Heidelberg Restructures Postpress Business: New Partners, Discontinued Lines, Loss of 650 Workers

HEIDELBERG, GERMANY—August 6, 2014—As already announced, Heidelberger Druckmaschinen AG (Heidelberg) has realigned its postpress portfolio. In-house production at the Heidelberg sites in Germany are no longer competitive under the new market conditions. The relevant operations are therefore being discontinued, except for production of folding machines at the Ludwigsburg site.

Postpress Packaging products and solutions will in future be developed and manufactured by the new Chinese OEM partner Masterwork Machinery Co., Ltd, with Heidelberg retaining responsibility for sales and service activities.

In the Postpress Commercial business area, Heidelberg will only continue to market the established folding machines and cutters. Swiss company Müller Martini will take over service activities for installed equipment from discontinued series. These measures will not affect business with Polar cutters and Heidelberg folding machines.

"We were able to win two renowned suppliers as partners for our realigned Postpress portfolio," said Stephan Plenz, member of the board, Heidelberg Equipment. "They will help us provide our customers with competitive products and ensure continuity in services and service parts."

The reduction of in-house capacities will result in the closure of the Leipzig site and a corresponding reduction in the workforce at the Ludwigsburg and Wiesloch-Walldorf sites. A total of around 650 employees worldwide will be affected.

Important step in optimizing portfolio to achieve target EBITDA margin of at least 8 percent in financial year 2015/2016
At its Annual Press Conference, Heidelberg announced the development of new business models for products with weak margins as part of its portfolio optimization.

"The competitiveness of postpress product lines at Heidelberg was limited, so these activities are being placed on an entirely new footing," said Heidelberg CEO Gerold Linzbach. "Realigning these areas is an important step in improving the company's economic situation and getting closer to the target EBITDA margin of at least 8 percent."

Source: Heidelberg.