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Heidelberg Drives Digital Transformation – 20 Contracts Already Signed for New Subscription Model

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Photo source: Sandrunrisk.com
Reading Time: 3 minutes
  • Incoming orders up 6 percent to €1,306 million in first half-year
  • Group sales also improve by 6 percent to €1,114 million
  • Operating result (EBITDA) increases from €60 million to €62 million
  • Still on course to achieve targets for financial year 2018/2019 as a whole

Six months into financial year 2018/2019, the launch of the new subscription model has led to further growth in incoming orders and the order backlog at Heidelberger Druckmaschinen AG (Heidelberg). No fewer than 20 subscription contracts covering the entire press life cycle – including service, software, and consumables – have been signed to date and demand for new machines remains healthy. As a result, incoming orders for the half-year have climbed by around 6 percent, from €1,234 million to €1,306 million. This figure would have been higher still had it not been for negative exchange rate movements amounting to €17 million. The order backlog improved by an impressive 23 percent, from €627 million to €774 million. Sales of up to €100 million, in particular for services and consumables, are expected over the standard five-year term of the subscription contracts already signed, which represent an annual sheet volume in the order of 1 billion pages.

“The subscription model offers huge potential. It’s transforming the market and also our company. We’re continuing to drive the digital transformation at Heidelberg,” commented Heidelberg CEO Rainer Hundsdörfer.

The implementation of the corporate strategy towards digitization is progressing. Printers in Europe, the US and China are already producing with high quality and productivity for their customers with the new Primefire digital printing system. With the newly founded Heidelberg Digital Unit, the e-commerce business will be rapidly expanded. As part of a digital roadmap, IT will also focus even more on efficient processes and the challenges of digital business models.

Half-year operating profit improves to €62 million

Despite negative exchange rate movements totaling €15 million, Heidelberg increased its net sales by 6 percent to €1,114 million (H1 2017/2018: €1,054 million) in the reporting period. EBITDA excluding restructuring result for the half-year climbed from €60 million to €62 million, which meant the EBITDA margin remained the same at 5.6 percent. EBIT excluding restructuring result matched the previous year’s solid level of €27 million despite additional staff costs resulting from the new collective bargaining agreement. Planned restructuring measures to improve efficiency generated higher restructuring expenses of €5 million (H1 2017/2018: €1 million). Furthermore, as already communicated, the partial repayment of €55 million of the existing high-yield bond, which was completed in mid-July, resulted in non-recurring transaction and early redemption charges. Consequently, the financial result after six months worsened from €-24 million to €-28 million, but will benefit significantly from lower interest payments in the future. The net result after taxes (including income taxes) thus fell as expected, from break-even to €-6 million.

This meant the operating cash flow of €27 million did not quite match the previous year’s level of €35 million. An increase in inventories due to the growing order backlog and the start-up of digital operations as well as investments in the construction of the innovation center at the Wiesloch-Walldorf site were among the factors influencing the free cash flow in the reporting period (€-86 million compared with €-32 million in the previous year). At €373 million, equity was substantially up on the level as at March 31, 2018 (€341 million), and the equity ratio improved accordingly, from 15 to 17 percent. Despite seasonal factors resulting in a higher net financial debt of €320 million (previous year: €259 million), the leverage of 1.8 as at September 30, 2018 was once again well below the target level of 2.

“As demonstrated in October with the acquisition of MBO, we’re investing in the company’s digital transformation. This highlights our strategic focus on consistently aligning our portfolio and new business models with the growth segments of digital and packaging,” said Heidelberg CFO Dirk Kaliebe.

Forecast for financial year as a whole unchanged – moderate growth in net sales and net profit after taxes expected

Given the solid progress in the first six months, Heidelberg can confirm the targets for financial year 2018/2019 as a whole. A moderate increase in sales and ongoing efficiency improvements should mean that, despite higher collectively agreed wages, the EBITDA margin excluding restructuring result will lie between 7 and 7.5 percent. Taking into account anticipated restructuring costs in the order of €20 million, non-recurring expenses from the partial repayment of the corporate bond, and rising tax costs at foreign subsidiaries, a moderate increase in the net result after taxes is forecast compared with the previous year (including a non-recurring tax effect in financial year 2017/2018).

Subscription model significantly increases order backlog – growing impact on net sales and result in years to come

It is expected that 30 contracts for the new subscription model will be concluded during financial year 2018/2019 as a whole, which will mean a further increase in the order backlog. Given the continued high level of interest from international customers, the number of contracts is set to climb to around 100 in the coming financial year. The new business model will only make a relatively small contribution to sales and the result at the start, but this will grow substantially in the medium term.

Image material, the interim report for the first half of financial year 2018/2019, and additional information about the company are available in the Press Lounge of Heidelberger Druckmaschinen AG at http://www.heidelberg.com.

Co-founder, Editor - After accumulating enough experience by launching and building a successful media and events organizer company in the gaming industry, the opportunity to also move into more verticals just came naturally. I have hunger for knowledge and like to report on technology and news that are not picked up by main stream media channels because they don't produce enough emotions. Make sure you subscribe to read our hand picked news which you will only find on PICANTE!

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Banking/Financial Services

Endor (EDR) Gets Listed on OKEx’s First Partner Exchange CoinAll

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Photo source: twitter.com / @OKEx
Reading Time: 1 minute

 

CoinAll (www.coinall.com), OKEx’s first partner exchange, has announced it will be listing Endor, a well-reputed protocol utilizing AI prediction technology. EDR deposits are now in effect. Trading started at 17:00 Nov 14th (HKT, UTC+8). To celebrate the listing of EDR on CoinAll, EDR has launched a campaign. During the promotion period, traders can deposit and trade EDR to win 6 BTC.

After years of research at MIT, Endor invented the “Google of predictive analytics”, providing automated AI predictions for companies. Leading banks, large retailers and Fortune 500 companies such as Coca-Cola and Mastercard have utilized Endor to predict consumer behavior, make data-driven decisions and increase revenue.

The Endor protocol is the world’s first predictions protocol, enabling an ecosystem that provides automated, accurate, affordable and censorship resistant AI predictions for the long tail of businesses – working on fully encrypted data. The EDR token is the exclusive means of payment for services on the Endor Protocol.

Recently, the deliberations of the Congressional Blockchain Caucus have been finally unveiled in the report: “The Impact of Blockchain for Government: Insights on Identity, Payments, and Supply Chain”. Endor stood out among the latest projects featured in this report as an exemplary landmark of how tokens can be used to achieve the true power of decentralization.

Report:

http://businessofgovernment.org/sites/default/files/The%20Impact%20of%20Blockchain%20for%20Government.pdf

As the world’s first community-based autonomous exchange, CoinAll adopts the advanced and secure technology of OKEx, including the world-class order matching system, digital asset wallet, and funds settlement system. CoinAll shares OKEx’s massive user base of more than 20M users. All OKEx accounts can be used to log into CoinAll and trade without further registration.

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Banking/Financial Services

Bitcoin BCH Hash War Will be Decided by Sustained – Not Temporary, Rented – Hash Power

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Photo source: oracletimes.com
Reading Time: 4 minutes

 

With the Bitcoin BCH network upgrade on November 15, a hash war has begun with miners voting between Bitcoin SV and Bitcoin ABC – two competing implementations of the BCH protocol. As fully expected, Bitcoin ABC appeared to take a temporary lead on the first day by receiving an artificial boost from temporary, “rented” hash power subsidized by Roger Ver’s organization Bitcoin.com, which announced it would use its pool customer hash on BCH for just 24 hours, and from ABC’s main supporter Bitmain Technologies, the Chinese manufacturer of crypto mining rigs. However, Bitcoin SV has strong support from CoinGeek, the largest BCH miner, and nChain, the leading blockchain research & development firm. CoinGeek and nChain have the resources to fight long term with their own sustained hash, long after Bitmain cannot afford to bleed money for rented hash. Therefore, the BCH hash war will not be decided in 1 or 2 days,but over many days and possibly weeks by on-going miner votes with sustained Proof of Work. Until a dominant chain emerges, cryptocurrency exchanges, wallet and service providers are advised to remain neutral, and to run a Bitcoin SV node to be prepared for the best interests of users.

CoinGeek founder Calvin Ayre expressed his determination to fight the BCH hash war as long as it takes:

“CoinGeek and nChain are in this battle for the long haul. We will mine BCH and fight as long as it takes to protect the original Bitcoin from Bitmain, Jihan Wu, and their Bitcoin ABC development group who all want to change BCH into some alt-coin Wormhole token technology. Roger Ver’s company Bitcoin.com is subsidizing hash for only 24 hours, taken from his own customers. As for Bitmain, to keep up with us in this hash war, Bitmain will have to spend millions of dollars a day from its investors’ money and shareholder assets, while also trying to raise more investor money for its shaky IPO. This will bleed Bitmain’s cash and cryptocurrency reserves, because we are prepared to fight for months and months. If I were a shareholder or investor in Bitmain, I’d be asking why Jihan Wu is spending all your money to control BCH when Bitmain’s business supports multiple cryptocurrencies.”

Bitcoin SV is the new full node implementation for Bitcoin Cash that seeks to restore the original “Satoshi Vision” for Bitcoin and allow it to massively scale. For the November 15 upgrade, Bitcoin SV’s feature set is not compatible with that of competing client Bitcoin ABC. When there is a disagreement between rule sets, the original Bitcoin white paper described the “Nakamoto consensus” method for miners to vote with their computing power (1 CPU = 1 vote) to enforce any rules: “The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it.”

The current hash war is the world’s first test of Nakamoto consensus. After the November 15 upgrade, Bitcoin ABC appeared to temporarily lead with a higher portion of the BCH network’s total hash power. But ABC’s perceived first-day advantage comes from a sudden burst of hash presumably rented from the Bitcoin Core (BTC) network to move over to BCH. By November 14, the day before the hard fork, Bitcoin SV’s support consistently grew for weeks and dominated with a clear 72-78% lead over ABC (18-22%):

Bitcoin ABC even dropped to tying for 3rd place with Bitcoin Unlimited, another implementation which is compatible (as a configurable option) with both Bitcoin SV and Bitcoin ABC rule sets.

Yet suddenly on the November 15 upgrade date, a huge wave of hash magically came to support Bitcoin ABC. This came from Bitcoin.com’s pool which announced it was boosting its BCH hash for only 24 hours, by moving customer hash from the BTC chain. In addition, Bitcoin ABC is receiving more support from “rented” or subsidized from BTC mining pools controlled by (Antpool.com, BTC.com, ViaBTC) or friendly (BTC.top) to Bitmain. To obtain rented hash, Bitmain must pay to subsidize the difference in lower revenue miners receive on the BCH chain when total hash rate grows, compared to mining on the more profitable BTC network. BTC.top’s CEO Jiang Zhuoer estimates this can cost over 100 million yuan or USD $14 million per day. The rented hash supporting Bitcoin ABC is temporary, and will leave the BCH network when not subsidized. This is a losing proposition for Bitmain; each day a hash war continues, Bitmain must pay millions of dollars to give Bitcoin ABC an artificial advantage. But when Bitmain can no longer afford to pay for it, the rented hash will leave BCH and Bitcoin SV will again dominate by virtue of its long-term, sustained hash support.

In contrast, Bitcoin SV’s support comes from CoinGeek and nChain’s BMG mining groups, which are 100% dedicated to support Bitcoin SV with their genuine hash. SVPool, a personal initiative of nChain Chief Scientist Craig Wright and the newly-formed Mempool also run Bitcoin SV; those pools gather miners supporting the Satoshi Vision and do not pay added subsidies to miners beyond the amount actually earned from participating in their pools.

Ayre explained why sustained hash power should decide:

Bitcoin is about Proof of Work (PoW), not Proof of Rented Hash (PoRH). To decide which chain should be the true Bitcoin BCH, you should pick the longest chain with the most legitimate, sustained Proof of Work invested. It is ridiculous to count transient, rented hash which comes onto BCH artificially for short bursts of time because it is subsidized to do so, but then disappears and does not really sustain Proof of Work on the network. That is like paying a person to show up in a foreign country to vote in a political election, without meeting citizenship requirements to vote. At CoinGeek’s BCH Miners Choice Summit on November 2, we were offered thousands and thousands of petahash to rent for this battle. While we can afford to pay for more rented hash than Bitmain can, we decided to set a better precedent for Bitcoin and fight with honest hash invested to support BCH long term.”

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Banking/Financial Services

Majority of micro VC LPs and GPs plan to invest internationally in 2019, Silicon Valley Bank survey finds

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Reading Time: 2 minutes

A majority of micro VC limited partners and general partners seeking new deals say they expect to make an international investment in 2019, according to a survey by Silicon Valley Bank (SVB), the bank of the world’s most innovative companies and their investors. Two-thirds of LPs and GPs surveyed at the sixth annual Micro VC Summit, hosted by SVB and Cendana Capital in San Francisco in October, said they are looking for investments abroad in 2019.

The survey asked investors to name which new regions they are considering that they haven’t previously explored, with 23 percent citing Asia, 18 percent saying Canada and 13 percent choosing Europe. In U.S. regions in which they had never invested previously, 18 percent said they are looking at the Midwest and Southern California, 13 percent said the Northwest and 12 percent chose the East Coast.

The survey also found that half of GPs expected to raise a new fund in 2019. Asked separately about the VC fundraising environment, 38 percent expected it to become more difficult next year, while 50 percent expected no change. Many acknowledged that the overabundance of capital would lead to increased competition for deals and higher valuations.

LPs that invest in VC-backed companies reported that they are nearly equally interested in life science/healthcare (48 percent) as they are in crypto/blockchain (45 percent). Ten percent said they are interested in investing in cannabis funds.

Jim Marshall, Head of SVB’s Emerging Manager Practice, said the results underscore the strength of micro VCs, especially as their reputations and track records are growing.

“With growing interest in the innovation sector from nontraditional investors, we’re predicting ample new opportunities for emerging managers. We have found that the majority of LPs are looking to invest in emerging managers for their greater likelihood to generate alpha,” Marshall said.

He added, “We also expect more VCs to look internationally for new investment opportunities. Many tell us they are exploring regions in which they have never invested previously. They are in search of new talent and lower startup operational costs, notably in Asia and Canada.”

Methodology
Silicon Valley Bank surveyed 111 micro VC LPs and GPs at its sixth annual Micro VC Summit in San Francisco on October 11, 2018. The Micro VC Summit is an invite-only annual education and networking event attracting more than 300 early-stage investors, largely comprised of general partners and limited partners in seed funds.

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