Press giant Heidelberg reports a steady start to the year with growth in net sales and results accompanied by a high demand for the newly established subscription model and the launch of series production of the Primefire digital press.
Incoming orders improved in the first quarter by six per cent and the previous year’s figure had benefited from the Print China trade show. The order backlog grew by 18 percent partly due to subscription contracts, particularly in terms of life cycle business, i.e. services and consumables.
The first quarter brought in the first revenues raised from subscription contracts, which generate recurrent sales over a term that usually lasts five years. However, Heidelberg also recorded growth in traditional business during the first quarter, with sales rising by nine per cent despite negative currency effects. The company believes that, had exchange rates remained similar, revenues would have risen by around 11 percent.
Heidelberg’s digital technology sector generated €665m ($1.16bn), increasing by 15 per cent from €272m from the corresponding period last year. Heidelberg says its digital segment benefited from higher sales in sheetfed and label businesses, especially in China. Rainer Hundsdörfer, chief executive officer at Heidelberg, says, “The strong customer demand for our new subscription portfolio and digital packaging printing presses has exceeded our expectations. Heidelberg is driving digitisation in the entire industry. The establishment of the new business models is proceeding to plan and will at first make a relatively modest contribution to net sales and result, albeit one that will increase significantly in the medium term.”
Dirk Kaliebe, chief financial officer at Heidelberg, says, “Our financing structure is very solid. We have low leverage and are maintaining liquidity reserves we can use to finance our planned investments in new business models and the company’s digital transformation.”
