Heidelberg is on track to achieve its operating targets for the current financial year, reporting a five per cent sales rise to €1.9bn after three quarters of 2012/13.
Richard Timson, managing director, Heidelberg Australia and New Zeland told Australian Printer, “Heidelberg’s third quarter result is a positive sign for the worldwide market, and is supported by increased sales in high technology equipment in most regions. Heidelberg Australia is on track to achieve its local targets with a definite increase in activity, and a positive outlook.”
Quarterly sales were up nine per cent on the same period the previous year, increasing from €631m to €688m while the operating result (EBIT) excluding special items increase by €2m to €25m.
Improvements in EBIT and the financial result led to a positive income before taxes of €5m after a negative result of minus €25min the same quarter of the previous year. Thanks to positive tax effects in the reporting period, the net result rose to €16m compared to the previous years minus €14m.
Heidelberg says that although after nine months the EBIT excluding special items is still negative, it has improved thanks to a strong quarterly result. It has also reported a positive free cash flow of €28m in the quarter, reducing its net financial debt to €325m.
Gerold Linzbach, CEO, Heidelberg says, "The financial year is going according to plan. The third quarter reflects the progress we had expected in terms of earnings. We are systematically moving toward our target of returning to profitability by the end of financial year 2013/2014. We are on the right track.”
As expected, the net financial debt was higher than at the end of the previous financial year (when it was €243m) due to the greater need for funds to process the orders received at the drupa trade show, and the payments relating to Focus 2012.
Heidelberg says its financing structure still shows appropriate diversification in terms of both financing sources and maturity profile. Heidelberg says it has a stable liquidity framework providing ample room for manoeuvre.
Dirk Kalieve, CFO, Heidelberg says, "The Focus 2012 efficiency program is progressing according to plan and is significantly improving our profitability. We have also made good progress with further reducing the company's debt. The clearly positive free cash flow shows we are definitely heading in the right direction.”
Since the drupa trade show in May 2012, incoming orders after nine months rose 12 per cent, from €1.975m to €2.203m. The order backlog remained unchanged year on year at €728m.
Heidelberg’s workforce has fallen by around 1,100 in the past year and as of December 31 Heidelberg has a workforce of 14,563 worldwide, compared to the previous year’s 15,666.
Heidelberg says it continues to assume that there will be a clearly positive result of activities excluding special items for financial year 2012/2013 as a whole.
The company says over one-third of the planned savings from Focus 2012 will already take effect in the current financial year. The expenditures required for this purpose, however, will negatively impact the financial result and the free cash flow in both the current and the forthcoming financial year. Net financial debt will increase year-on-year in the current financial year 2012/2013.
The company says in the coming financial year 2013/2014, the cost reductions resulting from FOCUS 2012 will be fully effective for the first time and result in annual savings of around €180m. The half-year forecast of achieving a net profit for the year remains unchanged.
Linzbach says, "We are well aware that a one-time cost-cutting program such as Focus 2012 alone cannot safeguard the future of Heidelberg. Just like our successful customers, we must be dynamic in focusing our portfolio on profitable segments. We will ensure this through our organization based on business areas. Focus 2012 is highlighting potential for making our structures and processes more efficient on an ongoing basis. We can't fight changes in the industry, so we need to respond quickly and harness the opportunities they present.”
