Heidelberg says it has reason to expect a strong second half to its financial year based on incoming orders rising over the same period last year.
Incoming orders in the first half of the year are up 7.4 per cent. Jürgen Otto, chief executive officer at Heidelberg, says, “Heidelberg is starting a very strong second half of the year. We are now ramping up the utilisation of our production capacities so we can work through our order backlog in the third and fourth quarters quickly and profitably.”
“The forecast sales volume for new machines has already been almost entirely met with orders and our production operations are running at full capacity. We can be confident that we will achieve our targets for the year.”
Heidelberg’s Asia Pacific region incoming orders recorded the clearest growth in the first six months of the current financial year, increasing by approximately 10 per cent. Based on strong order levels, the company anticipates an increase in sales in the second half of the current financial year in particular.
When adjusted for special items, the EBITDA margin in the first six months of financial year 2024/2025 was 3.4 per cent (same period of previous year: 9.2 per cent) and was impacted in particular by lower sales in Q1 and by expenses related to drupa. Strict cost discipline had a positive impact in the reporting period.
During the period under review, there were no special items that require adjustment. Compared to the same period of the previous year, the result after taxes after six months dropped in line with the lower adjusted EBITDA.
Tania von der Goltz, chief financial officer at Heidelberg, says, “Our active cost management is increasingly bearing fruit by considerably improving free cashflow over the course of the year.
“Consistent cost control over the coming months will play a big part in the success of the current financial year. Furthermore, the anticipated improvements in results in the second half of the year will have a positive impact on the free cash flow.”
Packaging solutions segment remains growth driver
Compared to the same period of the previous year, the packaging solutions segment increased incoming orders in the first half of the year by around 9.7 per cent, contributing approximately 53 per cent to the total volume.
Heidelberg says megatrends in the packaging market are first and foremost the growing demand for packaging that is both sustainable and high-quality. It adds that this is where the positioning of Heidelberg a systems integrator and total solution provider has a positive impact, helping to further expand its very strong position in the packaging market.
The company also anticipates further growth opportunities in China due to its location benefits.
Beyond the packaging business, Heidelberg wants to capitalise on other strengths. The company is characterised by a high export ratio, as more than 80 per cent of its business is generated outside of Germany. In particular, the company sees further growth opportunities in China and the Asia-Pacific region thanks to local production and a very strong market position.
Beyond Asia, Heidelberg benefits globally in the service business from a large installed base of machines that are connected to Heidelberg via a cloud. Networking allows the efficiency of the systems to be improved, preventive maintenance to be planned and software updates to be installed.
Taking into account the expectations and assumptions published and presented in the 2023/2024 management report, the company continues to expect sales for financial year 2024/2025 to be in line with the previous year’s figure. The adjusted EBITDA margin is also expected to be similar to the previous year’s figure (previous year: 7.2 pe rcent).
The high order backlog resulting from the successful drupa trade fair and the continuous focus on margins and costs will provide a sound basis for the achievement of the targets. In future, the focus will primarily be on strategic growth measures in the packaging, industry and service segments, as well as further cost reductions.
