MAN Roland Says New Orders Are Down, Optimistic Over the Medium Term
Press release from the issuing company
August 8, 2002 -- Interim report for the period beginning January 2002 until June 30 2002 MAN Roland, the world’s market leader in web offset printing and the world's second largest printing press manufacturer, is anticipating a downturn in business for 2002, despite favorable prospects in the global market for printed products over the medium and long term. Internationally, the market situation in the graphic arts industry in general and in the printing press manufacturing sector in particular remains tense. Competition is becoming tougher in the face of weak demand, putting strong pressure on manufacturing volume and pricing policies. A sweeping recovery is not foreseen in the near future. The underlying cause of the current situation is the slump in the advertising market that has made many printing companies put their investment plans, if only temporarily, on hold.
In the first six months of 2002 new orders at MAN Roland fell by 34% compared to the previous period to EUR 773 million. Sales came to EUR 850 million, or 12% less than the previous period’s figures. Since the beginning of the financial year, orders on hand have fallen by 11% to EUR 1137 million. As of June 30, 2002, the MAN Roland Group employed a staff of 10,610. Pre-tax earnings in the first half of the current reporting period came to EUR 11 million (EUR 32 million the previous period). In view of continuing weak economic activity, operating results for the entire year are expected to be approximately half of the healthy figures achieved last year (EUR 89 million).
Developments in the first half of the year
In the spring of this year in Birmingham, MAN Roland took the opportunity to show its technological lead and its systems competence in its alliance with PrintCity. Also, for the first time all the company’s products (sheet-fed, commercial, newspaper, and digital printing systems) appeared in the new harmonized design which underscores the MAN Roland name and corporate core competencies.
Increased efforts in marketing and sales and a new international marketing strategy will help cushion the effects of the current economic downturn. MAN Roland is able to distance itself from the business cycles associated with capital goods investments by consistently expanding its trade and services business activities. A range of comprehensive measures have been put in place to streamline business processes and enhance the product portfolio in order to maintain consistently high quality. Capacity adjustments were initiated in the sheet-fed press sector at the beginning of the year. Taking full advantage of alternating work-time plans as well as innovative works agreements drawn up with employee representatives have allowed MAN Roland to effectively deal with utilization fluctuations without endangering workplaces.
In the first six months of the 2002 financial year new orders at MAN Roland fell by 34% (compared to the previous reporting period) to EUR 773 million. Figures for the sheet-fed press sector were 36% less than those achieved in the same period last year, while web-offset figures and those for trade and services compared to last year were also down by 42% and 10%, respectively.
All in all, net sales were down 12% in the first six months compared to the same period last year, coming to EUR 850 million. Net sales in the sheet-fed sector and the trade and services sector were also down compared to last year’s six-months figures by 35% and 10%, respectively. However, in the web-offset sector, MAN Roland was able to achieve a plus of 10% compared to last year due to the longer order processing times in the systems business.
Orders on hand
As of June 30, 2002, MAN Roland’s order on hand came to EUR 1137 million. Orders on hand thus fell by 11% compared to levels recorded at the beginning of the financial year.
As of June 30, 2002, the MAN Roland Group employed 10,610 persons (without third-party contractors and trainees). This figure includes the employees of the newly consolidated company ppi Media GmbH, Hamburg, with a staff of 116. The total number of cost-effective employees (including third-party contractors, without trainees) was reduced by 218 persons in the first half of 2002. Compared to the number of employees on June 30, 2001, the total number was reduced by 627 persons.
The focus of company investments, amounting to EUR 33 million (EUR 30 million the previous year), was on the continuing improvements being achieved in productivity throughout the production and assembly facilities.
Half-year results and outlook
Pre-tax earnings of the MAN Roland Group in the first half of the current reporting period came to EUR 11 million (32 million the previous period). In view of continuing weak economic activity, operating results for the entire year are expected to be approximately half of the healthy figures achieved last year (EUR 89 million).
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