New Heidelberg raises profile - high demand for new digital products and innovative business models

Heidelberg (ots) -

- Digital transformation bearing fruit - subscription model
attracting considerable interest, with further growth in demand for
innovative digital packaging and label presses
- New Heidelberg Digital Unit to significantly expand e-commerce
business
- Operating result on target after nine months
- Incoming orders for third quarter 16 percent up on previous
year
- Group sales match previous year's level at EUR 1,657
million despite negative exchange-rate effects
- Operating result (EBITDA) improves once again to EUR 105
million
- Clearly positive net result after taxes excluding
non-recurring tax effect due to U.S. tax reform
- Sights still set on operating targets for financial year 2017/2018
as a whole - even more confidence in medium-term outlook

After nine months of financial year 2017/2018 (April 1 to December
31, 2017), the digital transformation initiated at Heidelberger
Druckmaschinen AG (Heidelberg) is increasingly taking shape. Among
other things, initial agreements have been signed under the new
subscription model whereby customers are ensured a performance
product comprising press, services, consumables, and software over a
period of several years. The successful market launch of this new
business model is a further important step toward achieving the
future growth targets. The demand for innovative digital presses
remains high, with a recent significant increase in incoming orders
in virtually all regions. What's more, the Heidelberg Digital Unit
provides a new competence center for digital marketing and
e-commerce. Among other things, this is intended to triple e-commerce
sales in the years ahead to some EUR 300 million. Furthermore, series
production of the Heidelberg Assistant has started, initially in four
countries. This will provide customers with digital support
throughout the life cycle of their products.

Slight improvement in sales after adjustment for exchange rate
movements - incoming orders significantly up in third quarter

Operationally speaking, Heidelberg is on course to achieve its
annual targets for financial year 2017/2018. At EUR 1,657 million,
Group sales were a little down on the previous year's figure of EUR
1,680 million but slightly up on the comparative period if negative
exchange-rate effects from Asia and the U.S. amounting to some EUR 39
million are not taken into consideration. Driven by the
above-mentioned high demand for digital product and business models,
incoming orders developed encouragingly in the third quarter of the
financial year, increasing by more than 16 percent from EUR 582
million to EUR 678 million. Virtually all regions that are of
relevance for Heidelberg recorded improvements, especially Europe and
the U.S. The order backlog of EUR693 million at December 31, 2017 was
at a very good level for a post-drupa year.

"Heidelberg is systematically transforming into a modern digital
technology company. The considerable customer demand for our new
digital solutions is just what we were hoping for. This applies to
the subscription models setting a new trend in our sector, our
e-commerce offerings of the new Digital Unit, and our industrial
digital presses for packaging and labels. Our medium-term target of
using technological leadership, digital transformation, and
operational excellence to generate sales of some EUR 3 billion and a
net profit after taxes in excess of EUR 100 million is increasingly
within our grasp," commented Heidelberg CEO Rainer Hundsdörfer.

EBITDA improves to EUR 105 million

Profitability rose further compared with the previous year's
figures. After three quarters, EBITDA excluding restructuring result
climbed from EUR 94 million to EUR 105 million. As a result, the
EBITDA margin after nine months was 6.3 percent after a figure of 5.6
percent in the previous year. EBIT excluding restructuring result
totaled EUR 54 million (previous year: EUR 43 million). Far lower
financing costs resulted in the financial result improving from EUR
-42 million to EUR -36 million. As communicated in December, the U.S.
tax reform led to one-time non-cash burdens of around EUR25 million.
Consequently, the net result after taxes was at the previous year's
level of EUR -10 million. Without this special item, the result would
have been clearly positive.

The free cash flow (EUR -20 million, previous year: EUR -10
million) was influenced by the acquisitions and investments made in
the period under review in connection with constructing the new
innovation center in Wiesloch. A positive figure of EUR 12 million
was achieved in the third quarter. The improvements at operating
level and the conversion of a convertible bond in July 2017 led to an
increase in shareholders' equity to EUR 345 million (previous year:
EUR 246 million). The equity ratio thus rose to some 16 percent
(previous year: approximately 11 percent). The net financial debt at
December 31, 2017 fell to EUR 244 million (previous year: EUR 282
million) and the leverage was still significantly lower than the
target value of 2 at 1.3 (previous year: 1.7).

"Our financing structure is very solid. We have a low leverage and
maintain sufficient liquidity to finance our planned investments in
new business models," said Heidelberg CFO Dirk Kaliebe. "In addition,
further acquisitions might become an option, if they help speed up
our digital transformation."

Sights still set on operating targets for financial year 2017/2018
as a whole

At the end of December, the U.S. tax reform led the company to
change its conditional forecast for the net result after taxes made
at the beginning of the financial year. After initially expecting a
further moderate increase over the previous year, Heidelberg is now
predicting that the result for financial year 2017/2018 will be
significantly down on the previous year's figure (EUR 36 million).

In terms of the annual operating targets, this means that -
adjusted for the above-mentioned special tax effect - Heidelberg is
standing by its guidance published with the figures for the second
quarter of 2017/2018 on November 9, 2017.

Net sales should be around the same level as in the previous year.
As already communicated, developments in North America are looking
brighter in the second half of the financial year, but exchange-rate
effects in Asia and from the U.S. dollar in particular, as well as
the deliberate reduction in business with remarketed equipment, are
continuing to have a negative impact on business. In financial year
2017/2018, the company is still aiming to achieve an EBITDA margin in
the region of 7 to 7.5 percent through measures to boost efficiency.
The further improved financial result will have a positive impact on
the net result after taxes, but the above-mentioned non-recurring
costs resulting from the U.S. tax reform will have a negative
one-time effect.

As planned, the strategic focus in financial year 2017/2018 is on
initiating and implementing the strategic measures that form part of
"Heidelberg goes digital!" - strengthening the company's technology
leadership, digital transformation of the business model, and
achieving operational excellence. These measures are already starting
to have a positive impact and will play a key role in achieving the
company's medium-term targets. Confidence about this has grown
further as the financial year has progressed.

Image material, the interim report for the first nine months of
financial year 2017/2018, and additional information about the
company are available in the Press Lounge of Heidelberger
Druckmaschinen AG at www.heidelberg.com.

Heidelberg IR now on Twitter:

Link to the IR Twitter channel: https://twitter.com/Heidelberg_IR
On Twitter under the name: @Heidelberg_IR

Other dates: The Press Conference for the 2017/2018 financial year
is scheduled for June 12, 2018.

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 macro-economic 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.

Further information:
Heidelberger Druckmaschinen AG

Corporate Communications
Thomas Fichtl
Phone: +49 6222 82-67123
Fax: +49 6222 82-67129
E-mail: Thomas.Fichtl@heidelberg.com

Investor Relations
Robin Karpp
Phone: +49 6222 82-67120
Fax: +49 6222 82-99 67120
E-mail: robin.karpp@heidelberg.com

Original-Content von: Heidelberger Druckmaschinen AG, übermittelt durch news aktuell