Heidelberg has reported an increase in orders and turnover as it closes the first quarter of the 2018-19 financial year, with its longer-term targets looking increasingly “realistic”.
Group sales for the German manufacturer rose by 9% to €541m (£484m) across the 1 April-30 June period compared with Q1 2017-18, with an EBITDA of €20m significantly up on the previous year’s €14m.
The success of its new pay-per-use business model was attributed as a key reason for the uptick, with a target to lock in 30 contracts by the end of the financial year that would bring in sales of around €150m, Heidelberg asserted its aim to reach 250 subscribers by 2022.
Looking ahead, the company’s report claimed it was “on course” to achieve its 2018/19 targets, although it added that the new subscription model and its extensive financial restructuring would have only a “limited effect” this year.
“In financial year 2017-18, the restructuring of Heidelberg made much progress,” said chief executive Rainer Hundsdörfer at the company’s AGM.
“It is also making progress in the current financial year. And all of the approximately 11,500 employees of this company can be proud of it. On behalf of the members of the management board, I would like to thank them for their tireless efforts.
“The further development of Heidelberg is proceeding as planned. If we continue to work on these fields as we did last year, Heidelberg will become a beacon of the digital industry 4.0. Our high ambitions are reflected in our specific medium-term goals.
“All in all, we expect moderate sales growth for the 2018-19 financial year as a whole. Excluding restructuring expenses, the EBITDA margin should be between 7%-7.5% of sales. Net income should also increase moderately. As already mentioned, the beginning has been made. The first quarter got off to a good start.”
Targets for 2018/19 were described as “realistic” by Hundsdörfer, who elected to look further ahead to his year-end targets for 2022 – an increase in turnover to €3bn with an EBITDA around €250m-€300m and net profit after taxes of “at least” €100m.
More modest expectations for the remainder of the current financial year were signalled by the expected cost of restructuring being in the €20m range, as well as rising tax expenditure among Heidelberg’s international subsidiaries.
A partial repayment of €55m to an existing corporate bond was also affected in July, impacting Q1 results.
The group’s previous financial year concluded with a slight slip in sales – down €104m to €2.42bn (£2.13bn) – and “encouraging” orders of €2.59bn in the post-Drupa year.
Hundsdörfer was unbowed by the slip, commending “excellent progress” in his company’s digital transformation maintaining the feasibility of its ultimate €3bn target.