Heidelberg: Order levels recovering and transformation taking effect

Print Solutions

Due to the increasingly tangible successes yielded by the Heidelberg’s transformation, plus growing demand from China and, since the third quarter, from Europe, too, the company is raising its target operating return for financial year 2020/21 as a whole. Consequently, it anticipates that its EBITDA margin excluding restructuring result will grow to approximately 7%, even though the coronavirus pandemic may lead to a sales decline of around €450 million to €500 million compared to the previous year (previous year’s sales: €2349 million) for the year as a whole. Previously, Heidelberg had anticipated an EBITDA margin that would, at its lowest, equal that of the previous year at 4.3%. It is also an encouraging sign for the coming months that print volumes among Heidelberg customers have almost reached the levels of the previous year, with the print volume in the packaging sector even exceeding the previous year’s level.

‘The successful roll out of the transformation measures has enabled Heidelberg to achieve a clearly positive operating result, despite the huge pressures caused by Covid-19. When it comes to both our finances and our balance sheet, we have done our homework. Signs of recovery are now emerging on the markets in China and Europe that are important to us. That is why our EBITDA target margin excluding restructuring result is being increased to around 7%. The growing interest in our contract business and strong demand for our electromobility charging stations are also grounds to be optimistic about the future,’ said Heidelberg CEO Rainer Hundsdörfer, commenting on the developments.

Again in the third quarter, the numerous measures of the transformation programme launched in March of last year more than compensated for the negative effect on earnings caused by a significant drop in sales due to Covid-19. As a result, after nine months of financial year 2020/21 (April 1 to December 31, 2020), the operating result including effects from the measures that have been implemented was above that of the same period of the previous year. In addition, the period under review saw a slightly positive net result after taxes, and significantly reduced net financial debt.

Although the market environment is still challenging, there were further signs of recovery for Heidelberg during the third quarter. While the Chinese market had already reached almost pre-crisis levels, business started to get back to normal levels in Europe, too.