Heidelberg presents new growth strategy

The company’s management board is presenting Heidelberg goes digital! – a package of measures for the years ahead with a strategic focus on technology leadership, digital transformation, and operational excellence.

Following the successful turnaround with a return to sustained profitability, Heidelberg will now also be aiming for continuous growth. Group sales of around 3 billion EUR (3.38 billion USD) are being targeted with a large number of specific measures in the period to 2022. The company has set its sights on a further significant improvement in profitability, with EBITDA of 250 million EUR (280 million USD) to 300 million EUR (338 million USD) and a net profit after taxes of over 100 million EUR (113 million USD). Sales in financial year 2016-17 were just over 2.5 billion EUR (2.81 billion USD), EBITDA at 179 million EUR (202 million USD) and the net result after taxes at 36 million EUR (41 million USD).

‘Over the next five years, Heidelberg will once again enjoy strong growth and profits. We’ve defined the relevant success factors and have already introduced initial measures. This marks the start of a new era of growth for Heidelberg,’ said the company’s CEO Rainer Hundsdörfer.

Despite a slight fall in sales, EBITDA doubled from the 2012 level to 179 million EUR (202 million USD). Following a huge loss of 230 million EUR (259 million USD) five years ago, the company recorded a net profit after taxes of 36 million EUR (41 million USD) in 2017.

Technology leadership and digital transformation are the two strategic focal points intended to generate additional sales of at least 500 million EUR (563 million USD) by 2022. The operational excellence measures include efficiency improvements at all levels to ensure the company’s agility – without the need for a new comprehensive restructuring program. The emphasis is more on streamlining structures and processes, implementing agile production, the current relocation of research and development activities to the Wiesloch-Walldorf site, and the optimization of the logistics wage structure that has just been initiated.

The company believes this has the potential to cut process and structural costs by some 50 million EUR (56 million USD) over the next five years.

The Heidelberg Digital Technology (HDT) and Heidelberg Digital Business and Services (HDB) sectors were established on April 1, 2017 to prepare for the company’s digital future. HDT combines sheetfed offset, label printing, and postpress operations and is responsible for developing, producing, and marketing the appropriate technologies and products for new business models. HDB, meanwhile, is where Heidelberg manages its operations relating to services, consumables, remarketed equipment, digital printing technology and solutions throughout the value-added chain.

With the preliminary figures for the financial year just closed, the best final quarter since 2008 enabled Heidelberg to meet its targets for financial year 2016-17. Sales rose slightly to 2.524 billion EUR (2.84 billion USD) (previous year: 2.512 billion EUR (2.82 billion USD)), with the final quarter 20 percent up at 845 million EUR (951 million USD) while the previous year was 710 million EUR (799 million USD)).

‘In financial year 2016-17, we not only achieved noticeable operational improvements, but also made further progress with our balance sheet quality. Our very sound financial structure will enable Heidelberg to independently finance the upcoming investments taking the company into the digital future. Our future focus will remain on improving our asset management and cash flow, and on achieving the best possible financial result by optimizing our financing framework,’ said Heidelberg CFO Dirk Kaliebe.

In financial year 2017-18, Heidelberg is focusing on its corporate strategy to expand the portfolio in growing markets, such as packaging and label printing, digital printing, selected consumables and software, also through targeted acquisitions.

Read more about Heidelberg's digital transformation in L&L issue 3, 2017