Heidelberg turned the volume up to 11 for the announcement of half year figures that it says show the company is getting stronger despite the pandemic.
The company made extensive use of social media channels, bursting out across Twitter, as well as the more traditional releases to the financial and business press to highlight the turnaround and improvement in business levels – over the first quarter at least.
Orders in the second three months of the year showed a “significant improvement” over the first quarter, which coincided with lockdowns across Europe. The improvement in business levels has not been enough to redress the impact of the first quarter, and even in China, which Heidelberg singles out, orders in Q2 this year remain lower than orders in Q2 a year ago.
Overall, inching orders are down 32% at the six-month stage and sales are 28% lower. Total revenue for the first half dropped to €823.3 million (€1.2 billion). Nor will Heidelberg match last year’s sales total, despite hoping to bring the company in at the same sale level as last year in Ebitda terms, though with the impact of restructuring “clearly in the negative range.”
The reason for the explosion in announcements is tied to the improved financial position. It has transferred money from an unneeded pension pot, used this to repay a €150 million corporate bond (a €12 million gain to the bottom line a year) and reduced its cost base through an agreed redundancy programme.
Their results, according to chief financial officer Marcus Wassenberg, show “significantly improved profitability.” Its Ebitda reached €97 million (€69 million) before costs pushed the company into a pretax loss of €5.6 million compared to a €52,000 pretax profit last year.
The share price was lifted on the announcement but not enough to recover the losses in value sustained in the last year. Market capitalisation at the end of September placed Heidelberg at €171 million, almost exactly half the €344 million at the same point in 2019.
CEO Rainer Hundsdörfer sums up: “Our transformation is proving successful. We are delivering on our promise. By the end of the half year, we had drastically reduced our debt and made significant improvements regarding our liquidity and results – despite the huge challenges our organisation has faced owing to the Covid-19 pandemic.
“Besides enhancing our financial stability, we are strategically positioning ourselves to meet our customers’ needs with an innovative, needs based product and service portfolio, with our aim being to further boost incoming orders and sales. We will continue to benefit from this when the markets recover, as demonstrated by China.”
There are signs of recovery in France, Italy, Spain and the UK, which had been the countries hardest hit by the lockdowns. And its approach to customers is changing with a much greater use of digital communications channels, demonstrated by the fanfare around the results and by the recent Innovation Week series of online presentations and discussions.
“Heidelberg will be pitching to customers individually and digitally moving forward, matching the trend towards shorter, faster innovation cycles and the rising momentum brought about by digitisation using new and increasingly digital formats.”
