Heidelberg Forges Ahead With Realignment - Consistent Implementation of Package of Measures Also Delivers Stability in COVID-19 Crisis

Preliminary results for 2019/2020 financial year confirmed

The economic impact of the COVID-19 pandemic had a major impact on the figures and results in the 2019/2020 financial year. Net sales in the 2019/2020 financial year (April 1, 2019 to March 31, 2020) were about 6 percent down on the prior year, at some € 2.349 billion (prior year: € 2.49 billion). The shortfall in the final quarter notably related to the key US and Chinese markets, where Heidelberg had recorded strong sales growth in the first nine months of the previous financial year. Across all markets, incoming orders were on a par with the prior year in the first nine months and showed a marked decrease in the final quarter of the financial year just completed. Incoming orders for the full financial year were down to € 2.362 billion (prior year: € 2.559 billion).

EBITDA excluding restructuring result came to € 102 million, compared with € 180 million in the prior year. The decrease mainly relates to volume, product mix and one-time effects. The EBITDA margin amounted to 4.3 percent (prior year: 7.2 percent). Due to restructuring expenses, the net result after taxes was well into negative figures, with a loss of € – 343 million (prior year: profit of € 21 million). As expected in connection with the realignment, the restructuring result came to € – 275 million. Free cash flow increased, largely because of the approximately € 324 million cash inflow from the trust assets to € 225 million (prior year: € –93 million).

During the financial year which just ended, Heidelberg significantly reduced net debt to € 43 million with an approximately € 380 million retransfer to the company of trust assets from Heidelberg Pension-Trust e. V. at financial year-end, making the company more stable today than it has been for years. Also leverage – the ratio of net debt to EBITDA excluding restructuring result – was at a low 0.4. This paves the way for the company to harness its own power in securing its status as a reliable partner to its customers, even in the current historic global economic crisis.

Outlook for current financial year is hampered by the current uncertain environment; rapid recovery of print volume in Chinese market

Heidelberg expects sales in the 2020/2021 financial year to be significantly down on the prior year (€ 2,349 million). The anticipated fall in sales due to the COVID-19 pandemic will also have a marked negative impact on the EBITDA margin due to lower volumes. However, earnings are expected to be improved by savings from the package of measures, accounting measures as well as temporary relief from more flexible working hours and short-time working. The overall target is to deliver an EBITDA margin excluding restructuring result that is at least level with the prior year, despite the lower sales. Based on the sales forecast, Heidelberg is expecting a significantly improved, but once again clearly negative result after taxes for financial year 2020/2021 compared to the previous year. In the medium to long term, Heidelberg believes that the comprehensive package of measures will help to sustainably improve the company's future profitability and its financing power for future growth.              

In the current operating environment dominated by the COVID-19 pandemic, it is not yet possible to be more precise as to onward market and industry developments. There are, however, a number of positive signs. The unique digital connectivity of its installed machine base gives Heidelberg excellent visibility with regard to printers' capacity utilization as a reliable indicator of economic activity in each market. As this data clearly shows, business in China – Heidelberg's biggest single market – is picking up again and has already surpassed the prior-year level. Other markets are likewise already showing initial signs of recovery in print volumes, thus giving cause for cautious optimism looking ahead to the second half of the financial year. There nevertheless remains considerable uncertainty with regard to the economic environment.

The virtual Annual General Meeting of Heidelberger Druckmaschinen AG will be held on July 23, 2020.

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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 macroeconomic 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.

For additional information:
Corporate Communications
Thomas Fichtl
Telefon: +49-6222-82-67123
Telefax: +49-6222-82-67129
E-Mail: Thomas.Fichtl@heidelberg.com

Investor Relations
Robin Karpp
Tel: +49-(0)6222-82-67120
Fax: +49-(0)6222-82-99-67120
E-Mail: robin.karpp@heidelberg.com