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 increasing packaging intensity across both developed and high-growth markets. 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, supported by continued investment in local sales, service and customer proximity. Q3 results show packaging-led sales growth offsetting softer order intake following a drupa-driven prior year, reinforcing the resilience of this end-market. 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, continues to support packaging-led mix improvement despite a normalisation in overall order intake post-drupa.

HEIDELBERG is expanding into defense and security infrastructure as a long-cycle growth hedge, with its VINCORION partnership progressing on schedule and activity now clearly visible within the HEIDELBERG Technology segment. 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 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. Q3 reporting confirms improving profitability and order momentum within the Technology segment, reflecting disciplined investment and early operating leverage. While still immaterial to group 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 rose to 7.1% after nine months, with Q3 margins at 8.2% despite a tougher macro and FX backdrop, reflecting higher capacity utilisation and structurally lower cost intensity.

Momentum is visible across operations. Net result after taxes turned positive at €17 million after nine months, while free cash flow improved year-on-year, albeit remaining negative at €-81 million as expected due to working-capital seasonality. In parallel, Amperfied continues to expand its infrastructure footprint following contracts with Siemens Energy and SAP, supporting recurring software-driven revenue. Management reaffirmed FY25/26 guidance, now expecting EBITDA margins toward the lower end of the up-to-8% range, consistent with cautious macro assumptions rather than execution slippage.

• 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 reaching 7.1% EBITDA margin after nine months and 8.2% in Q3, management reaffirmed full-year guidance toward the lower end of the up-to-8% range. Any evidence of sustained Q4 margin resilience despite FX and macro headwinds would reinforce confidence in the Zukunftsplan trajectory and support a valuation re-rate.

• Continued margin improvement in Q4: Adjusted EBITDA margin reached 7.1% after nine months, with investors focused on Q4 delivery as personnel and efficiency savings (~€30 million) continue to flow through, cementing credibility of the turnaround despite softer order intake.

• Integration progress from Polar Mohr acquisition: Integration progress from Polar Mohr acquisition: Acquisition closed in August 2025, expanding HEIDELBERG’s cutting and die-cutting capabilities within the Print & Packaging Equipment segment. Investors will watch for operational integration, utilisation rates and early commercial traction in FY26 as proof points for future bolt-on acquisitions.

• 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-led sales growth continuing to offset cyclicality in orders and Technology segment profitability improving in FY25/26, rising contribution from non-print activities supports HEIDELBERG’s transition into a broader industrial-tech platform and underpins the case for a structural re-rating beyond cyclical OEM status.

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.

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.