Speaking at Heidelberg’s AGM meeting at the end of last week (23 July), Hundsdörfer said that Heidelberg’s turnaround was almost complete, with the transformation programme instigated prior to the Covid-19 crisis, and accelerated because of it, bearing fruit.
The event was held virtually from its Wiesloch/Walldorf site.
“Our transformation program was and is successful. As a result, Heidelberg has massively reduced the break-even point – in two years at the latest, it should be around €1.9bn. And we are back on [a] solid financial footing,” he stated.
Hundsdörfer pointed out that Heidelberg’s share price was up 200% since the previous AGM, although at that time it had been at a record low.
“This is very positive, but by no means a reason to pat each other on the back or rest on our laurels. My colleague on the management board, Marcus Wassenberg, and I want to and will make Heidelberg a more valuable and value-creating company. And there is still a lot to do here. To achieve this, we must and will deliver what we promise.”
Regarding the future outlook, he commented: “We are only at the beginning of an enormous growth spurt from new innovative offerings, for example in e-mobility, and will expand more outside our core activities in the future.
“Heidelberg's well-known technological excellence will also be a strong driver of growth in the megatrends of automation and the platform economy. In the future, we will increasingly focus on interesting growth markets and are confident that we can be successful here with our technological excellence, similar to e-mobility.”
Hundsdörfer also acknowledged that the business had benefited from various one-off gains in the 2020/21 financial year such as its pension reorganisation and disposals of subsidiaries, and said such moves needed to be compensated for in the future by “actual operating improvements”.
That said, the current financial year will also benefit from land sales, including the mega deal announced last month to sell the site of its Brentford HQ in the UK to a housing developer.
“However, compared with the non-recurring income from the previous year, these are of a smaller volume. We will therefore show a significantly improved earnings quality in the current year,” Hundsdörfer said.
“Now we need to make a gradual transition from a restructuring story to a growth story - and a profitable one at that,” he noted.
“We are being helped in this by the spirit of optimism that can be felt everywhere and that is increasingly being experienced in our company – and not just since the [Covid-19] incidence figures began to fall. Heidelberg has finally changed! And I am happy to repeat this word, because in the past, for various reasons, we have not succeeded in tying the knot to real change and leading Heidelberg to real prospects.
“Ladies and gentlemen, we are developing from a printing press supplier into a technology company,” he stated.
Regarding the firm’s ambitions, he said Heidelberg planned to grow packaging printing sales (including Gallus and some new products specially developed for the Asian market) from around €860m (£736m) to more than €1bn by the 2026 financial year.
Heidelberg also plans to expand its Chinese production site and increase the amount of parts produced there to over 85%. “And we will also increasingly rely in China on the lifecycle business already successfully established in the rest of the world. There is already promising demand there,” Hundsdörfer noted.
Sales in China are targeted to grow to €360m, from €300m, by 2026.
In digital business models, including Heidelberg Plus, Prinect in the cloud, and the Zaikio open platform, the group aims to dramatically expand sales from €200m to €450m in the next five years.
Heidelberg’s E-mobility operation has been spun-off into a separate limited company, offering “further options for expansion” including strategic partnerships, with more details to come this year.
“The prospects for e-mobility make me almost euphoric,” Hundsdörfer said.
“Sales are expected to increase annually by a mid-double-digit percentage. And this field of activity serves as a blueprint for us to bring further innovative technologies to market and series maturity. One example is printed electronics.”
Concluding his address, Hundsdörfer stated: “Heidelberg is back”.
Shareholders approved the agenda items, including the appointment of Dr Fritz Oesterle, a lawyer and private equity consultant, as a shareholder representative on the group’s supervisory board.
Heidelberg’s share price has risen by nearly 12.6% in the last five days, to €2.04 (52-week high: €2.14, low: €0.47).
