Heidelberg sells CERM, reports on Q1
Thursday, August 13, 2020
Heidelberg has sold its CERM narrow-web MIS subsidiary to an MBO team in an €8m (£7.23m) deal.
The likely sale of Belgium-headquartered CERM had been telegraphed when Heidelberg sold its Gallus label printing business for €120m in July.
Heidelberg acquired CERM in the spring of 2001.
Geert Van Damme, CERM's CEO and member of the MBO team, commented: “We are constantly focusing on existing and new customer needs and technological evolution. To explore our full potential and fuel that growth, we needed to regain independence, and welcome additional distribution and support channels.”
CERM and Heidelberg will continue to work together to develop and distribute the Prinect Business Manager software that Heidelberg sells to commercial printers.
“All existing Heidelberg customer contracts and support channels remain in place,” CERM stated.
Van Damme added: “We highly value the cooperation throughout the years and will continue to collaborate with Heidelberg sales and service units. We are also looking forward to expanding our deep industry expertise offering in the label and packaging market as an independent, innovative, and agile niche player through additional sales and service channels.”
The sale was announced alongside Heidelberg’s Q1 results. The press manufacturer said that its transformation and restructuring programme had helped the group “successfully counter the huge operational pressures brought by the Covid-19 pandemic”.
In the three months to 30 June incoming orders were down 44% at €346m while sales were down by more than a third, falling from €520m to €330m.
Heidelberg said June had seen an improvement in trading that had continued during July.
EBITDA prior to restructuring charges was €60m (2019: €14m) thanks to the €73m gain from revamping its pension plans.
Restructuring charges were €20m.
Heidelberg was back in the black at the bottom line in Q1, posting a €5m net result after taxes, compared to the prior year’s €31m loss at the same stage.
The firm said that precise forecasts about how the market would develop remained “difficult” due to the pandemic, but it pointed to a number of positive trends and insights thanks to the performance data gleaned from its installed base.
“This data clearly shows that business in China – the biggest single market for Heidelberg – is picking up speed and is already surpassing last year’s level. Other markets are also showing the first signs of recovery in terms of print volumes, which is cause for cautious optimism as regards the second half of the financial year.” The firm stated.
Heidelberg expects to be loss-making for the full year, but “significantly better” than in 2019/20, and has set a target of achieving an EBITDA margin prior to restructuring costs that will “at least match” the prior year figure.