AThe future is traded on the stock exchange – an old stock market adage that is sometimes underpinned by miraculous comebacks on the stock market. But until such a thing happens, investors sometimes need more than staying power. A case worth noting is probably Heidelberger Druckmaschinen AG, or Heidelberg for short. Shareholders and market participants have been able to observe the ups and downs of a pearl of German mechanical engineering over the past 20 years. After management has tried many things (unsuccessfully) to boost business once more, they finally seem to have identified a real beacon of hope.
In the past, various structural developments have been fatal for the people of the Electoral Palatinate. The printing press pioneer mainly served the print media. The advent of digital technologies threatened the business foundation. Added to this were events such as the attacks of September 11, 2001 or the financial crisis of 2007/08. These hit the global economy hard. Heidelberger Druck’s business, which is sensitive to the economy, continued to suffer when the industry increasingly held back on orders. The result was an unprecedented downsizing. A few numbers to compare:
In fiscal year 2000/01, group-wide sales were 5.3 billion euros. The number of employees was more than 24,000. In the 2020/21 financial year (end of March), Heidelberger Druck once more had revenues of EUR 1.9 billion, while the number of employees at the end of the financial year was around 10,200.
A real turnaround story
Heidelberg is one of the most popular turnaround stories on the stock exchange. Time and once more, austerity measures and investments in new business areas seem to bear fruit for a short time. So far, however, there has been no definitive liberation. That should change now. The company is praised by the shareholders’ protectors. “If you look back, the extremely long dry spell and the ordeal for the owners and employees is certainly extraordinarily long and intense,” says Marc Tüngler, General Manager of the German Association for the Protection of Securities (DSW). “Despite all the prophecies of doom, Heidelberg survived and that’s because everyone involved made their contribution.”
Our author Christoph Scherbaum is a stock exchange specialist and works as a financial journalist from Ludwigsburg.
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Image: Christoph Scherbaum
In this context, the shareholder representative refers to the employees of the company, “who clearly took the risk that the funds from the pension fund were used for the company. It was a major financial liberation.”
A real sense of optimism can now be felt in the company. CEO Rainer Hundsdörfer said in an interview to the FAZ: “We have found a new field in which we can not only use our skills excellently, but also earn money, and which promises enormous growth rates. You have no idea what it means internally when the workforce no longer just has to struggle once morest the decline. We dare to do something once more, we take courage and ideas.”