The German manufacturer also said it would launch a 127m (EUR200m) cost-cutting programme.

Chief executive Bernhard Schreier said the economic climate had put restraints on advertising spend, leading to lower print volumes and a reluctance to invest in new equipment.

In Germany, capital expenditure for the print industry is down 11% on the same time last year, while Heidelbergs orders for the first quarter were down 20% on 2001s figures at 700m.

Schreier said full details of the cost-cutting measures would be announced in the next few weeks, but said it would not influence the companys strategy.

We will continue to offer a full range of products to our customer base, he said.

Although Schreier said there were no plans to cut jobs, he added: We are reviewing all possibilities to improve our future flexibility. This means all divisions and production sites will be checked.

Story by Andy Scott