Through the systematic and swift implementation of its transformation strategy, Heidelberg has strengthened its position in the first half of its 2020/2021 financial year of April 1 to September 30.
Heidelberg has achieved a positive EBITDA, excluding its restructuring result, in the second quarter of the current financial year, recording €97 million in the first six months – a significant increase from the previous year (€69 million).
EBITDA margin for the half-year was 12 per cent, compared with 6.2 per cent in the same period of the previous year. At the same time, its net financial debt was reduced from €416 million in the previous year to €157 million.
In terms of sales and incoming orders, Heidelberg said the gap compared to the previous year shrank in the second quarter of the current financial year.
While sales after the first quarter were at a loss of 34 per cent, this figure was reduced to a loss of 24 per cent in the period from July to September; incoming orders, meanwhile, improved from a loss of 44 per cent to a loss of 20 per cent.
“There was a positive development in demand in a number of markets, above all in the key single market China, where, compared with the previous year, the level of incoming orders increased from around a loss of 50 per cent in the first quarter to around a loss of eight per cent in the second,” it said.
Heidelberg added that this trend and the planned additional steps to optimise the company’s assets and portfolio and reduce staff costs provide reason to be optimistic that it will reach its announced targets in the year as a whole and continue to achieve sustainably profitable growth in the years that follow.
Heidelberg CEO Rainer Hundsdörfer said with a number of measures adopted as part of the transformation program launched this March to boost profitability, enhance competitiveness, and secure the company’s future, Heidelberg has been able to more than compensate for the negative effect on earnings caused by a significant drop in sales due to the COVID-19 pandemic.
“Our transformation is proving successful. We are delivering on our promise. By the end of the half-year, we had drastically reduced our debt and made significant improvements regarding our liquidity and results– despite the huge challenges our organisation has faced owing to the COVID-19 pandemic,” he said.
“Besides enhancing our financial stability, we are strategically positioning ourselves to meet our customers’ needs with an innovative, needs-based product and service portfolio, with our aim being to further boost incoming orders and sales. We will continue to benefit from this when the markets recover, as demonstrated by China.”
Heidelberg said it has also paid back the corporate bond – the outstanding sum of €150 million for the corporate bond that was originally due to expire in 2022 (coupon of eight per cent per annum) was repaid in cash on September 9.
“This eases the burden on the financial result by approximately €12 million a year due to lower interest payments,” it said.
By implementing its transformation program, Heidelberg aims to achieve both short-term and sustainable savings of around €80 million regarding material and staff costs in the current financial year.
Over 90 per cent of the savings targets defined for the 2022/2023 financial year, which overall amount to approximately €140 million, have been anchored in the transformation program.
“The great speed at which we are putting our transformation into action and our significantly improved liquidity are making us substantially stronger, particularly in the current situation surrounding the pandemic,” Heidelberg chief financial officer Marcus A. Wassenberg said.
“In our opinion, however, it is also vital that we fundamentally realign Heidelberg today so we can achieve profitability faster and on a more sustainable basis in the future. Our program doesn’t just deliver in the short term. Indeed, we are already banking on the defined measures having substantial effects in the years ahead.”
Based on the sales forecast, Heidelberg still anticipates the net result after taxes for financial year 2020/2021 to be significantly better than in the previous year, but once again in the negative range.
“Precise forecasts for the ongoing development of the markets and the industry continue to be significantly hampered by the impact of the COVID-19 pandemic and by the renewed worsening of the situation in many markets at present,” it said.
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