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Heidelberg Implements New Corporate Structure, Targets Break-even Financial Results

March 30, 2010
HEIDELBERG, GERMANY—03/30/2010—Heidelberger Druckmaschinen AG (Heidelberg) has completed the restructuring announced in November 2009 and identified further potential for improving efficiency. From April 1st forward, the company will be split into the Heidelberg Equipment, Heidelberg Services, and Heidelberg Financial Services divisions.

"We are starting the new financial year with a leaner and more efficient organization. This will enable us to also provide our customers all over the world with a faster and more focused service," said CEO Bernhard Schreier.

The company is also responding to the changing structures in the global print media industry by expanding the Heidelberg Services division in the future, which is relatively independent from economic cycles. The objective is to provide services that will help Heidelberg customers enjoy greater business success on a sustainable basis.

"The new structure has paved the way for Heidelberg to be even more powerful in the strategic core businesses of equipment and services," continued Schreier.

New corporate structure geared towards strategic core businesses and expected market volumes

The aims of the Heidelberg Equipment division are to build on the company's market-leading position in the commercial printing segment, and to achieve growth in packaging printing and the associated postpress operations. The new Heidelberg Services division also strengthens the company's claim to be the preferred service partner for print shops in the print media industry.

The company's restructuring has involved optimizing processes and streamlining the entire organization. This will result in the planned shedding of up to 450 jobs worldwide in administrative and sales.

The slight upward trend in the print media industry has continued over recent months, but no major upturn is as yet apparent. Heidelberg plans to adjust the production workforce so as to gear capacities to the continuing economic uncertainty in 2010. This will result in the loss of up to 400 jobs — primarily at the Wiesloch/Walldorf site.

From financial year 2011/2012, the lowering of structural and personnel costs will result in annual savings of approximately EUR 80 million. The plan is to achieve EUR 60 million of these savings already in financial year 2010/2011. Some EUR 30 million of the costs resulting from these job cuts will be additionally booked in financial year 2009/2010, with a further EUR 20 million to be booked in the next financial year.

"The order situation in the print media industry has stabilized over recent months. The higher demand is still coming mainly from emerging markets such as China and Brazil. There is no prospect of a significant increase in the industry's investment volume in 2010. We are adapting our company's capacities and structure accordingly. As a result, the level of sales at which we achieve an operational break-even result has been lowered once again, to less than EUR 2.5 billion. The objective of this measure is to achieve a break-even operating result for the next financial year assuming stable economic development and furthermore an economic value added (EVA) in all areas of business in the medium term," said Schreier. The company will provide at the earliest an outlook for the new financial year at the Annual Press Conference.
 

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