- Sales and result below previous year’s figures as expected - Efficiency-enhancing program gets off to successful start - Company still aims at keeping net profit on a positive level for the full year despite restructuring costs As expected, the figures reported by Heidelberger Druckmaschinen AG (Heidelberg) for the first six months (April 1 to September 30) of fiscal year 2002/2003 did not match those of the previous year. Sales by the Heidelberg Group in the first half of the year were around Euro 1.9 billion ($1.89 billion) (previous year: around Euro 2.3 billion [$2.29 billion]). Incoming orders during the same period were a good Euro 2 billion ($1.99 billion) (previous year: Euro 2.5 billion [$2.49 million]). "The first half of the year was shaped by the continuing weakness in the world economy and the resulting investment reluctance in the USA and Germany ", stated Bernhard Schreier, CEO of Heidelberg. "We are not anticipating an economic recovery this year and believe that, even in 2003, the global economy will only begin to pick up speed again slowly." The operating result fell as expected to Euro 36 million ($35.86 million) during the reporting period (previous year: Euro 110 million [$109.59 million]). The net profit was Euro 13 million ($12.95 million) (previous year: Euro 62 million [$61.77 million]). "We are not satisfied with the results", stated CFO Dr. Herbert Meyer. "To ensure a sustained improvement in our earnings power even in these difficult times, we have introduced efficiency-enhancing measures worth Euro 200 million ($199.28 million)." As of September 30, 2002, the Heidelberg Group had a workforce of around 24,500 worldwide (excluding the 500 personnel of the newly consolidated Gallus Group). Efficiency-enhancing program initiated immediately the measures aimed at achieving the Euro 200 million ($199.28 million) savings were already introduced in October. The program to increase efficiency and ensure lasting cost reductions is expected to become fully effective in the next fiscal year. Savings of Euro 110 million ($109.63 million) are set to be made in the Sheetfed Division, Euro 40 million ($39.87 million) in Digital, Euro 30 million ($29.90 million) in Web Systems and Euro 20 million ($19.95 million) in Postpress. There are plans to cut staffing levels worldwide by some 2,200 as part of the program. Discussions about the planned job losses are expected to be concluded by the end of the current fiscal year. Prospects for fiscal 2002/2003 Heidelberg had announced in September that it anticipated sales for the full year to be around 10 percent down on the previous year (approximately Euro 5 billion [$4.98 billion]). "The Management Board continues to believe the Company will achieve this level of sales. Despite the one-off expenses of up to Euro 140 million ($139.67 million) all efforts will be made to keep the net profit this fiscal year on a positive level", stated Schreier. Heidelberg will continue to be affected by global economic developments in the future too. "No far-reaching recovery in the world economy is expected during the next calendar year either", stated Dr. Meyer. "Therefore, the economic success of the Heidelberg Group depends essentially on bringing about a sustained improvement in cost structures".