Heidelberg Druck's Diversification Bet: Can Batteries and Drones Fill the Gap Before Print Fades?

Heidelberg Druck's core business slides 13% in Q1, while new battery and drone ventures remain early-stage. Stock down 28% YTD.

The transformation story at Heidelberger Druckmaschinen has moved well beyond the printing press. With its HD Advanced Technologies (HDAT) subsidiary now pushing forward on two ambitious fronts — a European sodium-ion battery supply chain with Swiss developer PHENOGY and an autonomous drone-countermeasure production line with Ukrainian partner Skyeton — the company is asking investors to see it as something more than a legacy machinery maker.

The PHENOGY partnership, first unveiled in July, aims to build lithium- and cobalt-free battery storage manufacturing initially in Germany with potential US expansion later. The Skyeton collaboration, presented at the ILA Berlin air show in June, targets industrial production of autonomous air-to-ground systems for drone defense at a Brandenburg site. Neither project has reached series production, and both remain in early development stages — a reality that frames the central tension for shareholders.

The Core Business Is the Immediate Problem

The urgency behind the pivot becomes clear in the numbers. First-quarter 2026/27 results, released just over a week ago, showed revenue sliding 13 percent to EUR 404 million as customers held back on investment. Adjusted EBITDA collapsed to just EUR 1 million, while the net loss widened to EUR 32 million. Management has nonetheless reaffirmed its full-year guidance: revenue roughly flat year-on-year at around EUR 2.29 billion, with a meaningful improvement in the adjusted EBITDA margin from last year's 6.6 percent.

That margin recovery is the linchpin of the bull case. The company is attacking costs on multiple fronts — completing the shift of Speedmaster CX 104 production to China, ramping up a new plant in North Macedonia, and integrating manroland sheetfed's lifecycle business along with POLAR Postpress production sites. These moves are designed to shore up the traditional operation while the newer ventures find their footing.

Signals of Confidence — and Caution

CEO Jürgen Otto added his own vote of confidence in mid-August, purchasing roughly EUR 80,711 worth of company stock. A leadership change is also on the horizon: Christoph Burkhard takes over as chief financial officer on October 1, succeeding Volker Herdin, a transition that could bring a fresh perspective on capital allocation.

Yet the market's enthusiasm has been measured at best. The shares have gained 2.0 percent since the quarterly report and sit above their 50-day moving average of EUR 1.41, with a 6.3 percent advance over the past 30 days. But the longer-term picture tells a harsher story: the stock remains down 28 percent year-to-date and sits 39 percent below its 52-week high of EUR 2.40. The 52-week low stands at EUR 1.29.

The Clock Is Ticking

The bearish argument hinges on timing. Battery storage and drone defense are capital-intensive markets with long development and certification cycles — meaningful revenue could be years away. In the meantime, the core business must carry the cash burden. If print demand doesn't recover while the new divisions are still burning through investment, Heidelberg Druck faces the uncomfortable position of financing two transformations simultaneously with neither yet generating returns.

Both partnerships remain in their formative stages, with no concrete production or revenue figures attached. The risk that they stall as mere memoranda of intent — while the core operation continues to bleed — is what keeps the valuation anchored to the red ink in the traditional business.

What Comes Next

The immediate catalyst is the company's "SHIFT 2026" industry event on October 6-7, where Heidelberg Druck plans to showcase its Jetfire 50 and Jetfire 75 digital printing systems alongside AI-driven processes and robotics applications. That presentation will offer a glimpse of whether the digital print story can complement the diversification narrative.

For now, the share price stabilization above the 50-day average suggests a cautious truce between optimism and skepticism. The next quarterly report will provide the first real test of whether the promised margin improvement is gaining traction — and whether the diversification story can move beyond announcements into the realm of orders and pilot projects. Until then, investors are left weighing a simple proposition: whether Heidelberg Druck can build its future faster than its past erodes.