20 March 2020

Heidelberg exits VLF and PrimeFire in wide ranging realignment package

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Heidelberg has adopted a wide-ranging package of measures aimed at restoring profitability which include terminating its VLF and PrimeFire product ranges. The company’s focus will now be on digitization of the value chain, integration of its product offering and new service streams such as subscription services.

“Heidelberg’s realignment is a radical step for our Company that also involves some painful changes,’ said Heidelberg’s Chief Executive Officer Rainer Hundsdörfer. ‘As hard as it was for us to make this decision, it is necessary in order to put our company back on track for success. Discontinuing unprofitable products enables us to focus on our strong, profitable core. This is where we will further extend Heidelberg’s leading market position by leveraging the opportunities of digitalization. Going forward, we will continue to provide our customers worldwide with technologically leading digital solutions and services across the board.” 
 
Heidelberg will discontinue individual products that earn far too little and significantly impact the company’s profitability, with an annual loss totaling some €50 million. In digital printing, the market for the Primefire 106 product has grown much more slowly than anticipated because of what Heidelberg describes as ‘the difficult industry and market environment’.  
 
Similarly, in sheetfed offset printing, the very-large-format product range ‘has been falling well short of sales targets because of a fundamental change in the market structure for this subsegment.’  Both businesses will be discontinued by the end of 2020 at the latest.  
 
As already announced, Heidelberg’s realignment package will be accompanied by up to 2,000 job losses globally and possible plant closures. The company is stressing that these cuts are part of previously announced measures and have nothing to do with the difficult business situation due to the corona pandemic. 
 
Heidelberg’s future strategy will be built around its ‘integrated solutions portfolio’ and new digital business models such as subscription. Future investment spending will focus on what the company describes as ‘full end-to-end digitalization of workflows, which primarily means integrated system solutions across machines, software, consumer goods and performance services. The vision is to create a cross-industry IoT-based platform to automate all customer-supplier relationships to enable print shops to secure a significant gain in productivity.” 

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