Heidelberg with a solid start to the new financial year - order backlog growing thanks to subscription model - Seite 2

than EUR20 million in the medium term. As part of this process, a
partial repayment of the existing corporate bond in the amount of
EUR55 million was effected in mid-July. The associated non-recurring
transaction and early redemption fees reduced the financial result in
the quarter under review from EUR-13 million to EUR-16 million,
although lower future interest payments will have a noticeable
beneficial impact. After factoring in income taxes, the net result
after taxes at EUR-15 million was slightly better than in the
previous year (EUR-16 million).

At EUR3 million, operating cash flow was on a par with the same
quarter in the previous year (EUR1 million). Free cash flow of EUR-45
million in the quarter under review (previous year: EUR-13 million)
can be attributed to a build-up in inventories due to the growing
order backlog, investments in building the innovation center at the
Wiesloch-Walldorf site and a non-recurring increase in leasing
payments for buildings. At EUR332 million, equity was at the same
level as on the annual reporting date of March 31, 2018. The equity
ratio was unchanged at around 15 percent. Despite the higher net
financial debt, which is typical for the season and amounted to
EUR278 million on June 30, 2018 (previous year: EUR234 million),
leverage was 1.4, meaning it is still well below the target value of
2.

"Our financing structure is very solid. We have low leverage and
are maintaining liquidity reserves we can use to finance our planned
investments in new business models and the company's digital
transformation," said Heidelberg CFO Dirk Kaliebe.

Outlook unchanged: Moderate growth in sales and net profit after
taxes anticipated for 2018/2019 financial year

Given the good start to the year, Heidelberg is confirming its
overall targets for 2018/2019. Consequently, it is still forecasting
a moderate growth in sales. Due to this, and thanks to continued
efficiency improvements, the EBITDA margin excluding the
restructuring result is likely to lie in the range of 7 to 7.5
percent, despite higher collectively agreed wages. Restructuring
costs should be in the region of EUR20 million. The non-recurring
expenditure associated with the partial repayment of the corporate
bond is having a detrimental impact on the financial result. Due to
this, and in view of rising tax expenditure among foreign group
subsidiaries, a moderate overall increase in the net result after
taxes compared to the previous year (including the non-recurring tax
effect for 2017/2018) is being forecast.