New Heidelberg CEO sets out ambitious growth plan
Thursday, June 8, 2017
Heidelberg's new chief executive Rainer Hundsdörfer has outlined a five-year plan that would see Heidelberg return to being the "high-growth and profitable lighthouse of the industry".
It also revealed further details of its new digital strategy, first discussed at its annual results last month, when it announced a yearly sales boost after a strong Q4.
The deal for Fujifilm’s EMEA pressroom chemical plant is set to be completed in July and will add around €25m in sales to the group’s consumables division. The 70-staff operation is made up of two sites, one in Reutlingen, Germany and one in Kruibeke, Belgium.
Heidelberg said the acquisition is the next logical step after the buyout of Belgium-based consumables business BluePrint Products in 2014 and UK coating manufacturer Hi-Tech Coatings in 2008.
The move is Heidelberg’s second acquisition this year, after it picked up German software developer Docufy on 1 May. Hundsdörfer announced in February that the group would be ramping up its M&A strategy.
Ulrich Hermann, head of the newly formed Heidelberg Digital Business & Services (HDB) division, said that through its new portfolio the group was now “making a productivity promise to our customers”.
Speaking at its annual investor press conference at its Wiesloch-Walldorf site, Hundsdörfer revealed further details of the group’s new segmented structure, which comprises of HDB and Heidelberg Digital technology (HDT), implemented on 1 April.
HDT comprises sheetfed, post-press and label printing operations, and places priority on development, production and supply of digital technologies and products. it is headed by Stephan Plenz, previously board member for equipment.
HDB consists of consumables, services, digital print, digital solutions and remarketed equipment, placing priority on devising and marketing new business models. Digital print includes the Versafire, Omnifire, Primefire and Labelfire models.
The group is also looking to deviate from its current business model to "lifecycle contracts" incorporating a performance-based business model related to print production volumes, with an impression charge model similar to click charges. "Customers pay for their output, rather than their input", the firm said.
Hundsdörfer said the initiation of the structure marks the start of a new period of growth for Heidelberg.
“Over the next five years, Heidelberg will once again become a leading light in the sector, enjoying strong growth and profits,” he said.
Heidelberg has set itself ambitious growth targets to make net profits of at least €100m by 2022, a figure which currently stands at €36m. It is looking to boost sales by around €500m to top the €3bn mark and boost EBIDTA margins by up to 10%.
The sales increase breaks down as €200m from its LabelFire and PrimeFire digital packaging lines, along with Drupa-announced Push to Stop concept, €250m from consumables incorporating the Fujifilm buy, and €50m from Industry 4.0, incorporating the Docufy buy.
it plans to double its market share in digital printing, which currently stands at circa 5%.
It also announced plans to reduce process-related and structural costs by around €50m over the next five years and has entered into a consultation period to settle on where these cost reductions will come from.
The group’s new development centre at its Wiesloch-Walldorf site, incorporating a new R&D centre, is still due for completion in 2018.