The company has agreed to implement its FOCUS 2012 Efficiency programme to ensure that it achieves its profitability targets. It has initiated measures to reduce capacity and cut sales, marketing, and structural costs and up to 2 000 job cuts are planned worldwide.
The programmes aim is to ensure that the target operating result before special items of around R1.5 billion (EUR 150 million) is still achieved in the financial year 2013/14 and that the company can independently continue to build on its leading position in the future. The programme is designed 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 programme includes a number of medium- to long-term measures aimed at adapting the entire organisation to the changed structures.
The ongoing economic uncertainties will continue to put a brake on the industrys 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.
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 optimising internal R&D processes, and reprioritising 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 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 be cut. At December 31, 2011, Heidelberg had 15 666 employees worldwide (incl. trainees).
As expected, the economic uncertainties have made the industry more reluctant to invest and resulted in weaker demand. The interim insolvency of a competitor is exacerbating this situation.
Heidelberg South Africa Marketing Officer, Marie-Louise Johnston, said, In general the industry hasnt fully recovered from pre-crisis levels, with market growth being slower then initially expected. This has lead us to review our business operations in order to adapt to market changes as well as keeping in line with international commitments, resulting in the streamlining of our operations.
Our main focus is to implement cost efficient measures, to ensure our customers continue benefitting from Heidelbergs comprehensive services and to deliver products of the highest quality despite the difficult economic environment.
This year is starting off with a stronger market vibrance which has a positive outlook for the year. Drupa is around the corner, we look forward to a good turnout of visitors and orders. Heidelberg will be presenting an extensive portfolio of the latest technologies, all marketed under the banner, Discover HEI. New products will be on display that will enable our customers to meet their latest market requirements, she said.