Heidelberger Druckmaschinen: Industrial Intelligence in Motion: HEIDELBERG’s Automation-Led Comeback

HEIDELBERG is making a renewed strategic push into fibre-based and automated packaging, now its fastest-growing segment with H1 sales up 17% year-on-year . This market's growth is backed by consumer-goods demand, sustainability regulation and reshoring of packaging supply chains. By integrating the entire workflow from digital printing to postpress, HEIDELBERG is strengthening its role as a systems integrator for brand-owner packaging lines. Its August 2025 Polar Mohr asset acquisition and partnership with Schubert Packaging in Brazil underline its move to extend service integration and full-value-chain control . As brands accelerate the switch to greener, automated production, HEIDELBERG is positioned to deliver a turnkey, scalable platform.

A key catalyst is the ‘Paperization’ trend, the global shift from plastics to fibre packaging. Through its Solenis partnership, HEIDELBERG has begun industrial trials of barrier-coated paperboard solutions, advancing circular-economy adoption and differentiating its offering in high-growth FMCG and e-commerce markets. Momentum from the Labelexpo launch of the Gallus Five and Gallus Alpha systems, where orders rose 20% year-on-year demonstrating Heidelberg’s expanding dominance in sustainable label and carton packaging .

HEIDELBERG is expanding into defense and security infrastructure as a long-cycle growth hedge, with its VINCORION partnership progressing on schedule and R&D funding already recognised in FY25/26 . The collaboration targets power and control systems for mobile and fixed safety-critical platforms, directly aligned with EU sovereignty and re-industrialisation goals. Early-stage work is now expected to yield initial revenue contribution in FY26, with long-term potential of around €100 million once serial production begins . Defense revenues, backed by government contracts, offer counter-cyclical stability versus printing and packaging cycles.

Through VINCORION, HEIDELBERG is building out its Technology segment as a higher-margin engineering hub, repurposing its automation and control expertise into “plant-like” defense solutions. This initiative leverages Germany’s strong defense industrial base and HEIDELBERG’s local supply chain, reinforcing its positioning as a Tier 2 supplier for both military and civil energy systems. While still immaterial to current revenue, the program is on track to deliver its first tangible contracts in 2026, marking a new structural leg of growth beyond print.

HEIDELBERG’s turnaround remains firmly on track under its ‘Zukunftsplan’ programme, which has now concluded 100% of personnel agreements, locking in €80 million of annual cost savings by FY28 . Efficiency and cost-avoidance measures worth €30 million are already materialising, driving margin recovery. The group’s adjusted EBITDA margin doubled to 6.4% in H1 FY25/26 (from 3.4%), with further improvement to 8.2% in Q2, reflecting higher capacity utilisation and lower fixed costs.

Momentum is visible across operations. Free cash flow improved by €38 million year-on-year, aided by working-capital discipline and lower consultancy expenses. In parallel, Amperfied secured new infrastructure contracts with Siemens Energy and SAP, confirming recurring software-driven revenue expansion in charging-infrastructure management. As savings ramp and ‘Zukunftsplan’ cash outs fade from Q3 onward, HEIDELBERG is on track for sustained margin expansion and mid-term EBITDA targets of 9–10% by FY28 .

• First VINCORION revenues and project validation: Initial R&D funding and prototype work are underway, with management guiding for first contractual revenues in FY26. Progress from MoU to execution would validate this vertical and broaden HEIDELBERG’s investor base beyond print.

• Amperfied: Following the Siemens Energy contract (200 charging points across 12 sites) and SAP integration, Amperfied’s recurring-service pipeline is expanding rapidly. Management expects further corporate-fleet contracts into 2026, supporting the DC infrastructure ramp-up.

• Achievement or upward revision of FY26 margin targets: After doubling EBITDA and reaching 8.2% in Q2, management reaffirmed full-year guidance for up to 8%. Any early FY26 indication of 9% trajectory under ‘Zukunftsplan’ would signal faster-than-expected execution and support a valuation re-rate.

• Continued margin improvement in Q3 and Q4: H1 EBITDA margin rose 300 bps year-on-year to 6.4%. Investors will watch for further expansion as personnel and efficiency savings (~€30 million) flow through from Q3 onward, cementing credibility of the turnaround.

• Integration progress from Polar Mohr acquisition: Acquisition closed in August 2025 and already benefiting Q2 results through new cutting and die-cutting assets. Smooth integration and cross-selling into packaging lines will be key proof points for future bolt-ons.

• Realisation of full €80m savings from FY28 onwards under Zukunftsplan: All personnel agreements are now contractually secured, locking in €80 m savings by FY28. Execution of €50 m personnel and €30 m efficiency gains remains a core long-term value driver.

• Material contribution from non-print revenue lines: With packaging and digital solutions already driving core growth (+17% y/y) and defense on track for first revenue in FY26, HEIDELBERG is transitioning into a broader industrial-tech platform. Sustained progress would re-rate the equity story from cyclical OEM to structural innovator.

Despite the promising trajectory in packaging, HEIDELBERG still relies on its traditional commercial printing segment, which is exposed to cyclical downturns. A potential slowdown in advertising, publishing, or macroeconomic conditions in Europe could reduce demand for commercial print systems and impact earnings volatility. To counter this, HEIDELBERG has increased its packaging revenue share consistently over the last years, consequently representing the majority of today’s business.

HEIDELBERG’s move into defense and industrial electronics is early stage, with execution risk driven by technology validation, regulatory approvals, and production scale-up. Delays or overruns could impact investor confidence and distract from core business priorities, with new talent and governance models required for smooth integration.

To mitigate risk, HEIDELBERG has recruited dedicated external teams to manage these ventures, and is building recurring revenues through long-term customer contracts, leveraging strengths in fleet management and public DC charging infrastructure.

Even as HEIDELBERG works to cut headcount and streamline operations, ongoing labour cost inflation, particularly in Germany, could erode gains. The company has historically struggled with a high fixed cost base, and future wage pressures or union demands may offset the benefits of restructuring. Furthermore, cost inflation could also limit its ability to attract or retain the specialised talent needed to drive growth in new technical domains like defense electronics and automation. Labour conditions in Germany are structurally a recurring challenge, and it can be expected that the current government will take measures to address them.