Heidelberg reports half-year profit; China still a major growth area
Heidelberg announced that the Group’s half-year sales increased to €983 million. This is up 22% of the previous year’s €805 million.
During the current reporting period, Heidelberg benefited from rising sales, improved cost-efficiency, and earnings of over €20 million from the sale of docufy GmbH.
“The highly positive developments in our growth areas and our improved cost-efficiency underline that Heidelberg is doing very well. We also see great potential for the future thanks to our leading position in China and in the areas of digital business models, e-mobility, and packaging printing. In addition to all this, our break-even point will continue to fall. Despite the clearly evident problems in the supply chain at present, we are therefore confident about this year and the years to come,” said Heidelberg CEO Rainer Hundsdörfer.
Continuing progress in the four growth areas
Developments during the first half-year are based on improved cost-efficiency and on the Group’s continuing progress in its growth areas: packaging printing, digital business models, China, and new technology applications, especially in e-mobility.
Heidelberg is benefiting from continued high growth in its largest single market – China – partly due to the company’s well-established local production operations.
The recovery of demand is also based on product innovations such as the new Speedmaster CX 104 universal press, which met with a very positive response at both China Print in June and the Innovation Days in Wiesloch in October of this year.
In packaging printing, Heidelberg has seen high demand during the half-year, with incoming orders up over 36% on the previous year.
The financial partnership entered into with Munich Re on November 8, 2021 for digital business models will set the course for future growth. This collaboration is intended to fully harness the global market potential of the subscription options offered by Heidelberg and significantly boost the volume of business in this area. As for new technology offerings, the success of wallboxes for e-mobility continues to stand out, with international expansion gaining further momentum.
Positive developments in growth areas, the focus on the profitable core business, and consistent implementation of measures to realign the company will be the dominant features at Heidelberg over the next few years, with total cost savings of over €170 million expected in financial year 2022/2023.
“At the end of the half-year, we have completely eliminated the net financial debt and improved our free cash flow to €74 million. It’s many years since Heidelberg was last in this situation, but we won’t be complacent and will systematically leverage our future potential to keep the development of these key figures positive,” said the company’s CFO, Marcus A. Wassenberg.
The growing market recovery in virtually all regions continued during the second quarter.
At the end of September 2021, incoming orders totalled €1,245 million. This is which is significantly above the €864 million recorded in the previous year due to the pandemic.
Orders amounting to €593 million in the second quarter were also considerably higher than the previous year’s figure of €518 million.
The order backlog increased to €886 million, compared with €627 million at the equivalent stage of the previous year.
Group sales for the half-year also grew substantially to €983 million, from previous year’s €805 million. The figure for the second quarter was €542 million, following on from €475 million in the corresponding period of the previous year. After taxes, Heidelberg recorded a profit of €13 million, following a figure of €-9 million in the previous year.
Heidelberg is still expecting sales to climb to at least €2 billion.