SOLID Q1 FOR HEIDELBERG ON PACKAGING

The world’s biggest press manufacturer Heidelberg says it has seen a good start to the new financial year, thanks to the recovery in Asia and continued growth in the packaging segment.

The technology company’s sales in the first three months (April 1 to June 30) climbed year-on-year from €530m to €544m. The adjusted operating result (EBITDA) of €42m was around €18m up on the adjusted figure for the corresponding quarter of the previous year. The corresponding EBITDA margin was 7.7 per cent, up from the previous year of 4.6 per cent.

The net result after taxes improved to €10m, double the previous year’s €5m. On a regional level, incoming orders grew strongly in Asia, but demand in other markets was muted.

In the Packaging Solutions segment, Heidelberg recorded particularly strong growth of around 25 per cent in incoming orders. “Heidelberg is strategically well positioned in its core market of printing and can offset restrained developments in other areas,” said CEO Dr Ludwin Monz.

The new Boardmaster webfed flexo press for productive packaging printing was unveiled in May, and the company already generated initial sales in the first quarter. Heidelberg says the demand for the new Gallus One in the growth area of digital label printing also confirms the market trend.

Free cash flow improved in the first quarter compared with the prior-year figure adjusted for special items, but remained negative overall compared with the previous year at minus €27m.

The reason for this was the absence of positive special items, as had been realised in previous years. “The quarterly result shows that our value creation programme, with which we aim to significantly increase our free cash flow, remains vital,” said Heidelberg CFO Tania von der Goltz. Under the programme, the company intends to continue to offset cost increases with price increases and maintain strict cost discipline.

Heidelberg has restructured its loans, and, at the end of July, it agreed a significant increase in the credit facility with its bank consortium. This now offers a syndicated credit line of €350m over a four-year period, with an option to extend for a further year. “The newly agreed financing structure underlines the financial market’s confidence in the strategic approach we have adopted to further boost the company’s financial strength and step up our investments in growth areas,” said CFO von der Goltz.

The forecast for financial year 2023/2024 remains. Assuming the global economy does not see weaker growth than predicted by the economic research institutions, and sales remain at the same level, Heidelberg is expecting the company’s development to remain stable.