The German press manufacturer said today (6 August) that while it has seen continuing positive effects from the successful Print China 2019 trade show, as well as an improving order situation, it has nevertheless “immediately introduced measures to boost results”.

These include strategies to make working hours more flexible in the short term, such as working-time accounts and short-time working, and structural projects to achieve a sustained increase in profitability.

It has also initiated a plan to significantly improve its net working capital and free up cashflow. This involves closely scrutinising many of the investments planned for the current financial year and the next, with a view to cutting planned investments by around €20m (£18.4m).

Optimised lead times and inventory levels as well as better accounts receivable management are also envisaged to reduce tied-up capital by around €50m.

The manufacturer also reiterated that it is considering making some adjustments to its portfolio, which will involve selling some smaller areas of the company, together with further structural optimisations.

Meanwhile, the business said it is continuing its digital transformation and to expand its digital business models, with a view to significantly reducing its exposure to economic fluctuations and increasing the share of recurring business in the medium to long-term.

Demand for its contract and subscription offerings that are the main focus of this strategy continued to grow in Q1 and the firm’s medium-term goal is to increase the share of recurring sales, primarily from contract and subscription business, to around one-third of total sales.

“The good start to the second quarter means we’re confident of achieving our planned business volume for the financial year. What’s more, the positive impact of the numerous measures we’ve introduced to improve our results and free cashflow will be felt in the second half of the financial year,” said Heidelberg chief executive Rainer Hundsdörfer.

The company said its first quarter was affected by “the increasing reluctance to invest, especially in western Europe, and associated shifts in sales due to the economic slowdown”. Accordingly, it downgraded its financial forecasts last month, propelling its share price to a five-year low.

The manufacturer said it is expecting sales for financial year 2019/2020 as a whole to match the previous year’s level. It anticipates that further stable expansion of its contract business will compensate for the economic slowdown and the associated reluctance to invest in equipment.

In the current financial year, the business is targeting EBITDA excluding restructuring result of between 6.5% and 7% of sales, and is expecting to break even after taxes.

Heidelberg’s share price stood at €0.98 at the time of writing, up by more than 4% on its close of €0.94 yesterday (52-week high: €2.66, low: €0.91).