Heidelberger Druckmaschinen AG : Heidelberg Decides on “FOCUS 2012” Efficiency Program to Achieve Profitability Targets

Heidelberg Decides on "FOCUS 2012" Efficiency Program to Achieve Profitability Targets

• FOCUS 2012" aims to deliver operating result of around EUR 150 million in financial year 2013/14
• Measures initiated to reduce capacity and cut sales, marketing, and structural costs
• Up to 2,000 job cuts planned worldwide
• With the "FOCUS 2012" program, expenses amounting to EUR 180 million should be saved, which requires non-recurring expenses in the amount of up to EUR 150 million
• Business in third quarter of 2011/12 in line with expectations in difficult economic environment 

As announced in November 2011, the Management Board of Heidelberger Druckmaschinen AG (Heidelberg) has agreed on the "FOCUS 2012" efficiency program to achieve the company's profitability targets. The aim is to ensure that the target operating result before special items of around EUR 150 million is still achieved in financial year 2013/14 and the company can independently continue to build on its leading position in the future.

"FOCUS 2012" - a comprehensive package of measures
The objective of the "FOCUS 2012" efficiency program is to help significantly reduce capacities and costs at Heidelberg over the next two years. This will lay the foundation for positive business developments in response to the volatile environment and changing market requirements. Most of the measures will be initiated and implemented quickly before the end of calendar year 2012. In addition, the program includes a number of medium- to long-term measures aimed at adapting the entire organization to the changed structures.

The target is to achieve total sustainable savings of around EUR 180 million in financial year 2013/14. Depending on the results of negotiations with employee representatives and other factors, the non-recurring expenditure required to do so is estimated at up to EUR 150 million. 

The short- and medium-term measures will be affecting the production and service capacities, research and development as well as sales and structure costs, which each are to be adjusted to the modified basic conditions, and thus shall be reduced.

The entire package of measures will have an impact on the global headcount of Heidelberg. Subject to talks with employee representatives, up to 2,000 jobs will be cut worldwide. Based on current plans, around 1,200 production, development, administrative, sales, and marketing jobs in Germany and around 800 jobs outside Germany will go. At December 31, 2011, Heidelberg had 15,666 employees worldwide (incl. trainees).

Preliminary results for the 3rd quarter
As expected, the economic uncertainties have made the industry more reluctant to invest and resulted in weaker demand. The interim insolvency of a competitor is exacerbating this situation.

Based on preliminary calculations, incoming orders in the third quarter of financial year 2011/12 (October 1 to December 31, 2011) totaled around EUR 640 million and sales around EUR 630 million, which is in line with the scaled-down expectations. Preliminary incoming orders at Heidelberg are down on the previous quarter's figure of EUR 668 million, while preliminary sales match the figure for the previous quarter (EUR 636 million). The third quarter's preliminary operating result (EBIT) excluding special items is just in the black again at around EUR 2 million (previous quarter: EUR 5 million). After nine months, despite sales falling slightly compared to the previous year, Heidelberg has succeeded in improving the operating result excluding special items to EUR -19 million (previous year: EUR -26 million). As a result, the company is still planning to achieve a noticeably better operating result excluding special items for financial year 2011/12 as a whole than in the previous year. The preliminary free cash flow in the third quarter almost broke even at EUR -4 million (previous quarter: EUR -12 million). This kept the net debt at a relatively low level and, at December 31, 2011, it was virtually unchanged from the previous quarter at around EUR 275 million.

For further information:
Heidelberger Druckmaschinen AG
Investor Relations
Robin Karpp
Tel: [phone]
Fax: [phone]
E-mail: [e-mail]

Heidelberger Druckmaschinen
A technology provider and partner in the print media industry

Heidelberger Druckmaschinen AG (Heidelberg) is the world-wide leading provider of solutions and services for the print media industry. The name Heidelberg is internationally associated with leading technology, top quality, and customer focus. The company's core business covers with its equipment and services the entire process and value chain of the sheetfed offset format classes from 20 inches (35 x 50 cm) to 64 inches (120 x 160 cm) as well as digital printing solutions. Furthermore, contract manufacturing - mainly for customers from other engineering sectors and the energy sector - is gaining importance at Heidelberg.

Headquartered in the city of Heidelberg, Germany, with production and development sites in seven countries and around 250 sales and service units in 170 countries, the company serves about 200,000 customers. Printing presses, prepress and postpress equipment are mainly produced in Germany in compliance with severe quality standards. For the Chinese market, standardized printing machines for all common format classes as well as folding machines are manufactured in Qingpu near Shanghai, China.

In financial year 2010/2011, the company had a sales volume of 2.629 billion Euros. As of March 31, 2011, the Heidelberg Group has employed a workforce of 15,282 including 631 trainees and apprentices.

Important Note
This press release contains forward-looking statements based on assumptions and estimations by the Management Board of Heidelberger Druckmaschinen Aktiengesellschaft. Even though the Management Board is of the opinion that those assumptions and estimations are realistic, the actual future development and results may deviate substantially from these forward-looking statements due to various factors, such as changes in the macro-economic situation, in the exchange rates, in the interest rates and in the print media industry. Heidelberger Druckmaschinen Aktiengesellschaft gives no warranty and does not assume liability for any damages in case the future development and the projected results do not correspond with the forward-looking statements contained in this press release.

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