Heidelberg UK ahead of budget
By Simon Nias Thursday, 19 July 2012
Heidelberg's UK sales arm is looking forward to a strong 2012 after avoiding the Q1 sales dip that blotted the group result, according to managing director Gerard Heanue.
Following the group’s preliminary first quarter results announcement last Friday (13 July), Heanue told PrintWeek that UK sales were ahead of budget for the quarter.
This contrasts markedly with the group result, which saw strong incoming orders off the back of Drupa marred by the worst sales performance since September 2009.
Incoming orders surged to €890m (£698m), their highest since June 2008, while sales fell to €520m, leading to an operating loss excluding special items of €58m.
The manufacturer attributed the poor group performance in what is almost always its slowest sales quarter to "customers’ reluctance to invest in the run-up to Drupa".
However, Heanue said: "We’re slightly different from the rest of Heidelberg in that we saw significant order intake from December onwards, continuing right into Drupa.
"So our sales for the quarter are ahead of budget and we have a strong order book from Drupa where we came fourth in terms of sales, excluding dealer markets."
Heanue added that the press manufacturer had learnt from past mistakes, when bumper trade show orders haven’t always converted into similar sales performance.
"We didn’t put in any really soft orders this time, whereas at trade shows in the past I think all manufacturers have been guilty of playing games," he explained.
"We’ve already converted almost 95%, with the remaining 5% to be converted in the next two to three weeks, so it’s not been an issue."
Comparing the group spike in incoming orders from Drupa with the corresponding spike four years ago reveals a near 23% dip, from €1.2bn in 2008 to €890m in 2012.
Whilst part of this could be attributed to a more disciplined approach in determining what counts as an order, the bigger factor has been the shrinking of the print industry.
"Our orders were down about 15-20% on four years ago, which is what I would expect as a result of the significant number of companies going bust in 2008/09," said Heanue.
Meanwhile, printers that survived but avoided significant capex in the past four years are now finding it difficult to delay investment much further, according to Heanue.
"The XL presses we’re selling now are more productive than the old SM’s and that is setting the price that print is sold out," he added.
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