Heidelberg reports cost cuts making impact

During the period, Heidelberg recorded incoming orders of EUR2.8bn, down from EUR3.1n in the previous year. Incoming orders in the third quarter were just short of EUR1bn. They thus matched the previous quarter and, after adjustments for currency fluctuations, were on a par with the previous year. Sales in the period under review were EUR2.5bn, down from EUR2.9bn in the previous year.

Bernhard Schreier, Heidelberg CEO, says, “The slow signs of recovery in the global economy are now also being paralleled by the first positive trends in the graphic arts industry. We believe that, after three years of strongly negative trends, we are beginning to see the turnaround. Slight increases in advertising budgets give reason for hope.”

Schreier says the course for the restructuring operations already announced by Heidelberg will have been set by the end of the fiscal year in March 2004. The cost-cutting measures in the third quarter alone generated savings of around EUR55m. All in all, they succeeded in reducing the level of the structural costs in the first nine months by some EUR115m compared to the same period last year.

In conjunction with the new alignment, the company set aside a total of EUR525m in the third quarter for non-recurring expenditure, predominantly depreciations on book values. This results in a net loss of EUR725m, compared to the previous year’s net loss of EUR82m.

The cost-cutting measures introduced resulted in improvements in costs and earnings in all division compared to the previous quarter. The Digital Division achieved a break-even operating result, while Web Systems and Postpress reduced their losses significantly.

Sales in the Sheetfed Division were around EUR1.7bn after three quarters, down EUR450m on the previous year. This was due primarily to the weak first half of the year. The operating result was EUR14m, down from EUR210m.

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