COVID-19 Impact: Working Closely with Partners and Customers is Key
Rainer Hundsdörfer, the CEO of Heidelberger Druckmaschinen AG, speaks to Print Pack MEA, about the measures his company has taken to continue business without disruption during the COVID-19 pandemic
During this COVID-19 crisis, what measures have you undertaken to continue your own business without disruption?
The top priority for Heidelberg is the health of our employees at all sites. Appropriate regulations on safety and hygiene are strictly observed. We closed our Print Media Centers and Academies for public access, restricted travels to a minimum, and provided our staff with the tools to enable them to work from home whenever possible. Special protection measures were put in place for employees whose jobs require their physical presence at our production facilities.
In order to keep running costs in check, we have put the factory on short-time work for the most part but are still maintaining all the facilities needed to ensure the supply of spare parts and consumables. We will support and advise our customers in the best possible way, wherever they need us and as long as we are still allowed to do so.
What measures and initiatives have been taken to provide uninterrupted service to customers?
Heidelberg responded as quickly as possible to the difficult conditions caused by the global coronavirus crisis, and provides its customers in the area of commercial, packaging and label printing with support at all levels. Especially in these challenging times, our digital interfaces to print shops worldwide are proving their worth in helping our customers in their daily operations.
We are generating around 85 percent of our sales abroad, and we support our customers in the best possible way locally with our globally based and proven service and sales network in the graphics industry. Customers in all major printing markets are served directly or via partners. Our global sales and service network, together with the global logistics center, remains committed to ensuring reliable supplies to print shops. Wherever there are customer orders in place or a machine installed, we try to maintain operation and perform in an exemplary and safe way.
We are able to process many inquiries and possible problems online via Remote Service and the Heidelberg Assistant, taking care of everything we possibly can via digital telephony or video conferencing, and providing information via our customer databases. In so far as possible, however, we will take every opportunity to send qualified service technicians on site in case of need.
Our partner Masterwork MK founded MK healthy Co., Ltd. at the end of February, and has entered into the production of disposable medical face masks, including the complete supply chain. So they are providing medical face masks for the Heidelberg Group, primarily for the use of service technicians on customer assignments.
Which top industry verticals and markets have you seen the maximum traction? How has COVID-19 impacted business with existing customers in those verticals and markets?
Heidelberg established a Print Media Industry Climate Report. There we are providing weekly updates on the development of print volumes in the packaging and label printing and commercial printing market segments. The representative basis of the anonymized data is formed by around 5,000 selected offset presses of all format classes at customers worldwide who are connected to the Heidelberg Cloud.
With the Print Media Industry Climate Report we have our finger on the pulse of our customers and with the weekly climate in the print industry we support print shops during the Corona pandemic in particular. It is important for all participants in the printing industry to understand which market segments and countries are currently most affected.
The most important findings of the first four weeks were that during the corona pandemic, print production in China fell by up to 80 percent compared to normal volumes, but recovered as the infection curve fell and is now back to last year’s levels in both the commercial and the packaging/label segments.
The packaging and label segment is very stable in the corona period, mainly due to the increasing demand for food and pharmaceutical packaging. While print production in all other countries was stable until mid-March 2020 and was above the level of previous years, the outbreak of the corona pandemic and the shutdown in the countries has led to a significant reduction in print volume worldwide, especially in the commercial market.
In recent weeks, the easing in many countries has fortunately led to a recovery of Commercial Printing worldwide in most countries. You may find the weekly update under www.heidelberg.com/PMI-climate.
Have you put in place any contingency plans if this crisis persists or gets escalated?
We are convinced that with the return to certain normality in the world, the capital goods industry will also benefit again, see the example of China. We also have a corona crisis team that constantly assesses the current situation and, if necessary, derives the necessary measures from it.
What sort of business and financial impact do you expect for your business as a result of COVID-19?
During a challenging financial year 2019/20 (April 1, 2019 to March 31, 2020), business operations at Heidelberg was impacted by the increasingly deteriorating economic environment caused by the COVID-19 pandemic. Based on preliminary figures yet to be audited, Group sales amounted to € 2,349 million, some 6 percent down on the previous year. Restrained investment activity caused by the economic circumstances had a negative impact on business, first and foremost in Europe.
During the fourth quarter, macroeconomic conditions worsened considerably and unexpectedly due to the COVID-19 pandemic and this was clearly reflected in sales, which at € 659 million were significantly lower than in the same quarter of the previous year (€ 797 million). We already announced a package of measures in March, to pave the way for Heidelberg to achieve stability, improve our liquidity and increase profitability step by step for the long term.
The COVID-19 pandemic poses significant challenges for Heidelberg and the entire industry, which we will master alongside our customers and using what Heidelberg has to offer as a technology leader in the printing industry. By joining forces, we will emerge stronger from the crisis.
Have you kick-started any initiatives for your employees to better handle this crisis?
We use the instrument of short-time work for our employees as well as the possibility to work remote from home. Furthermore, there are many training webinars to keep up to date with our complete offerings. For the duration of one week we will have remote sales trainings to get all the news about our new products and services which we would have launched at the postponed drupa and which we are now launching step by step in the markets.
Where do you see new opportunities emerging from – either industry sectors, jobs, markets?
Heidelberg is now collecting all resources, stories and tools around the corona crisis under the hashtag We4You. There you may learn more about what the Heidelberg colleagues are doing across the globe to support customers, or even about how our customers are supporting each other. Simply visit the Heidelberg website at www.heidelberg.com/en/we4you and social media channels and look for the hashtag We4You.
For example, the series “Expert Talk with Print Media Center Atlanta” came to life, where, starting the first week of May, first-hand expert knowledge is shared by the employees at Heidelberg USA. We are offering remote demonstrations live from our Print Media Centers: we offer customers and prospects around the world the possibility to register for a personalized remote demonstration of our press and postpress machines.
This service enables them to experience our machines up close and personal and to interact with our experts from the comfort and safety of their home. Under the hashtag We4You there are also examples of customers and stories of how they are meeting the crisis with creative and flexible solutions.