The cost saving measures that Heidelberg has introduced this year will enable the press manufacturer to break even on sales of less than €2 billion.
This will be close to the sales volume for this financial year, which Heidelberg is predicting will be €450-500 million below the €2.35 billion earned last year. It was on course for this at the end of its Q3, closing at the end of December. After a 44% fall in incoming orders in Q1, 20% in Q2, Q3’s orders received were just 12 % down on the position last year. It amounts to a 24% drop in incoming orders in the year to date. In the same nine month period sales were down 25%.
According to CEO Rainer Hundsdörfer, China had recovered fully and orders from Europe were well on their way to a full recovery at the end of Q3. North America continues to be suffer the effects of the pandemic. Operating levels of existing commercial and packaging presses had almost reached pre-crisis levels at the end of year. Nobody has said whether the latest wave of lockdowns across Europe has had an impact on output levels and incoming orders since the start of 2021.
December’s incoming orders tally was the strongest month to date for this financial year, Hundsdörfer says, more than matching 2019. Part of this may be due to the company’s online Innovation Week in October, described as “a complete success” to replace any participation in Drupa.
The company has been able to mitigate the worst financial impact of the pandemic crisis through assets sales. Its Belgian MIS company CERM, and chemicals manufacturing business have been sold, as have 130,000m2 of land at the Wiesloch factory site and most recently the iconic Print Media Academy in the centre of the city.
It has paid off loans to bring net debts down to €127 million (€262 million) and reducing outgoing payments by €12 million a year.By the end of financial year in March it will have shed 965 jobs from a total of 1,600 that have agreed redundancy packages. Of these 1,200 are from Germany.
However, it has failed to bank €120 million after the expected sale of Gallus fell through leaving Heidelberg with an unwanted asset, staff and five plants to operate. It is too early to say what will now happen to rollfed label and packaging operation, though Heidelberg is unlikely to want to keep it in the long term.
Nor is there any announcement about the tally of subscription deals that have been done. “The growing interest in our contract business and strong demand for our electromobility charging stations are also grounds to be optimistic about the future,” he says. The company plans to double production of its wall mounted charging units for electric vehicles.
The package has been well received by investors, with Heidelberg’s shares climbing to €1.39 from 0.82 at the start of the year. There is still a long way to go.
