Heidelberg records €229m loss but targets swift recovery

Heidelberg's restructuring programme has contributed to a €138 million ($171.8 million) pre-tax loss in the last quarter of its financial year 2011/12, resulting in a €229 million pre-tax loss for the full year .

Its full year results for 2011/12 also revealed a small dip in sales, from €2,629 million to €2,596 million, while its pre-tax loss ballooned from €143 million in 2010/11. Incoming orders slipped by 7% to €2.5 billion for the year, while the company’s order backlog for the period fell by 20% year-on-year to €506 million.

However, the German manufacturer said it was aiming to capitalise on a strong showing at Drupa by targeting a positive operating profit of €150 million in 2013/2014. Its confidence stems from a strong start to its 2012/2013 financial year, driven by a successful showing at Drupa, which resulted in incoming orders worth more than €800 million ($996 million).

As a result, the press manufacturer is predicting a spike in sales during the latter part of the 2012/13 financial year.

In the short term, though, any sales boost is likely to be undermined by the costs involved in the company's Focus 2012 efficiency restructuring programme, which will involve the cull of more than 1,500 staff by 2014.

Heidelberg said the cost-saving programme would help achieve targeted annual savings of around €180 million in the 2013/14 financial year.

As part of the Focus 2012 plan, employees' working weeks will be cut to 31.5 hours, which will see capacity at the German manufacturer's plants reduced by 15%. Ultimately, Heidelberg plans to employ a workforce of 14,000, down from 15,666 in December 2011.

According to the manufacturer, the first round of staff left the business on a voluntarily or mutually-agreed basis.

Heidelberg chief executive Bernhard Schreier said the second half of the company's financial year 2011/2012 was shaped by "great uncertainty".

He added: "Through our new products, improved cost base, new organisation, and stable financing, we have created a solid foundation for a successful future.

"Now it is imperative to take advantage of the improved mood in the industry and of the opportunities in the market, as well as to continue with the systematic implementation of the cost-cutting measures and thus returning to profitability in 2014."

The company used its results statement to reveal that Marcel Kiessling, board member responsible for services has assumed overall responsibility for "all customer contacts with the sales and service functions as well as the consumables business". It said the move would harmonize its global sales operations and drive growth across the BRIC countries.

This article originally appeared at printweek.com