Heidelberg is claiming that its mostly completely its restructuring though the end of year figures for the financial year ending 31 March 2015 show that sales have dropped slightly to € 2.33 billion from last year’s € 2.43 billion. Heidelberg blames this on its restructuring efforts. However, Heidelberg did manage to achieve a higher operating profit largely due to cost savings.
Nonetheless, the final figure was a loss of €72m, as against a profit of €4m last year. Heidelberg has largely blamed this on a rise in pension provisions due to the significant lowering of the discount rate for pensions in Germany from 3.50 percent in the previous year to 1.70 percent on the balance sheet date. Heidelberg has said that its medium-term goal is to increase the equity ratio again by returning to sustained profitability.
The free cash flow has also suffered, down from last year’s €22m to €-17m, which apparently included one-time payments for the Focus efficiency program of around € 45 million.
Heidelberg says that its future growth will be generated primarily in the services and digital sectors, pointing out that it recently acquired a number of servicing companies that should generate sales of over € 100 million from the current financial year 2015/2016 onward. In addition, Heidelberg acquired Neo7even and the Gallus Group to improve its share of the digital print market, and reorganized its unprofitable postpress division.
During the year under review, the financing structure was optimized further. The financing portfolio consists of three pillars comprising corporate bonds, a syndicated credit line, and other instruments such as convertible bonds. The net debt of € 256 million is covered by basic funding until 2022. Heidelberg currently has total credit facilities of around € 750 million.
For the current 2015/2016 financial year and in the medium term, Heidelberg is striving for annual sales growth of 2 to 4 percent and is anticipating an operating margin on EBITDA of at least 8 percent of sales.
“We’ve made Heidelberg fit for the future,” said Gerold Linzbach, CEO of the company. “The reorientation will enable Heidelberg to enjoy sustained profitable growth in the future.”