Drupa orders brighten poor Q1 for Heidelberg
By Simon Nias Monday, 16 July 2012
Heidelberg has hailed its "strongest start" to a financial year since 2008 after recording a surge in incoming orders in its preliminary first quarter results.
However, the Düsseldorf-based event proved a double-edged sword as Heidelberg blamed it for its worst sales and operating result in almost three years.
Sales for the three months to 30 June 2012 came in at €520m, down 4.4% on the previous year and at the lowest level since Q2 2009/10 when Heidelberg posted net sales of €499m. The manufacturer attributed the poor result in what is almost always its slowest sales quarter to "customers' reluctance to invest in the run-up to Drupa".
The operating result excluding exceptional items came in at a loss of €58m, ending three consecutive quarters of profit and representing the worst return since the €65m loss recorded in Q2 2009/10.
In its preliminary results announcement, the company said: "As expected, lower profit contributions resulting from the lower sales in the first quarter and the costs of preparing for Drupa and launching new products had a negative impact."
Free cash flow was stated as between -€105m and -€115m due to the increase in inventories resulting from the incoming orders received and payments made for Heidelberg's Focus 2012 cost reduction programme.
Despite the negatives, the Drupa-induced boom in incoming orders, which at €890m were more than €100m higher than the next best result since Drupa 2008, was cause for some optimism.
"As a result of the trade show, Heidelberg is expecting sales to show a distinct shift to the second half of the financial year with a corresponding improvement in profit contributions," said the manufacturer.
"The company implemented the main measures of the Focus 2012 efficiency program before Drupa, which means up to a third of the planned annual savings of €180m will take effect during the current financial year."
As a result of the rise in orders and the cost savings of Focus 2012, Heidelberg said it was still on track to achieve a "clearly positive result of operating activities excluding special items" in the current financial year, followed by an operating result excluding exceptional items of around €150m and a net profit in the 2013/14 financial year.
Further details will be published together with the management's presentation of the first quarter results on 8 August.Tweet
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