Heidelberg on Track to Meet Medium-Term Targets; Expected Stable Development in 2017/2018
Tuesday, May 08, 2018
Press release from the issuing company
Heidelberger Druckmaschinen AG (Heidelberg) made significant progress with the Group’s targeted digital transformation in financial year 2017/2018 (April 1, 2017 to March 31, 2018). A number of customers have already opted for the new subscription model that offers Heidelberg products and services under a usage-based all-in contract running over several years. The total of more than 30 contracts targeted for the new financial year 2018/2019 are set to generate a business volume of some €150 million over the term of the standard five-year models.
In addition, the series production of digital presses for packaging and label printing (Primefire and Labelfire), which also started in financial year 2017/2018, will have an increasingly positive impact on sales. Heidelberg is thus on course to meet the medium-term targets communicated in the summer of 2017. These include an increase in Group sales to around €3 billion, an operating result (EBITDA) of €250 to 300 million, and a net profit after taxes of over €100 million.
“Heidelberg made excellent progress with its digital transformation in 2017/2018. Both our new subscription model and the new digital presses are in high demand. Given that this will be reflected in the company’s sales and result to an ever greater extent in the years ahead following the current start-up phase, our medium-term targets will be increasingly within our grasp,” CEO Rainer Hundsdörfer commented on the developments.
Operating targets for financial year 2017/2018 achieved
EBITDA excluding the restructuring result totaled €172 million in the reporting period (previous year: €179 million). This meant the resulting EBITDA margin of 7.1 percent (previous year: 7.1 percent) was within the expected range. The restructuring result amounted to around €-16 million in 2017/2018 (previous year: €-18 million). Lower interest costs resulted in a further significant improvement in the financial result to €-48 million (previous year: €-56 million). Without the tax burden from the American subsidiaries due to the U.S. tax reform, this would have led to a comparable net result after taxes of €39 million (previous year: €36 million). Due to the above-mentioned tax burden, however, the total net profit after taxes was around €14 million.
As expected, the free cash flow was slightly negative at €-8 million (previous year: €24 million) in the period under review due to acquisitions and investments associated with the construction of the new innovation center in Wiesloch. The net financial debt fell to €236 million in the reporting period (March 31, 2017: €252 million) and the leverage remained well below the target value of 2 at 1.4.
“Our growth initiatives are accompanied by a new financing framework that also enables us to further accelerate the digital transformation through targeted acquisitions,” said CFO Dirk Kaliebe.
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