HEIDELBERGER DRUCKMASCHINEN AG, FEBRUARY 5, 214 Interim Results 9-month figures 14 Gerold Linzbach, CEO Dirk Kaliebe, CFO Robin Karpp, Head of IR
Interim Results 9-month figures 14 February 5th, 214 Improved Profitability Headwinds Continuous cost savings & rightsizing Price increases Margin improvement due to gradual scaling back of low margin businesses Weakening of local currencies (e.g., Japan, India, Brazil) Investment reluctance in countries with weak local currency (Brazil, India) EBITDA margin* Previous year Current year Medium-term target >8% 4.% 2.9% % 9m 212/13 212/13 9m 213/14 213/14 *Previous year s figures restated according to IAS 19 (211) 1
Interim Results 9-month figures 14 February 5th, 214 Management focus on 4 fields of action Invest to grow Mid-term growth in Digital businesses by cooperations and new products Short-term organic growth / acquisitions in Service & Consumables Re- invest to maintain Continuous margin improvement in Sheetfed Offset Manage for cash Non-strategic businesses: Margin optimization by new business models and portfolio measures Non-performing Performing 2
Interim Results 9-month figures 14 February 5th, 214 Further key milestone 13/14 on the way to profitability Sales volume is expected to decline by approx. 1% in 213/14 compared to the previous year FX rates Reluctance to invest in some markets, e.g. Brazil Gradual scaling back of low margin business Significant improvement of Profitability Cost saving program Measures to increase margins Work-time-flexibility Outlook: Net profit remains target for financial year 213/214 3
Interim Results 9-month figures 14 February 5th, 214 Sales in a paradigm shift: margin driven instead of volume driven Net Sales* by division EBIT* by division Comments m 2, 1,5 27 (43%) 1, 1,95 9 1,149 (6%) -12% 1,685 6 98 (58%) m 8 4-58 +68m 7 32 1 6 6 9m: Sales down by 12% yoy (FX adjusted by 8%); HD Services adjusted for FX effect stable Q3: Sales down by 14 % yoy to 588m (FX adj. by 1 % to 618m) Operating result clearly improved against previous year on lower sales volume; break-even exceeded 5 747 (4%) 9m 212/213 412 (6%) 698 (41%) 9m 213/214-4 -8-96 9m 212/213-55 9m 213/214 Favorable impact of sustainable savings measures from Focus and higher profit contributions HDE volume reduced by 17m, but improved result. EBIT slightly negative in Q3 with -7m but improved against previous quarter ( -13m) HDS-EBIT margin at 1% in Q3 HD Equipment HD Services HD Financial Services *Previous year s figures restated according to IAS 19 (211) and new segmentation, before special items 4
Interim Results 9-month figures 14 February 5th, 214 All KPIs affecting the results improved significantly net debt kept on low level Key figures* Comments in m 9m 212/13 9m 213/14 Q3 213/14 D 9m to py Net Sales 1,95 1,685 588-11.5% EBITDA 4 67 36 +63m EBIT before Special items -58 1 18 +68m Special items -24-2 -1-22m EBIT after Special items -82 8 17 +9m Financial result -36-41 -13-5m Profit before Tax -118-32 4 +86m Net profit/net loss -94-4 7 +54m Free Cash Flow -87-1 -38 +77m Net debt 325 271 271-54m Equity 378 348 348-3m Clearly positive EBITDA after nine months; margin at 4% Positive Profit before Tax in Q3, significantly improved after nine months Positive Net Result in Q3; loss after nine months reduced FCF almost break even after nine months, incl. payments for restructuring ( 57m) Net debt reduced yoy Equity ratio at 16% *Previous year s figures restated according to IAS 19 (211) 5
Interim Results 9-month figures 14 February 5th, 214 Financial framework extended until 217/218 Financial framework Maturity profile m ~79 36 34 Other Extended RCF (Jun 217) Amended RCF (Dec 214) Convertible Bond (Jul 217) High Yield Bond (Apr 218) Real Estate Lease (Mar 218) Net debt (as of Dec 213) 6 355 271 34 277 355 Dec-213 8 CY 214 8 CY 215 8 CY 216 6 8 CY 217 CY 218 6
Interim Results 9-month figures 14 February 5th, 214 Review Q3 213/14 EBITDA (excl. special items) in Q3 with 36m at the previous year's level ( 38 m); significant improvement to 67m after nine months (previous year 4m) Free cash flow amounts to -38m in Q3 (previous year +28m), almost balanced after nine months incl. payments for Focus program; Net debt at 271m (previous year 325m) Operating break-even point exceeded; Sales of 588m in Q3 (FX adjusted 618m) in line with second quarter ( 593m; previous year 687m); Order intake of 592m; FX adjusted 62m (prior year 645m) Net result at 7m in Q3 Financial framework extended until 217/218 Outlook: aiming for net profit in 213/14 7
Q&A
Interim Results 9-month figures 14 February 5th, 214 Investor Relations Robin Karpp Head of Investor Relations + 49 () 6221 92-62 + 49 () 6221 92-5189 (Fax) robin.karpp@heidelberg.com Heidelberger Druckmaschinen AG Kurfuersten-Anlage 52-6 69115 Heidelberg Germany 9
Interim Results 9-month figures 14 February 5th, 214 Disclaimer This presentation contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management's views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as "may," "will," "should," "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "seek," or "target" and similar expressions, as they relate to Heidelberger Druckmaschinen Aktiengesellschaft ("Heidelberg") or the market in which it operates, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of Heidelberg to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Heidelberg's targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Heidelberg does not intend or assume any obligation to update these forward-looking statements. 1
Interim Results 9-month figures 14 February 5th, 214 Financial Calendar 213/14 Date Publication of the final figures 213/214 June 11, 214 AGM July 24, 214 Release of the figures for the first quarter 214/215 Release of the figures for the second quarter 214/215 Subject to change August 13, 214 November 12, 214 11
Interim Results 9-month figures 14 February 5th, 214 FX adjusted order intake in Q3 in line with previous quarters Order intake 29/1 Q3 213/14 Comments m 1. Order intake Q3 13/14 at 592m (FX adjusted 62m); headwind 8 from FX and investment reluctance in related markets 6 4 2 59 69 64 76 588 Order backlog with 588m stable compared to previous quarter ( 598m) Main risk to our business: ongoing economic uncertainties and risks, particularly in emerging economies and euro zone as well 29/1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 as substantial currency effects 29/1 21/11 211/12 212/13 Backlog Order intake 12
Interim Results 9-month figures 14 February 5th, 214 Order intake Regional split Q3 213/14 (PY) 13
Interim Results 9-month figures 14 February 5th, 214 Stable operating result (EBITDA) HD Services with stable volume Net Sales* by division Comments 8 6 27 (43%) 687 3 437 (64%) -18% 588 2 359 (61%) Sales down by 14 % yoy to 588m (FX adjusted by 1 % to 618m) HD Services adjusted for FX effect stable 4 Operating result (EBITDA) with 36m stable compared to previous year ( 38m) 2 248 (36%) -8% 412 (6%) 227 (39%) 38 36 Q3 212/213 Q3 213/214 HD Equipment HD Services HD Financial Services EBITDA excl. special items *Previous year s figures restated according to IAS 19 (211) and new segmentation 14
Interim Results 9-month figures 14 February 5th, 214 HD Equipment margin improves further but suffers from lower volume HD Services margin improves on stable volume EBIT (excluding special items)* Comments m EBITDA* 4 3 38 36 Operating result stable against previous year on lower sales volume 2 1 17 18 Favorable impact of sustainable savings measures from Focus and higher profit contributions Q3 212/13 Q3 213/14 EBIT by Division (excluding special items)* HDE HDS HDE-EBIT still negative but improved against previous quarter ( -13m) HDS-EBIT margin at 1% m 3 22 2 13 1 2-1 -7 Q3 212/13 Q3 213/14 Heidelberg Financial Services: Q3 212/13: 3m; Q3 213/14: 2m *Previous year s figures restated according to IAS 19 (211) and new segmentation 15
Interim Results 9-month figures 14 February 5th, 214 Balance sheet: Further reduction of balance sheet total > Assets 213 213 214 > Equity and liabilities 213 213 214 Figures in meur 31.12.212 31.3.213 31.12.213 31.12.212 31.3.213 31.12.213 Fixed assets 87 84 765 Equity 378 42 348 Current assets 1.561 1.483 1.43 Provisions 1.16 998 872 thereof inventories 846 7 726 thereof provisions for pensions 463 415 415 thereof trade receivables 33 382 257 Other Liabilities 955 862 935 thereof receivables from customer financing 128 118 88 thereof trade payables 152 139 14 thereof liquid assets 137 157 27 thereof financial liabilities 462 419 479 Def tax assets, Prepaid expenses, other 53 51 55 Def. tax liabilities, deferred income 72 76 68 thereof deferred tax assets 37 36 32 thereof deferred tax liabilities 7 8 8 thereof deferred income 13 13 14 thereof deferred income 64 68 6 Total assets 2.421 2.338 2.223 Total equity and liabilities 2.421 2.338 2.223 Equity ratio 15,6% 17,2% 15,7% Net debt 325 261 271 16
Interim Results 9-month figures 14 February 5th, 214 Free Cash Flow: better cashflow but restructuring payments burden EaT Q3 213/14-9 7 Positive earnings after taxes in Q3 lead to cashflow of 23m D&A 19 Slight increase of NWC with higher trade receivables NWC -14 Direct financing portfolio reduced as planned CuFi 11 Other operating changes incl. payments related to FOCUS 212 Others -55 Net investments kept on low level Net investments -6 FCF negative in Q3 (py 28m); after 9m almost balanced FCF Q3 213/14-38 Mid Term target: Leverage <2.x (Nebt Debt/EBITDA) 17
Interim Results 9-month figures 14 February 5th, 214 Financial framework Diversification of financing sources and maturities Comments m Further optimization of financing structure: 8 6 4 ~8 37 34 6 Others Syndicated Loan Facility until June 217 Convertible Bond 6 until July 217 High Yield Bond 355 until April 218 Net debt as of Dec 213 Syndicated Loan Facility prolonged until mid-217 Tap on existing HYB; issue size of 51m Ongoing asset management improves capital bounded Net investments on planned level 2 355 271 Further optimization of NWC Reduction in direct financing portfolio as from Dec 213 Mid Term target: Leverage <2.x (Nebt Debt/EBITDA) 18
Interim Results 9-month figures 14 February 5th, 214 Focus on asset management and capital structure will improve financial leverage Net working capital in m / as % of LTM sales 1 1.261 1.36 1.38 1.212 Mid-term target 35% 39% 39% 4% 781 29% 732 737 27% 29% < 35% Q1 Q2 Q3 Q4 Q1 Q2 Q3 29A 214A Q4 R&D in m / as % of quarterly sales 5 52 49 35 3 29 3 8% 6% 6% 4% 6% 5% 5% 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 29A 214A Q4 Capex 2 in m / as % of quarterly sales 7% 7% 6% 6% 3% 44 47 48 59 2% 2% 12 19 9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 29A 214A c. 2% Source: Heidelberg quarterly reports; financial data based on Heidelberg fiscal year (E 31 Mar); actuals (1) Net working capital ( NWC ) includes inventory and trade receivables net of trade payables and advance payments; LTM : last twelve months (2) Capex is defined as investments in intangible assets, tangible assets and investment property 19
Interim Results 9-month figures 14 February 5th, 214 Financial Performance Net Sales m EBITDA* m 4. 3. 3.67 2.999 2.36 2.629 2.596 2.735 5 4 3 391 2. 1. 8A 9A 1A 11A 12A 13A 1.685 9m 14A 2 1 (1) 8A 51 9A (25) 1A 14 9 111 11A 12A 13A 67 9m 14A * Before special items; since Q1 13/14 according to IAS 19 (211) Free Cash Flow m Net debt m 3 2 1 (1) (2) 215 (21) (62) 75 1 (18) (1) 8 6 4 2 42 681 695 247 243 261 271 (3) 8A 9A 1A 11A 12A 13A 9m 14A 8A 9A 1A 11A 12A 13A 9m 14A 2