News

Deteriorating market conditions and a strong euro have driven down Heidelberg's revenues and profits.

The print giant's preliminary results for 2007/2008, which were released this morning, revealed sales, operating results and net profit were all down on the previous year.

"Poorer economic prospects have taken their toll over the past financial year, in particular during the second six months," said Heidelberg chief executive Bernhard Schreier.

"This has led to a reluctance to invest in a number of regions."

The manufacturer said that there was "no market improvement on the horizon" and, despite anticipated sales at Drupa, the operating result for the current fiscal year will be down on last year's figure.

Sales for the past year totalled €3.5bn (£2.76bn), down 3.5% on the previous year; the preliminary order backlog on March 31 was €874m, down from €1.02bn last year; and profit was down €2m to €142m.

While the press division saw a slight drop in revenue, the company took a major hit due to falling sales in its finishing division. The exchange rate and the reluctance of US print shops to invest were cited as the primary reasons for this fall.

A strong performance from the Russian and Eastern European markets provided some hope, but the company was unable to capitalise on the strong Chinese market as the Euro/Yen exchange rate forced customers looking to invest towards Japanese products.

Schreier said the intention was to invest in its service and consumables operations in order to reduce dependency on economic cycles.

Heidelberg's shares rose on the results, suggesting the market had feared worse, and in recognition of the company maintaining its dividend at €0.95.