Heidelberg claims restructuring overcoming Covid-19

Improved sales, incoming orders, and EBITDA in Q2

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Rainer Hundsdorfer, chief executive officer, Heidelberg
Rainer Hundsdorfer, chief executive officer, Heidelberg

In its press release dated 10 November 2020, Heidelberg Druckmaschinen says that by systematically and swiftly implementing its transformation, it has further strengthened its position in the first half of the 2020/2021 financial year (1 April to 30 September 2020). With several measures adopted as part of the transformation program launched this March to boost profitability, enhance competitiveness, and secure the company’s future, Heidelberg says it has been able to more than compensate for the negative effect on earnings caused by a significant drop in sales due to the Covid-19 pandemic.

Heidelberg has again achieved a positive EBITDA, excluding restructuring results in the second quarter of the current financial year, recording €97 million in the first six months – a significant increase from the previous year (€69 million). The EBITDA margin for the half-year was 12%, compared with 6.2% in the same period of the last year. Simultaneously, the net financial debt was successfully reduced from €416 million in the previous year to €157 million.

Improvement in Q2, especially in China

In terms of sales and incoming orders, the gap compared to the previous year shrank in the second quarter of the current financial year. While sales after the first quarter were at –34%, this figure was only –24% from July to September; incoming orders, meanwhile, improved from –44% to –20%. There was a positive development in demand in some markets, above all in China’s critical single market, where, compared with the previous year, the level of incoming orders increased from around –50% in the first quarter to about –8% in the second. This trend and the planned additional steps to optimize the company’s assets and portfolio and reduce staff costs provide a reason to be optimistic that Heidelberg will reach its announced targets in the year as a whole and continue to achieve sustainable, profitable growth in the years that follow.

“Our transformation is proving successful. We are delivering on our promise. By the end of the half-year, we had drastically reduced our debt. We made significant improvements regarding our liquidity and results – despite the huge challenges our organization has faced owing to the Covid-19 pandemic. Besides enhancing our financial stability, we are strategically positioning ourselves to meet our customers’ needs with an innovative, needs-based product and service portfolio, with our aim being to boost incoming orders and sales further. We will continue to benefit from this when the markets recover, as demonstrated by China,” says Rainer Hundsdörfer, CEO of Heidelberg.

Readers will recall that the Heidelberg systemic plan includes the early repayment of corporate bonds, which was done on 9 September 2020. The early repayment of this debt reduced its interest payments by €12 million annually. The sale of the Gallus division to Swiss company benpac should also bring Heidelberg another €120 million by the end of the year.

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