Heidelberg sales dip in Q3 but order backlog indicates strong Q4
Thursday, February 7, 2019
Heidelberg’s revenue dropped by 4% year-on-year in Q3 but the company said its order backlog indicates a strong Q4 and its targets for the full-year are still in sight.
The manufacturer’s net sales for the three-month period ended 31 December 2018 came in at €579m (£509m), down from €603m in the equivalent period a year ago. But the company’s nine-month sales of €1.69m were up around 2% on nine-month sales a year prior of €1.66m.
Its order backlog in Q3 was €804m, up 16% year-on-year from €693m.
The company said the lower Q3 revenue was “largely due to deliveries being moved into the fourth quarter owing to supply bottlenecks at suppliers for certain product series, and due to the discontinuation of a funding program in Italy”.
A Heidelberg spokesperson told PrintWeek: “Some of the deals moved from December to January – so from the third to the fourth quarter – but it has now been secured with our suppliers that all of our parts are coming on time, so we are able to finish the financial year as planned.”
EBITDA excluding restructuring charges fell from €45m to €39m year-on-year in Q3, and from €105m to €101m for the first nine months. The EBITDA margin dropped slightly to 6%.
Operating cash flow dropped from €69m a year ago to €50m. Free cash flow was influenced by factors including an increase in inventories caused by the growing order backlog, and longer-than-planned throughput times due to supply bottlenecks, as well as investment in the now-completed construction of Heidelberg’s new innovation centre for digital R&D in Wiesloch, which was opened in December.
Earlier this week Heidelberg said it had sold its 1,000th Wallbox – its new charging system for electric cars. In the medium to long-term, the manufacturer said it aims to generate approximately €50m in sales with this product and others like it.
Wallbox is currently only available to customers based in Germany but the spokesperson said it will likely also be sold in other markets in the future.
“We are always looking at where we can use our core competencies for other markets. Last year we started to sell our own Wallbox under our name to enter the growing e-mobility market. We will continue to develop this product in the future with more intelligence and more functionality in it.”
Other growing initiatives for Heidelberg include its new subscription model. Following the signing of 26 contracts for the model in the first nine months of its financial year, the firm’s next interim target is 30 contracts by the end of the financial year, which corresponds to an order volume of approximately €150m.
“We have reached important strategic milestones in financial year 2018/2019. The enhanced partnership with Masterwork [which is set to become Heidelberg’s largest shareholder] opens up a great deal of potential for us in the growing packaging sector and on the huge Chinese market,” said Heidelberg chief executive Rainer Hundsdörfer.
“There is strong demand for the subscription model, our digital presses have now entered series production, and we are leveraging our skills for e-mobility. This progress makes us very optimistic about the future development of Heidelberg.”
The company said that, as it expects another strong Q4, its targets for the financial year as a whole – which include a moderate growth in sales – are still in sight.
Heidelberg's shares opened at €1.85 this morning, following the release of the results, up 2.8% on yesterday’s close, but had fallen to €1.68 at the time of writing.