Heidelberger Druck

Good afternoon, good morning, ladies and gentlemen, and welcome to the conference call for the publication of preliminary figures FY 2025-26. At this time, all participants have been placed on the listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Jürgen Otto.

Good morning, ladies and gentlemen, and welcome to Heidelberg's conference call. our preliminary financial results for fiscal year 2025-26. We would like to give you some insight on the financial performance of last fiscal year, while our strategic outlook and financial guidance will be presented to you in our press conference dated 10th of June 2026. 2025-26 was characterized by setting the right strategic direction for Heidelberg with a great amount of projects and measures which we initiated and partly already finished. We will summarize at a later stage of this presentation, but to tell it in a nutshell, we have set the right points for the mid and long-term development of Heidelberg. Operational-wise, we are looking back at a challenging and volatile external environment with increased geopolitical tensions, such as the Iran conflict. But even in these uncertain times, Heidelberg continues to make targeted, forward-looking investments in new growth areas, particularly in security and defense. We are of the firm belief that this will strengthen the foundation for future profitable Despite the visible headwinds, Heidelberg demonstrated resilience, disciplined execution, and continued progress on its strategic priorities. Order intake amounted to 2.2 billion euro, which we expected comparing to a very strong prior grouper year. Adjusted for currency effects of 71 million euro, order intake would have reached around 2.3 billion euro. reflecting a stable underlying demand environment. Importantly, momentum improved toward year end, with Q4 representing the strongest quarter of the year. Net sales totaled 2.3 billion euro and remained stable year on year despite FE's headwinds of 69 million euro. On the observing side, group operational performance was preliminary primarily impacted by margin pressure in print and packaging. A weaker macroeconomic environment, including softer demand and pricing, delayed investment decisions and timely related upfront expenses in technology growth areas, waiting on overall performance. These effects were partly offset by strong cost discipline with personal expenses excluding the structuring reduced by 23 million Euro supported by a roughly 3% reduction in headcount from 9,309 to 9,065 employees. Further functional costs also came in below prior year levels based on strongly executed initiatives. As a result, Heidelberg delivered on adjusted APDA margin of 6.6% despite external pressures, negative currency effects of around 20 million Euro and accelerated investments in growth areas such as security and defense. Heidelberg closed the year with a positive net financial position of 39 million Euro and further strengthened its financial flexibility by extending its syndicated credit facility to 2030. Obese the challenging market conditions and pressure we have observed fiscal year 2025-26 in total demonstrates improving operational quality, disciplined cost management and continued strategic momentum positioning Heidelberg well for the future. Volker, I may pass it on to you for further details on the financial performance of last fiscal year. Thank you, Jürgen. Welcome from my side to today's conference call. Let's take a look at the segment's performance after 12 months, noting that currently headwinds had a significant impact on the results. Net sales mix continued to be well balanced, with around 52% generated in print and packaging equipment, 46% in digital solutions and lifecycle, while the remaining part contributed by Heidelberg technology. For the time being, a minor contribution, which developed in line with internal expectations, is the future of the growth engine of Heidelberg. Incoming orders in the print and packaging equipment segment declined by 11%, amounting to 1.13 billion euro, reflecting the absence of investment tailwinds and negative currency effects of around 41 million euro. Net sales grew softly by 2%, reaching 1.18 billion euro, driven primarily by solid demand in sheet metal and white wrap despite currency headwinds of around €39 million. As a result, adjusted EBITDA declined, reaching €93 million compared to €107 million in the previous year. The adjusted EBITDA margin declined by 130 basis points to 7.9%, largely due to product mix utilization and currently affects rather than any deterioration in underlying competitiveness. After 12 months, the digital and lifestyle segment recorded an order intake of 1.05 billion Euro, which is about 4% below the previous year's level, primarily driven by currency again. Currently alone accounts for roughly 30 million Euro masking, an otherwise broadly stable and underlying demand picture. Net phase performed roughly stable year-on-year to 1.05 billion euro concentrated in servicing consumers. Again, materially impacted by currency effects of around 13 million euros. This was partially offset by solid performance in narrow web, which helped stabilize the top line. Adjusted EVDA stable at 6.8%, reflecting deliberately reduced cost base and disciplined cost management. In the hybrid technology segment, order intake and net sales showed a slight improvement versus prior year. Driven by e-mobility, industry business remains stable, providing a steady baseline. In e-mobility, HydroDirk achieved a significant improvement in the cost position. However, given the current scale and ramp-up status in security and defense, this improvement was offset. Overall, the adjusted APDM margin is still negative. Let's move on to the regional view. In the mirror, the absence of last year's two-way effect combined with challenging economic conditions was clearly felt. residing in an 11% decline in order intake to 1.1 billion euro. Net sales, however, reached 1.17 billion euro, representing a 3% increase. With weaker performance in life cycle, partially offsetting stable equipment demand, regionalized to highlight the performance contribution of Italy, which was backed by a governmental subsidy program. Across Greater China and Asia-Pacific, order intake decreased about 6% to €600 million, while Greater China order intake showed underlying improvement towards the second half, partially offset by significant currency headwinds of overall €40 million. Net sales were, with €583 million, 8% below prior year. On a currency-adjusted basis, performance was largely stable. The reported decline mainly reflects currency pressure and bigger sheet-set demand in Asia-Pacific. The 535 million euro order intake in America was 2% below prior year, impacted by U.S. trade-related uncertainties and a significant negative currency effect of 30 million euro, despite an improving order trend since third quarter. at both the prior year driven by strong demand for board mass and sheet beds, more than offsetting adverse currency effects of 32 million euros. Now, let's turn to our EBDA bridge, which highlights the key drivers behind the year-on-year change in operating profitability. In the prior year, reported EBDA amounted to 137 million euros. In December, 2024, we recognized a provision of €29 million for future transformation measures, which was adjusted for in EBITDA. In March 2025, this provision was adjusted to a total of €25 million. During the year, operating performance was impacted by a challenging external environment. The outbreak of the conflict in the Middle East led to a sudden weakening of investment demand alongside supply constraints, order delays, higher energy prices, and tariff effects. In addition, persistently negative currency impacts reduced EBITDA by around €20 million, while the product mix was less favorable compared with the prior year. Such surprising, combined with the €20 million negative currency impact and stable capacity utilization, on profitability. At the same time, efficiency initiatives generated measurable productivity improvements, while disciplined cost management further reduced the operating cost base. In addition, the absence of global trade fair cost benefited the period, partly offset by expenses related to this year's print China. Overall, adjusted EBITDA came in at 151 million euro for the fiscal year 2025-2026. Next page, we show the cash flow, starting with a decreased operating cash flow, which was at 36 million euro compared to 113 million euro in prior year, due to lower customer down payment and reduced EBITDA after 12 months. Tax and interest slightly improved year on year. Networking capital effect declined year on year by 48 million euro, primarily due to lower down payments, which more than offset operational improvements on reduced inventories. Restructuring related payouts increased to 26 million euro. Reflecting the implementation of the so-called Zukunftsplan, Further, year-on-year movements were driven by function, effects, and other operating changes. This included a mix of cash and non-cash items and had an overall negative impact on operating cash flow. The decline was mainly due to working capital-related effects, including personal accruals, timing differences between payables and receivables, higher commission payments, and tax-related items. Let's finish the cash flow section by looking at our free cash flow. The cash flow from investments amounted to minus 76 million euro after 12 months. CapEx was below prior year despite Polar Group acquisition of 11 million euros as a prior year elevated by demo machine investments. Devestments, income of around 22 million euro was lower in the prior year. which had benefited from strong sales of demonstration machines around Cuba. After 12 months, free cash flow was negative 19 million euro compared to 51 million positive in the previous year, mainly due to a slightly weaker operating result. While inventory reductions did not fully compensate for lower customer down payments. To conclude, Let me briefly highlight how we further strengthened our balance sheet and financial position over the year, underpinned by a higher equity ratio, a solid net financial position, and the early extension of our evolving credit facility, clearly demonstrating our financial leeway and flexibility. Equity increased over the past 12 months, supported by strong net income growth of approximately €15 million and a higher pension discount rate. Accordingly, the equity ratio improved by 210 basis points to 27.2%, with the total equity amounting to €568 billion. This positive development was partially offset by currency translation effects of €13 million recorded directly in equity. Function liabilities stood at €605 million, reflecting the increase in the German function discount rate to 4.2%. The net financial position decreased to €39 million, mainly as a result of negative free cash flow of €19 million. The continued positive net financial position underpins Heidelberg's strong financial discipline. During the year, we further reinforced our financial flexibility by upsizing our syndicated credit facility to €436 billion and extending its maturity. As a result, liquidity remained with substantial headroom as the revolving credit facility was strong at only almost 15% of its 436 million euro capacity at the end of March 2026. I now want to hand back to Jürgen Otto to wrap up the achievements of fiscal year 2025-26. Thank you, Volker. Let me now wrap up our presentation by summarizing our key achievements for full year 2025-26. Overall, we made strong progress on both our strategic initiatives, and cost measures, which translated into improved structural cost indicators, as well as a better result before tax and after taxes, laying a solid foundation for our future development. Among the key structural highlights, within our Zukunft Plan, we concluded more than 550 exit agreements to structurally adjust our personal cost base, mainly in Germany. We implemented significant cost reduction and efficiency measures, including the consistent relocation of CX-104 in China and the launch of our low-cost country footprint in North Macedonia. We advanced key decadalization initiatives. In addition, we made substantial progress in executing our strategic transformation. We further expanded our digital business, including the ramp-up of digital print through strategic partnerships with Canon and Ricoh. We signed a strategic partnership agreement with Masterwork, significantly expanding the scope and the depth of our collaboration beyond the previous sales cooperation. And we completed the integration of Polar, further enhancing our market position and operational platform by striving for further M&A to even extend our position as a leading player in our industry. We successfully transformed Amplified's business model from a hardware-focused player to a fully integrated solutions provider in charging technology. And very important, we established a further pillar in security and defense successfully initiating our activities in high-growth and future-orientated markets. Taken together, these measures have started to improve our cost base and earnings profile, reinforcing the foundation for sustainable and profitable growth going forward. With that, thank you very much for listening. Let me hand it back to the operators.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star, nine, and the pound key on your telephone keypad. If you would like to rewrote your question, please press star, three, and the pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone. So please press star, nine, and the pound key on your telephone keypad if you would like to ask a question. And the first question comes from Stefan Augustin from Warburg Research. The floor is yours.

Yes. Hello, gentlemen. Thank you very much for taking my question. I have a couple of ones. The first one is actually a little bit a question if you can elaborate more on where the sudden shortfalls in Q4 on the profitability side actually came from versus your budget? I mean, I see if I look in the segmentation that Europe and Asian business has been quite weak in the sales, has been quite weak in the fourth quarter while the U.S. was okay. And you highlight the effects impact, so possibly a little bit reframing the question. Is it fair to simply assume that the pricing in the North American sales was not up to your expectations?

Yeah, good morning. Mr. Augustin David Schmeding is speaking on the title to answer your question, especially talking about the shortfall in Q3, the sudden one. Yeah, of course, we were faced with the outbreak of the conflict in the Middle East, led to, of course, a sudden weaker, let's say, situation of investment. Yeah, this came forth as a surprise in this speed and this, let's say, heaviness, and of course, we had some other explanations behind, causing some order delays, of course, which were now reflected in the figures. And talking, of course, about the situation in America, yes, the order momentum increased. This is what Foucault was talking about starting in Q3. Yes, it improved, but nevertheless, the situation is still uncertain due to the Paris situation. And of course,

Hello.

One moment, please. So I will bring them back.

Thank you. Please wait one moment.

Hello. Hi, hi. Okay, so you're back in the conference. Please go ahead.

Mr. Augustin, have you got the answer or?

Most of it probably, maybe just a lot.

We were lost.

Yeah, we were lost in the connection. I was talking about the currency situation in America, so I don't know if you've got the answer here. We're talking about the... heavy FX impact headwinds in the U.S. economy, causing also some delays in investment decisions, plus the tariff situation, so causing a lot of trouble. The customers are delaying investments, of course. Nevertheless, we saw an improving order momentum starting in Q3. Customers ordered again. but it's still not on the level that we were expecting. And the tariff situation is still an issue for us. Of course, especially in the service business, we increased prices significantly over the last quarter to compensate for the shortfalls caused by tariffs. This will compensate the loss over the next quarter as well. But overall, the situation is as it is, and it's reflected now in the numbers.

I want to add one thing. We had a mixed effect. That means, as you already mentioned, we had weaker sales in China, and in China we have better profitability in our machines, so the mixed effect hit us. Additionally, we had some clean-out effects on the year-end. Certain warranty claims and other topics which amounted to 3 to 4 million, which also came together or that all came together at the year end, and that's why we had this weakness.

Okay, thank you very much for the explanation. A couple of others. The first one is actually on the joint venture on that. a little glimpse of how you plan to progress here. The next one is then an update on Manroland and your entry into the very large format. So what will you make out of the situation with Manroland? I mean, there's possibly a service business to be patched up. And the last one is a small housekeeping question. the deviation between the free cash flow and the change in the net cash position, is it all either or is there a couple of other elements in there, or let's say, is there one mainly big element in there, or is it just a couple of smaller ones? That will be the question.

Thank you. I think we will give you a much deeper outlook at the 10th of June regarding all our security and defense activities, and there will be some news also presented to public at the 10th of June, and we will give also a deeper outlook for our Onberg activities at that date. Secondly, Manroland, yeah, David.

I can answer your question about Manroland. The Heidelberg plan remains to continue the VLS business, but economic, relational and shareholder value creation are key. And accordingly, we follow the current situation and Manroland and MICE adapt our internal defined strategy if needed. Looking for your understanding that we don't comment, of course, on any market speculation, but be sure that we will communicate immediately as soon as we have some updates about the VLS strategy. Thank you.

a statement on the net cash and the free cash flow?

Yeah, Stefan, we will answer your question. We have the experts here.

Yeah, your assumption was basically correct. So it's mainly due to IFRS 16 these effects and minor fixed effects due to currency translation of around 2 million euro.

All right. Thank you very much.

Thank you, Stefan.

To ask a question, please press star, nine, and the pound key on your telephone keypad. And we have one more question from Sven Dauer from Kepler Software. The floor is yours.

Hello. Good morning, gentlemen. Thank you for taking my question. Just one from my side and a follow-up on On the impact of the Iran war in Q4, I'm a bit confused because on the one side you say that there has been a weakening of investment demand due to the war, which was pretty much one month in your last quarter. But on the other side, the Q4 order intake was even up year over year. So does that imply that you would have expected a higher order intake in Q4, or were there some cancellations? Yeah, it would be great if you could provide some more color on this.

So at the end, it depends, of course, on the regional development, which were really different globally. So talking about the regional development, we saw a strong momentum coming from China in the last month of the last fiscal year. So helping us in this fiscal year, of course, with these orders in the same way. We saw shortfalls in the order intake, which were expected on a high level in Europe, and this is exactly reflected in the total number. So the effects coming from the different global developments, so China was performing on an okay level in the last quarter, the last fiscal year, and compensated shortfalls in other regions, especially in EMEA, where our Iranian and Middle East businesses included.

Okay, thank you.

If you would like to ask a question, please press the down line and the pound key. Or you can also use the dial-in function in the browser. But at the moment, there are no further questions.

Yeah, then thank you, everybody, and see you back in June, thanks, with some exciting news. See you then. Bye-bye.