Heidelberg boosts sales, result in Q1

The Asia Pacific region is driving growth at Heidelberg, as the company increases its net sales and operating result in the first quarter of the 2018/2019 financial year, pinning the success on its new subscription model, along with its Primefire digital press.

 

Incoming orders improved in the first quarter, which covers April 1 to June 30 on the EU calendar, by 6 per cent to €665m. Heidelberg says this growth is made more impressive by the fact that the previous corresponding period (pcp) figure of €629m benefited from the Print China trade show.

 

EBITDA excluding the restructuring result for the quarter came in at €20m, €6m higher than the pcp result of €14 million, bringing its EBITDA margin up from 2.8 per cent to 3.7 per cent.

 

In the Asia Pacific, sales were up from €133m in the pcp to €172m, accounting for a substantial share of Heidelberg’s growth, which the company attributes mostly to business in China. The region now accounts for 32 per cent of the company’s revenue, up from 27 per cent in the pcp.

 

The net result after tax remains in the negative, improving by €1m from the pcp, coming it at €-15m from €-16m.

 

The first quarter brought in the first revenues raised from subscription contracts, which generate recurrent sales over a term that usually lasts five years. The order backlog grew by 18 per cent to €714m, surpassing the previous year’s result of €603m, which the company attributes to subscription contracts, particularly in terms of life cycle business across services and consumables.

 

A spokesperson from the company says, “High demand for the newly established subscription model and the launch of series production of the Primefire digital press are demonstrating the potential the digital transformation offers the company.”

 

Heidelberg also recorded growth in traditional business during the first quarter, with sales rising by 9 per cent in total to €541m, despite negative currency effects. The company says that had exchange rates remained similar, revenues would have risen by around 11 per cent.

 

Rainer Hundsdörfer, CEO of Heidelberg, says, “The strong customer demand for our new subscription portfolio and digital packaging printing presses has exceeded our expectations. Heidelberg is driving digitisation in the entire industry. The establishment of the new business models is proceeding to plan and will at first make a relatively modest contribution to net sales and result, albeit one that will increase significantly in the medium term.”

 

Dirk Kaliebe, CFO, Heidelberg, says, “Our financing structure is solid. We have low leverage and are maintaining liquidity reserves we can use to finance our planned investments in new business models and the company’s digital transformation.”

 

A spokesperson says, “Despite the additional staff costs associated with the new collective wage agreement, EBIT excluding the restructuring result was positive in this quarter, which traditionally records the weakest sales, at €2 million (previous year: €-3m). As previously announced, the company is continuing to work on reducing financing costs to less than €20m in the medium term.”

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