New Heidelberg Raises Profile

After nine months of financial year 2017/2018 (April 1 to Dec. 31, 2017), the digital transformation initiated at Heidelberger Druckmaschinen AG (Heidelberg) is increasingly taking shape.
 
Among other things, initial agreements have been signed under the new subscription model whereby customers are ensured a performance product comprising press, services, consumables, and software over a period of several years. The demand for innovative digital presses remains high, with a recent significant increase in incoming orders in virtually all regions.
 
Operationally speaking, Heidelberg is on course to achieve its annual targets for financial year 2017/2018. At €1,657 million, group sales were a little down on the previous year’s figure of €1,680 million but slightly up on the comparative period if negative exchange-rate effects from Asia and the US amounting to some €39 million are not taken into consideration.
 
Driven by the above-mentioned high demand for digital product and business models, incoming orders developed encouragingly in the third quarter of the financial year, increasing by more than 16% from €582 million to €678 million. Virtually all regions that are of relevance for Heidelberg recorded improvements, especially Europe and the U.S. The order backlog of €693 million at Dec. 31, 2017 was at a very good level for a post-drupa year.
 
“Heidelberg is systematically transforming into a modern digital technology company. The considerable customer demand for our new digital solutions is just what we were hoping for. This applies to the subscription models setting a new trend in our sector, our e-commerce offerings of the new Digital Unit, and our industrial digital presses for packaging and labels. Our medium-term target of using technological leadership, digital transformation, and operational excellence to generate sales of some €3 billion and a net profit after taxes in excess of €100 million is increasingly within our grasp,” said Heidelberg CEO Rainer Hundsdörfer.
 
Profitability rose further compared with the previous year’s figures. After three quarters, EBITDA excluding restructuring result climbed from €94 million to €105 million. As a result, the EBITDA margin after nine months was 6.3% after a figure of 5.6% in the previous year.
 
The free cash flow (€-20 million, previous year: €-10 million) was influenced by the acquisitions and investments made in the period under review in connection with constructing the new innovation center in Wiesloch. A positive figure of €12 million was achieved in the third quarter.
 
Net sales should be around the same level as in the previous year. In financial year 2017/2018, the company is still aiming to achieve an EBITDA margin in the region of 7 to 7.5% through measures to boost efficiency.