Interview
PRINTING
MUST BE
SMART An Exclusive Interview with Rainer Hundsdörfer, CEO Heidelberger Druckmaschinen AG
Past few months have been a roller coaster of events for Heidelberg. They made big announcements, some of them shocking, but it seems that the company, which still is the biggest press manufacturer in the world is on its way to financial stability. In order to make sense of Heidelberg’s recent controversial decisions we decided to talk to the man at the helm of the company and here is what he had to say:
MEPrinter September - October 2020
The market for print products remains stable with a worldwide print volume of more than 400 billion Euros annually
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Is Heidelberg financially healthy at the moment? Yes, we are. We are making rapid progress with the transformation initiated in November last year to increase profitability, competitiveness, and safeguard the future. Following the financial stabilization through the retransfer of €380 million from the trust assets of Heidelberg Pension Trust e.V. in March 2020 and the decision to divest from loss-making activities by the end of 2020, significant structural measures are now being implemented. We have already agreed with the works council on socially responsible solutions for the reduction of around 1,600 jobs worldwide. In June, a new operating model was launched which, with fewer management levels, leaner processes and a significantly improved customer focus, enables more efficient management of the profitable core business. Overall, the action package is designed to
improve Heidelberg’s profitability by € 100 million. We also believe that the program will strengthen our position in the ongoing difficult market environment. We are in the process to sell the Gallus Group in Switzerland, which operates in the label sector, to the Swiss company benpac Holding AG. The agreed purchase price of € 120 million will generate earnings in the mid-double-digit million Euro range in the current financial year. The next milestone in our ongoing financial stabilization and transformation process is the pay back of the remaining amount of € 150 million on the existing highyield bond (HYB), which has a term to maturity until 2022 and a coupon of 8 % p.a. We will make the payback before maturity in September 2020. The pay back will be funded from cash reserves and will unburden the financial result by approx. € 12 million per year. This gives us leeway for future investments and to shape the future of our company. We’re thus giving our liquidity a big boost, which will be particularly helpful during the coronavirus crisis. Overall, the company is thus financially more stable than it has been for years. History has not been kind to Heidelberg when it comes to digital printing. Back in 2000 was Nexpress project, which didn’t go anywhere and now
Primefire, which was supposed to be Heidelberg’s big break into digital printing, so what seems to be the problem? The Primefire is the best product in this segment at the moment. However, we had no choice but to realize that the market for it has not developed to date as we expected. We therefore decided to abandon production of the Primefire. This is the only sensible decision from an entrepreneurial point of view, given the fact that this segment is quite simply unprofitable. Continuing production would ultimately be at the expense of our profitable and world market-leading core business, since we would no longer be able to provide all the technological developments our customers need. The big press manufacturers have been diversifying since at least two decades ago, venturing into different areas of printing such as flexible packaging, security printing and so on and so forth, do you think at the moment Heidelberg product mix is a right one for the current state of the graphic arts market? Our focus now is the interests of our customers and their needs and a clear focus on our core business. Our core business remains printing. We support our customers in packaging and label printing as well as in commercial printing
