Heidelberg Expecting Profitable Growth in FY 2021/2022 and Subsequent Years

Given an improving order situation and the increasingly positive impact of the Group’s extensive transformation, Heidelberger Druckmaschinen AG (Heidelberg) is confident of returning to profitable growth in financial year 2021/2022 (April 1, 2021 to March 31, 2022).

Despite the continuing uncertainties regarding the duration and scope of the negative effects of the COVID-19 pandemic in financial year 2021/2022, the company is therefore expecting sales to climb from €1,913 million to at least €2 billion.

“The comprehensive transformation Heidelberg initiated before the coronavirus pandemic hit has made the company leaner and more efficient. Given that demand is now also definitely picking up again in most key sales regions, we’re expecting to achieve a far better operating margin this year, including a slightly positive net result after taxes. The considerable growth potential offered by packaging printing, digital business models, business in China, and new technologies such as wallboxes is also making us confident about the years ahead,” said Heidelberg CEO Rainer Hundsdörfer.

The company predicts that profitability will grow even more strongly than sales. For example, the expected increase in sales, the lower cost base, and the fact that significant restructuring costs of some 5% (including restructuring result) will no longer need to be met means the EBITDA margin is set to increase to between 6 and 7%. After two years of losses, a positive net result after taxes is also likely to be achieved thanks to a sustained improvement in the financial result.

Cost savings totaling €170 million are expected to have taken full effect in financial year 2022/2023 and the Group’s operating break-even point is likely to have decreased to around €1.9 billion.

“We’re delighted that all our efforts during the crisis in financial year 2020/2021 are now bearing fruit. Heidelberg is back on a solid financial footing, is fully focused, has become far more efficient, and is benefiting from excellent growth potential in various regions and areas of business,” added CFO Marcus A. Wassenberg.

Thanks to a strong final quarter, Heidelberg generated sales of €1,913 million in financial year 2020/2021, which was slightly above the range of €1.85 billion to €1.90 billion that had been adjusted in the third quarter of financial year 2020/2021. As already announced, the pandemic has resulted in the company failing by some margin to match the previous year’s figure (€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 €2 billion at the end of the financial year. In the fourth quarter alone, incoming orders improved very significantly, from €462 million in the same quarter of the previous year to €579 million. This increased the order backlog to €636 million, which creates a good basis for the new financial year.

EBITDA excluding restructuring result in financial year 2020/2021 stood at €146 million, a clear improvement on the previous year (€102 million). At 7.6%, the EBITDA margin excluding restructuring result exceeded the company’s own forecast of around 7% and the previous year’s figure of 4.3%.

While packaging printing quickly returned to pre-crisis levels and is set to see further growth, advertising printing is likely to take longer to recover from the impact of the pandemic. All in all, Heidelberg does not expect the global print volume to fully return to pre-pandemic levels just yet.