241 million, net sales were also down 8 percent on the same quarter the previous year (€261 million). Despite low sales, the operating result excluding special items amounted to €10 million, matching the positive level of the same period the previous year.
The Heidelberg Financial Services Division once again achieved a positive operating result in the quarter under review. At €4 million, the operating result was up on the same quarter the previous year (€3 million).
Business developments in the regions
In the Europe, Middle East and Africa region, incoming orders of €245 million in the first quarter failed to match the high level of the previous year, mainly due to the IPEX trade show held the previous year in the United Kingdom. Incoming orders in the Eastern Europe region of €73 million were down 13 percent against the comparable quarter of the previous year.
In the North America region, incoming orders—after adjustment for exchange rate effects—increased by 6 percent over the previous year. In the South America region, incoming orders were 21 percent below the previous year’s figure for this period, mainly due to the ExpoPrint trade show that took place at this time.
In the Asia/Pacific region, incoming orders were down 10 percent, but matched the prior year level after adjustment for exchange rate effects. While net sales for the first quarter after adjustment for exchange rate effects grew slightly in Eastern Europe, North America, and South America, sales in Europe, Middle East and Africa, and Asia/Pacific were either on a par or below the previous year’s levels.
The global economic and market risks are still high and have increased significantly overall in the last few days. The worsening of the debt crisis in some European countries and in the United States, coupled with the recent upheavals on the international financial markets, could slow the pace of macroeconomic growth and have a negative impact on investment behavior. If underlying macroeconomic conditions and the sector as a whole remain stable, Heidelberg nevertheless continues to strive for a break-even pre-tax result in financial year 2011/2012 - based on a higher operating result and lower financing expenses.
The global printing volume remains stable and will require investments in production equipment. Based on this, Heidelberg intends to achieve a medium-term sales target of over € 3 billion annually over the next two to three years. Assuming that the economic environment will continue to be generally stable, Heidelberg expects to gradually approach this target during the current and next financial year. Due to drupa 2012 and the ongoing upswing in the print media industry, sales in the next year should grow more strongly than during the current financial year.
Additional details on the company can be found at www.heidelberg.com.