The manufacturer had already issued a cautious outlook for 2019/20. In a trading statement issued yesterday evening, it said business in the “traditionally weakest quarter” had been hit by the economic downturn, particularly in Germany, with customers reluctant to invest.

The group’s share price fell by nearly 15% to €1.14, a five-year low, following the announcement (52-week high: €2.66, low: €1.11).

Sales in the three months to 30 June were down by €39m (£35m) to €502m. This was despite a boost from Print China orders, as well as service, supply and subscriptions contracts growing by around 10% to €80m. Incoming orders slumped by €50m at €665m.

The after-tax loss for the period more than doubled to €31m (prior year loss: €15m), while free cash flow was negative €83m, compared to negative €45m in 2018/19.

Heidelberg has been forced to downgrade its EBITDA margin targets for the year as a result, and is now expecting margins of 6.5%-7% compared to the previous expectation of 7.5%-8%. It said the reluctance to invest was also leading to an equipment product mix with “lower overall profitability”.

The company is reviewing investment plans, will “significantly increase cost discipline” and look at short-term flexible working to stabilise the situation.

A spokesman told PrintWeek: “We have a list of investments and we have to prioritise things that are absolutely necessary, or can be shifted to a future date.

“All approaches to our digital transformation stay in place, and that’s an important message to our customers. We are definitely convinced about our strategy, and our recurring revenue business model is increasing.”

In the previous financial year Heidelberg made a major investment of around €50m in its new Innovation Center, housed in a former production hall at its Wiesloch site.

The full results for Q1 will be released on 6 August. 

Separately, Heidelberg has announced the development of a new app-based vendor management tool that allows it to “manage the entire consumables logistics chain” for its subscription customers.

German printer Lensing Druck, one of the first customers for the subs scheme, has been piloting the app. Managing director Robert Dembinski said: “Since the launch in mid-May, our inventory management has been getting better and better. Optimised goods delivery means Heidelberg can plan supplies of the materials required virtually in real time while also conserving resources.”