Heidelberg predicts further drop in sales

The global financial and economic crisis and the sharp decline in order levels lead to Heidelberg recording a sharp drop in sales and results for financial year 2008/2009.

In financial year 2008/2009, Heidelberg sales fell by 18 per cent to EUR 2.999 billion (previous year: EUR 3.670 billion). Excluding restructuring costs, the operating result based on EBIT fell to EUR -49 million. Including restructuring costs, EBIT was EUR -228 million (previous year: EUR 268 million). The worsening of the financial result to EUR -119 million (previous year: EUR -69 million) can be attributed largely to a substantial rise in the refinancing requirements of Heidelberg in the past financial year. At EUR -249 million, the annual net loss was substantially down on the annual net profit for the previous year (EUR 142 million).

According to Bernhard Schreier, (pictured) Heidelberg CEO, the 2008/2009 financial year was “one of the most difficult in the company’s history.”  “The positive start to the year with the drupa 2008 trade show was burdened in the following months with the global recession and the collapse in demand worldwide,” he said.

“We succeeded in easing the effects of the crisis by implementing a raft of cost-cutting measures at an early stage and managed to create a basis for the future by making some – at times painful – cutbacks.”
 
After the first quarter, incoming orders for 2008/2009 fell to EUR 2.906 billion for the year as a whole, 20 per cent down on the figure for the previous year (EUR 3.649 billion). Due to the worsening economic situation and the restrictive lending policy applied to print shops, demand fell sharply in the second half of the year in particular.
 
Heidelberg does not expect the economic situation to improve significantly in financial year 2009/2010, nor does the company anticipate print shop investments in some industrial countries to pick up in the months ahead. Incoming orders are also predicted to remain at the low level recorded for the last two quarters. In view of this assessment and the low order backlog, Heidelberg forecasts a further drop in sales for the current financial year.

The further decline in sales in the current year will once again lead to low profit contributions and thus weigh on the operating result. This is being counteracted by the package of measures the company was quick to introduce. The sharp rise in refinancing costs, which also include the cost of the guarantees under the Economic Stimulus Package II, will cause Heidelberg to post high costs that will also weigh on the financial result for the current financial year. As a result of these costs in particular, the company predicts another negative result for the 2009/2010 financial year.