Technology company Heidelberger Druckmaschinen AG (HEIDELBERG) has reported its financial performance for the first half of the fiscal year 2023/2024, indicating stability in a tough global economic environment.

The company’s performance has been buoyed by a slight improvement in sales in the EMEA region, primarily driven by growth in the packaging segment. Key highlights from their financial report reveal:

Steady sales in EMEA region

During the first half of the fiscal year (1 April – 30 September 2023), HEIDELBERG achieved sales of €1.092bn ($1.17bn) after adjusting for exchange rate fluctuations.

This figure closely matched the previous year’s sales of €1.120bn.

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Incoming orders for the same period reached €1.184bn after adjusting for exchange rate movements, remaining on par with the previous year’s level of €1.229bn.

Notably, the adjusted operating result (EBITDA) improved to €101m, compared to the previous year’s figure of €92m. The corresponding adjusted EBITDA margin rose to 9.2%, up from 8.2% in the previous year.

Successful market launch in packaging printing

HEIDELBERG’s successful entry into the packaging printing sector contributed to its positive performance. New technologies, such as the Gallus One digital label press and the Boardmaster press for high productivity in packaging printing, garnered significant attention from customers.

The Packaging Solutions segment witnessed a substantial increase of approximately 16% in incoming orders during the first half-year.

HEIDELBERG CEO Dr Ludwin Monz noted: “Given the stable growth of packaging printing, we are continuously expanding our portfolio in this sector.”

Positive impact of price adjustments

HEIDELBERG’s performance was also influenced by price adjustments to compensate for higher personnel, material and energy costs, which had a positive impact.

Despite these factors, the net result after taxes for the first half of the year remained positive at €33m, though it decreased compared to the previous year (€44m) due to higher tax expenditure, increased pension-related interest costs and the absence of positive special items.

Improved operating cash flow

The company reported a substantial improvement in operating cash flow, driven by effective management of inventories and receivables (working capital).

However, the free cash flow for the first six months was €–28m, down from the previous year’s level of €–13m, which included special items of approximately €52m.

HEIDELBERG CFO Tania von der Goltz emphasised the need for resources to drive growth, stating: “The current free cash flow situation underlines the necessity to use further impetus from our value creation programme to generate resources for growth in segments such as the lucrative digital printing sector.”

The analysis phase of this programme is ongoing and HEIDELBERG aims to achieve a positive free cash flow by the end of the financial year.

Outlook for FY 2023/2024

HEIDELBERG’s forecast for the financial year 2023/2024 remains unchanged from its previous announcement on June 14, 2023.

The company expects that if the global economy aligns with economic research institutions’ growth predictions, its sales for the fiscal year will match the previous year’s figure of €2.435bn.

The adjusted EBITDA margin is anticipated to remain at the previous year’s level of 7.2%, indicating confidence in the company’s outlook.