Heidelberger Druckmaschinen AG (Heidelberg) has seen a positive quarter, with sales up nine per cent to €622m (A$1b) from €573m, EBITDA (excluding its restructuring result), up 28 per cent to €55m, and incoming orders up one per cent to €648m.
Heidelberg is still looking to cost-cutting measures however, including downsizing the management board, with Stephan Plenz, Chief Technology Officer and in charge of the Heidelberg Digital Technology segment, leaving the company by mutual agreement when his current contract ends in June 2020. It is also cutting planned investment by €20m.
The company claims the main boost to business came from the ongoing digitisation of its sheetfed offset printing, including push-to-stop technology) which is generating higher sales in the United States and China. Its subscription business model is also making a positive contribution, through the growing proportion of recurring sales from contract business and e-commerce.
Subscription business now accounts for over 10 percent of the order backlog, with the medium-term goal at Heidelberg to significantly reduce the company’s exposure to economic fluctuations by generating around a third of total sales from recurring business.
“Recent months have shown that our basic strategy is right – the proportion of contract business is growing, an increasing number of customers are making use of our digital solutions in sheetfed offset, and we’re using targeted investments in our core business to safeguard our global market and technology leadership,” said Heidelberg CEO Rainer Hundsdörfer. “The solid progress in the second quarter means we’re confident of achieving the planned sales target for the financial year. The difficult economic climate worldwide is affecting both us and our customers, though, so we’ll be taking a highly systematic approach to implementing the measures initiated to improve our net result and free cash flow in the coming months,” he added.
Cost-efficiency strategies and further streamlining both organisational and management structures at the company are key to securing sustainable results.
Heidelberg confirms its targets for financial year 2019/2020 as a whole, with sales at the same level as in the previous year. The target range for EBITDA excluding restructuring result is 6.5 to 7 per cent of sales, and a break-even net result after taxes is expected.
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