Heidelberger Druckmaschinen AG
- WKN: 731400
- ISIN: DE0007314007
- Land: Deutschland
Nachricht vom 17.03.2020 | 18:41
Heidelberger Druckmaschinen AG: Heidelberger Druckmaschinen AG adopts comprehensive action package to raise profits, improve the Company's financing structure and eliminate nearly all of its net debt.
Heidelberger Druckmaschinen AG / Key word(s): Restructure of Company/Financing
Heidelberger Druckmaschinen AG adopts comprehensive action package to raise profits, improve the Company's financing structure and eliminate nearly all of its net debt. Guidance for full-year 2019/20 adjusted to reflect non-recurring expenses of approximately EUR 300 million and the global impact of the Corona pandemic.
Heidelberg, March 17, 2020. The Management Board of Heidelberger Druckmaschinen AG (Heidelberg) today adopted a wide-ranging action package, as announced last year, for a short-term reduction in structural costs and long-term improvements in the Company's profitability. Focus on Heidelberg's profitable core business in which the Company has assumed a leading position worldwide and systematic streamlining of the cost base are geared to delivering an improvement of €100 million in EBITDA, excluding the restructuring result. To meet the EBITDA target, Heidelberg plans to discontinue the production of certain loss-making products/product lines such as Primefire 106 (a digital printing product) as well as the "Large-format" product line (sheetfed offset printing) by no later than the end of 2020. The Company also intends to make long-term adjustments to production and structural costs in a move that could lead to up to 2,000 job cuts worldwide and possibly site closures. To this end, Heidelberg will soon be taking up negotiations with the employee representatives on making the specific changes in a socially responsible manner.
At the same time, Heidelberg will significantly improve its liquidity position by transferring a portion of the liquidity reserve of approximately €375 million from the trust fund managed by Heidelberg Pension-Trust e.V. back to the Company. The return transfer, which is supported by both the Board and the members of Heidelberg Pension-Trust e.V., will reduce the Company's fiduciary assets to the level required to secure all pension entitlements that are not covered by statutory insolvency insurance. The transfer will have no negative impact whatsoever on existing or future pension entitlements. Heidelberg plans to use the additional liquidity to eliminate nearly all of its net debt - especially to pay off a high-yield, €150 million bond early - and to substantially improve the Company's financing structure. This plan of action as regards the Company's financing concept enjoys the support of the employee representatives and the trade union as well as all lending banks.
Heidelberg estimates that, depending on the outcome of negotiations with the employee representatives as well as accounting charges in the financial year 2019/2020, the non-recurring expenses necessary to implement the action package will total about €300 million. These expenses and the increasingly deteriorating global economic environment due to the corona pandemic will negatively impact sales and earnings in the current financial year more severely than so far anticipated. Heidelberg thus expects full-year sales will be well below the prior-year level of some €2.490 billion. Consequently, the forecast EBITDA range - excluding the restructuring result and one-time proceeds from the sale of Hi-Tech Coatings at the end of 2019 - of between 5.5 and 6.0% can no longer be attained and the net result after taxes will be negative, at the level of the restructuring expenses of around €300 million.
It is projected that a major part of Heidelberg's realignment measures will be initiated in the financial year 2020/2021, such that - depending on the outcome of negotiations with the employee representatives as well as the ongoing economic impact of the corona pandemic - there may once again be a negative net result after taxes in the transition year, too. It is anticipated that substantial positive effects from the realignment will materialize starting in the financial year 2021/2022.
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Heidelberger Druckmaschinen AG
Corporate Public Relations
Phone: +49 (0)6222 82-67123
Fax: +49 (0)6222 82-67129
Phone: +49 (0)6222 82-67120
Fax: +49 (0)6222 82-99 67120
Information and Explanation of the Issuer to this News:
Heidelberg adopts action package to increase profitability
- Consistent focus on Heidelberg's profitable core business
- Closure of unprofitable businesses as well as sharp cuts in production costs and structural costs - production of 'Primefire' and 'very-large-format printing' will be stopped
- Action package includes global reduction in force by up to 2,000 jobs
- Non-recurring expenses of approximately €300 million impact FY 2019/20 earnings
- Return transfer of around €375 million in liquidity from trust fund secures financing of action package and significantly increases financial stability
- Net debt to be almost completely eliminated; high-yield bond to be repurchased
- Focus on technology leadership in core business with emphasis on digitalization to advance
The Management Board of Heidelberger Druckmaschinen AG (Heidelberg) today adopted a wide-ranging action package, as announced last year, for a short-term reduction in structural costs and long-term improvements in the Company's profitability. Focus on the profitable core business and systematic streamlining of the cost base are geared to delivering a €100 million improvement in EBITDA, excluding the restructuring result. At the same time, a return transfer of liquidity reserves from the trust fund will almost completely eliminate net debt, thereby significantly improving Heidelberg's financial stability.
'Heidelberg's realignment is a radical step for our Company that also involves some painful changes. As hard as it was for us to make this decision, it is necessary in order to put our Company back on track for success. Discontinuing unprofitable products enables us to focus on our strong, profitable core. This is where we will further extend Heidelberg's leading market position by leveraging the opportunities of digitalization. Going forward, we will continue to provide our customers worldwide with technologically leading digital solutions and services across the board,' said Heidelberg's Chief Executive Officer Rainer Hundsdörfer.
Financing secured, net debt to be almost completely eliminated
'This marks a milestone for Heidelberg. At a single stroke, we are freeing ourselves from the severe debt burden and, at the same time, can systematically implement the requisite operational realignment within the next 18 months,' said Marcus A. Wassenberg, Heidelberg's Chief Financial Officer. 'This will make us crisis-proof in the short term and significantly improve profitability so that we can press ahead with our digital realignment. We are pleased that this financial plan of action has the support of the employee representatives and the trade union as well as all the lending banks.'
With the return transfer, the Board of Heidelberg Pension-Trust has resolved to support Heidelberg's stabilization and reduce the assets held in trust to a level that provides for those pension entitlements not covered by the statutory pension plan. The measure consequently has no negative impact on existing and future pension entitlements.
'We are dealing responsibly with the funds placed in trust by Heidelberg, in the interests both of the pension beneficiaries and of the Company. The sounder the Company's financial base, the better it is for its pension beneficiaries,' said Prof. Rupert Felder, Chief Executive Officer of Heidelberg Pension-Trust e.V.
Action package to increase profitability
As has already been announced, Heidelberg's realignment is accompanied by comprehensive streamlining of production costs and structural costs. In total, the planned measures will affect up to 2,000 jobs worldwide. This may also include plant closures. This reduction in force is an essential part of the long projected action package for Heidelberg's realignment, quite independently of what is currently a very difficult business situation due to the corona pandemic. Negotiations on the detailed implementation will be taken up in talks with the employee representatives set to begin in the near future. Especially in view of current circumstances, Heidelberg is conscious of its responsibility to the workforce and will work with the employee representatives to ensure that the reduction in force is made as socially responsibly as possible. Depending on the outcome of negotiations with the employee representatives as well as accounting charges in the financial year 2019/2020, the non-recurring expenses necessary to implement the action package are estimated to total about €300 million.
Current financial year impacted by action package and economic environment
Priority following realignment is on increasing profitability
'With this comprehensive action package and major refinancing, we are doing everything in our power to position Heidelberg so that we are sufficiently resilient to remain profitable even in times of economic uncertainty.' The top priority following Heidelberg's realignment will be profitability,' said Marcus A. Wassenberg.
Focus on technology leadership in core business with emphasis on digitalization to advance
Heidelberg IR now on Twitter:
This press 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 development and results may deviate substantially from these forward-looking statements due to various factors, such as changes in the macro-economic situation, in the exchange rates, in the interest rates, and in the print media industry. Heidelberger Druckmaschinen Aktiengesellschaft gives no warranty and does not assume liability for any damages in case the future development and the projected results do not correspond with the forward-looking statements contained in this press release.
|Company:||Heidelberger Druckmaschinen AG|
|Phone:||+49 (0)6222 82-67121|
|Fax:||+49 (0)6222 82-67129|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||999565|
|End of Announcement||DGAP News Service|
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