Heidelberg mainly focuses on the profitable core business and systematic streamlining of the cost base
Heidelberg is set to implement wide-ranging action package to enhance profitability (Credit: Heidelberger Druckmaschinen AG)
Germany-based Heidelberger Druckmaschinen (Heidelberg) is set to implement a wide-ranging action package to minimise short-term structural costs and enhance long-term profitability.
The company aims to focus on the profitable core business and systematic streamlining of the cost base to make €100m improvement in EBITDA, excluding the restructuring result.
Heidelberg also noted that return transfer of around €375m from the trust fund will help the firm to reduce net debt and significantly improve its financial stability.
As part of a wide-ranging action package, the company aims to develop a strong brand and advance its profitable core business with an average EBITDA margin of more than 8%.
Heidelberg also plans to discontinue individual products such as Primefire 106 digital printing press and very-large-format product range in sheetfed offset printing segment, as they are affecting the company’s profitability with an annual loss of around €50m.
The planned measures may lead to 2,000 job cuts
The planned measures, which may also include plant closures, are expected to result in the loss of around 2,000 jobs across the world.
Heidelberg plans to implement a major part of the realignment in the financial year 2020/2021, based on the results on negotiations with the employee representatives and the economic impact of the corona pandemic.
The company will focus on expanding its technology leadership, as it includes an integrated solutions portfolio and new digital business models such as subscription.
Heidelberg will invest in full end-to-end digitalisation of customer value creation, helping to provide better-integrated system solutions for machines, software, consumer goods and performance services.
Heidelberg CEO 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 digitalisation.”