Heidelberg is enjoying its highest order backlog in ten years thanks to bounce back in orders which in Europe has been led by Germany, Italy and the UK. The disclosure comes in the company’s annual report for the 2021/22 financial year.
The backlog is tempered by rising costs across the board, in materials, people and energy in particular. Some of these costs will have to be passed on to customers says the company. It has also written off assets, including spares and other inventory, that is tied up in Russia as a result of sanctions imposed on the country.
Regardless of the ongoing challenges Heidelberg says it is hopeful of continuing its transformation in the current year with an expansion in sales to €2.3 billion €2.18 billion) with Ebitda margin of 8%. The measures introduced in March 2020 have eliminated €400 million in debt and by the end of this financial year will have cut a further 2,000 positions in the business.
The company says it is well placed to ride out supply chain disruption and further economic uncertainty. “A high degree of vertical integration is helpful in the current supply chain crisis,” CEO Ludwin Monz says in the annual report. “We consider the two location strategy to be a competitive advantage.” This refers to factories in Germany and in China. The latter plant near Shanghai employs 550 in production from 1,000 employees in China overall. At the end of March, the company employed 9,811 overall, meaning more than 10% of staff are now employed in China.
While demand for packaging received a boost in the pandemic and is forecast to continue to rise in coming years, the share of revenue from Heidelberg’s packaging division slipped to 42.4% (45.1%) while the share for Print Solutions, the commercial print arm, rose to 55.3% (53.7%) with technology, including its interest in Xaikio and wallbox chargers, almost double its share to 2.3% (1.2%).
In e-mobility, a contact-free payment charger is being introduced alongside the domestic chargers, coming now under the banner of Heidelberg Amperfied, The division also includes printed electronics where there are sensors in healthcare and to monitor battery strength and for car seats, with further potential in the automotive sector.
In the last decade Heidelberg says it has shipped 2,800 sheetfed presses for packaging applications. The CX104, which began shipping last year, is capable of carton printing as well as commercial print work. The first UK user of the press will be printing both commercial and carton work with it.
Heidelberg is expecting a 2.5% growth rate in packaging to 2016, lifting its value from €122 billion to €138 billion with demand for labels increasing by 3.5% to €34 billion from €28 billion currently. Within this demand for inkjet is growing 6% a year and inkjet accounts for 30% of the volume. Heidelberg’s Gallus Labelfire competes in this sector. The overall print market is reckoned at €380 billion today, growing to €385 billion in 2026.
In commercial printing a growing volume is accounted for by digital printing. Heidelberg’s partnership with Ricoh has delivered 1,600 Versafire digital presses since the partnership was created in 2011. Heidelberg is developing an enhanced version of the Prinect DFE to cope with the growing potential for digital printing.
While the company is upbeat about its position and the dynamics of the printing industry and the impact of the changes it has implemented, Monz tempers the optimism in an interview in the report: “We have strong and, in some cases, new competitors in offset and digital printing” he says, though without identifying the companies that Heidelberg now considers to be new competitors.
