Heidelberg makes 'good progress'

By Jo Francis, Wednesday 10 February 2016

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Heidelberg’s burgeoning services division accounted for almost half of the firm’s sales in its latest quarterly results.

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Heidelberg: group has broken even after nine months

The world’s largest printing press manufacturer posted sales up 15% to €640m (£495m) in the three months to 31 December, and up 16% to €1.8bn for the first nine months of its financial year, including a €93m gain due to exchange rates.

Its services business, boosted by last year’s acquisition of PSG, accounted for €288m of Q3 sales and €866m for the nine-month period.

The firm improved its operating performance and doubled earnings before interest and taxes to €65m. After restructuring charges of €24m and interest and other costs of €42m Heidelberg broke-even at the pre-tax level and reduced net losses from €95m to €7m. 

Heidelberg described the results as “pointing in the right direction”.

Chief executive Gerold Linzbach said that Heidelberg’s portfolio of products and services was now “more closely geared toward stable market segments”.

“We’ve made good progress with our goal of ensuring long-term profitability,” he said.

Heidelberg expects to post a 2%-4% increase in sales for the full year, and an operating margin of at least 8%. Chief financial officer Dirk Kaliebe said the group was still on the lookout for suitable acquisitions.

Sales grew in Europe and North American, and were “stable” in Eastern Europe and Latin America. But business in China – Heidelberg’s biggest market – was described as “very subdued”.

Heidelberg UK managing director Gerard Heanue said the UK had performed well: “For the UK market we haven’t seen any ‘Drupa effect’ in terms of delayed orders. Sales will be at a similar or higher level to the prior year.”

Heanue also said the boom in its services business had been fuelled by the requirements of large-scale industrial printers: “Customers realise, especially those in the industrial world, that they need quick response and remote diagnostics, and they are willing to invest in that.”

Heidelberg said it would highlight its standing as a “driving force” behind the industry’s digitisation at the upcoming Drupa show, where it will focus on automation and integration.

It is already collecting data on 10,000 networked presses worldwide, paving the way for new data-based services.

Heidelberg’s share price rose by 11.7% to €1.84 on the results.

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