Heidelberg ‘fit for the future’

The focus during this process was on realigning the group’s portfolio toward profitable areas of business and growth sectors, with future growth to be generated primarily in the services and digital sectors. Heidelberg continued to strengthen the services sector in the 2014/15 financial year through acquisitions of companies such as BluePrint Products, Printing Systems Group and Fujifilm Sverige. The newly acquired companies are set to generate sales of over 100 million EUR (113.5 million USD) from the current financial year onward, and will help ensure sustainably profitable growth for Heidelberg following complete integration.

Heidelberg’s position in digital printing was further strengthened with the complete takeover of Neo7even and Gallus, and the launch of DCS 340.

Another aim is to further improve the company’s profitability. The reorientation of unprofitable activities such as those in post-press, which was completed during the 2014/2015 financial year, will improve the result by approximately 30 million EUR (34 million USD) in the future.

The structures for offset printing have also been adapted to the market environment, thus enabling Heidelberg to respond more flexibly to market fluctuations and achieve cost savings in the low double-digit million euro range.

Heidelberg’s corporate structures have also been adapted to dynamic changes in markets. This has had a further significant impact on sales and results and has provided the basis for profitable growth. 

‘The reorientation will enable Heidelberg to enjoy sustained profitable growth in the future,’ Linzbach said.

‘From the current financial year onward, we expect to consistently achieve clearly positive net results.’

Heidelberg’s sales in the 2014/2015 financial year were 2.33 billion EUR (2.64 billion USD), down on the previous year but in line with expectations as adjusted at the half-year point. This decline of around four percent was due to portfolio optimization, the associated sales of parts of the company, and the effects of the general slowdown in growth in China.

Despite the lower volume of sales, Heidelberg reached its target of achieving higher operating profitability in the 2014/15 period than in the previous year. The operating margin was slightly up on the previous year on a comparable basis due to cost savings.

During the year under review, the company’s financing structure was optimized further. The financing portfolio consists of three pillars comprising corporate bonds, a syndicated credit line, and other instruments such as convertible bonds. A net debt of 256 million EUR (290.5 million USD) is covered by basic funding until 2022. Heidelberg currently has total credit facilities of around 750 million EUR (851 million USD).

‘Heidelberg has a stable financial footing, and with three pillars, the financing structure is now well balanced and basic funding is assured until 2022,’ said Dirk Kaliebe, Heidelberg chief financial officer. ‘This long-term financing framework provides a solid foundation for a further strategic realignment of the company.’

The outlook for 2015/2016 is a sales increase of two to four percent, with target EBITDA margin of at least eight percent

For the current 2015/2016 financial year, and in the medium term, Heidelberg is striving for annual sales growth of two to four percent. As in the previous year, the share of sales is expected to be higher in the second half of the financial year than in the first half.