Heidelberg: Net profit of Euro 61 million, Agrees to Cuts
Press release from the issuing company
April 25, 2005 -- Earnings by Heidelberg turned around in financial year 2004/2005 (April 1, 2004 to March 31, 2005). "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," stated Bernhard Schreier, CEO of Heidelberger
Preliminary sales of the Heidelberg Group during the period under review grew 3 percent to Euro 3.207 billion (previous year: Euro 3.114 billion) and by 5 percent after adjustments for exchange rate movements. Sales of the largest division, the Press Division (offset printing), increased by around 5 percent to Euro 2.797 billion, or by 7 percent 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.
Incoming orders in the financial year just closed were Euro 3.508 billion (previous year: Euro 3.247 billion) and were therefore 8 percent higher than last year's figure. The order backlog at March 31, 2005 was noticeably higher that one year ago. It exceeded Euro 1 billion and, consequently, was almost Euro 300 million higher than at the end of the financial year 2003/04.
"The preliminary operating profit - including the operating loss from Nexpress – improved from Euro 10 million to about Euro 160 million”, 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 Euro 33 million to Euro 207 million, or 6.5 percent on sales. The preliminary net profit for the Heidelberg Group amounts to Euro 61 million (previous year: Euro 695 million). 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 (previous year: 22,782).
Results in the Press and Postpress Divisions improved
In the Press Division (offset printing), preliminary sales in the financial year just closed rose by approx. 5 percent to Euro 2.797 billion. Incoming orders in the period under review increased by 10 percent on the previous year to around Euro 3.087 billion. The preliminary operating profit for 2004/2005 was Euro 183 million (previous year: Euro 151 million).
In the Postpress Division (finishing), sales in the period under review were Euro 348 million. Incoming orders were Euro 359 million. The operating profit in this division improved to Euro –2 million (previous year: Euro –18 million).
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 percent on average.
Agreement signed on safeguarding the future of Heidelberg’s German sites
Following tough negotiations, an agreement was reached today between the 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 Euro 100 million, 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. The savings would help cushion the negative effects of price increases for materials and the strong Euro.
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