Heidelberg targets further growth after positive performance in 2015-16

During the previous year's reporting period, from April 1 to March 31, Heidelberg saw sales up 7.6 percent to 2.5 billion EUR (2.8 billion USD), or 2.4 billion EUR (2.7 billion USD)/four percent after adjustment for exchange rate movements. Net profit after taxes was reported at 28 million EUR (23 million USD), a positive swing of around 100 million EUR (114 million USD) with net profit after taxes in the 2014-15 financial having been reported as a loss of 72 million EUR (82 million USD). The sales increase, EBITDA margin improvement and significant reduction of financing costs contributed to the turnaround in the net profit.

Heidelberg said the effects of its strategic reorientation over the past few years are evident in its results, including a greater focus on digital and package printing. The company is focusing on new products and concepts from the strategic areas of equipment, services and consumables that are intended to significantly increase the future volume of business and unlock new market opportunities. These new offerings from Heidelberg are aimed primarily at the growing market for high-end packaging, in addition to high-quality commercial printing at industrialized print shops. New digital printing options create greater scope for customers’ business models. At the same time, Heidelberg is continuously expanding its service portfolio, such as with a new cloud-based service platform. 

‘Heidelberg has delivered and is once again making profits,’ said Heidelberg CEO Gerold Linzbach. ‘The reorientation is showing positive results.

‘We’re also looking to achieve further growth in the future with our investments in the digital and services business. The high level of customer interest at drupa confirms we’ve adopted the right strategy.’

Future growth is to be supported by optimization measures initiated over the past financial year, which have created a highly diversified long-term financial framework. A loan from the European Investment Bank, as detailed here, is helping Heidelberg to act as ‘the driving force’ behind the sector’s digitization and further expand the packaging, digital and services growth segments. The company has also succeeded in further reducing interest costs, which has provided greater scope for investments in these growth areas.

‘Financially speaking, we are excellently positioned for the planned growth,’ said CFO Dirk Kaliebe. ‘High operating profitability and falling interest payments will increase the earnings per share for our shareholders.’

A four percent growth in group sales in 2016-17 is being targeted, as well as the mid-term target of 3 billion EUR (3.4 billion USD), also a four percent growth. Despite its outlay to speed up the expansion of its digital and service business, Heidelberg is expecting to match the previous year’s EBITDA margin in the current financial year. It is looking to further improve the financial result by reducing the interest burden. The ultimate aim for financial year 2016/2017 is a moderate increase in the net profit after taxes, with further improvements in the coming years.

Heidelberg’s portfolio will also shift toward growing activities that are more cyclically resilient. The mid-term goal is for services to account for at least half of group sales, digital operations for 10–20 percent and the traditional equipment business just over a third. Organic growth will be ensured by further boosting the company’s innovative strength, above all in the areas of software and digital, while external growth will be driven by targeted acquisitions focusing on services and consumables.

Currency conversion correct as of June 8, 2016 via xe.com/ucc