Heidelberg continues to weather economic storm

During the first six months (April 1 to September 30) of fiscal year 2003/2004, Heidelberg recorded sales of around €1.5bn (previous year: €1.9bn).

Adjusted for currency and consolidation effects, this represents a fall of 15 per cent compared with the previous year. Incoming orders during the same period amounted to €1.8bn (previous year: €2.0bn).

Order levels during the second quarter were better than for the months April to June, particularly in the Sheetfed Division and, under regional aspects, in the countries of Asia and Eastern Europe.

Bernhard Schreier, Heidelberg CEO, says, “The global reluctance to invest and the economic and structural problems facing our industry have not changed significantly in the first half of the current fiscal year. The current economic climate does not allow concrete sales and profit forecasts for fiscal year 2003/2004. We must wait and see over the coming weeks and months to what extent the positive development from the second quarter proves to be sustainable”.

The operating result for the half-year was a €93m loss (previous year: €36m). The net result was a €129mloss (previous year: €13m).

Herbert Meyer, Heidelberg CFO, says, “Despite sales being only slightly up on the first quarter, we were able to virtually halve the operating loss in the second quarter to a loss of €34m (previous quarter: a loss of €59m). The cost-cutting measures introduced are already beginning to bite. Personnel costs in the second quarter, for example, were seven per cent down versus the first quarter. We will continue to drive forward our efficiency-enhancing and cost-cutting measures in order to achieve the planned improvements in results”.

As of September 30, 2003, the Heidelberg Group had a workforce of some 23,700 worldwide (previous year: 25,000). Overall, Heidelberg is looking to reduce staffing levels worldwide by around 3,200 over the period April 1, 2002 to March 31, 2004, some 400 jobs being cut in the second quarter of the current fiscal year alone.

Sales in the Sheetfed Division climbed €70m from €492m in the first three months of the fiscal year to €564m. Incoming orders rose from €551m in the first quarter to €752m in the second. The Digital Division’s sales, incoming orders and result also improved on the figures for April to June, though levels were still low. Orders received by Web Systems were well up on the first quarter, while Postpress recorded increases in both sales and incoming orders.

Only Digital returned figures that improved on the first half of last year. Incoming orders for this Division grew €10m over the same period last year to €111m, with the operating result improving to a loss of €17m (previous year: a loss of €38m). The operating result for Sheetfed was a loss of €7m (previous year: €137m).

The Asia and Eastern Europe regions continued to develop well. Despite the difficulties facing the industry, the figures for both regions were on a par with those for the first half of last year.

As a result of the continuing reluctance of commercial printers on many markets to invest, most noticeably in the key markets of the United States and Germany, Heidelberg will continue to adapt its production capacities in the Sheetfed Division to the order situation by extending job safeguards and short-time working up to and including May 2004. In Germany, the Heidelberg, Wiesloch, Amstetten and Brandenburg sites will be particularly affected by these measures.

Heidelberg is continuing to improve its cost structures in all divisions of the Company and is currently in negotiations in this respect with regard to the Digital and Web Divisions.

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