Transformation of Heidelberg already showing effects in first quarter of 2020/2021 - Seite 2
export-oriented mechanical engineering industry, the COVID-19 pandemic had a
huge impact on the quarter. 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. We are confident we will continue to
perform well by having the right offerings and solutions," says Heidelberg CEO
Rainer Hundsdörfer.
The company anticipates further positive effects in the forthcoming quarters
from its cost-efficiency measures, along with additional earnings in the
mid-double-digit million euro range from its sale of the Gallus Group, which is
to be completed in the current calendar year. Heidelberg also sold its Belgian
subsidiary CERM N.V. at the end of July as part of a management buyout. CERM
specializes in developing management information software for the narrow-web
label market, a sector that Heidelberg has pulled out of with the sale of
Gallus. This transaction is generating a gain on disposal of approximately EUR 8
million. Both portfolio measures are helping Heidelberg carry forward its
consistent alignment on its profitable core business in sheetfed printing. At
the same time, this is further strengthening the company's balance sheet and
financial position, which is directly beneficial in the current market crisis.
Early repayment of high-yield bond in September to generate a sustainable
improvement in financial result
Another important step Heidelberg announced a few weeks ago, as part of its
moves to stabilize its financial position, is the early repayment of the
high-yield bond (with a coupon of 8 percent p.a.), the term of which was due to
run to 2022. The company will settle the remaining sum, amounting to EUR 150
million including accrued interest, from cash reserves as early as on September
9 this year. The planned early repayment will help the company unburden its
financial result by approximately EUR 12 million per year.
"We are successfully working our way step by step through our transformation
program. By focusing on our core business and our measures aimed at delivering
added financial stability, we are laying foundations that will safeguard the
future of Heidelberg. We have already considerably enhanced our financial
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