Machinery and plant engineering – a flagship of the German economy – had to accept significant declines in orders last year. According to current figures from the German Engineering Federation (VDMA), order intake fell by 12% in 2023.

The Heidelberger Druckmaschinen AG is also affected by this order slump. Here, order intake has dropped by almost 9% to 1.69 billion euros in the third quarter of the 2023/24 financial year (October to December 2023) after a good first half year (April to September 30).

The company attributes the order decline to the weaker economic environment. In addition, some customers are also waiting for short-term interest rate reductions and innovations from the industry trade fair drupa, which begins in May.

In response to the order slump, the printing machine manufacturer has introduced short-time work in parts of production and at several locations since January. This is initially planned to run until the end of March. Before I go into more detail about the current figures of Heidelberger Druckmaschinen AG, I would like to briefly introduce the machinery manufacturer to you.

The Heidelberger Druckmaschinen AG in brief profile The Heidelberger Druckmaschinen AG, founded in 1850, is, according to its own statements, an innovative technology company with a leading position in the global printing industry. In its core business of printing machine construction, the company focuses on customer requirements in the target markets of packaging and label printing as well as special and advertising printing. In addition, Heidelberg Druckmaschinen is also active in the area of charging solutions for electric cars (wall boxes).

With a market share of over 40%, the company is the leading provider of sheetfed offset presses, a technology used in the production of high-quality, high-volume printed products.

In addition, the Heidelberger Druckmaschinen AG has expanded its position in flexographic printing for the packaging market and in digital label printing in recent years. The printing machine manufacturer employs around 9,500 people worldwide and is represented together with sales partners at 250 locations in 170 countries.

The nine-month figures at a glance In the period from April 1 to December 31, 2023, the company achieved sales of around 1.69 billion euros, which was around 2.5% lower in constant currency than in the previous year. Adjusted earnings before interest, taxes and depreciation and amortization (adjusted EBITDA) improved by 8% compared to the previous year period and amounted to 135 million euros after three quarters. The adjusted EBITDA margin increased from 7.2 to exactly 8%.

After nine months, the free cash flow (cash inflow) was significantly below the previous year’s level at -54 million euros (-16 million euros). However, in the previous year, the free cash flow was supported by positive special effects, such as land sales (around 72 million euros in the previous year). Such effects did not occur in the current financial year.

Forecast confirmed Despite the weak order situation and the slightly lower sales, Heidelberger Druckmaschinen AG confirms its forecast for the 2023/24 financial year, published on June 14, 2023. The company continues to expect sales and an EBITDA margin at the previous year’s level.

After the publication of the mixed nine-month figures, the SDAX company slumped significantly on Wednesday of this week, but recovered slightly the following day. However, since the beginning of the year, the stock has been significantly down by 16%. In the past, I have done well to avoid this stock and will continue to do so.