Heidelberg closes fiscal year 2021-22

The highest order backlog in 10 years

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Heidelberg
Heidelberg successfully closes fiscal year 2021-22 with after-tax profit. Photo Heidelberg

According to preliminary calculations (unaudited), Heidelberger Druckmaschinen AG (Heidelberg) achieved its own forecast for sales and EBITDA margin for the past financial year 2021/22 from 1 April 2021 to 31 March 2022) and returned to profitability. At €2.183 billion (approximately Rs 17,831 crore), sales were around 14% higher than the previous year, thus meeting the target of at least €2.1 billion. The reporting period showed a clear recovery from the previous year, which had been particularly hard hit by the effects of the Covid-19 pandemic. The noticeable improvement in the investment climate was reflected in particular in the increase in incoming orders received by more than €450 million (approximately Rs 3,675) crore year-on-year to €2.454 billion (approximately Rs 20,044 crore).

Both commercial printing and packaging printing recorded significant year-on-year growth in the past financial year, with the increase in commercial printing being stronger due to the particularly weak comparative period. Demand picked up across almost all products and in all regions, with investments in new presses being the main driver. As of 31 March 2022, the order backlog stood at around €900 million, the highest level in more than 10 years (previous year: €636 million).

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Strong business development in the e-mobility segment

In percentage terms, the still-young business unit saw the strongest growth in the electromobility market. Demand for charging stations for electric vehicles, known as wallboxes, picked up strongly, with sales increasing by more than 120% to around €50 million in the past fiscal year. Despite increased investments in growth, the operating margin increased significantly compared to the previous year. Having started out as a supplier to the automotive industry, Heidelberg is now one of the suppliers in this sector, with over 165,000 units sold.

“In a challenging environment, we have grown in all core business areas, both in terms of sales and earnings,” said Dr Ludwin Monz, chairman of the Executive Board of Heidelberg. “The high order backlog resulting from the noticeable market recovery in the past fiscal year provides a good foundation for sales in the new fiscal year. However, the effects of the war in Ukraine are currently presenting us, like most other companies, with challenges. We have to deal with the economic uncertainty and the significant increase in raw material and energy prices.” Monz, who took over as chief executive officer on 1 April 2022, adds with regard to the further development of Heidelberg, “Heidelberg has been extremely successful in coming out of the trough of the Covid-19 pandemic. We will continue to work on strengthening our core business in the printing sector. This will free us up to expand into new markets at the same time.”

The positive development of sales and a significant improvement in cost efficiency also had a strong impact on the development of earnings. EBITDA increased to €160 million in the financial year (previous year: €95 million). In addition to the operating improvements, income from asset management, in particular the sale of docufy (around €22 million) and a property in the United Kingdom (around €26 million), also made a positive contribution. Adjusted for comparable effects from the previous year, the operating improvement underlying EBITDA alone amounted to more than €100 million. The EBITDA margin in relation to sales was around 7.3%, well above the previous year’s figure of 5.0% and within the target corridor.

“In recent years, we have significantly reduced our cost base, turned free cash flow positive and completely eliminated net financial debt. This is benefiting us today in these uncertain times,” said Marcus A. Wassenberg, the company’s chief financial officer. “However, we must not rest on our laurels and must continue to work on increasing our profitability.”

As expected, the preliminary net result after taxes improved significantly year-on-year to €33 million in fiscal 2021/22 (prior year: €-43 million). Mainly as a result of the sharp reduction in net working capital and proceeds from asset disposals in the reporting period, free cash flow for the full year is clearly positive at €88 million.

The company will publish its annual financial statements and annual report for fiscal year 2021-22 on 9 June 2022.

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