Heidelberg has announced that it has made a successful start to the new 2022/23 financial year, seeing significant improvements in both sales and operating profitability in Q1.
The company said this is because of the continued recovery of the markets in almost all regions and the progressive success in transforming the company.
The group’s sales figures between April and June grew by 20 per cent year on year to €530 million ($768.4 million), with Heidelberg adding that this significant increase can largely be attributed to the rise in the number of new machines delivered.
The regions of Europe and North America recorded particularly positive developments as well.
By contrast, it said results in China were sometimes weaker compared to the previous year, due to the extensive lockdowns in the economically relevant cities.
Overall, higher sales and the ongoing reduction of structural costs resulted in Heidelberg significantly improving its operating result (EBITDA) in the first quarter, recording an increase of €20 million ($29 million) to €35 million ($50.7 million).
The company said this enabled it to pass on sustained increases in material costs.
All segments increased their sales during the first quarter with particularly strong growth in its packaging solutions division at around 28 per cent.
Heidelberg also mentioned that incoming orders of €607 million ($880 million) in the first quarter showed a return to the pre-pandemic 2019/2020 level (€615 million) – even though business in China was curbed by the two-month COVID-19 lockdown in Shanghai and the war in Ukraine led to weaker demand in Eastern Europe.
However, it said it was not quite possible to reach the previous year’s high figure of €652 million ($945 million), as this had been unusually high due to the China Print trade show in 2021.
However, the order backlog saw a further significant increase of 15 per cent during the first quarter, totalling €969 million ($1.4 billion) on June 30, 2022 (previous year: €840 million).
“The positive start to the new financial year gives us cause to be cautiously optimistic as we look forward,” Heidelberg CEO Dr. Ludwin Monz said.
“Provided there is no downturn in the general economic environment, we are confident we will reach the annual targets we have set. We will support our growth by expanding our products and services for digital printing in the label market and launching new, networking-capable wallboxes in the electromobility sector.”
The company identified that after three months, a close to break-even free cash flow situation was achieved, with a figure of €–1 million (previous year: €29 million).
“Compared to the previous year, the slight increase in net working capital was noticeable. This rise was due to the high volume of orders and the lower revenues from the sales of assets. With a figure of €5 million ($7.25 million), the net financial debt continued to be at a low level (previous year: €41 million),” it said.
Despite ongoing global uncertainties, the company said it believes it has good opportunities for profitable growth in the 2022/23 financial year. It expects sales figures to grow to around €2.3 billion ($3.3 billion) (2021/22: €2.183 billion), provided there is no significant downturn in the general economic environment.
Heidelberg is forecasting further improvement in the EBITDA margin to at least eight per cent for the 2022/23 financial year (2021/22: 7.3 per cent). The net result after taxes is also expected to increase slightly compared to 2021/22 (€33 million).
“In addition to the recovery of the markets, we are increasingly reaping the benefits of the measures we have taken to boost efficiency within the Group,” Heidelberg CFO Marcus A. Wassenberg said.
“At the start of the new financial year, Heidelberg has again made itself more robust and is in a good financial position. We therefore feel confident as we look to the future, in spite of the economic risks.”
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