HeidelDruck to Cut 2,000 Jobs to Meet Target for Earnings
The manufacturer aims to save 180 million euros ($229 million) by reducing capacity over the next two years, the Heidelberg, Germany-based company said in a statement today. Heidelberger is targeting operating profit before one-time items of 150 million euros in the fiscal year ending March 2014.
Heidelberger is suffering as the volume of printed material is shrinking and banks curtail financing of machinery among small and mid-sized customers. The slump led competitor Manroland AG to enter insolvency and bids are being received for different divisions. The financial struggle of a competitor is making customers more cautious, Heidelberger said.
“As expected, the economic uncertainties have made the industry more reluctant to invest and resulted in weaker demand,” the company said. “The interim insolvency of a competitor is exacerbating this situation.”
Shares (HDD) of Heidelberg jumped as much as 5.1 percent. The stock fell 3 cents, or 1.5 percent, to 1.64 euros at 1.01 p.m. in Frankfurt, valuing the company at 383 million euros.
The printer said sales in the quarter ended Dec. 31 were little changed from the previous period at about 630 million euros, with the order intake falling 4.2 percent. The operating loss narrowed to 19 million euros, from 26 million euros a year earlier.
Around 1,200 jobs in Germany will go, with the remainder being cut abroad. The move will reduce production capacity by around 15 percent. The company had 15,666 employees as of Dec. 31.
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