Heidelberg shows signs of recovery – EBITDA increases to €55 million

Sales expected at €2.3 billion for FY 2022-23, up from €2.183 billion last year

Heidelberg has improved its sales and result for the first half-year of 2022.
Heidelberg has improved its sales and result for the first half-year of 2022.

Heidelberg’s Packaging division saw the best results, with sales up from €221 million in Q2 last year to €291 million in Q2 this year, and up from €415 million in the first half of the previous year to €535 million this half. This equates to Earnings Before Interest, Taxes, Depreciation and Amortisation of €38 million for Q2 this year, up from €11 million in the same period last year. The EBITDA result for the first half rose from €17 million last year to €55 million for this year. 

In contrast, the Print Solutions division saw its orders for this year’s Q2 stay static at €334 million, the same as the previous year, while the figures fell for the half as a whole, from €689 million last year to €682 million this year. The EBITDA fell from €48 million in Q2 last year to €33 million this year, though this is mainly because the previous year’s figures included non-recurring income from the sale of its Docufy subsidiary. This means that the EBITDA for the first half also fell slightly from €55 million to €53 million this year.

Wallbox EV charging systems runs into loss territory

Heidelberg’s Technology Solutions, the division that covers the Wallbox EV charging systems, also saw its sales down markedly, from €12 million in Q2 last year to €6 million this quarter. The half year picture shows orders of €16 million, down on the €21 million from last year’s first half. This means that the EBITDA has fallen from €1 million in Q2 last year to a loss of €-3 million this quarter, and from €2 million for the first half of last year to a loss of €-4 million in this year’s H1. This is mostly due to the end of funding for private charging stations in Germany, together with longer delivery times for new electric cars.

Net sales for the first half of the year are up 14% on last year’s H1 figures to €1120 million, though Heidelberg acknowledged this was in part due to favourable exchange rates. Heidelberg says that its incoming orders for the company as a whole are 5% up for Q2 on last year’s figures to €622 million. For the first half, the orders stand at €1229 million, which leaves Heidelberg with an order backlog over €1 billion. This has led to some optimism regarding the company’s prospects for the full year, despite likely rising costs for energy and staffing.

The free cash flow for the first half fell from last year’s figure of €74 million to €–13 millionths year, mainly due to the usual production-related increase in inventories. This is mostly from Q2, which saw a drop from €45 million to €-12 million. In addition, revenues from the sale of assets in the first half-year also fell.

The half-year net financial debt was €23 million, which Heidelberg says is partly due  to the negative free cash flow. However, the company has improved its equity ratio, which is partly due to the higher actuarial interest rate for pensions in Germany as well as the rise in the quarterly profit to around 20 percent. The net result after taxes for the second quarter was €39 million, up from €27 million the previous year, and for the first half it stood at €44 million, up from €13 million last year. 

Heidelberg’s CEO, Dr Ludwin Monz, commented: “Despite a difficult environment, we have successfully overcome the challenges in the first half-year and achieved further growth. We remain cautious, though, because it’s not yet entirely clear how the global situation will develop.” He added: “During the first half-year, Heidelberg has laid a good foundation for achieving our financial targets. With this in mind, we are focusing on maintaining our supply chains, safeguarding our margin through higher sales prices, and continuing our cost discipline.” 

Consequently Heidelberg is still expecting its sales figures to increase to around €2.3 billion for the full year, up from €2.183 billion last year, though this obviously depends on the prevailing economic conditions. Heidelberg expects to see its own costs rising, but is confident that its EBITDA margin will rise to at least 8.0 percent for the year, up from last year’s 7.3 percent. The company expects the net result after taxes to improve slightly on last year’s €33 million.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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