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Printing Presses and Machinery (New and Used, Service and Repair)
News Release from: Heidelberg
Edited by the Printingtalk Editorial
Team on 08 May 2008
Heidelberg Suffers And Fears For Next 12
Months
In its own words Heidelberg has admitted that the future of its markets in the next 12 months will mirror the poor conditions it has experienced, with it recording a drop in net profits.
Preliminary sales 2007-2008 financial year totalled EUR3.670 billion, 3.5 per cent down on the previous year's EUR3.803 billion Business slowed in the fourth quarter because of the downturn in the world economy and the financial crisis in the USA, together with customers' reluctance to make investments before the Drupa 2008 exhibition in Germany later this month
This article was originally published on Printingtalk on 6 Jun 2003 at 8.00am (UK)
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The state of the market is such that Heidelberg said it will review its operations to reduce its cost base and lessen the effects of exchange rates.
The Heidelberg Group recorded an operating result of EUR268 million, against the previous year's EUR302 million - a 7.3 per cent return compared to 2006-2007's 7.9 per cent.
The latter figure was boosted by the sale of Linotype and the company's research and development Centre in Heidelberg under a sale and lease back arrangement.
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Preliminary incoming orders in the financial year just closed amounted to EUR3.649 billion Euro, five per cent down on the previous year's EUR3.853 billion.
Whereas the high volume of orders achieved in the previous year was exceeded in Germany, fears of a recession and further effects of the credit crunch made American customers unwilling to invest, added the company.
Business was also less than satisfactory in the UK and Japan, although orders were enhanced by the recovery in the Chinese market.
The preliminary order backlog at March 31 was EUR874 million when it was EUR1.018 billion during 2006-2007.
Heidelberg's chief executive officer, Bernhard Schreier, said: "Poorer economic prospects have taken their toll over the past financial year, in particular during the second six months.
This has led to a reluctance to invest in a number of regions." He explained: "There is no market improvement on the horizon for the 2008-2009 financial year.
With Drupa still to come, it is difficult to predict how sales will develop.
Consequently, we will be publishing our sales forecast for the current financial year at the beginning of August with its figures for the first quarter." Schreier added that it is already predictable that the sales for the first quarter of the current financial year will be down on the previous year's figure and that the operating result (EBIT) will be negative.
The entire fiscal year will be affected by non-recurring expenditures for Drupa, the start-up of series production for a number of new products and the strong Euro.
For those reasons, the operating result for 2008/2009 will be down on previous fiscal year's performance.
He commented: "After Drupa but before our AGM on July 18 we will announce appropriate measures to secure our leading market position and financial performance in the long term.
Our aim is to improve our cost structures and lessen the effect of exchange rates in the medium term by internationalising purchasing and production.
We will also be stepping up our service and consumables operations to further reduce our dependency on economic cycles." And Heidelberg chief financial officer, Dirk Kaliebe, added: "We have once again achieved a good free cash flow in a difficult economic situation.
Based on the preliminary figures of financial year 2007-2008 the management board intends to propose to the supervisory board and subsequently the annual general meeting a dividend of EUR0.95, which matches last year's dividend." In the company's press division (offset printing), preliminary sales were down on the previous year at EUR3.213 billion (2006-2007 - EUR 3.321 billion).
Preliminary incoming orders fell by five per cent to EUR3.2 billion (EUR3.367 billion last year).
At EUR239 million the preliminary operating result for the division was below the previous year's adjusted figure of EUR254 million.
The post-press division (finishing) failed to meet the targets set by the copmpany.
Exchange rate movements and the reluctance of US printers to invest were the main reasons for the division's preliminary sales, incoming orders and operating result falling below the previous year's level.
Preliminary sales amounted to EUR427 million Euro (2006-2007 EUR445 million) and preliminary incoming orders were EUR419 million Euro (2006-2007 EUR449 million) and the preliminary operating result was minus EUR7 million (previous year - EUR7 million).
In the North America, Latin America, and Asia-Pacific regions, sales and incoming orders either matched the previous year's level or fell below it.
Sales and incoming orders only climbed significantly in eastern Europe region.
Growth was strong in Russia in the year under review but it was a different story for the Asia-Pacific region where, despite the recovery in the Chinese market, the figures fell below the previous year because of what the company described as the extremely unfavorable currency situation for European suppliers in Japan.
Incoming orders slackened off in the North America region, in particular in the second half of the year.
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