Heidelberg confident of returning to profitable growth in 2021-22

Buoyed by an improving order situation and an increasingly positive impact of the Group’s extensive transformation, Heidelberg’s CEO Rainer Hundsdörfer said, he is confident of returning to profitable growth in the financial year 2021-2022 (April 1, 2021 to March 31, 2022).

14 Jun 2021 | By Noel D'Cunha

Rainer Hundsdörfer, CEO, Heidelberg

A strong final quarter saw Heidelberg generate sales of some Euro 1,913 million in the financial year 2020/2021, which was slightly above the range of Euro 1.85 billion to Euro 1.90 billion that had been adjusted in the third quarter of the financial year 2020/2021. 

The EBITDA excluding restructuring costs rose from Euro 102-million to Euro 146-million, boosted by Euro 85m in savings from its transformation programme, Euro 100-million benefit from short-time working, Euro 75-million from restructuring its pension scheme, and Euro 19-million from the sales of CERM, BluePrint Products and Hi-Tech Chemicals. 

In March 2020, Heidelberg launched a transformation programme designed to boost profitability, enhance competitiveness, and secure the company's future.

Hundsdörfer said that the comprehensive transformation has made the company “leaner and more efficient”. Given that demand is now picking up again in most key sales regions, he said, “We're expecting to achieve a far better operating margin this year, including a slightly positive net result after taxes.”

Last month, PrintWeek had reported that Heidelberg India had more than 25 installations of its machines in the last 14 months, which included presses –  Speedmaster XL 75 Anicolor at Art -O-Print in Ahmedabad;  Speedmaster CX 102 7+LUV presses at Miraj Multicolour in Udaipur, Noble Printing Press at Mumbai and Global Printing and Packaging in Bangalore; a Speedmaster XL 75 Anicolor at Rohan Cards in Pune; apart from CX 75 at Print Point at Bangalore, Multiple SX 74 2P and SX 102 2P installations across many customers in India and multiple Speedmaster CS 92 installations in the northern and western region, like Rukson Packaging, and some repeat orders from Rahul Print O Pack and Replika Press. In the label segment, the company completed three Gallus ECS 340 and two Labelmaster flexo presses installations during the pandemic.

The pandemic though has resulted in the company failing by some margin to match the previous year's figure (Euro  2,349 million). Due to an uptick in demand – in particular in China, parts of Europe, and in the final quarter in the United States as well – incoming orders increased to around Euro 2-billion at the end of the financial year. In the fourth quarter alone, incoming orders improved very significantly, from Euro 462 million in the same quarter of the previous year to Euro  579 million.

“This increased the order backlog to Euro  636 million, and considerable growth potential offered by packaging printing, digital business models, business in China, and new technologies such as wall boxes are also making us confident about the years ahead,” said Hundsdörfer

Responding to a question on what has been the biggest key to the turnaround in the last 14 months from Heidelberg India’s point of view, Samir Patkar, president at Heidelberg India, said, “We understand that 2020 has been a struggle for our customers. To ease them and us into the new normal, we had arrived at four deeply thought-out value packages. Printers can choose from any of the four print site contracts that we are offering. Each contract comes with a different scope of service and payment method. The ranges are from a “Lifecycle Smart” contract that includes services and consumables to a “Subscription Plus” package that covers equipment, consulting, training, services, consumables, and Prinect solutions. All four packages aim to maximise customers' overall equipment efficiency (OEE), which delivers genuine added value when compared to purchasing individual components.”

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