Heidelberg board down to two after another departure
Tuesday, February 18, 2020
Heidelberg has announced the shock departure of its ‘digital transformation’ evangelist Dr Ulrich Hermann, with the firm’s management board reduced to just two people as a result.
Hermann joined Heidelberg in November 2016 at the same time as Rainer Hundsdörfer was appointed as the group’s new CEO.
Both men were industry outsiders.
At the time Hermann was described as “an expert in changing business models into the digital world” and he has spearheaded the introduction of the manufacturer’s subscription model during his time at the business.
Hermann will officially step down at the firm’s financial year-end in March.
In future the management board at the €2.49bn-turnover company will comprise of CEO Hundsdörfer and recently appointed CFO Marcus Wassenberg, with a new ‘Executive Committee’ becoming responsible for “cross-product customer solutions and the operational functions”.
“By merging our management board divisions and setting up an Executive Committee, we aim to make our internal processes even more efficient so that we can drive forward the ongoing realignment of Heidelberg with even more vigour," Hundsdörfer said.
Further details about the composition of the Executive Committee were unavailable at the time of writing.
Hermann’s departure comes after fresh chairman – and digital transformation expert – Martin Sonnenschein took up his role in December.
In January the manufacturer downgraded its sales and profits forecasts for the second time. Credit rating agency Moody’s subsequently downgraded Heidelberg’s rating citing concerns about the firm’s liquidity and the likelihood that a continuation of challenging market conditions could impede Heidelberg’s restructuring efforts.
In a statement, Sonnenschein praised Hermann for shaping the further development of Heidelberg “with innovative impetus and valuable contributions”.
“With his important pioneering work in the realignment of the company, the successful introduction of digital business models in the IoT sector, the subscription business and the establishment of the Heidelberg Digital Unit (HDU), he has laid a decisive foundation for the future direction of the company. Following the strategic concept and entrepreneurial development work, further implementation can now be carried out by the operational management. With the new management structure, we will now use and drive forward the opportunities arising from changed business models, technological change and new customer requirements," he said.
The share of recurring sales from subscription models accounted for about 13% of Heidelberg’s order backlog at the end of last year. The group’s target is for a third of sales to come from this type of activity in the medium term, with the intention of making the business less susceptible to economic fluctuations.
An industry source commented: “Hundsdörfer and Hermann were supposed to provide a transformational model that would see Heidelberg making money again and turn the business around.
“Hermann has spent a fortune on the Heidelberg Digital Unit and was seen as the next CEO before this happened, which suggests the new chairman is not happy with what he’s found.”
Shares in Heidelberg have been on the slide this week, and were down at €0.90 at the time of writing (52-week high: €1.79, low: €0.84).
Hermann had also taken on some of the responsibilities of Heidelberg’s longest-serving board member, chief technology officer Stephan Plenz, whose departure was announced in November.
Plenz stepped down in December, earlier than originally announced.