Heidelberg – a German specialist offering offset printing presses, digital printing technologies, post-press packaging machines, converting equipment – has made a good start to the new financial year owing to the recovery in Asia and a growth in the packaging segment, the company said.
The technology company’s sales in the first three months (April 1 to June 30, 2023) climbed year-on-year from 530 million Euros to 544 million Euros. The adjusted operating result (EBITDA) of 42 million Euros was around 18 million Euros up on the adjusted figure for the corresponding quarter of the previous year. I Euro is equivalent to approximately US $1.10 as per present market rates.
The corresponding EBITDA margin was 7.7 % (previous year: 4.6%). The net result after taxes improved to 10 million Euros (previous year: 5 million Euros). On a regional level, incoming orders grew strongly in Asia but demand in other markets was rather muted.
Well-positioned in the packaging printing market
In the packaging solutions segment, Heidelberg recorded particularly strong growth of around 25% in incoming orders. “Heidelberg is strategically well positioned in its core market of printing and can thus cushion restrained developments in other areas,” says Heidelberg CEO Ludwin Monz. Thanks to the new Boardmaster for highly productive packaging printing that was unveiled in May 2023, the company already generated initial sales in the first quarter. The demand for the new Gallus One in the growth area of digital label printing also confirms the market trend, the company said.
Free cash flow improved in the first quarter compared with the prior-year figure adjusted for special items but remained negative overall compared with the previous year at –27 million Euros. The reason for this was the absence of positive special items, as had been realized in previous years. “The quarterly result shows that our value creation program, with which we aim to significantly increase our free cash flow, remains vital,” says Heidelberg CFO Tania von der Goltz. Under the program, the company intends to continue to offset cost increases with price increases and maintain strict cost discipline.
Medium-term financing structure realigned
Heidelberg has restructured its loans, and, at the end of July, it agreed a significant increase in the credit facility with its bank consortium. This now offers a syndicated credit line of 350 million Euros over a four-year period, with an option to extend for a further year. “The newly agreed financing structure underlines the financial market’s confidence in the strategic approach we adopted to further boost the company’s financial strength and step up our investments in growth areas,” says Tania von der Goltz.
Start to the financial year 2023/2024 confirms forecast
The forecast for the financial year 2023/2024 remains as published on June 14, 2023. Assuming the global economy does not see weaker growth than predicted by the economic research institutions and sales remain at the same level, Heidelberg is expecting the company’s development to remain stable.
A successful 2022-23
Heidelberg had exceeded its targets in the previous financial year 2022-2023 – generating sales of 2.435 billion Euros compared with 2.183 billion Euros in the previous year, which represents an increase of around 12%. The adjusted operating result rose from 5.1% to 7.2%. The free cash flow was positive at 72 million Euros but this figure benefited from non-recurring effects.
