Market conditions worsened considerably for Heidelberger Druckmaschinen
AG (Heidelberg) (FWB: HDD) in financial year 2007/2008 (April 1, 2007 to
March 31, 2008), with sales, operating result and net profit all down on
the previous year´s levels. "Poorer
economic prospects have taken their toll over the past financial year
in particular during the second six months," stated Heidelberg CEO Bernhard Schreier. "This
has led to a reluctance to invest in a number of regions," he added.
There is no market improvement on the horizon for the current financial
year 2008/2009. With drupa "“ the hugely
important trade show running from May 29 to June 11, 2008 "“ still to come, it is difficult to predict how sales for financial year
2008/2009 will develop. Consequently, Heidelberg will be publishing its
sales forecast for the current financial year at the beginning of August
with its figures for the first quarter.
However, it is already predictable that the sales for the first quarter
of financial year 2008/2009 will be down on the previous year´s
figure, and that the operating result (EBIT) will be negative. Like the
first quarter 2008/2009, 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 these reasons, the
operating result for the entire fiscal year 2008/2009 will be down on
previous fiscal year´s figure.
"After drupa but before the Annual General
Meeting on July 18, we will announce appropriate measures to secure our
leading market position and financial performance in the long term," stated Schreier. "Our aim is to improve our
cost structures and lessen the effect of exchange rates in the medium
term by internationalizing purchasing and production. We will also be
stepping up our service and consumables operations to further reduce our
dependency on economic cycles," he added.
Preliminary figures for financial year 2007/2008
Preliminary sales by the Heidelberg Group for the year as a whole
totaled EUR 3.670 billion, 3.5 percent down on the previous year´s
figure (previous year: EUR 3.803 billion). Business slowed in the fourth
quarter in particular due to the effects on the world economy of the
financial crisis in the U.S. and customers´ reluctance to make investments in the run-up to the all-important drupa
trade show.
Preliminary incoming orders in the financial year just closed
amounted to EUR 3.649 billion, around 5 percent down on the previous year´s
figure (previous year: EUR 3.853 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 U.S. customers
less ready to invest. Business was also less than satisfactory in the
United Kingdom and Japan. On a more positive note, orders were boosted
by the recovery in the Chinese market.
The preliminary order backlog at March 31, 2008 was EUR 874
million (previous year: EUR 1.018 billion).
In the period under review, the Heidelberg Group recorded an operating
result of EUR 268 million (previous year, adjusted for positive
one-time effects: EUR 302 million). This represents an operating return
on sales of 7.3 percent (adjusted value for the previous year: 7.9
percent). The previous year´s figure was
boosted by the sale of Linotype GmbH and the R&D Center in Heidelberg ("sale
and lease back").
The preliminary net profit amounted to EUR 142 million (previous
year, adjusted for positive one-time effects: EUR 144 million). At EUR
215 million, the free cash flow remains at a high level (previous
year: EUR 229 million). Based on sales, Heidelberg was able to reduce
the working capital by 1.1 percentage points to 32.5 percent.
"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 the
Supervisory Board and subsequently the Annual General Meeting a dividend
of EUR 0.95, which matches last year´s
dividend," said Heidelberg CFO Dirk Kaliebe.
Performance in the divisions and regions
In the Press Division (offset printing), preliminary sales were
slightly down on the previous year at EUR 3.213 billion (previous year:
EUR 3.321 billion). Preliminary incoming orders fell by 5 percent to EUR
3.2 billion (previous year: EUR 3.367 billion). At EUR 239 million, the
preliminary operating result for this division was below the previous
year´s adjusted figure of EUR 254 million.
The Postpress Division (finishing) failed to meet the targets
set. Exchange rate movements and the reluctance of U.S. printshops 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 EUR 427 million (previous year: EUR 445 million)
preliminary incoming orders were EUR 419 million (previous year: EUR 449
million), and the preliminary operating result EUR -7 million (previous
year: EUR 7 million).
In the EMEA, 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 the Eastern Europe region. Growth was particularly
strong in Russia in the year under review. 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 due to 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.
At March 31, 2008, the Heidelberg Group had a workforce of 19,596
worldwide (previous year: 19,171). Most of the new appointments were in
the field of production and global sales.
Other dates:
The scheduled publication date for the Annual Report 2007/2008 is June
10, 2008. As this coincides with the drupa trade show, a press release
will replace the usual press conference.
For the table with the figures and further details, visit the Internet
Press Lounge at www.heidelberg.com.
Important note:
This Press Information contains statements about future development that
are based on assumptions and estimates by the management of Heidelberger
Druckmaschinen Aktiengesellschaft. Even if the management is of the
opinion that these assumptions and estimates are accurate, future actual
developments and future actual results may differ significantly from
these assumptions and estimates due to a variety of factors. These
factors can include changes to the overall economic climate, changes to
exchange rates and interest rates and changes in the graphic arts
industry. Heidelberger Druckmaschinen Aktiengesellschaft provides no
guarantee that future developments and the results actually achieved in
the future will agree with the assumptions and estimates set out in this
press release and assumes no liability for such.
