Heidelberger Druckmaschinen Aktiengesellschaft Q3 Earnings Call Highlights

Heidelberger Druckmaschinen Aktiengesellschaft (ETR:HDD) executives said the company delivered a “solid and resilient” performance through the first nine months of its 2025/2026 financial year, citing improving profitability and stable demand despite weak macroeconomic momentum and significant foreign-exchange headwinds.

CEO Jürgen Otto told investors that order intake reached EUR 1.6 billion for the nine-month period, down year-over-year as expected given a stronger comparison period, but emphasized that the book-to-bill ratio remained above 1.0, supporting revenue visibility. Otto and management also pointed to a “slightly positive trend” in demand, highlighting particularly strong order intake from the U.S. in October and November after customers had delayed investment decisions.

Nine-month results show higher sales and margin improvement

Otto said nine-month net sales increased to EUR 1.6 billion, with currency effects weighing on reported growth. On a constant-currency basis, he described the underlying development as “clearly positive.” Profitability improved as the company executed on efficiency and cost measures under its “Zukunftsplan” transformation program.

According to Otto, the adjusted EBITDA margin improved to 7.1%, up 140 basis points year-over-year, driven by higher production efficiency and a more favorable cost structure. Headcount declined as planned, and the CEO said structural, personnel, and functional cost actions are increasingly translating into earnings leverage.

Otto also noted that net income increased by EUR 59 million to EUR 17 million after nine months. Free cash flow remained negative, which he said is typical for the period, reflecting working capital timing and non-recurring cash outs related to M&A, the Polar acquisition, and Zukunftsplan implementation. Still, he said free cash flow improved year-over-year due to higher net income and disciplined cash management.

Quarterly performance: order softness, higher sales, improved net income

Chief Financial Officer Volker (management did not provide a last name in the transcript) said third-quarter order intake declined 6% year-over-year, citing market conditions and adverse currency effects. He added that the prior-year quarter included “through-flow related orders,” including double-digit million-euro orders tied to Labelexpo in September, which benefited label-printing activity last year.

For the third quarter, management reported:

• Net sales growth of 4% despite currency pressure.
• Adjusted EBITDA down 100 basis points year-over-year, with gross margin effects partly offset by functional efficiency gains.
• Net income rising to EUR 17 million from EUR -7 million a year earlier.
• Free cash flow of EUR -17 million, down from EUR 4 million, attributed to lower customer down payments.

The CFO said seasonality trends in sales remained intact and expressed confidence that sequential growth in the fourth quarter would support delivery against the company’s 2025/2026 guidance.

Segment and regional highlights

In the Print and Packaging Equipment segment, the company recorded nine-month order intake of EUR 794 million, down 18% year-over-year. Net sales increased roughly 14% to EUR 804 million, which management attributed to robust demand and deliveries. Adjusted EBITDA rose to EUR 77 million from EUR 58 million, and the adjusted EBITDA margin increased to 9.6% on higher capacity utilization and lower costs.

The Digital and Lifecycle segment reported nine-month order intake of EUR 791 million, about 3% below the prior year, reflecting what management described as lower cyclical sensitivity. Net sales were steady at EUR 755 million, with narrow web growth—boosted by Labelexpo—offsetting softer service and consumables. Management said the adjusted EBITDA margin improved to 6.1% over the first three quarters versus the prior-year period, though the third quarter was below the prior-year quarter due to temporary product mix effects.

In the Technology segment, management said order intake and net sales after nine months were up about 4% year-over-year, while adjusted EBITDA improved by roughly 10 percentage points.

Regionally, management described mixed demand conditions:

• EMEA: Order intake fell 11% to EUR 823 million, reflecting the absence of a prior-year “super effect” and challenging economic conditions. Net sales rose 13% to EUR 836 million, driven by new machine deliveries. Management highlighted Italy’s contribution, supported by a governmental subsidy program.
• Asia-Pacific: Order intake totaled EUR 415 million, down 14% on a reported basis (or 9% adjusted), amid cautious investment behavior, currency weakness, and U.S. trade conflicts. Management noted China declined 5% year-over-year but outperformed other countries in the region. Net sales were reported at EUR 41 million, down 3%, but would have grown about 3% at constant currency, with solid deliveries to Japan and Indonesia.
• Americas: Nine-month order intake was down about 5%, though the third quarter rebounded strongly with roughly 17% growth versus the prior-year quarter. Management said net sales ended above last year, while currency headwinds and tariff uncertainty persisted.

Balance sheet, financing, and cash flow

Management emphasized steps to strengthen financial flexibility. Otto said the company extended its syndicated credit line ahead of schedule, increased the volume by EUR 66 million to EUR 436 million, and extended maturity to 2030, adding new banking partners. He said the facility is intended to support both the core business and growth initiatives outside print and packaging.

Volker said equity grew over the first nine months, supported by the positive net result and a higher pension discount rate. The company’s equity ratio increased 110 basis points to 26.2%, reaching EUR 563 million in absolute terms, partly offset by EUR 19 million of currency translation losses recorded directly in equity. Pension provisions totaled EUR 626 million, reflecting an increase in the German pension discount rate from 3.8% to 4.1%.

The company’s net financial position declined to EUR -18 million, driven by EUR -81 million in free cash flow after nine months, a non-cash increase of EUR 24 million in lease liabilities, and EUR -5 million in adverse currency effects on cash balances. Volker added that the revolving credit facility was used at only 25% of its EUR 370 million capacity at the end of December 2025.

Strategy and outlook: hybrid portfolio and expansion beyond print

Executives reiterated Heidelberg’s strategy of combining equipment, software, and services as a system integrator, while expanding its hybrid offset-and-digital offering. Dr. David Schmedding highlighted continued traction for the Jetfire 50, saying about 30 machines have been sold with a “solid funnel,” and noted the January launch of the Jetfire 75, which management positioned as the “digital core” of the hybrid strategy targeting short runs, personalization, and hybrid jobs.

Schmedding also pointed to Heidelberg’s Saphira consumables portfolio, referencing a November “Saphira Experience Day” at the company’s Wiesloch Print Media Center, which management said demonstrated integrated workflows and emphasized higher efficiency and lower total cost of ownership for customers.

Beyond the core print business, Otto said Heidelberg is exploring partnerships in defense, security, energy, and charging infrastructure. He said the company plans to bundle these activities under HD Advanced Technologies, assigning dedicated resources to develop what management described as a “second engine” for growth.

For the full 2025/2026 year, management reaffirmed guidance for net sales of around EUR 2.35 billion (up from EUR 2.28 billion last year). Given currency impacts and a weak macro and uncertain trade-policy environment, Otto said the company expects the adjusted EBITDA margin to come in toward the lower end of the forecast improvement of up to 8% versus 7.1% in the prior year.

The call concluded without any analyst questions.

About Heidelberger Druckmaschinen Aktiengesellschaft (ETR:HDD)

Heidelberger Druckmaschinen Aktiengesellschaft, together with its subsidiaries, engages in manufacture, sale, and dealing of printing presses and other print media industry products in Europe, the Middle East, Africa, Asia/Pacific, Eastern Europe, North America, and South America. The company operates through Print Solutions, Packaging Solutions, and Technology Solutions segments. It offers printing machines, including digital, offset, narrow web, screen, and inline-flexo printing, as well as remarketed equipment; and finishing equipment comprising cutting, die-cutting and embossing, folding, inspection, folding carton gluing, hot foil stamping, and shingled folding.