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Preliminary figures for the financial year 2004/2005 show that Heidelberg’s earnings have turned around. According to the preliminary report: • Sales are up 3 per cent to Euro3.2bn• Incoming orders climbed by 8 per cent to Euro3.5bn
• Net profit of Euro61m was achieved
• Agreement signed on safeguarding the future of Heidelberg’s German sites has been reached
Bernhard Schreier, CEO of Heidelberg says, “"Even if the markets and the global economy did not exhibit the robust growth that we had hoped for, particularly in recent months, the figures nevertheless show that we are on the right track and that our measures are beginning to take hold."
Sales of the largest division, the Press Division (offset printing), increased by around 5 per cent to Euro2.797bn, or by 7 per cent after adjustments for exchange rate movements. The free cash flow was well above the previous year at Euro 154 million, and thereby clearly exceeded expectations.
"The preliminary operating profit - including the operating loss from Nexpress – improved from Euro10m to about Euro160m”, explained Heidelberg’s CFO, Dr Herbert Meyer. “Through the deep restructuring of Heidelberg we achieved this major improvement in earnings which will have continuing effects.” The preliminary operating profit of the continuing operations improved by Euro33m to Euro207m, or 6.5 per cent on sales. The preliminary net profit for the Heidelberg Group amounts to Euro61m. This corresponds to a return on sales after tax of 1.8 percent.
As of March 31, 2005, the Heidelberg Group had a workforce of 18,679 worldwide, justb over 4,000 down on the year before, which can be accounted for in the divesture of its web and digital printing divisions.
In the Press Division (offset printing), preliminary sales in the financial year just closed rose by approximately 5 per cent to Euro2.797bn. Incoming orders in the period under review increased by 10 per cent on the previous year to around Euro3.087bn. The preliminary operating profit for 2004/2005 was Euro183m (previous year: Euro151m).
In the Postpress Division (finishing), sales in the period under review were Euro348m. Incoming orders were Euro359m. The operating profit in this division improved to a loss of Euro2m, compared with a Euro16m loss the year before.
Sales in all regions were up on the previous year, with the exception of North America. Incoming orders improved on last year’s figures in all regions, climbing around 8 per cent on average.
Following tough negotiations, an agreement has been reached between Heidelberg’s Management Board and employee representatives. A framework agreement was concluded that sets out the conditions for extending working hours while at the same time cutting personnel costs. The agreement is to last until March 31, 2008. It will safeguard existing jobs and achieve cost savings of about Euro100m, increasing annually and being full effective by 2008. “After controversial and difficult negotiations, we have arrived at a solution that is acceptable to all parties. This solution will raise earnings in the long term and will help to increase further the competitiveness of the Heidelberg Group”, stated Dr. Herbert Meyer, CFO at Heidelberg. Heidelberg says the savings would help cushion the negative effects of price increases for materials and the strong Euro.
