Heidelberg has produced interim results with Drupa stamped all over them, following the path set by Koenig & Bauer and Komori in their recent figures. In the run up to the show, business slowed leading to a fall in sales in the first six months of the year. But the show resulted in a boost to orders, which should translate into sales in the second half and beyond.
Incoming orders were up 7.4% to €1 273 million (€1 184 million), but sales were down to €915 million (€1 092 million). This meant under utilisation of equipment and a failure to expedite the overheads. Consequently the Ebit line dropped to a loss of €6 million compared to €60 million in surplus a year ago.
Unsurprisingly the company is upbeat. CEO Jurgen Otto, making his first statement on the results since joining the business in June, says: “Heidelberg is starting a very strong second half of the year. We are now ramping up the utilisation of our production capacities so we can work through our order backlog in the third and fourth quarters quickly and profitably.
“The forecast sales volume for new machines has already been almost entirely met with orders and our production operations are running at full capacity. We can be confident that we will achieve our targets for the year.”
The market is less delighted resulting in a dip in the share value.
In presentations Otto points to underlying strengths that the business has: strong demand in and near to China after a flat period; positioned to take advantage of a shift to fibre based packaging, especially in emerging markets. Packaging now accounts for 53% of total sales and will increase. Incoming orders and the backlog have improved more for this division than for commercial printing.
In the longer term the challenge is to find areas of growth in what is a mature industry. This means seeking out markets beyond offset says the company.
The Boardmaster flexo packaging press is a manifestation of this. So too is partnership with Canon to tackle the rapidly growing inkjet market. Heidelberg believes this can deliver sales of ‘low three digits’ per year. There will be a renewed focus on service and in obtaining a higher share of wallet from existing customers.
There are other opportunities in exploiting Heidelberg’s engineering process as a provider to the automotive industry that Otto knows well, and in emobility. These are very much at the start of the journey and as ever with Heidelberg’s plans to diversify its revenue streams, success is not guaranteed.
