Meeting its targets in 2023/2024, and following a successful drupa show, Heidelberg is confident about its financial prospects in the 2024/25 financial year.
The company’s sales remained stable at around €2.4 billion this financial year (previous year: €2.435 billion). An adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of 7.2 percent was also maintained, said the company.
Heidelberg stated that the industrial inkjet printing collaboration with Canon, announced in Düsseldorf, is set to open up new growth areas. Overall, despite economic policy uncertainties, Heidelberg is expecting sales and the EBITDA margin for financial year 2024/2025 to match the previous year’s level.
‘We have taken a big step toward our goal of achieving sustainable profitability at Heidelberg. Even in economically uncertain times, we have remained resolutely on track, which gives us confidence,’ commented Heidelberg CEO Dr Ludwin Monz. ‘Moving forward, we are looking to open up further growth markets thanks to our collaboration with Canon in the industrial inkjet printing sector,’ he added.
Explaining the reason behind its maintained sales, the company said that the free cash flow of €56 million did not include any special items in the reporting year, such as the sale of non-operating assets. Adjusting the previous years’ free cash flow results for special items, the free cash flow for the financial year just closed is therefore the highest in over ten years. These figures, it added, highlight the success of the value creation program, which has improved the company’s financial resilience.
‘Despite difficult economic conditions, we have achieved our targets for the year. Heidelberg has performed solidly in financial terms. Our value creation program is a key step in creating a more future-proof company. In economically uncertain times, we are expecting stable business development,’ said Heidelberg CFO Tania von der Goltz.
In the context of its value creation program, Heidleberg has identified over 250 measures to boost productivity and strengthen its financial basis. Implementation is ongoing. The introduction of measures during the financial year just closed compensated for the pressures resulting from the downturn in demand and rising costs. Measures to optimise the net working capital also had a positive impact on the free cash flow.
Since financial year 2023/2024, when it accounted for 52 percent of sales, the packaging solutions segment of the company has been the largest area of business at Heidelberg. Its sales were roughly seven percent up on the previous year at around €1.2 billion, claimed Heidelberg.
The number of orders from the drupa trade fair led to a recovery in incoming orders at Heidelberg at the start of the new 2024/2025 financial year, which is expected to reach around €650 million in the first quarter of 2024/2025. Due to better utilisation of production capacities, short-time work at the German sites will end as early as June 2024.
Assuming the global economy does not see weaker growth than predicted by the relevant institutions, Heidelberg is expecting sales in financial year 2024/2025 to match the previous year’s figure 2023/2024 (€2.4 billion). A further supposition in this context is that there will be no substantial changes in key exchange rates for the company’s business activities. The adjusted EBITDA margin is also expected to remain at the previous year’s level 2023/2024 (7.2 percent).