海德堡2009-2010财年的年度报告初稿(英文)
 

Heidelberg financial year 2009/2010: Company successfully stabilized – upward trend apparent in the industry

· Incoming orders at low level of EUR 2.371 billion
· Sales down 23 percent to EUR 2.306 billion
· Restructuring showing signs of success – continued focus on cost-cutting measures
· Noticeable recovery in incoming orders in second half of year
· Structures implemented for profitable growth
· Prospects 2010/2011: Break-even operating result expected along with stable cyclical trend
· Heidelberg plans capital increase to enhance capital structure

As expected, Heidelberger Druckmaschinen AG (Heidelberg) recorded a significant fall in sales and profit in financial year 2009/2010 due to the general reluctance to invest throughout the print media industry.

“The financial and economic crisis has hit the Heidelberg Group hard, but we have been able to strengthen our leading market position,” said Heidelberg CEO Bernhard Schreier. “What's more, we have restored the Group's financial stability and lowered the break-even threshold considerably. The reorganization has adapted and optimized all our structures in line with the changed market environment, so that we can once again enjoy profitable growth in the future. A definite upward trend was apparent in the second half of the year and we are therefore looking to the future with confidence,” he added.

The financial and economic crisis impacted on incoming orders in financial year 2009/2010. The total order volume of EUR 2.371 billion was around 18 percent down on the previous year’s figure (EUR 2.906 billion). Orders were lower for virtually all markets on which Heidelberg operates. One exception was the Asia/Pacific region. In China, order volumes were more than 50 percent higher than in the previous year. The second half of the financial year brought a significant market recovery. At EUR 1.287 billion, incoming orders were around 19 percent higher than in the first half of the year.

The reluctance to invest resulted in a 23 percent drop in sales in the financial year under review, to EUR 2.306 billion (previous year: EUR 2.999 billion). As with incoming orders, Heidelberg recorded much better sales figures in the second half of the financial year.

The result of operating activities excluding special items fell from the previous
year's figure of EUR –49 million to EUR –130 million. A large part of this loss –
some EUR –128 million – was recorded in the first half of the financial year. A close to
break-even operating result of EUR –2 million excluding special items was achieved
for the second half-year. This reflected the positive impact of higher sales combined
with the cost-cutting measures, and the usual seasonal effects. Special items for
restructuring measures totaled EUR 28 million for financial year 2009/2010 as a
whole. Due to higher financing costs and the loss in book value resulting from
liquidation of the corporate tax credit, the financial result fell to
EUR –127 million (previous year: EUR –119 million).

At EUR –229 million, the annual loss was slightly better than the figure for the previous year (EUR –249 million).

“Systematic implementation of the package of cost-cutting measures introduced has enabled Heidelberg to lessen the impact of the big drop in volume on the result quite substantially,” said CFO Dirk Kaliebe. “We will remain focused on optimizing the company's cost structure. By significantly reducing our net working capital, we have kept the net financial debt in the year under review at virtually the same level as the previous year and created a stable financial basis for the company,” he continued.

At EUR –62 million, the free cash flow remained negative (previous year:
EUR –201 million), but a significant reduction in net working capital made it possible to optimize the cash outflow, even though the underlying conditions were far worse during the year under review than in the previous year.

Results in the Press, Postpress, and Financial Services divisions
In the Press Division, incoming orders were 17 percent down on the previous year at EUR 2.108 billion. Sales in the period under review fell by 21 percent to EUR 2.058 billion. At EUR –110 million, the operating result excluding special items was well down on the previous year's figure of EUR –35 million. In the second half of the year, however, the division achieved a slightly positive operating result of EUR 1 million. Both incoming orders and sales fell significantly in the Postpress Division. At EUR 244 million and EUR 229 million respectively, they were 27 percent and 35 percent down on the relevant figures for the previous year. Despite the big drop in sales, the operating result excluding special items remained at the previous year's level of EUR –31 million. In the Financial Services Division, sales fell as expected, from EUR 25 million to EUR 19 million. The result of operating activities excluding special items for the year under review was EUR 11 million (previous year: EUR 16 million).

From the current 2010/2011 financial year onwards, the company will be adapting the above breakdown to the reorganization of its divisions and quoting figures for “Heidelberg Equipment”, “Heidelberg Services”, and “Heidelberg Financial Services”.

No dividend payment planned
Given the difficult underlying conditions in the period under review and the significant annual loss, the Supervisory Board and Management Board will be proposing to the Annual General Meeting that no dividend be distributed for the 2009/2010 financial year.

Stabilizing operations and creating structures for profitable growth
The package of cost-cutting measures has significantly lowered the Heidelberg Group's structural costs and thus its break-even threshold. The targeted annual savings of EUR 400 million were already achieved in the financial year under review and thus ahead of schedule. As part of the company's reorganization, all processes have been analyzed and will be further optimized in future, unlocking additional savings of around EUR 80 million per year. Savings totaling EUR 60 million are set to be achieved already in the current financial year. In order to ensure the company's long-term profitability, the cost structure will be analyzed on an ongoing basis in future and optimized as necessary.

Since the start of financial year 2009/2010, the company has reduced its staffing levels by around 2,400. As of March 31, 2010, the Heidelberg Group thus had a workforce of 16,496 worldwide (previous year: 18,926). Adjusted to take into account newly consolidated companies and trainees, and including temporary agency staff, a total of just under 4,000 jobs worldwide have been cut over the past two financial years – more than 2,700 at the German sites.

New corporate structure geared towards strategic core businesses
The restructuring at Heidelberg took effect on April 1, 2010, when the company was split into the “Heidelberg Equipment”, “Heidelberg Services”, and “Heidelberg Financial Services” divisions. Heidelberg offers its customers both state-of-the-art products and a comprehensive range of enhanced services. The company is also responding to the changing structures in the global print media industry by putting in place plans to expand the Heidelberg Services division, which is relatively independent of economic cycles.

With the Heidelberg Equipment division, Heidelberg aims to further increase its market share in the advertising printing segment and also achieve growth in packaging printing and the associated postpress operations. According to industry analyses, the market for new machinery will grow at an annual rate of up to 12 percent in the coming years.

Heidelberg Services is strengthening the company's claim to be the best service partner for print shops in the print media industry. To this end, the company intends to expand its service portfolio and, in addition to the current range of services and Heidelberg service parts, also strengthen services in the areas of Saphira consumables, Prinect software and integration services, as well as training and consultancy for print media companies. The strategy of further developing services is intended to make the company as a whole less dependent on economic cycles, because this sector benefits from relatively stable developments and offers opportunities for growth. The part of the consumables market that is accessible to Heidelberg, for example, is worth around EUR 8 billion worldwide. The company's current market share is 4 percent and the medium-term goal is to increase this to 7 percent.

“By cutting costs significantly and optimizing processes and structures in financial year 2009/2010, we have ensured that Heidelberg is well placed to return to profitable growth and win further market share when the economic climate brightens,” said Schreier.

Future prospects: Break-even operating result in financial year 2010/2011 along with stable cyclical trend
Heidelberg expects to see further stabilization in the print media industry in the coming months. The company is therefore predicting a modest increase in sales for financial year 2010/2011. Sales are expected to carry on growing in financial year 2011/2012 and, consequently, profit contributions should increase substantially. This, together with the savings made to date, will have a positive impact on the operating result. Heidelberg is striving for a break-even operating result in financial year 2010/2011, provided the economic situation remains stable. Given that high financing costs will continue to substantially burden the financial result, however, the company is once again expecting a significant net loss in the current financial year.

In the medium term, Heidelberg once again expects to achieve annual sales in excess of EUR 3 billion. This would take the operating margin (EBIT margin) above 5 percent and the return on capital employed (ROCE) to roughly 15 percent.

Heidelberg plans capital increase to enhance capital structure
In view of reducing the financial liabilities and enhancing the capital structure of Heidelberger Druckmaschinen AG (Heidelberg), the company's Board of Directors resolved to propose to shareholders, during their general meeting, a rights issue to increase the company's capital by approximately EUR 420 million gross. The relevant proposal will be submitted to the general shareholders' meeting for voting on 29 July 2010.

“With this initiative, the Board intends to increase the company's flexibility in accessing sustainable and independent capital market financing. This will benefit the shareholders, clients and employees equally”, said CEO Bernhard Schreier.

"The proposed capital increase is an important component of our refinancing programme. With it, we seek to stabilise our capital structure and meet the expectations towards an investment grade company. It will thus contribute significantly to increasing the value and securing the future of our company ", said CFO Dirk Kaliebe.