Heidelberg publishes Q1 figures

Heidelberg is claiming a good start to its current financial year after its first quarter figures showed some signs of growth which is largely due to the recovery in Asia after the lifting the pandemic lockdowns as well as growth in the packaging segment.

Consequently sales revenues were up year-on-year from €530 million to €544 million. The operating result, adjusted for Earnings Before Interest, Taxes, Depreciation and Amortisation, was €42 million, up from €24 million the previous year. The corresponding EBITDA margin was 7.7 percent, up from 4.6 percent, while the net result after taxes was €10 million, double the €5 million from last year.

However, Heidelberg has said that while incoming orders grew strongly in Asia, the demand in other markets was “rather muted”. The figures are bit blunter than the press release; overall incoming orders fell from €607 million to €591 million. The Asia Pacific region saw incoming orders grow from €145 million to €192 million, and Eastern Europe went up from €61 million last year to €73 million this year. But incoming orders fell in the the EMEA region from €242 million last year to €198 million this year, though Heidelberg points out that last year’s Q1 benefited from a boost as the pandemic lockdowns ended. In North America the incoming orders fell from €133 million to €113 million, which Heidelberg puts down to negative currency effects, and in South America from €26 million to €15 million this year.

In terms of applications, the Print Solutions division saw its incoming orders fall from €348 million to €277 million, while the Technology Solutions registered incoming orders of just €2 million, down from €10 million last year.Dr. Ludwin Monz, Heidelberg’s CEO, commented: “Heidelberg is strategically well positioned in its core market of printing and can thus cushion restrained developments in other areas.”

That said, incoming orders for Packaging Solutions rose 25 percent from €250 million to €311 million, which appears to justify Heidelberg’s decision to invest in developing its Boardmaster packaging press. The company has already seen orders for both the Boardmaster and the Gallus One digital label press. Hopefully Heidelberg will see this trend continue but it has been significantly helped in Q1 by sales from the Print China show, itself boosted by the end of the lockdown in China.

There are a couple of areas that need further attention. Firstly, the company’s free cash is in the red at €-27 million. For the previous year the company reported €-1 million of free cash, but that was offset by a €32 million payment resulting from property disposal. That suggests that this is a longer term problem. Heidelberg says that this is caused by a rise in net working capital from rising material costs. Tania von der Goltz, Heidelberg’s CFO, commented: “The quarterly result shows that our value creation program, with which we aim to significantly increase our free cash flow, remains vital.” That hardly explains the negative result though Heidelberg has said that it intends to continue to offset cost increases with price increases and maintain strict cost discipline, which won’t be welcome by Heidelberg’s customers.

Tania von der Goltz will be joining Heidelberg as CFO.

The second issue is that Heidelberg has restructured its loans in order to agree an increase in its credit facility with its bank consortium. This now offers a syndicated credit line of € 350 million over a four-year period, with an option to extend for a further year. Von der Goltz noted: “The newly agreed financing structure underlines the financial market’s confidence in the strategic approach we have adopted to further boost the company’s financial strength and step up our investments in growth areas.”

Nonetheless, Heidelberg is continuing to forecast that this year’s sales will match last year’s €2.435 billion “assuming the global economy does not see weaker growth than predicted by the economic research institutions and sales remain at the same level.” You can find further details from heidelberg.com.


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