Heidelberg reports 'faster progress' as shares spike
Wednesday, February 10, 2021
Heidelberg’s share price jumped by 25% after it reported a recovery in demand in China and Europe and upgraded its operating profit forecasts for the full year.
In its Q3 and nine-month report, Heidelberg said that despite expecting an overall fall in sales year-on-year of as much as €500m (£438m), it was anticipating EBITDA margins prior to restructuring costs of around 7% (prior year: 4.3%).
Sales in the group jumped by 25.3% to a 52-week high of €1.50 following the news.
While Heidelberg admitted that the recent non-completion of its sale of Gallus Group was “clouding the positive picture”, CFO Marcus Wassenberg stated: “All in all, we have made much faster and more successful progress with our company’s transformation than previously reported… We are therefore confident we will return to attractive profitability in the medium term.”
The manufacturer has implemented a major reorganisation programme since last March, including culling unprofitable product lines – notably the B1 Primefire sheetfed inkjet press and its VLF sheetfed presses – and cutting around 1,600 job cuts worldwide.
The moves will reduce costs by more than €170m a year.
Heidelberg said that Q3 trading showed “further signs of recovery”, and noted that in December “incoming orders were back above the previous year’s figure for the first time in this financial year”.
For the first nine months of the 2020/21 financial year covering 1 April to 31 December, sales were down 24% at €1.29bn, while incoming orders were down 25% at €1.9bn. The shortfall in orders reduced to 12% in Q3.
EBITDA excluding restructuring costs of €38m was €88m for the period, with a small net profit of €3m compared with the prior year’s €10m loss for the period.
Heidelberg still expects to post a loss for the full year, albeit reduced on 2019/20 when restructuring costs of €275m propelled the group to a massive €343m bottom line net loss.
Last month Heidelberg announced that it would double the production capacity of Wallbox manufacturing by April, and has fired up a second production line for the products at its Wiesloch-Walldorf site.
The latest model, the Heidelberg Wallbox Home Eco Europe, is suitable for use in most European countries including the UK.