12 November 2017 Business

Heidelberg continues to be work in progress as it delivers interim profit

The press manufacturer is in transition towards a digital organisation and has reported a first first half profit for ten years.

Heidelberg is celebrating a first-half profit for the first time in ten years. While sales in the first half of the year were almost unchanged, costs were lower, and an Ebitda of €45 million increased to €60 million for this financial year resulting in a net profit of €28 million.

Incoming orders slipped from the Drupa boosted €1.41 billion to €1.23 billion. The company points to a reluctance to invest from customers in North America. It also points out that “uncertainty over the forthcoming Brexit was noticeable in incoming orders and sales on the UK market”.

In addition the Italian economy has, unlike Spain, not recovered from 2007, while Japan is in full recovery, going GDP 1.6% in the first half due to domestic demand rising. The first half was also boosted by sales resulting from China Print in Q1.

Packaging and the digitisation of the printing industry continue to be key growth areas. At Labelexpo, Heidelberg sold 20 of the new Labelmaster presses. It has sold out production of the Primefire 106, introduced last week at packaging open days, for the next two years.

And it says it is open to acquisitions to add to these directions. Product developments are in planning or on the verge of being launched, it says without further details. There is mention of how data can provide new business opportunities, comprising a package of machinery, services, consumables and software in a pay to use subscription model. This is in the pilot phase.

It has also launched its first branded charging point for electric vehicles having developed the technology under licence previously.

There is to be further transformation in the leadership team to reduce hierarchies and to promote agility and simplicity. This will be in place for the start of the new financial year in April 2018.

CEO Rainer Hundsdörfer says: “The process of converting our company into a state of the art digital technology group is progressing well. With the launch of new subscription models for our customers and our portfolio of innovative products for the eMobility growth sector, we’re moving into new territory that offers enormous potential for growth.

“Heidelberg will be setting new standards when it comes to technologies of the future, digitization, and efficiency. The necessary cultural shift has only just begun.”

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It has been a flag day for Heidelberg as the company reports a first profit at the interim stage for ten years. But the company is not sitting back: a management reorganisation is underway, culminating in the new structure to be announced in April next year.

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