Heidelberger Druckmaschinen AG

Welcome to the conference call regarding the publication of the first quarter of full year 2026-2027. The conference call is being recorded. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Guillaume Otto.

Good morning, ladies and gentlemen, and welcome to Einberg's conference call on the publication of the figures for Q1 2026-2027. They're delighted to welcome our investors and analysts. Besides commenting on our business performance in the first quarter, we will also cover the key highlights of the period and discuss our outlook for full year 2026-2027. Afterwards, we will be happy to take your questions. A key recent highlight has been the appointment of Christoph Burckhardt, a Heidelberg News CFO. Christoph brings extensive international leadership and financial management experience. His strong capital market background, deep expertise in the specialized machinery sector, and a successful track record in building and expanding new business areas were key factors in the supervisory board's decision and positioned him well to support Heidelberg's strategic development going forward. With official start on October 1st, We are pleased to welcome Christoph Burckhardt to Heidelberg's management board. We would also like to express our sincere gratitude to the current head of finance, Volker Herding, for his outstanding service, unwavering commitment and significant contributions to Heidelberg. During September, Volker will ensure a smooth transition of responsibilities to Christoph before retiring from Heidelberg. Before turning to the current fiscal year, let us first review the key achievements of the past year that have laid the foundation for our recent developments. First, we made significant progress in optimizing our cost base. Through disciplined execution of efficiency measures and accelerated digitalization, we strengthened our competitiveness and created the basis for future margin improvements. Second, we successfully established the foundation of our security and defense business through Heidelberg Advanced Technologies. This represents an important step in diversifying our revenue streams and reducing our dependence on the traditional trading business. Third, we continue to expand our digital and technology activities through partnerships and targeted M&A initiatives. acquisitions of Melrolin and Polar, as well as the intensification of our digital partnership, strengthen our market position and create additional life cycles and recurring revenue opportunities. Taken together, these achievements have sharpened Heilberg's strategic profile, strengthened our resilience, and provided the foundation Now let's take a look at the key figures of the first quarter that was marked by conditions that remained challenging, which were reflected in particular in sales volume and earnings. Given that the expiration of the subsidy program in Italy alone has resulted in over 60 million euros fewer orders in this country, in comparison to last first quarter, incoming orders of 537 million euros were quite satisfactory. China, Japan and the US were able to increase their order intake. In sales, We saw a noticeable decline to $404 million, driven by the segment printing packaging equipment. Regional-wise, also here, Italy reflected the phasing out of the subsidy program, but also other markets of the EMEA region, as well as the U.S. showed lower sales volume, while the Chinese market recorded a clear increase. Referring to profitability, the adjusted EBITDA margin was primarily impacted by the lower sales volume, resulting in a margin of 0.2%. Let me now turn to our strategic progress. Heidelberg continues to execute its strategic roadmap, driving high tech. Despite the challenging market environment, the measures implemented are already showing initial positive effects. Importantly, both our core business and HD Advanced Technologies, our strategic second pillar, built on the same technological foundation, competencies, people, and infrastructure, generating synergies for both sides. Our activities in HD Advanced Technologies leverage capabilities developed over decades, including software, automation, manufacturing expertise, systems integration, and service, and apply them to attractive new markets and megatrends. For example, our expertise in complex power distribution and control systems for high-performance printing machines 40 meters long forms the basis for our charging, energy management, and defense-related solutions. Likewise, managing thousands of EV charging points draws the same digital capabilities that collect and monitor more than 11,000 Idleback systems worldwide. This shared technology base creates synergies, reduces execution risk, and positions us to capitalize on key growth trends such as automation, e-mobility, energy infrastructure, and security technologies. For a deep dive in our strategic progress, I hand over to David, starting with the core business.

Thank you, Jürgen. And hello, everyone, and also welcome from my side. Let's start the deep dive with our latest developments in our core business. The acquisition of MAN Roland is a unique strategic opportunity that strengthens our market position as system integrator, while also supporting industry consolidation. It expands our customer reach by more than 3,000 customers, enhances our service and spare parts business, and supports the continued growth of our lifecycle business. Increasing the contribution of recurring revenues is quite important for several reasons. First, Recurring revenue provides visibility. Second, recurring revenue reduces macro-driven cyclability and makes Heidelberg more resilient. Third, the lifecycle business offers higher margins and will drive group profitability in the future. Emma and Roland's presence in 35 countries with approximately 600 employees drives and streamlines Heidelberg's footprint. Accordingly, a key benefit is the combination of our sales and service networks. Stronger together, Heidelberg and MAN Roland represent around 2,700 sales and service employees worldwide, strengthening our presence in key markets such as China, Mexico, and Latin America. Importantly, in early stage we are already seeing commercial successes. including the first sale of a Heidelberg VLS machine to a MAN Roland customer, our Carsten Master 145. Let's turn the attention to the business case. Following the successful completion of the acquisition in early July, we expected the MAN Roland operations to contribute a mid-double-digit Euro amount to Heidelberg's group sales, with no impact on the operating line in the current year. With regard to the potential for synergies, we anticipate two types. First, following the full integration of the Emma and Roland operation, which is planned to take place over a two-year period, Heidelberg expects a positive, absolute EBIT contribution to the group in the low teens. Second, and even more importantly, larger scale creates substantial leverage opportunities. Additional synergy potential is expected from the sale of Heidelberg Systems plus recurring consumer business. Both contributions are expected to come in with typical margins for such business. Following the full integration of the MAN-Oland operation, Heidelberg targets for the combined operation a stable sales contribution of in total 100 million plus Euro, with an EBIT contribution ambition of approximately 10 to 15 million Euro per year. As already mentioned, stronger together, and we are confident that this partnership will create long-term sustainable value for our stakeholders. Another important strategic step in recent weeks was the complete acquisition of Polar. Polar is a highly recognized specialist for post-press systems and has been a long-standing partner of Heidelberg. The acquisition supports our ambition to become an even stronger system integrator for our customers and contributes from different angles. By fully integrating polar machines and systems into the Heidelberg organization and ecosystem, on the one hand, we strengthen our position in packaging and labeling while expanding our offering along the value chain. On the other hand, the transfer of the polar production to North Macedonia is the key lever for improving our cost competitiveness. Let us now switch the focus to our international expansion plans, reducing reliance on the domestic market. China recently recorded one of its strongest quarter one order intakes. With our strategy in place, we will further enhance efficiency to continue growing in China. Building on over a century of presence in Japan, Heidelberg's strong market position enables the company to capture future growth opportunities across the region. In Vietnam and India, too, we are pursuing a dedicated initiative to further secure and strengthen our access to the market. The African countries are also focused markets for Heidelberg. This means that we are unlocking new potential with a tailored strategy. In Brazil, thanks to a strong sales and service network, we see an opportunity to capitalize on the promising market growth. Packaging printing is also a key growth driver here, fused by rising prosperity and the increasing use of paper packaging. Accordingly, sales in the first quarter of the current fiscal year more than doubled. An also promising region is Mexico, which is primarily driven by nearshoring, especially for packaging and label. With that, let me conclude the section on our geographic expansion strategy across customers and send markets. Equally important, our geographic ambitions to ensure further competitiveness of Heidelberg as paid for stakeholder value creation. As part of our efficiency and cost optimization strategy, we are establishing a low-cost country footprint in North Macedonia. We have created a new entity, Heidelberg Industrial Solutions, operational since the beginning of 2026, starting with the assembly of post-press equipment and scalable overtime. Execution is progressing rapidly. Production ramp-up commenced already in 2026, with the site expected to reach full operation capacity by 2028. The location offers a very attractive cost position at China level, combined with government support for both CAPEX and OPEX. As previously highlighted, the relocation of Polar's production activities to North Macedonia will support the ramp-up. Overall, the expansion of production in low-cost countries is a key lever to structurally improve our cost base and support margin expansion. Having laid a strong foundation through consistent cost optimization, we now shift our focus with full conviction to unlocking substantial growth opportunities in new markets beyond Heidelberg for business. And with that, I will hand back to Jürgen.