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

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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.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital 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.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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