However the world’s biggest printing press manufacturer says its figures for the second half of the year were a marked improvement on the first half, and point to a brighter future, the press division for instance broke even in the second half of the year.
Heidelberg also says that according to industry analyses, the market for new machinery will grow at an annual rate of up to 12 per cent in the coming years, providing further succour for the Board.
Orders in virtually every region in the world were sharply down, however orders from the Asia Pacific region were up, due mainly to orders from China which rose by remarkable 50 per cent over the previous year. Overall global orders were down by 18 per cent to €2.37bn while sales were down by almost a quarter, 23 per cent, to €2.3bn.
Bernhard Schreier, Heidelberg CEO, putting a positive spin on the results, says, “The financial and economic crisis has hit the Heidelberg Group hard, but we have been able to strengthen our leading market position. What’s more, we have restored the Group’s financial stability and lowered the break-even threshold considerably. The reorganisation has adapted and optimised all our structures in line with the changed market environment, so that we can once again enjoy profitable growth in the future. A definite upward trend was apparent in the second half of the year and we are therefore looking to the future with confidence.”
Heidelberg says the second half of the financial year brought a significant market recovery. At €1.287bn, incoming orders were around 19 per cent higher than in the first half of the year.
The resulting loss from operating activities excluding special items more than doubled from the previous year’s loss of E49m to E130m. A large part of this loss, some €128m, was recorded in the first half of the financial year, with a close to break-even operating result of €2m excluding special items was achieved for the second half-year. This reflected the positive impact of higher sales combined with the cost-cutting measures, and the usual seasonal effects. Special items for restructuring measures totaled €28m for financial year 2009/2010 as a whole. Due to higher financing costs and the loss in book value resulting from liquidation of the corporate tax credit, the financial result fell to €127m from previous year’s figure of €119m.
In the Press Division, incoming orders were 17 per cent down on the previous year at €2.1bn. Sales in the period under review fell by 21 per cent to €2bn. At minus €110m, the operating result excluding special items was a significant decline on the previous year’s loss of €35m. In the second half of the year, however, the division achieved a slightly positive operating result of €1m.
Both incoming orders and sales fell significantly in the Postpress Division, down 27 per cent and 35 per cent respectively on the relevant figures for the previous year. Despite the big drop in sales, the operating loss excluding special items remained at the previous year’s level of €31m. In the Financial Services Division, sales fell as expected, from €25m to €19m. The result of operating activities excluding special items for the year under review was €11m compared with the previous year of €16m.
Given the difficult underlying conditions in the period under review and the significant annual loss, the Supervisory Board and Management Board will be proposing to the Annual General Meeting that no dividend be distributed for the 2009/2010 financial year.
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