Publicado 13/08/2020 08:53CET

Transformation of Heidelberg already showing effects in first quarter of 2020/2021 (2)

Free cash flow was also better than in the previous year, improving from EUR -83 million to EUR -63 million, primarily as a result of inflows from net working capital and the conversion of securities into cash and cash equivalents. Now that debt has been considerably reduced by the retransfer of trust assets of Heidelberg Pension-Trust e.V. at the end of financial year 2019/2020, the company's net financial debt of EUR 122 million is much lower than it was 12 months ago (EUR 391 million). The same applies to the ratio of net financial debt to EBITDA excluding restructuring result (leverage), which continues to be low at 0.8 (same quarter of previous year: 2.1). By contrast, the equity ratio of 6.3 percent - which dropped due to a further reduction in actuarial interest rates and despite the quarterly profit - continues to be unsatisfactory and therefore remains a clear focal point for the management team.

Outlook for the current financial year unchanged - high income from portfolio streamlining further strengthens Heidelberg

As the company announced when it published its 2019/2020 Annual Report on June 9, 2020, Heidelberg anticipates that sales in the 2020/2021 financial year will be significantly lower than those of the previous year (EUR 2,349 million). Owing to volume effects, the predicted sales decline due to the COVID-19 pandemic will have a significant impact on the EBITDA margin. However, earnings improvements are expected from savings in conjunction with the package of measures, accounting effects and temporary relief from more flexible and shorter working hours. Heidelberg envisages that the sale of the Gallus Group to Swiss packaging company benpac holding and the management buy-out of the Belgian software subsidiary CERM will result in a total gain on disposal in the mid-double-digit million euro range in the forthcoming quarters. Overall, despite the downturn in sales, the company is aiming for an EBITDA margin excluding restructuring result that at least matches the previous year's figure. Based on the sales forecast, Heidelberg estimates that the net result after taxes for financial year 2020/2021 will be significantly better than in the previous year but still clearly in the negative range.

In the medium to long term, Heidelberg believes that the comprehensive package of realignment measures will help achieve a sustainable improvement in both the company's profitability moving forward and the financial resources for future growth.

Precise forecasts of how the markets and the sector will develop are currently still difficult due to the COVID-19 pandemic. However, a number of positive trends are emerging. The unique digital networking of its installed machinery gives Heidelberg an excellent overview of capacity utilization in print shops and therefore a reliable indicator for the economic activity of a country. This data clearly shows that business in China - the biggest single market for Heidelberg - is picking up speed and is already surpassing last year's level. Other markets are also showing the first signs of recovery in terms of print volumes, which is cause for cautious optimism as regards the second half of the financial year. Nonetheless, the economic environment is still marred by considerable uncertainty. As part of its transformation program, Heidelberg has put in place targeted market initiatives so that it can quickly benefit with tailor-made customer offerings when business picks up again.

The full quarterly report, image material, and further information about the company are available in the Investor Relations and Press Lounge of Heidelberger Druckmaschinen AG at [].

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Important note:

This press release contains forward-looking statements based on assumptions and estimations by the Management Board of Heidelberger Druckmaschinen Aktiengesellschaft. Even though the Management Board is of the opinion that those assumptions and estimations are realistic, the actual future development and results may deviate substantially from these forward-looking statements due to various factors, such as changes in the macro-economic situation, in the exchange rates, in the interest rates, and in the print media industry. Heidelberger Druckmaschinen Aktiengesellschaft gives no warranty and does not assume liability for any damages in case the future development and the projected results do not correspond with the forward-looking statements contained in this press release.