Despite the difficult global economic situation, Heidelberg says it is well on track after six months of the financial year 2023-2024. This is the result of a slight improvement in sales in the key EMEA region thanks to growth in the packaging segment. After adjustment for exchange rate movements, the technology company achieved sales of 1.092 billion Euros in the first half-year (April 1 – September 30, 2023), which matched the previous year (1.120 billion Euros). One Euros is equivalent to US $1.07, according to present market rates.
Incoming orders after six months totaled 1.184 billion Euros after adjustment for exchange rate movements, which was also equivalent to the previous year’s level (1.229 billion Euros). The adjusted operating result (EBITDA) was an improvement on the same period of the previous year, with the half-year figure amounting to 101 million Euros (adjusted result for previous year: 92 million Euros). The corresponding adjusted EBITDA margin increased to 9.2%(previous year: 8.2%).
New technologies in growth sector of packaging printing
Packaging and label printing is experiencing structural growth due to burgeoning worldwide demand for packaged goods, the company said. That being the case, the market launch of new technologies from Heidelberg for this growth segment was a big success, it said.
For example, the Gallus One digital label press impressed at the major industry trade show LabelExpo and attracted a great deal of interest from customers. The Boardmaster press for high productivity in packaging printing generated further sales. In parallel with this, incoming orders for the packaging solutions segment saw a significant increase of around 16%in the first half-year. “Given the stable growth of packaging printing, we are continuously further expanding our portfolio in this sector,” says Heidelberg CEO Ludwin Monz.
Besides effects associated with the product and country mix, price adjustments to compensate for higher personnel, material, and energy costs have also had a positive impact. The net result after taxes for the half-year remained clearly positive at 33 million Euros. Compared with the previous year (44 million Euros), higher tax expenditure, increased pension-related interest costs, and the lack of positive special items had a bearing on the result.
Improved operating cash flow
The cash generated from operating activities (operating cash flow) improved substantially, in particular due to rigorous management of inventories and receivables (working capital). Despite this positive development, the free cash flow of –28 million Euros after six months was down on the previous year’s level ( –13 million Euros), which had included special items amounting to around 52 million Euros . “The current free cash flow situation underlines the necessity to use further impetus from our value creation program to generate resources for growth in segments such as the lucrative digital printing sector,” says CFO Tania von der Goltz. The program’s analysis phase is ongoing. Heidelberg is still planning to achieve a positive free cash flow at the end of the financial year.
FY 2023-2024 half-year figures confirm forecast
The forecast for financial year 2023-2024 remains as published on June 14, 2023. Assuming the global economy does not see weaker growth than predicted by the economic research institutions, the company is still expecting sales in financial year 2023/2024 to match the previous year’s figure (2.435 billion Euros). The adjusted EBITDA margin is also anticipated to remain at the previous year’s level (7.2%).