Heidelberg releases positive results

Heidelberg’s results for the financial year just ended shows net sales up 12 percent from €2.18 billion to €2.43 billion and the Earnings Before Interest, Tax, Depreciation and Interest up 31 percent from €160 million to €209 million. This was better than the €2.3bn that Heidelberg had predicted, thanks largely to strong sales in Q4, particularly around the Packaging Solutions business.

Not surprisingly the net result after taxes has risen 176 percent from €33 million to €91 million. However, the incoming orders and the order backlog as fallen back slightly and the company spent €2 million less on R&D. 

The company recorded free cash flow of €72 million though Heidelberg’s net financial position (cash minus financial liabilities) was €51 million, up from €11 million. However, Tania von der Goltz, chief financial officer, explained that “growth needs investment” adding: “In particular, we are paying attention to cash flow. At first glance, this looks like it has developed well over the last few years, but it has been buoyed by non-recurring effects such as the partial sale of the premises in Wiesloch. We won’t see that again in the future. That’s why we have launched a program with the aim of steering operating cash flow well into the black in order to allow forward-facing investment.”

She adds: “We will provide and redistribute the resources for growth through our own internal efforts so as to successfully implement our growth strategy.”

Dr Ludwin Monz, CEO of Heidelberg, says that the company is now following a dual strategy that goes beyond its core sheetfed offset business, noting: “We also want to create a future beyond the printing market. That’s why we will be moving Heidelberg forward along two lines. Firstly this means consolidating core printing business – our growth will be focussed on the packaging market in the short term. Secondly broadening the business portfolio by cultivating new business areas.”

Heidelberg has been quite successful in developing its e-mobility range of charging systems for electric vehicles. But there’s no clue as to what those new business areas might be with the report simply stating that “Heidelberg intends to use its expertise in technology and production to tap additional growth markets and continuously analyses market opportunities and developments.” 

Monz went on to point out that the world population is growing, which means that there will be more need for packaging. He also noted that digital printing is becoming more significant in some market segments and that Heidelberg already had the Gallus One and Gallus Labelfire narrow web presses, adding: “now we have to strategically expand this expertise.”

It’s worth noting that just a couple of years ago, under the previous management, the strategy was to expand into digital packaging – now abandoned – and sell Gallus. The report also addresses the fall-out from the failure to complete the planned sale of Gallus, noting that the buyer, Benpac Holding AG, failed to make the agreed purchase price payment of €120 million. Heidelberg has claimed damages against both Marco Corvi, the owner of Benpac, and Benpac Holding AG itself, though has not yet been successful due to Benpac’s insolvency.

To some extent, Monz has already previewed some of its arguments from this report at the company’s Interpack press conference, which I have covered earlier. Overall the report paints a picture of a company that has successfully cut away all the fat and all the baggage that accrues over time in any large company and is now better able to concentrate on the core business. But it also makes it clear that Heidelberg now needs to find new growth opportunities though there’s little indication from this report that Heidelberg knows where that growth will come from. Nonetheless, these figures do give Heidelberg some room to be able to expand on its growth strategy, which is not a bad place to be in. 

You can find further details from heidelberg.com.

Caption: The picture above shows Dr Ludwin Monz, CEO of Heidelberg, after the company’s Interpack press conference earlier this year. ©NessanCleary.





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