Heidelberger Druckmaschinen Ag · XETR:HDD
Heidelberger Druckmaschinen — FY 2019/20 Earnings Presentation
36 slides from Heidelberger Druckmaschinen's earnings presentation, Jun 9, 2020
Slide 1: Our goals: Profitability – Competitiveness – Safeguarding the future
Our goals: Profitability – Competitiveness – Safeguarding the future Heidelberger Druckmaschinen AG – Annual Analysts’ and Investors’ Conference Rainer Hundsdörfer, CEO | Marcus A. Wassenberg, CFO | Wiesloch, June 9, 2020
Slide 2: Agenda
Agenda 1. Current situation | Rainer Hundsdörfer, CEO 2. Financial figures, action package & outlook | Marcus A. Wassenberg, CFO 3. Strategy, realignment & conclusions | Rainer Hundsdörfer, CEO © Heidelberger Druckmaschinen AG 2
Slide 3: Our goals
Our goals. Profitability. Competitiveness. Safeguarding the future. Point by point, we are taking the necessary steps to achieve our goals: © Heidelberger Druckmaschinen AG 3
Slide 4: Safeguarding the future
Safeguarding the future. Action package right on point – for our customers and us. Through good times and bad #We4You In times of crisis, we continue crafting innovative digital solutions to support our customers. With our PMI Climate Report, we keep customers up to speed about key market developmen
Slide 5: Agenda
Agenda 1. Current situation | Rainer Hundsdörfer, CEO 2. Financial figures, action package & outlook | Marcus A. Wassenberg, CFO 3. Strategy, realignment & conclusions | Rainer Hundsdörfer, CEO © Heidelberger Druckmaschinen AG 5
Slide 6: Economic environment
Economic environment. Covid-19 pandemic impacting the global economy and the industry. Coronavirus pandemic has stranglehold on global Business climate in mechanical engineering economy. Balance Saldo der of positive positiven undand negative negativen reportsininProzent Meldungen percent 60 • The e
Slide 7: Regional sales performance
Regional sales performance. Covid-19 pandemic hits end of FY. €m Sales China €m Sales USA €m Sales Germany €m Group net sales 150 150 150 1000 100 100 100 500 50 50 50 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 18/19 FY 19/20 FY 18/19 FY 19/20 FY 18/19 FY 19/20 FY 18/19 FY 19/20 Chin
Slide 8: Key figures
Key figures. Covid-19 has substantial impact on FY 19/20 sales and earnings. • Incoming orders level with PY at end of third quarter; sharp fall in FY 18/19 FY 19/20 Δ PY Q4 due to Covid-19 pandemic. Incoming orders 2,559 2,362 -197 • Order backlog at € 612 m (PY € 654 m) • Sales in first nine month
Slide 9: Operating profit
Operating profit. Lower volumes in Q4 have major impact on FY 19/20 earnings. Main factors impacting earnings: EBITDA excluding effects of restructuring • (-) Volume (approx. € 60m) €m 200 • (-) Portfolio measures/remeasurement and risk 180 provisioning for Covid-19 (approx. € 30m) 150 • (-) Other (
Slide 10: Financial position
Financial position. Significant impact on equity ratio; reduction in net debt. > Assets FY 2019 FY 2020 > Equity and liabilities FY 2019 FY 2020 Fi gures i n mEUR 31-03-2019 31-03-2020 Fi gures i n mEUR 31-03-2019 31-03-2020 1 Fixed assets 846 953 Equity 399 2 202 Current assets 1.399 1.532 Provisio
Slide 11: Financial stability: free cash flow
Financial stability. Free cash flow benefits from inflow of capital. • Cash used in operating activities was € -54 m at the FY 18/19 FY 19/20 reporting date (prior year: € -11 m) after adjusting the result after taxes for non-cash items such as Net result after taxes 21 -343 impairments, depreciatio
Slide 12: Financial stability: net debt
Financial stability. Significant reduction in net debt. Net debt • Traditional intra-year increase in net debt due to inventory build-up and larger share of sales in second €m half-year. 500 • Higher level of net debt overall in 2019/20 financial year 400 due to initial application of IFRS 16 (€ 50
Slide 13: Financial stability: financing framework
Financial stability. Stable financing framework with sufficient liquidity. • The pillars of our financing portfolio – capital market instruments (corporate bond issue and remaining portion of Financing instruments convertible bond issue), syndicated credit facility and other instruments and promotio
Slide 14: Outlook – Heidelberg PMI Climate Report for Packaging and Label
Outlook – Heidelberg PMI Climate Report for Packaging and Label. Constantly above previous year's level with boom during the crisis. • Packaging printing has come through the crisis in Packaging and Label stable form with growth relative to the prior year. Data from around 5,000 installations evalua
Slide 15: Outlook – Heidelberg PMI Climate Report for Commercial
Outlook – Heidelberg PMI Climate Report for Commercial. Constant upward trend after coronavirus slump around Easter. • In commercial printing, the impacts were more Commercial pronounced, but this segment is increasingly recovering in markets like China. Data from around 5,000 installations evaluate
Slide 16: Outlook – Heidelberg PMI Climate Report for China's market
Outlook – Heidelberg PMI Climate Report for China’s market. One month after pandemic back in growth mode. China‘s market • Development of China’s market gives cause for hope, (Packaging/Label & Commercial) showing that demand picks up as the Covid-19 situation eases. Data from around 5,000 installat
Slide 17: Economic environment
Economic environment. Covid-19 pandemic impacting the global economy and the industry. Corona pandemic has stranglehold on global ORDER INTAKE economy. (March 2018/2019 in brackets) • The global economic environment presents companies Total in all industries with enormous challenges. (-9%) • German
Slide 18: Outlook for FY 20/21
Outlook for FY 20/21. Covid-19 pandemic impedes forecasting. -• Weak ordering activity worldwide +• Incipient market recovery Sharp fall in orders due to Covid-19 (especially in USA and Analysis of operating data from the global installed machine Europe) means noticeable year-on-year drop in sales i
Slide 19: Realignment: goals and measures
Realignment. Profitability. Competitiveness. Safeguarding the future. Goals Measures Financial resilience Stabilization: Debt reduction and improving liquidity Focus: Portfolio focused on core Sustainable profitability business and competitive cost structure Implementation: Consistent Technology lea
Slide 20: Realignment: progress on action package
Realignment. Major progress in rapid implementation of action package. • Reduction of net debt by return transfer of liquidity reserve. • Agreement on reduction in force by about 1,600 jobs worldwide. • Portfolio streamlining and focus on profitable core activities: Discontinuation of loss-making ac
Slide 21: Realignment: production network restructuring
Realignment. Restructuring of the production network to enhance competitiveness. • Relocation of production from Gallus (Switzerland) to Germany. • Wiesloch to be strong future location for high-end products. • Increased capacities for production of volume models in China. • Joint venture with MK Ma
Slide 22: Realignment: financial impact of measures
Realignment. Financial impact of the adopted measures. Discontinuation of unprofitable products € 50 m Significant reduction of production costs and structural costs € 50 m ∑ Improvement in operating profit (EBITDA) € 100 m © Heidelberger Druckmaschinen AG 22
Slide 23: Agenda
Agenda 1. Current situation | Rainer Hundsdörfer, CEO 2. Financial figures, action package & outlook | Marcus A. Wassenberg, CFO 3. Strategy, realignment & conclusions | Rainer Hundsdörfer, CEO © Heidelberger Druckmaschinen AG 23
Slide 24: Our core business & our products
Our core business & our products. Added value for our customers – from quotation to invoice*. Core business Quotation Packaging & Label Commercial Invoice Service & Software Sheetfed Postpress Consumables Heidelberg Transaction Heidelberg Subscription Specific package for Volume-based package for co
Slide 25: Digital technology leadership
Digital technology leadership. Smart Printshop for autonomous printing. Yesterday Today • User experience, smart driver assists, • Max. speed speech recognition … • Bhp • Internet services Cars • Acceleration/torque • Autonomous driving • Number of cylinders • Occupant safety • Cylinder capacity • E
Slide 26: Profitability: contract business
Profitability. Expansion of contract business to stabilize sales. Lifecycle Pay per month Subscription Pay per outcome LIFECYCLE SMART LIFECYCLE PLUS SUBSCRIPTION SMART SUBSCRIPTION PLUS Equipment Consulting & Training Consulting & Training Prinect Prinect Prinect Consumables Consumables Consumables
Slide 27: Positioning in growth markets: China
Positioning in growth markets. China. • Incoming orders in the Asia/Pacific region increased to € 683 million (prior year: € 658 million) despite Covid-19-related shortfall in the fourth quarter – primarily due to orders from China. • With currently some 850 employees in sales, service and productio
Slide 28: Positioning in growth markets: packaging
Positioning in growth markets. Some 50 % of sales with sheetfed offset presses in packaging. • Packaging market is an essential service for key industries such as food and health due to Covid-19 pandemic • Portfolio expansion in China; special machine configurations • MK Masterwork as strong partner
Slide 29: Cultural change
Cultural change. From corporate group to agile player. • Heidelberg is undergoing a radical transformation from a large corporate group to a modern agile partner to our customers. All levels • We are streamlining at all levels and systematically gearing our structures and processes to customer needs
Slide 30: Next steps and goals
Next steps and goals. Clear-cut agenda for profitability. The strategic focus for the coming months is clear-cut: 1. Safeguarding liquidity 2. Implementing the workforce measures 3. Systematic implementation of transformation to agile player 4. Improving profitability 5. Extending digital technology
Slide 31: Heidelberg's realignment
Heidelberg’s realignment. We have a solid financial base and staying power. Heidelberg’s stability throughout the crisis is a good springboard for potential economic recovery. We are now streamlining and lowering the breakeven point. Positive outlook in Heidelberg’s markets instill optimism for futu
Slide 32: BACKUP
BACKUP © Heidelberger Druckmaschinen AG 32
Slide 33: Key Financial Highlights
Key Financial Highlights. Sales and EBITDA by segment in FY 19/20. Sales by segment EBITDA* by segment • Heidelberg Digital Technology: 3000 200 180 Earnings burdened by economic uncertainties 2,490 2,349 4 4 150 and the pandemic. EBITDA* margin of -0.8% 601 5 655 601 102 2000 270 270 122 951 1 was
Slide 34: Regions
Regions. Asia/Pacific with order increase – worldwide Covid-19 declines in Q4. Incoming orders by region FY 19/20 (FY 18/19) €m 3000 South America 2500 72 63 North America 2.7% 457 EMEA 427 (2.8%) 2000 18.1% 296 (17.9%) 261 1500 39.3% 658 € 2,362m (42.0%) 683 (€ 2,559m) 1000 28.9% Asia/Pacific (25.7
Slide 35: Financial calendar 2020/2021
Financial calendar 2020/2021. June 9, 2020 Press Conference, Annual Analysts’ and Investors’ Conference July 23, 2020 Virtual Annual General Meeting August 13, 2020 Publication of First Quarter Figures FY 2020/2021 November 10, 2020 Publication of Half-Year Figures FY 2020/2021 February 10, 2020 Pub
Slide 36: Disclaimer
Disclaimer This release contains forward-looking statements based on assumptions and estimations by the Management Board of Heidelberger Druckmaschinen Aktiengesellschaft. Even though the Management Board is of the opinion that those assumptions and estimations are realistic, the actual future devel
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