Heidelberg is increasing prices to achieve profitability, says CEO Ludwin Monz. At the nine-month mark for the 2022/23 financial year the strategy had increased sales by 10% despite shipping fewer presses than at the same point in 2021/22 financial year. And pretax profit has responded, rising to €65 million (€50 million).
Demand from the US and Mexico has been strong (+30%) helping to compensate for a fail in orders from China. The drop is blamed both on the effects of lockdowns in Shanghai and on comparison with an influx of trade show orders a year ago. Spain, UK and France are picked out for mention because of a growth in orders.
The increasing focus on the packaging sector is justified by a rise in orders for the segment by 5.6% and sales increase of 22.7% in the third quarter, In comparison orders of commercial print equipment dipped by 5.8% while sales increased 3.5%. Sales in the very much smaller technology sector, comprising dropped 42.9% as the impact from a drop in EV sales after German government subsidies were withdrawn and a shortage of components have fed into extended delivery times.
Heidelberg received €12 million for the former Gallus factory in St Gallen, adding to the €26 million received last year for the Brentford site.
Sales might have been higher had not supply chain disruption continued affecting delivery dates the company says. As a consequence of this, Heidelberg has increased the amount of inventory it carries in an attempt to mitigate these bumps. Profit margins have increased thanks to a reduction in overheads, reducing the company’s break even point, and thanks to higher selling prices.
Announcing the results, Monz says: “We had a positive third quarter and were able to further increase our sales and operating result. Looking ahead, the coming months will continue to be affected by the expected increases in material, energy, and personnel costs.
“We will continue to counter this through price rises and maintain our cost discipline. We are therefore very confident of achieving our targets for the year.”
