Two of the world’s leading printing press manufacturers cite continued economic uncertainty around the globe as a cause for the continuing decline in technology investments.
In preliminary financial statements issued by both Heidelberg and Koenig & Bauer AG (KBA), the German-based press makers revealed improved incoming orders over the last quarter, however sales for the year remain below last year’s levels.
Heidelberg’s fiscal third quarter (Oct. 1 to Dec. 31, 2009) saw the highest level of incoming orders they’ve seen in five quarters, yet sales were down 23 percent when compared with the same quarter last year. And for the first nine months sales dropped 28 percent from the same period last year.
"Incoming orders and sales were slightly up in the third quarter," stated Heidelberg CEO Bernhard Schreier (pictured above) in the company release. "There is currently no sign of a significant recovery, though, because generally speaking print shops around the globe are still reluctant to invest."
The company has sold over 30 large-format sheetfed presses worldwide since entering the market in 2008 and foresees further growth in this market, particularly within the packaging printing segment.
Looking forward Heidelberg anticipates year-end sales to be below last year with a net result being a loss of between 110 million Euro and 150 million Euro.
KBA reports that global demand in 2009 was more than 40 percent below the level experienced two years ago.
Like Heidelberg, KBA reported some growth of incoming orders over the last quarter, but overall company orders dropped 29 percent from the previous year. KBA’s sales for 2009 reached $1.55 billion (Euro 1.06 billion), a 31 percent fall from last year. However, despite its drop in sales KBA turned around its pre-tax loss of $127 million (Euro 87.1 million) in 2008 to a balanced result for 2009. The company even anticipates turning a modest post-tax profit for the year.
Both company’s have been shedding jobs since the beginning of the global economic decline. Heidelberg cut 181 jobs in the last quarter. (A total of 2,550 jobs have been lost since March 31, 2008, with a target total of some 4,000 jobs to be cut worldwide by the end of the next fiscal year.) KBA’s workforce was trimmed from around 8,000 to less than 7,000 and this year it will be lowered to around 6,300.
KBA points out in its report that its restructuring process was accomplished with no state aid or new debt. In its statement the company cites its disagreement with government aid supporting other (un-named competitors) in the industry (i.e. Heidelberg):
"management is deeply concerned that other companies appear to be using state aid to preserve excess capacities by building for inventory and selling off stock at deep discounts. This has seriously undermined the price of both new and second-hand equipment, making it difficult for competitors to win contracts at an economically viable price, and counteracting the benefits of consolidation. Such behaviour harms the entire industry and demonstrates once again that state for individual companies can distort competition for the rest of the field. Jobs secured at the tax-payer’s expense are ultimately lost elsewhere."
KBA will issue its 2009 year-end results on March 26th along with an outlook for 2010. Heidelberg’s preliminary fiscal year-end report will be released May 11th.
