Jetfire 50 from HEIDELBERG: The cooperation with Canon will further expand business in digital industrial commercial printing.
Heidelberger Druckmaschinen AG (HEIDELBERG) has commenced the new financial year 2024/2025 with significant growth in incoming orders. Following the successful drupa industry trade fair, the technology company's incoming orders for the first quarter (April 1 to June 30, 2024) surpassed its own expectations, reaching €701 million compared to the previous year's €591 million. This marks the highest order value since 2016, providing a solid foundation for the entire financial year with a substantial order backlog of €923 million (compared to €652 million on March 31). Europe (+25%) and the Americas (+30%) experienced notable growth, while Asia's growth was slightly lower at 3% due to the strong performance in the previous year driven by Print China.
"The robust rebound in our order intake instills us with great confidence as we look ahead to the entire financial year," stated Jürgen Otto, CEO of HEIDELBERG. "The favorable order backlog resulting from the drupa trade fair is expected to drive increased sales in the upcoming quarters compared to Q1. Concurrently, we are addressing our cost structure and personnel expenses, which are currently deemed excessive."
Forecast confirmed despite after-effects of the order slump
As anticipated, sales in the first quarter amounted to €403 million, lower than the previous year's figure of €544 million, primarily due to a cautious approach towards investments ahead of drupa. The adjusted operating result (EBITDA) decreased by approximately €51 million to €-9 million compared to the adjusted figure for the same quarter in the previous year. Consequently, the corresponding EBITDA margin stood at -2.3% (compared to 7.7% in the previous year). The net result after taxes declined to €-42 million (compared to €10 million in the previous year). As expected, the free cash flow was negative at €-103 million (compared to €-27 million in the previous year) due to the quarterly loss, the rise in inventories resulting from the high order intake, and seasonal effects.
"Heidelberg experienced the repercussions of the decline in orders from the third quarter of 2023/2024 in the first quarter," stated Tania von der Goltz, CFO. "Although we anticipate enhancements in sales and earnings in the latter half of the year, we remain committed to optimizing our costs and efficiency. Our goal is to attain the same level of performance as the previous year in the current fiscal year."
In the Print Solutions segment, HEIDELBERG saw significant growth in incoming orders of approximately 21% driven by drupa-related activities. However, sales in this segment decreased by around 23% from April to June, primarily due to lower order intake in the third quarter of the previous year. On the other hand, the Packaging Solutions segment experienced a 17% increase in incoming orders, while sales in this segment declined by 29% as anticipated.
At drupa, HEIDELBERG positioned itself as a comprehensive solution provider for the printing industry, offering both offset and digital solutions. The collaboration with Canon is specifically aimed at tapping into the expanding market of digital industrial commercial printing. HEIDELBERG's objective is to substantially boost its sales in this sector over the medium term.
Based on the robust order intake, Heidelberger Druckmaschinen AG (HEIDELBERG) confirms the forecast for the 2024/2025 financial year. Assuming that the global economy aligns with the predictions of economic research institutes and does not experience slower growth, HEIDELBERG anticipates a consistent earnings trajectory with sales remaining stable.
