Sales uptick in key EMEA region with growth in packaging segment
Despite the challenging and uncertain global economic climate, Heidelberger Druckmaschinen AG (HEIDELBERG) is well on track after six months of financial year 2023-2024 (FY 2023-24). The company registered a sales uptick in the key EMEA region with growth in the packaging segment.
After adjustment for exchange rate movements, the technology company achieved sales of €1.092 billion in the first half (H1)(1 April – 30 September, 2023) of the financial year, which matched the previous year’s figure of €1.120 billion. Incoming orders after six months totalled €1.184 billion after adjustment for exchange rate movements, which was also equivalent to the previous year’s €1.229 billion. The adjusted operating result (EBITDA) saw an improvement with H1 figure of €101 million, as against €92 million in the year earlier period. The corresponding adjusted EBITDA margin increased to 9.2 percent as against the previous year’s 8.2 percent.
Successful market launch of new technologies in packaging printing
Packaging and label printing is experiencing structural growth due to burgeoning worldwide demand for packaged goods. That being the case, the market launch of new technologies from HEIDELBERG for this growth segment was a big success. The Gallus One digital label press, for example, impressed at the major industry trade show LabelExpo, attracting a great deal of customer interest. The Boardmaster press, with its high productivity in packaging printing, also generated further sales. In parallel with this, incoming orders for the Packaging Solutions segment saw a significant increase of around 16 percent in H1. “Given the stable growth of packaging printing, we are continuously further expanding our portfolio in this sector,” says HEIDELBERG CEO Dr. 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 H1 remained clearly positive at €33 million. Compared with €44 million in the year earlier period, 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 compared with year earlier period
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 after six months was down on the previous year’s level of €-13 million, which had included special items amounting to around €52 million. “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 2023-24 figures forecast
The forecast for FY 2023-24 remains as published on 14 June, 2023. Assuming the global economy does not see weaker growth than predicted by the economic research institutions, the company is still expecting sales in FY 2023-24 to match the previous year’s figure of €2.435 billion. The adjusted EBITDA margin is also anticipated to remain at the previous year’s level of 7.2 percent.