Heidelberg figures show cautious optimism

Last week Heidelberg released its end of year figures for the year ending March 31st 2018, amid claims that it has met its immediate financial targets and is on track for further growth.

Heidelberg’s main headquarters is in Wiesloch, Germany.

The figures show Group sales of €2,420 million, which is just short of the previous year’s figure of €2,524 million, which the company attributes to negative currency effects and the decision to avoid selling low margin remarketed equipment.

The incoming orders were also slightly down at €2,588 million compared with €2,593 million from the previous year, but that was following from the last Drupa. Heidelberg points out that demand rose in the last quarter, up from €603 million to €676 million.

Meanwhile, the Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) were €172 million, down from last year’s  €179 million. However, when we add in the restructuring costs to both year’s figures then it shows a loss of €16 million, which is a slight improvement on the €18 million loss of the previous year. The net result, after taxes, is a profit of €14 million, down from the €36 million of the previous, largely due to issues with the company’s American subsidiaries following reforms to the US tax system.

Heidelberg has set itself some ambitious targets, including an increase in Group sales to around €3 billion, an operating result (EBITDA) of €250 to 300 million, and a net profit after taxes of over €100 million and despite all of these figures being just a little bit lower that the previous year, the company says that it is on course to achieve these goals.

Much of the reason for this is down to Heidelberg’s ongoing efforts to transform itself, and its customers, into a more digitally-focussed business. The company has already signed more than 30 contracts for this financial year for its new subscription model, which offers Heidelberg products and services under a usage-based all-in contract running over several years. Heidelberg estimates that this will generate some €150 million over the term of the standard five-year models.

In addition, Heidelberg is just getting started with its digital presses for packaging and label printing, the new Primefire and Labelfire, which use Fujifilm inkjet technology.

CEO Rainer Hundsdörfer commented: “Heidelberg made excellent progress with its digital transformation in 2017/2018. Both our new subscription model and the new digital presses are in high demand. Given that this will be reflected in the company’s sales and result to an ever greater extent in the years ahead following the current start-up phase, our medium-term targets will be increasingly within our grasp.”

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