He arrived at the business on a mission to ensure Heidelberg’s operations – already the subject of restructuring under previous CEO Gerold Linzbach – were suitably primed to take advantage of the profit potential in the trend to digitisation.
Hundsdörfer’s tenure has, of course, also included the huge upheaval caused to Heidelberg, its customers and the global economy by the coronavirus pandemic, which five years ago wasn’t part of anyone’s planning process.
As he prepares to hand over the reins at the end of the group’s financial year, he opens up to Printweek about the highs and lows he’s experienced during his time in the role, and why he’ll still be attending Drupa 2024.
Jo Francis The response to Heidelberg’s Q3 results was encouraging, is it safe to say you’re leaving the business on a high?Rainer Hundsdörfer I think my successor, Dr Ludwin Monz, has a good opportunity. If he continues the strategies we've started it's going to be a long party.
That’s good to hear. What was your biggest challenge in the role apart from the obvious thing – Covid-19 – which has been the biggest challenge for all of us since 2020.It was changing the mindset of the Heidelberg team to really try new things. To start believing again in their capabilities even outside of the area where we have been active in the past, because Heidelberg is still an excellent company with unbelievable skills, which are also valuable outside of the print media industry.
To change that and to get the people to understand that if they would be brave and try new things, this would not only help the company, but it would also secure the core of Heidelberg.
So if we find new business fields using the capacities and the capabilities Heidelberg has, then the print parts will also benefit from it because in future we can afford an R&D environment which is unheard of in the whole machinery industry. It's the main reason for the market position and the success of Heidelberg, at least in respect of market share and customer recognition and satisfaction.
Will print always be at the heart of what Heidelberg does, despite all these other initiatives and growing new business areas such as e-mobility?Our core business is back, and we have sized the company perfectly for this business. We did our segmentation in a different way to say: we have print, we have packaging solutions, and technology solutions. All of these businesses are very valuable businesses.
Print of course is not growing anymore. We all know that. But it is still big. It's still a billion-euro business. And Heidelberg has such a great offering for this business. This will be an important part for Heidelberg also in the future, and we will invest and we will drive this technology forward and Heidelberg will stay the market leader and the technology leader in that field.
In packaging we have some opportunities because this market is growing and maybe we can even gain some market share, and we can broaden our product portfolio. And there are environmental issues which are becoming more and more important, and solutions for that can and will give Heidelberg growth because we have the ideas, the power of innovations, and the technology part.
The next thing which will fly and is almost ready to lift off is printed electronics. And that's printing, that's Heidelberg’s core competence again, and it's done on Heidelberg machines. And our competency in electronics together [with print] allows us to offer systems solution for that. We have many good projects. And I'm sure we will see the first [sales] and the first profits in the next 12-to-18 months.
We look forward to seeing how that market develops for Heidelberg. Next question: How has the Covid experience been as CEO of the group – did it radically change your plans? I guess it changed lots of people's plans one way or another. Can you sum up the whole Covid experience?I think Heidelberg was in a little bit of a different situation when Covid hit us. If you remember, we just decided and started the restructuring just before Covid. And luckily we did that, because in Covid it wouldn't have been possible simply by the fact that you wouldn't get all the bankers together, which we had done just two weeks before the shutdowns.
I think we did the right thing to not decide to stop and secure the cash and somehow survive.
We said now, we will even accelerate and move further through this pandemic – of course not knowing what the outcome was – but we were optimistic in moving forward fast.
And the result is coming to the surface now. It shows it was the right thing to do, that we were brave and despite the pandemic we moved forward. To do the restructuring, and also to continue to invest to develop new products.
Our new flexo generation was developed during Covid and other things as well – e-mobility was pushed forward during Covid. We didn't stop we accelerated.
Covid did two things to us. One of course, it threatened us big time. If I remember May to June 2020. There were moments when we didn't know how to manage such a decline in orders.
But we didn't run away. We managed and business came back [because] we did the right things.
And so I can say at the end we came out stronger than we went in.
What it also did, of course, and that's for me personally a little bit of a sad part, we lost probably [on the implementation of the transformation plans] one or one-and-a-half years. We would probably be one year further on in regards to turnover and also capability… but it is not gone. It is only a little time shift.
And so the plan is fully intact. It’s just that we lost basically 2020, because that year was about survival.
What about the situation in Ukraine, what impact is that having on the business?We are watching the developments in Ukraine with great concern, especially from a humanitarian point of view when you see the current images on a daily basis. The health of our employees and business partners on site is our top priority.
Our employees and their families are safe and well cared for. We remain in close contact with them and are doing everything we can to ensure that this remains the case.
We have a subsidiary in each of the two countries. Last year, the Russian subsidiary generated sales of just under €25m, while the Ukrainian subsidiary generated sales of around €4m to €5m euros. If we put the sales of our activities there in relation to our total sales of over €2bn a year, we reckon that the impact should be manageable in purely economic terms. In view of current developments, we must also ask ourselves what this means for raw material and energy prices in general. Of course, we are registering what is happening in Russia's economic environment right now.
We will comply with all sanctions and legal requirements.
And what was the most difficult decision you made during your time as CEO, pandemic or otherwise?The most difficult decision, because I'm an engineer, was to kill two of the world's best products. To kill the VLF which also is strategically important, but if you can't make money from a business point-of-view, you have to kill it.
That was hard. And the same with the Primefire. It’s still by far the best digital packaging B1 printing press… But if there is no market you have no choice.
And in particular for an engineer. And Heidelberg is an engineering company. So it was not a tough decision for me only, it was a tough decision for all to basically accept that even if something is technically outstanding, but business-wise a disaster. You're going to have to kill it.
The Primefire debuted at Drupa 2016
Do you think Heidelberg will step back into that space in a big way at some point with your own products?Sooner or later, I think yes. Digital printing is certainly something which will continue to have some important role. The first time I got in touch with printing was in 1986 or so. I worked for a company that made some accessories for web guides. And at the sales meeting, I had to give a speech to all the sales people about all the printing processes available and their advantages and disadvantages.
And already in 1986 digital printing was already announced as the printing solution for the future. And let's face it in commercial printing, it is already today. It has eaten Heidelberg’s share of the [B3] SX 52 machines and also some of the half-format machines already right now.
In packaging, it's different. There is some digital printing but it's all web. That's not sheetfed and there is also some ways to go until that happens because nobody prints individual packaging, not in a large scale at least.
But we are in digital printing. Heidelberg is big time in digital printing, and that's in labels. In labels it is the growth path. And that's why Heidelberg takes all that we learned with the Primefire and with the Labelfire, and we will soon be coming out with the next generation which has a much broader scope to the market.
And we believe that digital printing in labels is going to grow and continue to grow, and sooner or later it might also jump over to packaging and we will be able to start this over again and start with packaging digital printing – as soon as the market is there. We also conserved the know-how of digital printing. And that includes not only the machines, but also the ink because you have to have the ink if you want to do good business in digital printing.
Interesting. I look forward to hearing more about that. Moving on to that glorious thing called hindsight, with hindsight, is there anything you would have done differently?I would have made a few personal decisions to get rid of some people earlier. I was probably wrong to believe they would change, and we could have been faster. Looking back in hindsight, there are a handful people and if they would have left earlier we would have been moving forward faster.
You can send me a list if you like…It always has to do with what is the biggest challenge, and this is change the mindset. And if you have some key people who just can't change, and that’s not because they are bad or incapable, but they can’t change. Then you have a problem that you cannot change the whole direction. And that's what I should have done or would have done in hindsight differently.
What's been the most enjoyable or interesting thing that you discovered about the printing industry during your five years ago here? I know that it wasn't all completely new to you, but I suppose being really embedded in it was.The printing industry is in its whole a very interesting industry. Printing is fascinating. The equipment… the offset printing press is fascinating technology. It's a big clockwork system with unbelievable precision. So from an engineering point of view of course I like it very much, I love that.
But mostly I like our customers and the unbelievable loyalty they have to Heidelberg. When I visit customers it’s almost like visiting family. I've worked for really good companies before where we also had loyal customers, but not as loyal as Heidelberg’s who are highly interested not only in their business, but also were very concerned when Heidelberg was in trouble. Not only ‘where do I get machines from’, it was as if somebody in the family was sick, you care and that was really fascinating.
And actually all over the world, in Germany, in the UK, in US or in China, I see that unbelievable loyalty. And what also impressed me was how fast our Chinese customers moved forward. How quickly they decide, how brave they are in entering into a new field they don't know much about, but they go.
So in particular our Chinese customers, but also our Chinese team. You know the factory Heidelberg has in China, it's an exciting factory. The people who work for us there, they have Heidelberg in their heart. Chinese people who could also work somewhere else, but no they become original Heidelbergers.
And what's been your proudest achievement?That that we finally made it despite a lot of challenges coming also from the outside. Even from here and there inside. That we still, even when it became tough, we could motivate the team to continue on and drive it through. Driving success.
I’m very proud that we managed that. And I'm very proud of our motivated team who did that. Then of course, we are also proud that we started subscription despite of course the challenges that we are not a rich company anymore who could afford to put all of it on our balance sheet, and we found a solution for how we can do that.
The new digital business model is definitely something to be proud of. And of course, all the automation we drove forward with workflow, with plate-to-unit for the machine, which allows basically unmanned operation. There are still a few steps to go but we're closing in and even a complex process, like sheetfed offset printing can be operated unmanned. I think that's a great achievement.
That's really good to hear. From your experience of meeting with Heidelberg customers all around the world, as you just mentioned, what do you think is the key thing that stands out in terms of being a successful printer?Dedication. I think that is always important regardless if you’re a printer or what business you run. But I think our successful customers think not about the process, they think about the needs of the customer better than others, which leads them to all those solutions we offer such as Push to Stop and all the workflow automations that address the customer needs: to deliver it just in time and to deliver also on a competitive basis, high quality.
Our customers who better understand their customers are the most successful ones. And that's also interestingly the ones who also request all our latest solutions. They're all usually, at least to a certain amount, the typical subscription customers as well. And it's not only because of subscription, it's because they think from the customer point-of-view and they say you know if I can get Heidelberg helping me to run my print shop, I will have more time for my customers.
I remember interviewing Hartmut Mehdorn, one of your predecessors a few years ago. At the time he was talking about how everyone was saying Heidelberg was too big: you had web offset presses, you had newspaper presses, digital presses, sheetfed presses... I remember him saying, but look at firms like Canon and HP and Xerox, look at the size of these companies they're bigger than Heidelberg. And this is where the new competition was coming from at the time. How do you view the competitive landscape and the big competitors now for Heidelberg?I think Mehdorn was right. The copier machine companies, they've blown up their copy machines and have taken away a good portion of the classical Heidelberg print business.
As I mentioned, a good portion of commercial printing is gone and will not come back. And it is gone in a way Heidelberg couldn't compete, we can’t make copy machines.
But we also could accept that as Heidelberg and say, we shouldn't fight for that, we should go where the lucrative business is, the high-volume, high-quality printing which is still there – and offer more in solutions than we have today and enable our customers to reduce their costs by using automation.
This is mainly if I look at the post-press area, there is a lot of work to do. Then also the automation which is in the first place the automation of data. Robotics is of course also automation. But where the industry suffers the most is in automation of the data, and that's what is being addressed by Zaikio, in the first step.
I think that's where Heidelberg needs to go. Because we can’t compete against copy machines, who in the meantime, can produce a quality which is close to offset, are very easy to use and a much lower investment.
We shouldn't try to compete on that and we should go where the strengths of Heidelberg are – making industrial machines, industrial printing, that's what we do. That's more and more packaging and still, as I mentioned before, a one-billion-euro business for Heidelberg. It is the industrial part of that.
Away from I suppose industrial production are all the things that people are printing now that they could never have printed before. There's a load of ‘new printing’ that I’m not sure really gets counted in all the figures either. What’s your view on these diverse opportunities?Looking a little bit forward if printed electronics, let's say functional print, it's not only electronics, we could do a lot more things, takes off. The business is going to grow significantly.
Many things we can imagine today can be printed. And the biggest part and that's the focus we have is sensors because digitisation needs information, and where do we get information from? Sensors. And in order to have many and to have them everywhere, they need to be inexpensive.
And if they are semi-conductor based, they are a lot more expensive. Whereas if you'd simply print on the substrate, which hopefully is even organic, and you can throw it away [and recycle it], you do not have an environmental problem like we have today with semi-conductors.
That is going to become, I think, in the next few years, a very, very big business for Heidelberg.
What we what we have developed together with the Heidelberg Innovation Lab, where Heidelberg is one of the main owners, is a sensor foil for battery cells, where we can supervise heat and pressure of the battery cells, which is important to know when you charge and when you de-charge to manage battery life. So this could very well become a big business, probably in the near future. Each battery will have thousands and thousands of square metres in each battery, multiply that by millions of cars.
And it's print, and printing, but it’s not decorative printing, it’s functional printing.
What are your views on the future trends and the biggest opportunities for the printing industry overall, and I guess for Heidelberg’s customers?I think in commercial it is really for our customers to meet even better the demand of their customers. To print what they need, what they want, high quality, and I think we have very good examples of customers who do that well.
Another big trend, I mentioned before, is in packaging. Sustainable packaging, I believe this will become big. Because if packaging is not sustainable, and 100%-recyclable, packaging will become an area where all the brand owners have no way to get out. Already now the CO2 footprint is only the first step, where they're asking our customers ‘what is the CO2 footprint of this packaging?’ Which they typically can't even answer. But Heidelberg could. We can take all the paper, the substrates, the inks, everything. We also know the scrap rate and and so you can calculate what is really the CO2 footprint.
And maybe we will have that as a service in future where, of course first we would start with subscription to do something like this because there we deliver everything and we can easily calculate for the customer what is the CO2 footprint, and we can also recommend what is the best combination of inks and colours to reduce this and to minimise it.
So that could be a USP for the whole package of Heidelberg in the future.
And then, of course, new technologies, in particular packaging, could also be a very interesting technology in particular for mass production that will close to a certain extent the gap we opened up with shutting down VLF. With that technology I can go any width, I can go two metres if I want.
As you say there's so much packaging that is such high volumes and won't change in that respect, when you think about the enormous volumes on a daily basis of some of these packs.The biggest trend, I believe will be printers who really automate their shop and get into today's world of digitalisation. Proper end-to-end digitalisation. With connections of all machines, with connection to all their partners. This is going to be the trend that I think will separate the good ones from the good ones. Because the performance of the machines themselves, it's a hygiene factor, and without that nobody can exist anymore.
So you need to differentiate on the digital field. And, and by the way, that's also a very interesting experience in China. There is on a big scale a generation change coming. All the founders who are all good and dear Heidelberg customers, bringing their sons and daughters to the shows and to Heidelberg. And these kids they're not really interested in the machine anymore. For them, a performing machine like a Heidelberg is a given. That's the basis. They ask our people, so how do I control the process. How is the digitalisation? How can I track my order? How can I optimise in the real world?
They are already digital natives. And the machine is just the hardware you need to execute and get the ink on the paper. That's it.
But to run your business, the machine is not the in the focus of their mind and that that shows where the industry is going and where the demand is. And I think that's where Heidelberg has a really good advantage, that we've started this digitalisation much earlier than anybody else.
I was recently talking to Micropress, one of your customers here in the UK – they have since won our Company of the Year Award – they’ve set up a new customer dashboard to give their customers access to their systems at any time of the day or night to see where their job is. And I remember Heidelberg announced your first app last year that promises something similar.Yes, to help our customers to really control and improve their cost situation and performance, we have just developed an app. Everything we develop new is already cloud-based to control the whole print shop or print shops. We developed the system collaboratively together with a customer and what he wants makes a lot of sense. He says, ‘the most money I lose is when I produce crap’. And by the way, it's also not very economical if I trash the paper, because I need 100 or 150 sheets until I'm in good print.
So basically on his smartphone, wherever he is at the moment, in the car, on the train, in the bed, whatever… he can look up how his operations are performing, and very easily see what is in the range and what is not in the range. It picks it up and allows him to solve any problems at a very, very early stage. And that's only one of many ideas where our customers basically say, ‘that is what we really want in order to increase our performance’.
Have you got any advice? For the incoming CEO?He should be brave and should not be afraid to challenge people with changes. And of course he needs to start to love the printing industry. That's very important. You need to love this industry. It's not very difficult to love it, but it's mandatory.
It definitely is. Mandatory is the right word! What will you miss most about print?It's very easy. The technology, the customers… I will definitely visit the next Drupa. And I've made good friends with some of our customers so I will also visit them in the future once in a while.
I will miss a lot this dedicated Heidelberg team all around the world. We have so many great people wherever you go. If it is somewhere in our factories in Germany, or in our sales organisation in Italy, or in the UK, or the US or Japan or China. I am going to miss that a lot.
I remember you saying that you had always gone to Drupa, so it's good to know that we may well bump into you at Drupa 2024 in the aisles. Do you have any plans for what you're going to do next? Are you going to relax or take on a new challenge?I'm still finishing the job and I am always 100% dedicated until the last day and this will be no different. I have already for many years had some supervisory board activities. These I will continue. Maybe there are new ideas where I can use my experience of the last few years at Heidelberg.
But on the other hand, I'm turning 65 this year. So I’m probably going to reduce a bit the operational activities where you are basically day-in-day-out working sometimes 60, 70, 80 hours a week, I probably should reduce that a bit. I say that now, let’s see if that’s true!
It does sound a like a nice idea to kick back at least a little bit.It’s very simple. I enjoyed being part of Heidelberg. I'm very proud to be part of Heidelberg. I'm very thankful that I got the option to be the CEO of Heidelberg for five years. And I'm very happy that despite all of the challenges, we could manage to stabilise Heidelberg and to bring it back on a growth path. So I'm very thankful for that. I'm thankful for the unbelievable loyalty of our customers to Heidelberg. That was an awesome experience. And that's something I will definitely miss.
I’m very thankful to you and all the journalists we had a very open and fair communication with, even during difficult times.
Oh! Thank you. That's good to hear. Obviously we want the industry to do well and be successful across the board and it's never nice when things go bad for printing companies or for manufacturers. Sometimes we have some difficult things to report on, but we always try to be fair about it. Thank-you for your time, and… see you at Drupa 2024!