Heidelberg is Growing and Moving into Future Markets
07/08/1999
Successful 1998/99 fiscal year - sales of 3.9 billion Euro
Heidelberger Druckmaschinen AG (Heidelberg) can look back on a successful 1998/99 fiscal year (1 April 1998 to 31 March 1999). With sales of 3.948 billion Euro, the Heidelberg Group was able to boost sales by 12.4 percent over the previous year (3.514 billion D-Mark). The pre-tax profit improved from 438 million Euro in 1997/98 to481 million Euro, with profits after tax climbing 6.5 percent to 256 million Euro (1997/98: 240 million Euro). "Heidelberg's return on investment (ROI) of 19 percent remains above average", explains Finance Director Herbert Meyer. The company's 1998/99 consolidated accounts are the first to be prepared in accordance with the requirements of the International Accounting Standards Committee (IASC). The differences in the valuation principles applied by the German Commercial Code (HGB) and IAS have resulted in changes to the consolidated accounts for the preceding year. To enable a comparison, the accounts for 1997/98 have been calculated on the basis of IAS.
Orders received by the Heidelberg Group in 1998/99 totaled 3.369 billion Euro and, as expected, thus fell 11 percent short of the comparable figure for the previous year (3.782 billion Euro). The unusually high level recorded in 1997/98, with its growth of 53.4 percent, was assisted by exceptional factors such as large orders from Asia and the PRINT '97 fair in Chicago. Adjusted by these factors, order levels for 1998/99 were actually higher than the average of the last three years.
Over the last few months, Heidelberg has strengthened important areas of its operations, has expanded its product portfolio, particularly in the field of digital printing, and has therefore penetrated new growth markets. "The successes of the 1998/99 fiscal year reaffirm our strategy of supplying complete solutions for the printing and publishing industry", states Chairman of the Managing Board Hartmut Mehdorn. The dividend of 1.50 Euro plus 0.20 Euro bonus which Heidelberg will be paying for 1998/99 reflects the progress made by the company.
Heidelberg's average workforce during the year was 19,714. The healthy growth over the previous year (average 16,895) was essentially the result of taking over sales organizations and expanding the company's finishing activities. Including the company's world-wide representations and the Office Imaging division which Heidelberg acquired from Kodak in April 1999, the company now employs a total workforce of some 23,500, around half of which are based in Germany.
Heidelberg shares have fared well since they were launched onto the market in December 1997 and have outperformed the DAX German share index. Within half a year of the share issue, Heidelberg was included in the MDAX on 22 June 1998 and was also included in Europe's two most important share indexes, the Dow Jones STOXX and Dow Jones EURO STOXX. Following an increase in share capital from corporate funds, the company issued bonus shares in a ratio of 5:1 in January 1999.
This dividend for 1998/99 thus represented an increase from around 25 million Euro to 146 million Euro. Heidelberg's majority shareholder at the end of the fiscal year was Lahmeyer AG (Frankfurt) with a 56.1 percent holding. Following the planned merger of Lahmeyer AG into RWE AG at the end of 1999, the future majority shareholder will be RWE.
Heidelberg's operations today are divided into four divisions and, since 1998, have also been structured into six world regions. The divisions are Prepress, Sheetfed, Web and Finishing. The regions are Central Europe, Eastern Europe, NAFTA (USA, Mexico and Canada), Central and South America, Asia/Pacific, and Middle East and Africa.
Prepress - integration concluded successfully
The Prepress division, which was the product of Heidelberg's acquisition of the former Linotype-Hell AG, has succeeded in turning around its results after its first full fiscal year. Losses and expenses have fallen and the division expects to break even in the year 1999/2000. Prepress has been able to record good growth in sales in a number of important markets, with developments in the USA being particularly pleasing. All in all, the division's sales of 416 million Euro were well above the previous year's figures (1997/98: 387 million Euro).
Sheetfed leads the way again
The Sheetfed division once again recorded by far the highest sales of all divisions during 1998/99. The total sales of 2.627 billion Euro were 12 percent up on the previous year. Heidelberg's Speedmaster products were particularly successful. The company achieved significant growth rates in all format classes.
Web reinforces market position
Heidelberg was able to register a growth of 5 percent in sales of web offset presses over the last fiscal year. Sales improved from 643 million Euro (1997/98) to 673 million Euro. The most important sales market continued to be North America, where Heidelberg is market leader with its commercial web presses and various mailroom products. In Eastern Europe and in Central and South America, the company's commercial presses kept it out in front. Following its announcement in the fall of 1998 to develop and produce its own newspaper presses, Heidelberg has now begun assembling a new generation of newspaper web presses in the USA. The first model, the Mainstream 80, will be introduced at DRUPA 2000 in Dusseldorf.
Heidelberg extends expertise in the finishing sector
The acquisition of the Stahl Group in December 1998 has enabled Heidelberg to integrate further processes for finishing print products. Heidelberg has been selling Stahl products for several years. As a result, its sales branches are already well familiar with the Stahl company's product portfolio. The pleasing sales figures of 232 million Euro (1997/98: 141 million Euro) - 15.5 million Euro of this derived from the acquisition of Stahl - were achieved primarily on the US and German markets. USA figures soared 93 percent on the 1997/98 levels, while Germany recorded an upswing of 32 percent.
New regions give even greater impact to sales
Heidelberg is now represented in over 170 countries worldwide and more than 240,000 customers use Heidelberg products.
In the 1998/99 fiscal year, the company took over sales companies in 23 countries of Asia, Africa and Scandinavia from the Danish company EAC (East Asiatic Company), and also acquired representations in France and Mexico. A new representation was also founded in Brazil. All new companies fared very well in the first year, particularly in France where Heidelberg's sales were up 24 percent. France is one of the most important countries in the Central Europe region. Sales of 1.851 billion Euro in Central Europe represented an increase of 20 percent on 1997/98. Heidelberg Deutschland achieved new record sales of 649 million Euro (1997/98: 546 million Euro). The Eastern Europe region was also set on the course for growth last year - and this despite the economic difficulties experienced by many countries in the area. Sales here rose 39 percent to 206 million Euro. Business was particularly pleasing in Poland, the Czech Republic, Romania, Hungary and Russia.
In the NAFTA region, Heidelberg boosted sales 12 percent to 1.2 billion Euro. Heidelberg customers in the Asia/Pacific region were enthusiastic about the new sales network. "The economic recovery in Asia will drive demand for print products", believes Hartmut Mehdorn. The region offers considerable potential for growth, he explains. While per capita sales of print products in Europe average 205 Euro, the figure for China is only 3 Euro per year. "Asia is thus one of the most important markets for the future and we are looking to double our sales here in the next five years". The Middle East and Africa region also holds substantial potential. Heidelberg was very successful here last year and enjoyed a 50 percent increase in sales to 102 million Euro.
Heidelberg Digital opens new market segments
The takeover of the "Office Imaging" division of Eastman Kodak Company in April 1999 has enabled the company to further expand its "digital printing" operations. Digital technology will open up new market segments for Heidelberg customers. In terms of quality and production price, it forms the link between copying processes and offset printing. In April 1999, Heidelberg established a new subsidiary "Heidelberg Digital" headquartered in Rochester, N.Y. (USA), for handling all activities in the field of digital technology. A business plan for this new area of activity is currently being prepared. "We are convinced that we will reach sales of at least 1 billion Euro in digital printing within five years", states Mehdorn. The development of new technologies and presses will require a particularly high level of commitment from all employees over the coming months, not least with an eye on DRUPA in May 2000. However, Heidelberg will be providing customers with more than just new technology to pave their way to the information era - it will also be offering them the services of its Print Media Academy. This international communication and knowledge center for the entire graphics industry will open in Heidelberg in the year 2000 - in good time to mark the company's 150th anniversary.
"Recent months have seen many developments within the company and we have achieved much", states Mehdorn. In view of the excellent sales and profit figures achieved in 1998/99 and a reticence on the part of customers to make new investments in the runup to DRUPA, Mehdorn anticipates that the increase in sales for the 1999/2000 fiscal year will be moderate.
Heidelberg Group
Key ratios for 1998/99 fiscal year
Figures in EURO million 1997/98
IAS 1998/99
IAS 1998/99
IAS, in DM million
Sales 3,514 3,948 7,722 - of which Prepress 387 416 813 - of which Sheetfed 2,343 2,627 5,137 - of which Web 643 674 1,318 - of which Finishing 141 232 454 Exports as % of sales 82.0 82.3 Results of ordinary operations 438 481 940 Profit for the year 240 256 500 Cash flow 506 466 911 Investments 140 207 405 Dividend incl. bonus* 1.41 1.70 3.32 Average number of employees 16,895 19,714
* 1997/98 adjusted to 85.9 million shares
Heidelberger Druckmaschinen AG (Heidelberg) can look back on a successful 1998/99 fiscal year (1 April 1998 to 31 March 1999). With sales of 3.948 billion Euro, the Heidelberg Group was able to boost sales by 12.4 percent over the previous year (3.514 billion D-Mark). The pre-tax profit improved from 438 million Euro in 1997/98 to481 million Euro, with profits after tax climbing 6.5 percent to 256 million Euro (1997/98: 240 million Euro). "Heidelberg's return on investment (ROI) of 19 percent remains above average", explains Finance Director Herbert Meyer. The company's 1998/99 consolidated accounts are the first to be prepared in accordance with the requirements of the International Accounting Standards Committee (IASC). The differences in the valuation principles applied by the German Commercial Code (HGB) and IAS have resulted in changes to the consolidated accounts for the preceding year. To enable a comparison, the accounts for 1997/98 have been calculated on the basis of IAS.
Orders received by the Heidelberg Group in 1998/99 totaled 3.369 billion Euro and, as expected, thus fell 11 percent short of the comparable figure for the previous year (3.782 billion Euro). The unusually high level recorded in 1997/98, with its growth of 53.4 percent, was assisted by exceptional factors such as large orders from Asia and the PRINT '97 fair in Chicago. Adjusted by these factors, order levels for 1998/99 were actually higher than the average of the last three years.
Over the last few months, Heidelberg has strengthened important areas of its operations, has expanded its product portfolio, particularly in the field of digital printing, and has therefore penetrated new growth markets. "The successes of the 1998/99 fiscal year reaffirm our strategy of supplying complete solutions for the printing and publishing industry", states Chairman of the Managing Board Hartmut Mehdorn. The dividend of 1.50 Euro plus 0.20 Euro bonus which Heidelberg will be paying for 1998/99 reflects the progress made by the company.
Heidelberg's average workforce during the year was 19,714. The healthy growth over the previous year (average 16,895) was essentially the result of taking over sales organizations and expanding the company's finishing activities. Including the company's world-wide representations and the Office Imaging division which Heidelberg acquired from Kodak in April 1999, the company now employs a total workforce of some 23,500, around half of which are based in Germany.
Heidelberg shares have fared well since they were launched onto the market in December 1997 and have outperformed the DAX German share index. Within half a year of the share issue, Heidelberg was included in the MDAX on 22 June 1998 and was also included in Europe's two most important share indexes, the Dow Jones STOXX and Dow Jones EURO STOXX. Following an increase in share capital from corporate funds, the company issued bonus shares in a ratio of 5:1 in January 1999.
This dividend for 1998/99 thus represented an increase from around 25 million Euro to 146 million Euro. Heidelberg's majority shareholder at the end of the fiscal year was Lahmeyer AG (Frankfurt) with a 56.1 percent holding. Following the planned merger of Lahmeyer AG into RWE AG at the end of 1999, the future majority shareholder will be RWE.
Heidelberg's operations today are divided into four divisions and, since 1998, have also been structured into six world regions. The divisions are Prepress, Sheetfed, Web and Finishing. The regions are Central Europe, Eastern Europe, NAFTA (USA, Mexico and Canada), Central and South America, Asia/Pacific, and Middle East and Africa.
Prepress - integration concluded successfully
The Prepress division, which was the product of Heidelberg's acquisition of the former Linotype-Hell AG, has succeeded in turning around its results after its first full fiscal year. Losses and expenses have fallen and the division expects to break even in the year 1999/2000. Prepress has been able to record good growth in sales in a number of important markets, with developments in the USA being particularly pleasing. All in all, the division's sales of 416 million Euro were well above the previous year's figures (1997/98: 387 million Euro).
Sheetfed leads the way again
The Sheetfed division once again recorded by far the highest sales of all divisions during 1998/99. The total sales of 2.627 billion Euro were 12 percent up on the previous year. Heidelberg's Speedmaster products were particularly successful. The company achieved significant growth rates in all format classes.
Web reinforces market position
Heidelberg was able to register a growth of 5 percent in sales of web offset presses over the last fiscal year. Sales improved from 643 million Euro (1997/98) to 673 million Euro. The most important sales market continued to be North America, where Heidelberg is market leader with its commercial web presses and various mailroom products. In Eastern Europe and in Central and South America, the company's commercial presses kept it out in front. Following its announcement in the fall of 1998 to develop and produce its own newspaper presses, Heidelberg has now begun assembling a new generation of newspaper web presses in the USA. The first model, the Mainstream 80, will be introduced at DRUPA 2000 in Dusseldorf.
Heidelberg extends expertise in the finishing sector
The acquisition of the Stahl Group in December 1998 has enabled Heidelberg to integrate further processes for finishing print products. Heidelberg has been selling Stahl products for several years. As a result, its sales branches are already well familiar with the Stahl company's product portfolio. The pleasing sales figures of 232 million Euro (1997/98: 141 million Euro) - 15.5 million Euro of this derived from the acquisition of Stahl - were achieved primarily on the US and German markets. USA figures soared 93 percent on the 1997/98 levels, while Germany recorded an upswing of 32 percent.
New regions give even greater impact to sales
Heidelberg is now represented in over 170 countries worldwide and more than 240,000 customers use Heidelberg products.
In the 1998/99 fiscal year, the company took over sales companies in 23 countries of Asia, Africa and Scandinavia from the Danish company EAC (East Asiatic Company), and also acquired representations in France and Mexico. A new representation was also founded in Brazil. All new companies fared very well in the first year, particularly in France where Heidelberg's sales were up 24 percent. France is one of the most important countries in the Central Europe region. Sales of 1.851 billion Euro in Central Europe represented an increase of 20 percent on 1997/98. Heidelberg Deutschland achieved new record sales of 649 million Euro (1997/98: 546 million Euro). The Eastern Europe region was also set on the course for growth last year - and this despite the economic difficulties experienced by many countries in the area. Sales here rose 39 percent to 206 million Euro. Business was particularly pleasing in Poland, the Czech Republic, Romania, Hungary and Russia.
In the NAFTA region, Heidelberg boosted sales 12 percent to 1.2 billion Euro. Heidelberg customers in the Asia/Pacific region were enthusiastic about the new sales network. "The economic recovery in Asia will drive demand for print products", believes Hartmut Mehdorn. The region offers considerable potential for growth, he explains. While per capita sales of print products in Europe average 205 Euro, the figure for China is only 3 Euro per year. "Asia is thus one of the most important markets for the future and we are looking to double our sales here in the next five years". The Middle East and Africa region also holds substantial potential. Heidelberg was very successful here last year and enjoyed a 50 percent increase in sales to 102 million Euro.
Heidelberg Digital opens new market segments
The takeover of the "Office Imaging" division of Eastman Kodak Company in April 1999 has enabled the company to further expand its "digital printing" operations. Digital technology will open up new market segments for Heidelberg customers. In terms of quality and production price, it forms the link between copying processes and offset printing. In April 1999, Heidelberg established a new subsidiary "Heidelberg Digital" headquartered in Rochester, N.Y. (USA), for handling all activities in the field of digital technology. A business plan for this new area of activity is currently being prepared. "We are convinced that we will reach sales of at least 1 billion Euro in digital printing within five years", states Mehdorn. The development of new technologies and presses will require a particularly high level of commitment from all employees over the coming months, not least with an eye on DRUPA in May 2000. However, Heidelberg will be providing customers with more than just new technology to pave their way to the information era - it will also be offering them the services of its Print Media Academy. This international communication and knowledge center for the entire graphics industry will open in Heidelberg in the year 2000 - in good time to mark the company's 150th anniversary.
"Recent months have seen many developments within the company and we have achieved much", states Mehdorn. In view of the excellent sales and profit figures achieved in 1998/99 and a reticence on the part of customers to make new investments in the runup to DRUPA, Mehdorn anticipates that the increase in sales for the 1999/2000 fiscal year will be moderate.
Heidelberg Group
Key ratios for 1998/99 fiscal year
Figures in EURO million 1997/98
IAS 1998/99
IAS 1998/99
IAS, in DM million
Sales 3,514 3,948 7,722 - of which Prepress 387 416 813 - of which Sheetfed 2,343 2,627 5,137 - of which Web 643 674 1,318 - of which Finishing 141 232 454 Exports as % of sales 82.0 82.3 Results of ordinary operations 438 481 940 Profit for the year 240 256 500 Cash flow 506 466 911 Investments 140 207 405 Dividend incl. bonus* 1.41 1.70 3.32 Average number of employees 16,895 19,714
* 1997/98 adjusted to 85.9 million shares
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