Heidelberg has eased the financial pressure it is under, repaying a high interest loan early and thus reducing the interest burden on the business.
A week after banking €120 million from the sale of its Gallus business to Benpac in Switzerland, Heidelberg has announced the repayment of the 8% bond due to mature in 2022. It will save €12 million a year as a result.
The company has been eating away at its mountain of debt following the €380 million influx of money through the liberation of funds from the Heidelberg Pension Trust.
“We are keeping our word and are working full speed ahead to consistently implement the measures announced in the program we presented in March to increase profitability, competitiveness and to secure our future. The early repayment of the high yield bond is a further milestone in improving our financing structure. We are permanently freeing ourselves from high interest payments and are becoming more financially independent and flexible,” says Marcus Wassenberg, CFO of Heidelberg.
There will be greater scope for future investments and to reshape the future of the company, says CEO Rainer Hundsdörfer. This has included a €5 million investment in a line to print electronic, particularly for medical sensors. The deal will also help make the business more attractive to investors.
The reshaping also continued with the sale via a management buyout of the CERM label MIS business. Heidelberg bought the Belgian MIS supplier in 2011, absorbed its commercial products but kept the label application at arms length rather than make it a full part of Prinect. And while ownership passes to a management team led by CEO Geert Van Damme, this will remain part of the Prinect Business Manager.
However, the way is now clear for the automated workflow to have a greater impact as the digital labels market expands without the connection to Heidelberg. “We are also looking forward to expanding our deep industry expertise offering in the label and packaging market as an independent, innovative, and agile niche player through additional sales and service channels,” says Van Damme.
A management buyout has unleashed Cerm's labels and packaging division to create its own future, nine years after acquisition by Heidelberg. Heidelberg will continue to handle sales and integration of Cerm's technology to commercial printers.