Heidelberger Druckmaschinen (HDD) Investor Update summary

Strategic direction and growth initiatives

• Targeting at least €300 million in new annual sales by FY 2028/29, focusing on packaging, digital workflows, and new business fields such as charging equipment and green hydrogen.

• Expanding in packaging printing, leveraging global trends like sustainability, population growth, and transitioning to paper-based packaging, with a strong focus on emerging markets.

• Growth in commercial inkjet printing, supported by a partnership with Canon and a hybrid offset-inkjet approach, with incoming orders already confirmed.

• Diversification into new business fields, including e-mobility charging, power electronics, and green hydrogen, with a prototype electrolyzer underway and HEIDELBERG Industries launching in March 2025.

• Over 85% of business is conducted outside Germany, with strategic initiatives expected to drive significant sales growth by 2028/2029.

Operational efficiency and cost optimization

• Personnel cost reduction plan targets over €100 million in cumulative savings, mainly at Wiesloch, through reducing up to 450 FTEs over three years and offsetting wage increases.

• Wage increase standstill for two years ensures FTE reduction savings are not offset by wage inflation.

• Special items of around €30 million will be recognized in FY 2024/2025, excluded from adjusted EBITDA.

• Cash outlay for savings program estimated at €40 million, with provisions built in the current fiscal year.

• Further cost-saving agreements at other sites are under negotiation.

Technology, recurring revenue, and service transformation

• Launch of Prinect Touch Free, an AI-driven software in 2025, to automate printing and boost recurring revenue.

• Lifecycle business generates €900 million in net sales, leveraging the largest installed base in the industry and tailoring service contracts.

• Use of data from 10,000 installed assets to develop AI-based, proactive service models for improved efficiency.

• Plans to improve global service coverage and digitize service operations using data analytics.

• Investments secured for a modern data center, infrastructure modernization, training, and projects in software and AI at Wiesloch-Walldorf.