German industrial machinery group Heidelberg reported a 13% year-over-year decline in first-quarter net sales to €404 million, citing the expiration of Italian subsidy programs as a primary factor in the drop. Adjusted EBITDA margin contracted to 0.2% from 4.4% a year earlier, reflecting weaker demand across Europe, the Middle East and Africa.
Order intake fell 4% to €537 million, while the order backlog rose to €762 million from €639 million at the end of the prior fiscal year. The company’s share price declined 4.42% to $1.34, near its 52-week low of $1.29, extending a year-to-date loss of 32%.
Heidelberg attributed the decline in European orders primarily to the phase-out of Italian incentives, which reduced demand by more than €60 million compared with the prior-year period. Regional performance diverged, with sales and orders rising in China, Japan and the U.S., while Brazil saw more than a doubling in sales. Staff costs decreased to €196 million from €208 million, and headcount fell to 9,019 employees from 9,228.
Operating cash flow improved to negative €55 million from negative €68 million, though free cash flow worsened to negative €77 million. The group’s net financial position turned negative to €39 million, compared with a positive €39 million at the fiscal year-end.
Heidelberg reaffirmed its full-year guidance, expecting broadly stable net sales versus the prior year and an improvement in adjusted EBITDA margin. Free cash flow is projected to remain negative but with easing outflows. CEO Jürgen Reusch stated that despite the challenging start, the guidance remains unchanged.
The company also highlighted strategic initiatives, including the completed acquisition of Manroland in early July, which is expected to contribute a mid-double-digit million-euro amount to group sales this year with no operating line impact. Full integration is targeted over two years, aiming for annual sales contributions of over €100 million and EBIT contributions of €10 million to €15 million. The acquisition adds more than 3,000 customers and expands the group’s footprint to 35 countries.
Additional moves include the acquisition of post-press systems specialist POLAR and the establishment of a new facility in North Macedonia under Heidelberg Industrial Solutions, which began post-press equipment assembly in early 2026. The site is expected to reach full operational capacity by 2028, targeting cost parity with the group’s Chinese operations.
Heidelberg also launched a partnership with PHENOGY to develop a European industrial platform for sodium-ion battery technology, aiming to produce complete battery energy storage systems within the region.
