Heidelberg "FOCUS 2012" Program to Achieve Profitability Targets
January 20, 2012
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As announced in November 2011, the Management Board of Heidelberger Druckmaschinen AG (Heidelberg) has agreed on the "FOCUS 2012" efficiency program to achieve the company's profitability targets. The aim is to ensure that the target operating result before special items of around EUR 150 million is still achieved in financial year 2013/14 and the company can independently continue to build on its leading position in the future.
"FOCUS 2012" - A comprehensive package of measures
The objective of the "FOCUS 2012" efficiency program is to help significantly reduce capacities and costs at Heidelberg over the next two years. This will lay the foundation for positive business developments in response to the volatile environment and changing market requirements. Most of the measures will be initiated and implemented quickly before the end of calendar year 2012. In addition, the program includes a number of medium- to long-term measures aimed at adapting the entire organization to the changed structures.
The target is to achieve total sustainable savings of around EUR 180 million in financial year 2013/14. Depending on the results of negotiations with employee representatives and other factors, the non-recurring expenditure required to do so is estimated at up to EUR 150 million.
"The ongoing economic uncertainties will continue to put a brake on the industry's recovery. We are seeing weaker demand in industrialized nations but stronger growth potential in emerging markets," said Heidelberg CEO Bernhard Schreier. "FOCUS 2012 will position Heidelberg accordingly, above all by significantly reducing production capacities and by adjusting sales activities to the regional market changes. This will create the basis and efficient structures needed for profitable business development," he added.
Among the short-term measures, production capacities will be reduced by around 15 percent and service capacities in the regions will be adapted in line with the expected medium-term level of sales.
Research and development expenditures will be cut by reducing capacities, further optimizing internal R&D processes, and reprioritizing projects.
Sales, marketing, and structural costs will also be reduced substantially by pooling sales and marketing activities and restructuring individual markets. Comprehensive support for the global customer base will still be ensured. The entire package of measures will have an impact on the global headcount of Heidelberg. Subject to talks with employee representatives, up to 2,000 jobs will be cut worldwide. Based on current plans, around 1,200 production, development, administrative, sales, and marketing jobs in Germany and around 800 jobs outside Germany will go. As of December 31, 2011, Heidelberg had 15,666 employees worldwide (incl. trainees).
"FOCUS 2012" - A comprehensive package of measures
The objective of the "FOCUS 2012" efficiency program is to help significantly reduce capacities and costs at Heidelberg over the next two years. This will lay the foundation for positive business developments in response to the volatile environment and changing market requirements. Most of the measures will be initiated and implemented quickly before the end of calendar year 2012. In addition, the program includes a number of medium- to long-term measures aimed at adapting the entire organization to the changed structures.
The target is to achieve total sustainable savings of around EUR 180 million in financial year 2013/14. Depending on the results of negotiations with employee representatives and other factors, the non-recurring expenditure required to do so is estimated at up to EUR 150 million.
"The ongoing economic uncertainties will continue to put a brake on the industry's recovery. We are seeing weaker demand in industrialized nations but stronger growth potential in emerging markets," said Heidelberg CEO Bernhard Schreier. "FOCUS 2012 will position Heidelberg accordingly, above all by significantly reducing production capacities and by adjusting sales activities to the regional market changes. This will create the basis and efficient structures needed for profitable business development," he added.
Among the short-term measures, production capacities will be reduced by around 15 percent and service capacities in the regions will be adapted in line with the expected medium-term level of sales.
Research and development expenditures will be cut by reducing capacities, further optimizing internal R&D processes, and reprioritizing projects.
Sales, marketing, and structural costs will also be reduced substantially by pooling sales and marketing activities and restructuring individual markets. Comprehensive support for the global customer base will still be ensured. The entire package of measures will have an impact on the global headcount of Heidelberg. Subject to talks with employee representatives, up to 2,000 jobs will be cut worldwide. Based on current plans, around 1,200 production, development, administrative, sales, and marketing jobs in Germany and around 800 jobs outside Germany will go. As of December 31, 2011, Heidelberg had 15,666 employees worldwide (incl. trainees).
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