Global third quarter results are a mixed bag for Heidelberg, but the German manufacturing giant remains confident a busy it will deliver on its targets. Despite predicting net profit for the year, the company is bracing for a 10% year-on-year drop in sales volumes.
Group sales clocked in at €1.7 billion, down from €1.9 billion last year, but according to Heidelberg results are considerably stronger than last year. The local market has also come out well on track, feeding off a boost in activity over the holidays. Speaking with Print21 Richard Timson, managing director Heidelberg Australia and New Zealand, confirmed that the local figures stack up well with the global nine-month results.
- Richard Timson, managing director,Heidelberg ANZ
“I’m happy with everything we’re doing. We’re ahead of targets and expecting a positive result. We had quite a bit of activity over the Christmas break, on target with service, sales and consumables, and a number of good installs too,” said Timson.
A slate of new presses have gone in across the region, with installations into Logans Print in NZ, a six-colour half-size landing at Clark Murphy in NSW, and an eight-colour half-size at Crystal Printing over in WA. Timson confirms that consumables are also performing well, anticipating a local profit for the business.
Despite a healthy operating result of €67 million, earnings before interest, tax, depreciation and amortisation (EBITDA), and exceeding its operational break-even, the business is currently running at a loss of €41 million. This is, in fact, a slip from €-36 million for last year, however, Heidelberg maintains that the previous year's figures were buoyed by one-time effects from interest on tax refunds.
Gerold Linzbach, Heidelberg, CEO, said, "After nine months, Heidelberg has made significant progress regarding profitability. As we expect our sales to pick up and the result to increase in the final quarter, we remain confident that we will meet our target of achieving a net profit."
The business also claims to have chipped away at its sizable debt facility over the past nine months, bringing the bill down €325 million to €271 million. From December Heidelberg has also improved its financing structure by extending its syndicated credit line by €51 million. That credit line currently stands at €340 million with a €60 convertible bond, due to mature mid-2017, and a further €355 million bond due to mature in April 2018.
Dirk Kaliebe, Heidelberg, CFO, said, "By successfully refinancing our credit line, we have made further significant progress in optimising our financing structure. We have extended the terms of our key financing pillars to 2017 and 2018. Thanks to our asset and net working capital management, the company's net financial debt remains at a low level. In the medium term, we intend to reduce our debt even further."