Heidelberg closes year with big order backlog

In its unaudited accounts, press giant Heidelberg achieved its own forecast for sales and EBITDA margin for the past financial year 2021/22, and returned to profitability.

At €2.2bn, sales were around 14 per cent higher than the previous year, meeting the target of at least €2.1bn. The reporting period showed a clear recovery from the previous year, which had been particularly hard hit by the effects of the Covid-19 pandemic.

As expected, preliminary net result after taxes improved significantly year-on-year, to €33m in fiscal 2021/22, compared to the prior year’s €43m loss.

The noticeable improvement in the investment climate was reflected in particular in the increase in incoming orders received by more than €450m year-on-year, to €2.45bn.

Both commercial printing and packaging printing recorded significant year-on-year growth in the past financial year, with the increase in commercial printing being stronger due to the particularly weak comparative period. Demand picked up across almost all products and in all regions, with investments in new presses being the main driver. As of 31 March, the order backlog stood at around €900m, the highest level in more than 10 years, and virtually 50 per cent higher that the previous year of €636m.

"In a challenging environment, we have grown in all core business areas, both in terms of sales and earnings," said Dr Ludwin Monz, chairman of the Executive Board of Heidelberg. "The high order backlog resulting from the noticeable market recovery in the past fiscal year provides a good foundation for sales in the new fiscal year. However, the effects of the war in Ukraine are currently presenting us, like most other companies, with challenges. We have to deal with the economic uncertainty and the significant increase in raw material and energy prices.”

Monz, who took over as CEO on April 1 this year, adds "Heidelberg has been successful in coming out of the trough of the Covid-19 pandemic. We will continue to work on strengthening our core business in the printing sector. This will free us up to expand into new markets at the same time."

The positive development of sales and a significant improvement in cost efficiency also had a strong impact on the development of earnings. EBITDA increased to €160m in the financial year, the previous year was €95m. Adjusted for comparable effects from the previous year, the operating improvement underlying EBITDA alone amounted to more than €100m. The EBITDA margin in relation to sales was around 7.3 per cent, well above the previous year's figure of 5 per cent and within the target corridor.

"In recent years, we have significantly reduced our cost base, turned free cash flow positive and completely eliminated net financial debt. This is benefiting us today in these uncertain times," said Marcus Wassenberg, the company's CFO. "However, we must not rest on our laurels and must continue to work on increasing our profitability."

Mainly as a result of the sharp reduction in net working capital and proceeds from asset disposals in the reporting period, free cash flow for the full year is clearly positive at €88 million.

In percentage terms, the biggest growth came in the electromobility market. Demand for charging stations for electric vehicles, known as wall-boxes, picked up strongly, with sales increasing by more than 120 per cent to around €50m in the past fiscal year. Despite increased investments in growth, the operating margin increased significantly compared to the previous year. Having started out as a supplier to the automotive industry, Heidelberg is now one of the major suppliers in this sector, with 165,000 units sold.