Heidelberger Druckmaschinen AG (Heidelberg) (FWB:HDD) expects a significant downturn in sales and thus a marked reduction in operating result (EBIT) for the current financial year (April 1, 2008 to March 31, 2009) compared to last year. The financial result is also expected to be down due to the current financial crisis and the movements in interest rates. These developments coupled with the restructuring costs will lead to a significant annual deficit in the current financial year.
Because of the unpredictable nature of the current financial crisis and its impact on customers´ investment decisions, Heidelberg will not, contrary to earlier announcements, provide a quantitative forecast for the current financial year. While financial year 2009/2010 is even more difficult to forecast, the Management Board does not currently expect any change for the better given the current developments.
In the light of the significant fall in sales and earnings for both the current and the next financial year, Heidelberg is extending its existing comprehensive package of cost–cutting measures and accelerating its implementation. Instead of the total cuts of EUR 75 million announced so far, the total package will now yield savings of EUR 150 million to EUR 180 million as early as financial year 2009/2010. Further measures in financial year 2010/2011 will boost total savings to around EUR 200 million.
To reach this objective, Heidelberg will adapt personnel capacities and organizational structures in Production, R&D, and Administration, but also in sales organizations worldwide. For the short term, it will request shorter working hours to achieve an immediate capacity adjustment. To achieve long–term adaptations to our capacities and structures, we will need to reduce worldwide staffing levels by up to 2,500 jobs. Every effort will be made to keep the social impact of these job losses as small as possible. In the process, it is likely that operational redundancies will be necessary at the company´s German sites. Talks with employee representatives about the restructuring measures will start immediately. The collective agreement for safeguarding jobs (Zukunftssicherungstarifvertrag), concluded in 2007, calls for such negotiations in the event of significant changes in market conditions and lays down a number of arrangements for the procedures to be followed and their implementation.
Given this additional need for restructuring measures, the overall costs for the extended package of measures will rise to EUR 130 million to EUR 150 million. The restructuring measures already include provisions from the collective labor agreement for partial retirement recently signed for the metal industry. Most of the restructuring costs are expected to arise in financial year 2008/2009.
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.
