Challenging market conditions across Europe, particularly in the third quarter, have effected Heidelberg’s 2019/20 forecast but the manufacturer says the upside is its digital transformation plan is well in hand.
The company said a dip in third quarter sales from 579 million euros to 567 million euros, compared to the PCP, took the shine off stable development of sales and orders for the first nine months of the 2020 financial year.
The slump was put down to a general reluctance across Europe, in particular Germany, to invest while the Chinese and US markets have continued to perform well.
For the nine months from April 1 to December 31, 2019, Heidelberg had incoming orders totalling 1,900 million euros reaching the previous year’s level of 1,912 million.
EBITDA, excluding a restructuring result, was 47 million euros in the third quarter, compared with 39 million euros in the PCP due to non-recurring income of around 25 million euros from the sale of Hi-Tech Coatings.
But this put against lower volumes, pressure on margins in the consumables business and regional shifts with a less favourable product mix and high upfront expenditures in digital printing had a negative impact on the business.
Heidelberg CEO Rainer Hundsdörfer said the company is now in an “advanced planning stage” to sustainably improve profitability and liquidity.
The measures include streamlining and focusing the organisational structures more strongly on customer needs and more efficient processes, selling additional non-core areas to focus the product portfolio and restructuring the international production base to reduce the cost base.
“We are gearing Heidelberg on profitable activities and are launching an innovation initiative to expand our technological leadership in our core business,” Hundsdörfer said.
“This will enable us to consistently adapt to the challenging market conditions, which are currently difficult to predict not least due to the uncertain economic impact of the coronavirus in China, our largest single market.”
Digitisation drive ahead of drupa 2020
Heidelberg said it is focused on customer-centric solutions and the continued drive towards digital transformation. It says it is getting closer to its goal of increasing the share of recurring revenues from subscription offers to around one-third in the medium term.
“When it comes to innovation with a focus on autonomous, fully automatic printing, Heidelberg will be presenting a new generation of offerings at the drupa 2020 trade show in June under the slogan “Unfold your Potential”. One example is the popular Speedmaster model with new “Plate to Unit” printing plate logistics to further improve both cost-effectiveness and competitiveness in offset printing,” Heidelberg said.
“Initial customer orders in this profitable core business of the group have already been received. Heidelberg is convinced that the enhanced product portfolio will enable it to further extend its market and technology leadership in future-oriented software-based applications, intelligent user guidance, and autonomous processes of integrated solution systems (“Smart Print Shop”).”
The company has also foreshadowed a new Speedmaster range that will be unveiled at drupa.
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