Heidelberg has released its financial results for the first half of its financial year from April to September, recording a net result after taxes of €28 million, the first profitable half year in ten years, demonstrating the strategy of turning to digital technology to turn the company around is paying off.
Rainer Hundsdörfer, CEO of Heidelberg, stated: “The process of converting our company into a state-of-the-art digital technology group is progressing well.” He added: “With the launch of new subscription models for our customers and our portfolio of innovative products for the eMobility growth sector, we’re moving into new territory that offers enormous potential for growth. Heidelberg will be setting new standards when it comes to technologies of the future, digitization, and efficiency. The necessary cultural shift has only just begun.”
This includes continued growth in the packaging market, with several orders for the Gallus Labelfire from Label Expo as well as installing the first Primefire, which is due to go into production in 2018. Heidelberg has also seen success with its Omnifire direct to object printer. The second quarter also saw the launch of a new business model – offering customers a full package of machinery, services, consumables, and software in a subscription model. Heidelberg has also established itself as a supplier of industrial expertise, and is now marketing high-performance wallboxes and intelligent charging cables for electric vehicles under its own name as well as manufacturing a 3D printer for Big Rep.
Sales for the first half closely matched last year’s results at €1,054m. Incoming orders were down on last year’s, which were boosted by Drupa but the company still has an order backlog of €630 million. Profitability, meaning EBITDA excluding restructuring result, was up from €45 million to €60 million. The free cash flow fell from €0 last year to -€32m this half, which Heidelberg attributes to acquisitions and investments made in the first six months in connection with constructing the new development center in Wiesloch.
The net financial debt at September 30, 2017 was €259 million (previous year: €276 million) and the leverage was significantly lower than the unchanged target value of 2 at 1.3.
Heidelberg is anticipating a further upturn in the second half of this year that will allow it to reach the same sales levels as last year. But the company is warning that negative exchange rate effects in Asia in particular, the systematic reduction of trading activities with re-marketed equipment, and the noticeable reluctance to invest on the North American market could all affect the final end of year results. Nonetheless, the company aims to achieve an EBITDA margin in the region of 7 to 7.5 percent through efficiency improvement measures with a moderate increase in the net profit.