A challenging financial year for Heidelberg has been made worse by the Covid-19 pandemic. The press manufacturer has issued preliminary sales figures for the year of €2,349 million, down 6% against the 12 months to March 2019. In Q4, with lockdowns taking effect across Europe, sales fell 20%, during what are traditionally Heidelberg's best three months.
The result was also impacted by the corporate restructuring, announced before the virus swept across the world, resulting in the announcement of a post tax loss of €343 million. Most of this is down to a one off cost of €272 million to pay for the restructuring amounting to 2,000 jobs lost and end for the Primefire and VLF product lines.
At the operating level, the result was €102 million, 40% below the €180 million achieved in the previous period, amounting to a margin of 4.3% below both the 7.2 % earned in 2019 and below the mid term target Heidelberg had set.
“Our financial year was shaped by a significant downturn in the global economic climate, and that affected our customers and Heidelberg itself, too,” says CEO Rainer Hundsdörfer. “Through our package of measures which we have announced in March, we have paved the way for Heidelberg to achieve stability, improve our liquidity and increase profitability step by step for the long term. The Covid-19 pandemic poses significant challenges for Heidelberg and the entire industry, which we will master alongside our customers and using what Heidelberg has to offer as a technology leader in the printing industry. By joining forces, we will emerge stronger from the crisis.”
This will come through an end to the loss making operations, through productivity measures and elimination of the net debt and the interest due. This came through the transfer of €380 million from a pension trust. Now the cost saving actions will help safeguard the future of Heidelberg, according to CFO Marcus Wassenberg.
The company has already revealed a large part of its Drupa hand, around the new version of the XL106, now as the 2020 version, with further announcements held back. These are expected to include progress and developments around the Crispy Mountain acquisition a year ago and development of an alternative information protocol as an alternative to JDF and a basis for Heidelberg's operating system to be followed out across the industry.
First the company has to secure a negotiated agreement over the 2,000 job cuts worldwide. Indication are that these are nearing completion and that 600 workers in Germany have already applied to be part of a transfer company set up as part of voluntary redundancy arrangements.