Citing an early analysis of its second quarter results (July-September) and recent economic and market-specific forecasts, German press manufacturer Heidelberg is forecasting a loss of between 110 million and 150 million Euro ($170 and $230 million) for its full fiscal year (ending March 2010).
Heidelberg CEO Bernhard Schreier
Second quarter sales worldwide are expected to be around 500 million Euro, on par with the slow first quarter of the year, and looking forward Heidelberg doesn’t anticipate any significant upturn.
"As a result of low advertising budgets, customers are still running well below capacity, which is expected to result in a continued reticence to invest," notes the company in a release dated October 9th, sent out in advance of its final second quarter results to be published November 10th.
Heidelberg’s share price tumbled 27% (from 7.2 to 5.2 Euro) following the announcement of its Q2 projected sales (and year-end outlook). This followed shortly after company shares had risen on October 7 following announcement that Heidelberg’s management and employee representatives reached agreement on a plan that will see some 1,500 jobs cut at German locations through this fiscal year. Additional cost savings will be achieved through pay reductions and flexible work schedules. Company executives have also agreed to reduced compensation. "These painful cuts are essential to counter the effects of the most serious crisis of our industry and create a stable position for the company’s future," said Bernhard Schreier, Heidelberg CEO.
Finally, rumours of the proposed merger between Heidelberg and manroland have cooled with reports suggesting that manroland has walked away from the table. Reuters reports that following Heidelberg’s dire sales projections for the rest of this fiscal year hopes of financing a merger between the companies seems unlikely. Both press manufacturers refuse to comment on the speculation.
