Heidelberg Presents New Growth Strategy

At its Annual Press Conference for 2016/17, Heidelberger Druckmaschinen AG (Heidelberg) is underlining its aspirations to further strengthen the company’s position in the printing press sector with the presentation of a new corporate strategy.
 
The company’s Management Board is presenting “Heidelberg goes digital!” – a package of measures for the years ahead with a strategic focus on technology leadership, digital transformation and operational excellence.
 
Following the successful turnaround with a return to sustained profitability, Heidelberg will now also be aiming for continuous growth. Group sales of around €3 billion are being targeted with a large number of specific measures in the period to 2022. The company has set its sights on a further significant improvement in profitability, with EBITDA of €250 million to €300 million and a net profit after taxes of over €100 million. Sales in financial year 2016/17 were just over €2.5 billion, EBITDA at €179 million and the net result after taxes at €36 million.
 
“Over the next five years, Heidelberg will once again become a leading light in the sector, enjoying strong growth and profits. We’ve defined the relevant success factors and have already introduced initial measures. This marks the start of a new era of growth for Heidelberg,” said CEO Rainer Hundsdörfer.
 
The turnaround achieved by Heidelberg over the past five years with a rigorous restructuring program and a shakeup of its portfolio has led to sustained profitability. Despite a slight fall in sales, EBITDA doubled from the 2012 level to €179 million. Following a huge loss of €230 million five years ago, the company recorded a net profit after taxes of €36 million in 2017.
 
The profitable growth now being targeted for the period to 2022 will be boosted by the following key strategies:
 
•  Technology leadership based on constant innovations focusing on customer benefits and aimed at improving productivity while also cutting costs in all print shop processes by maximizing efficiency. Heidelberg is looking to play a pioneering role in digitization (Simply Smart/Smart Print Shop) with its Push to Stop concept and also in industrial digital printing for the packaging market with the Labelfire and Primefire product lines. The objective here is to double the market share in digital printing from the current level of less than 5% percent to as high as 10 % and generate additional sales potential amounting to nearly €200 million in the period to 2022.
 
•  Digital transformation, including the digitization and integration of the previously separate areas of equipment, software, services and consumables with straightforward, transparent pricing of all offerings for customers. The entire work process at the customer’s print shop will be addressed from a single source using a single e-commerce sales platform. The aim here for Heidelberg over the next five years is to increase the company’s market share for consumables from the current level of 5% to just under 10% while also leveraging additional sales potential of €250 million. Part of this strategy is the takeover of Fujifilm’s coatings and pressroom chemicals business in the EMEA region, which represents a sales volume of some €25 million. It will take effect as of July 1, 2017.
 
Digital transformation also means that Heidelberg will offer its know-how to other plant and mechanical engineering companies and startups in the future. Heidelberg benefits from the software and engineering expertise forming part of the new possibilities offered by Industry 4.0 – with options such as an IT suite, a cloud-based platform, and production capacities. Industrial companies such as BigRep, for example, already have their latest products for additive manufacturing (3D printers) produced by Heidelberg. The aim by 2022 is for this to generate additional sales of some €50 million with well above-average profit margins. The recent acquisition of software supplier DOCUFY to strengthen the Digital Platforms business area and expand the Industry 4.0 portfolio underlines the company’s ambitions in this direction.
 
The Heidelberg Digital Technology (HDT) and Heidelberg Digital Business and Services (HDB) sectors were established on April 1, 2017 to prepare for the company’s digital future. HDT combines sheetfed offset, label printing, and postpress operations and is responsible for developing, producing, and marketing the appropriate technologies and products for new business models. HDB, meanwhile, is where Heidelberg manages its operations relating to services, consumables, remarketed equipment, digital printing technology and solutions throughout the value-added chain.
 
“In financial year 2016/17, we not only achieved noticeable operational improvements, but also made further progress with our balance sheet quality. Our very sound financial structure will enable Heidelberg to independently finance the upcoming investments taking the company into the digital future. Our future focus will remain on improving our asset management and cash flow, and on achieving the best possible financial result by optimizing our financing framework,” said Heidelberg CFO Dirk Kaliebe.