Heidelberg Druck's Pivot Picks Up Speed: Battery Production Begins as Defense Ambitions Take Shape

Heidelberg's battery storage output begins, but Q1 print revenue fell 13% and net loss widened to EUR 32M, testing diversification.

The transformation at Heidelberg Druckmaschinen is no longer just a strategy presentation. The company's HD Advanced Technologies subsidiary has started industrial-scale production of battery energy storage systems for PHENOGY, giving the group's diversification push its first tangible manufacturing output beyond printing presses.

The move comes as the 170-year-old machinery maker scrambles to offset a deteriorating core business. Print machine revenue fell 13 percent to EUR 404 million in the first quarter of fiscal 2026/27, while adjusted EBITDA collapsed from EUR 20 million to just EUR 1 million year-on-year. The adjusted EBITDA margin now sits at 0.2 percent, down from 4.4 percent — a squeeze that underscores why management is racing to build new revenue streams.

Defense partnerships and a leadership shake-up

On the defense front, Heidelberg has teamed up with Ukrainian developer Skyeton to develop autonomous air-to-ground systems, part of a broader push that also involves US-Israeli partners in battery technology and drone defense. The company is betting that its precision engineering heritage translates well into sectors where European demand is structurally rising.

The strategic repositioning coincides with a change in the finance department. Christoph Burkhard takes over as CFO on October 1, succeeding Volker Herdin, who departs at the end of September. The announcement, made last Wednesday, helped lift the stock 4.8 percent — a sign that investors view fresh leadership as an asset during this transition.

Market gives partial credit

The share price closed Friday at EUR 1.54, up 1.7 percent on the day. Over the past seven trading sessions, the stock has gained 8.1 percent, and the 30-day advance stands at 13 percent. The rally suggests investors are weighing the pivot story more favorably than the underlying quarterly numbers would justify.

Still, the recovery is from a deep hole. The stock remains 24 percent lower since the start of the year and 22 percent below its level twelve months ago. At EUR 2.40 in October, the 52-week high sits 36 percent above the current price — a reminder of how far the shares have fallen and how much ground a turnaround would need to reclaim.

The numbers behind the urgency

The first-quarter results, released roughly two weeks ago, painted a stark picture. Revenue dropped to EUR 404 million from EUR 466 million in the prior-year period, and the company posted a net loss of EUR 32 million after a EUR 11 million loss a year earlier. Reuters attributed part of the weakness to the expiration of a state subsidy program in Italy. Order intake slipped nearly 4 percent to EUR 537 million.

Management nonetheless reaffirmed its full-year guidance: revenue should hold steady at prior-year levels, with a noticeably improved adjusted EBITDA margin versus the 6.6 percent recorded last year. A cost-cutting program and the relocation of some production to lower-cost countries are expected to support that target.

Execution questions remain

For now, the defense and energy storage ventures remain strategic declarations rather than quantified revenue contributors. The battery cabinet production for PHENOGY is the first concrete output, but the company has not disclosed expected sales volumes or timelines for meaningful contributions.

The acquisitions of manroland sheetfed's lifecycle business and POLAR's production operations add further pieces to the puzzle, but they too are unlikely to fully compensate for the structural decline in print machinery demand.

What investors will be watching in coming quarterly reports is whether the new segments start showing up in the top line. The market has rewarded the direction of travel — but the gap between narrative and numbers remains wide. The share price action over the past month suggests a portion of investors is willing to give management the benefit of the doubt. The fundamentals, however, have yet to provide much comfort.