Heidelberg has adopted a wide-ranging action package, as announced last year, for a short-term reduction in structural costs and long-term improvements in the company’s profitability. Focus on the profitable core business and systematic streamlining of the cost base are geared to delivering a €100 million improvement in EBITDA, excluding the restructuring result. At the same time, a return transfer of liquidity reserves from the trust fund will almost completely eliminate net debt, thereby significantly improving Heidelberg’s financial stability.
Heidelberg will discontinue individual products that earn far too little and significantly impact the company’s profitability with an annual loss totaling some €50 million. In digital printing, for example, the company noted that the market for the Primefire 106 product has grown much more slowly than anticipated because of the difficult industry and market environment. Similarly, in sheetfed offset printing, the very-large-format product range has been falling well short of sales targets because of a fundamental change in the market structure for this sub-segment.
To improve overall profitability as soon as possible, production in both businesses is to be discontinued by the end of 2020 at the latest. The aim is to focus Heidelberg consistently on profitable activities in order to secure strong operational performance and profitability under its own power, also when times are difficult.
Heidelberg’s chief executive officer Rainer Hundsdörfer said, “Heidelberg’s realignment is a radical step for our company that also involves some painful changes. As hard as it was for us to make this decision, it is necessary in order to put our company back on track for success. Discontinuing unprofitable products enables us to focus on our strong, profitable core. This is where we will further extend Heidelberg’s leading market position by leveraging the opportunities of digitalization. Going forward, we will continue to provide our customers worldwide with technologically leading digital solutions and services across the board.”
The Primefire was introduced in 2016 and shown at that year’s drupa. colordruck Baiersbronn, which operates throughout Europe, was the first pilot customer for Primefire 106.
