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Heidelberg posts Q1 profit despite net sales drop

Print tech giant Heidelberg has posted a net profit of €5m (£4.5m/$5.9m) for the first quarter, despite also reporting a 34% year-on-year drop in net sales, as its business felt the impact of the novel coronavirus (Covid-19) pandemic.

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Heidelberg posted a profit despite seeing net sales decline in Q1

Net sales for the three months to June 30th totalled €330m, down from €502m in the corresponding period last year.

Heidelberg put this down primarily to the Covid-19 crisis, saying that it felt the economic consequences of the pandemic across all segments and regions.

Incoming orders in Q1 fell 44% from €615m to €346m, though Heidelberg notes that the previous year was boosted by its appearance at the China Print trade show.

At the end of Q1, the manufacturer’s order backlog was €605m, down 17% from €730m at the same point last year.

However, Heidelberg says that it did see some signs of recovery towards the end of the quarter as businesses began to reopen following Covid-19 shutdowns in countries around the world

Compared to May, incoming orders rose by approximately 27% in June, and the manufacturer says it expects this upward trend in new orders to continue into Q2, with incoming orders surpassing the total for June.

We are confident we will continue to perform well by having the right offerings and solutions

“As expected, and as across virtually all sectors and particularly the export-oriented mechanical engineering industry, the Covid-19 pandemic had a huge impact on the quarter,” Heidelberg chief executive Rainer Hundsdörfer says.

“The consistent implementation of our transformation program is helping us maintain a stable course through the crisis. From a financial perspective, we are on a solid footing, are continuing to streamline our portfolio, and are already seeing the first positive effects of our cost efficiency measures.

“At the same time, we are sensing a gradual recovery on the market and incoming orders are starting to increase again as a result. Our market initiatives are helping us consistently address our customers’ requirements in these challenging times.”

EBITDA excluding restructuring result totalled €60m, up from €14m) last year due to earnings of €73m generated by restructuring company pension plans.

As a result, net profit after tax in the quarter was €5m, an improvement on a loss of €31m last year. Heidelberg adds that given net financial debt was reduced to €122m, it is in a financially stable position.

Hundsdörfer adds: “We are confident we will continue to perform well by having the right offerings and solutions.”

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