Heidelberg
The new Peak Performance generation of the Speedmaster XL 106 offset press had its world premiere at drupa 2024. Its productivity is up to 20% higher than the previous generation

There are the cold hard numbers that Heidelberg is projecting of the just ended financial year and the coming year and then the sheer crowds and anecdotal reports of various equipment sales at its drupa stand. While the numbers are mostly creditable and have largely met the planned targets as sales remained stable at around € 2.4 billion they are slightly lower than the previous year’s € 2.435 billion. An adjusted EBITDA margin of 7.2% was also maintained and the free cashflow of € 56 million excluding special items such as the sale of non-operating assets, also points to stability.

The company says in its post-drupa press release that its highly successful showing at drupa gives it confidence about the prospects for FY 2024-25. The high level of global visitors at its stand and their interest in its current offerings and innovations has apparently, “led incoming orders to recover further still at the start of the new financial year.” These are expected to reach around € 650 million in the first quarter of 2024/2025. This will lead to better utilization of production capacities and the company says that short-time work at the German sites will likely end as early as the end of this month (June 2024).

It is reliably learned from industry experts at drupa that the industrial inkjet printing collaboration with Canon announced in Düsseldorf, has led to a respectable number of deals for the B3 inkjet being signed at the show. This is very interesting for the Indian market to which Canon has already sold and installed at least a pair of these sheetfed inkjet presses and established the technology. It is also the segment (commercial printing and book production) in which Heidelberg has been losing market share in India according to reasearch by IppStar (www.ippstar.org). 

Packaging business at Heidelberg expected to keep growing

Heidelberg keeps saying that since financial year 2023/2024, when it accounted for 52% of sales, the Packaging Solutions segment has been its largest area of business at Heidelberg. Its sales were roughly 7% up on the previous year at around € 1.2 billion. However, the company quite naturally does not give the overall figures or estimates of the growth in this segment or that of its competitors, in which it has lost ground in some markets. 

Heidelberg
Heidelberg is intending to extend the new Boardmaster inline flexographic web printing system’s range of applications to the growth segment of flexible papers with barrier properties

Nevertheless, with the new Peak Performance Speedmaster XL 106 offset press premiered at drupa and shown running at 21,000 sheets an hour the 20% higher productivity mantra is likely to maintain and attract new interest in the monocarton industry. The Masterwork finishing and converting machines at drupa showed better integration between Heidelberg and its largest shareholder. The automation ancilliaries demonstrated add to the confidence of the company’s larger customers – a considerable footprint especially in the developed markets. 

The company showed modules of its web-fed Boardmaster packaging press at the show and the full running press to visitors taken to its Weisloch factory. This press is likely to add to the company’s competitive impact, especially as it says it is working on its developments to print on paper substrates designed as an alternative to flexible plastic packaging – already a noticeable sustainability shift or trend. 

At the same time, the company’s inkjet label presses and the modular concepts talked about at the show could take this established technology beyond just labels and further into the flexible packaging arena including coated paper substrates with improved barrier properties. It helps that Heidelberg was able to project and leverage the capabilities of its Prinect workflow, front-end and automation software – possibly one the company’s best assets.

Resilient outlook for FY 2024-25

Nevertheless, despite having one of the busiest stands at drupa24, and the diverse pieces of the printing, finishing, converting and production process, its strong global footprint and spare parts and servicing network, the company is being quite realistic about its prospects in the coming financial year. It is essentially projecting resilience – a quality that should not be taken lightly in an uncertain geopolitical world.

Heidelberg
Available since drupa 2024, the new Jetfire 50 inkjet press from Heidelberg in the B3 sheet format

Despite economic policy uncertainties, Heidelbergis expecting sales and the EBITDA margin for financial year 2024-25 to match the previous year’s level. The final published results of FY 2024-25 will be released at the end of June. “We have taken a big step toward our goal of achieving sustainable profitability at Heidelberg. Even in economically uncertain times, we have remained resolutely on track, which gives us confidence,” said the outgoing Heidelberg CEO, Dr Ludwin Monz, adding, “Moving forward, we are looking to open up further growth markets thanks to our collaboration with Canon in the industrial inkjet printing sector.”

Apart from this collaboration, several value creation and cost cutting programs are in place according to the company which is expecting stable business development. The company has also optimized its working capital and is expecting further improvement in net working cashflow which as already the highest in the past decade. 

The company states, “Assuming the global economy does not see weaker growth than predicted by the relevant institutions, Heidelberg is expecting sales in the Financial Year 2024-25 to match the previous year’s figure 2023/2024 (€ 2.4 billion). A further supposition in this context is that there will be no substantial changes in key exchange rates for the company’s business activities. The adjusted EBITDA margin is also expected to remain at the previous year’s level 2023/2024 (7.2%).”

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As we present our 2024 publishing plan, India’s real GDP growth for the financial year ending 31 March 2024 will exceed 6%. The packaging industry growth will match the GDP growth in volume terms and surpass it by at least 3% in terms of nominal growth allowing for price inflation in energy, raw materials, consumables, and capital equipment.

The capacity for flexible film manufacturing in India increased by 45% over the past four years. With orders in place, we expect another 20% capacity addition in 2024 and 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels are growing similarly. As the consumption story returns over the next six months, we expect demand to return and exceed the growth trajectory of previous years. The numbers are positive for most of the economies in the region – and as shown by our analytics, our platform increasingly reaches and influences these.

For responsible and sustainable packaging, with its attendant regulations and compliances, there is significant headroom to grow in India and the region. Our coverage includes the entire packaging supply chain – from concept to shelf and to waste collection, sorting, and recycling.

We target brand owners, product managers, raw material suppliers, packaging designers and converters, and recyclers. This is a large and complex canvas – the only thing that can work is your agile thinking and innovation together with our continuous learning and persistence.

The coming year looks to be an up year in this region, and this is the right time to plan your participation and marketing communication – in our rich and highly targeted business platform with human resources on the ground. Share your thoughts and plans to inspire and mobilize our editorial and advertising teams!

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– Naresh Khanna (25 October 2023)

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Naresh Khanna
Editor of Indian Printer and Publisher since 1979 and Packaging South Asia since 2007. Trained as an offset printer and IBM 360 computer programmer. Active in the movement to implement Indian scripts for computer-aided typesetting. Worked as a consultant and trainer to the Indian print and newspaper industry. Visiting faculty of IDC at IIT Powai in the 1990s. Also founder of IPP Services, Training and Research and has worked as its principal industry researcher since 1999. Author of book: Miracle of Indian Democracy. Elected vice-president of the International Packaging Press Organization in May 2023.

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