Heidelberg Implements A New Corporate Structure

HEIDELBERG, Germany—Heidelberger Druckmaschinen AG (Heidelberg) has completed the restructuring announced in November 2009 and identified further potential for improving efficiency. Beginning this month, the group 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,” says CEO Bernhard Schreier. “This will enable us to also provide our customers all over the world with a faster and more focused service.”

The company is responding to the changing structures in the global print media industry with plans to expand the Heidelberg Services division in the future. The company’s objective is to provide services that will help Heidelberg customers run successful businesses 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,” continues Schreier.

The new corporate structure is geared towards strategic core businesses and expected market volumes. The aims of the Heidelberg Equipment division are to build the company’s position in the commercial printing segment and to achieve growth in packaging printing and the associated postpress operations. The purpose of the new Heidelberg Services division is to strengthen 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 administration 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.

For the financial year 2011/2012, the lowering of structural and personnel costs will result in an expected annual savings of approximately EUR 80 million. The plan is to achieve EUR 60 million of these savings in financial year 2010/2011.

“The order situation in the print media industry has stabilized over recent months,” says Schreier. “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.”

Business at Heidelberg in the fourth quarter of the current financial year 2009/10 is in line with the company’s expectations. As already forecasted, sales will be up slightly on the third quarter, which will also improve the operating result. Heidelberg will thus achieve its most recent forecast for 2009/2010 as a whole.