Heidelberger Druckmaschinen AG, the world’s biggest printing-press maker, will close a plant in Leipzig, Germany, and cut about 650 jobs as the company withdraws from the bookbinding market.
Chinese partner Masterwork Machinery Co. will take over most postpress operations from the German company, which will retain only marketing of folding machines and cutters, the Heidelberg-based manufacturer said today in a statement. The measures will improve earnings by about 30 million euros ($40 million) annually starting in the year through March 2016.
“The competitiveness of postpress product lines at Heidelberg was limited, so these activities are being placed on an entirely new footing,” Chief Executive Officer Gerold Linzbach said in the statement. “Realigning these areas is an important step in improving the company’s economic situation” to reach a target margin of earnings before interest, taxes, depreciation and amortization at 8 percent of revenue.
The manufacturer’s profit-improvement efforts in the past year have also included setting up a digital-printing partnership in November with Japanese photography-supplies company Fujifilm Corp. Heidelberger Druck posted net income in fiscal 2014, its first profit since 2008.
Heidelberger Druck fell as much as 6 percent, the steepest intraday drop since March 25, and was trading down 0.4 percent at 2.35 euros as of 2:30 p.m. in Frankfurt. The stock has declined 8.9 percent, this year, valuing the company at 550 million euros.
Another partner, Swiss manufacturer Mueller Martini, will take over servicing of installed equipment from products Heidelberger Druck is no longer making, the German company said. That won’t include Polar cutters or Heidelberg folding machines, it said.