BERLIN (dpa-AFX) - Heidelberger Druckmaschinen said it plans to make long-term adjustments to production and structural costs in a move that could lead to up to 2,000 job cuts worldwide and possibly site closures.
The company also plans to discontinue the production of certain loss-making products/product lines such as Primefire 106--a digital printing product-- as well as the 'Large-format' product line --sheetfed offset printing--by no later than the end of 2020.
At the same time, Heidelberg will significantly improve its liquidity position by transferring a portion of the liquidity reserve of about 375 million euros from the trust fund managed by Heidelberg Pension-Trust e.V. back to the Company. The return transfer reduce the Company's fiduciary assets to the level required to secure all pension entitlements that are not covered by statutory insolvency insurance.
Heidelberg plans to use the additional liquidity to eliminate nearly all of its net debt - especially to pay off a high-yield, 150 million euros bond early - and to substantially improve the Company's financing structure.
Heidelberg estimates that the non-recurring expenses necessary to implement the action package will total about 300 million euros.
The expenses and the increasingly deteriorating global economic environment due to the corona pandemic will negatively impact sales and earnings in the current financial year more severely than so far anticipated.
Heidelberg expects full-year sales will be well below the prior-year level of some 2.490 billion euros. Consequently, the forecast EBITDA range - excluding the restructuring result and one-time proceeds from the sale of Hi-Tech Coatings at the end of 2019 - of between 5.5 and 6.0% can no longer be attained and the net result after taxes will be negative, at the level of the restructuring expenses of around 300 million euros.
The company expects to initiate a major part of its realignment measures in the financial year 2020/2021, such that there may once again be a negative net result after taxes in the transition year, too. It is anticipated that substantial positive effects from the realignment will materialize starting in the financial year 2021/2022.
Copyright RTT News/dpa-AFX
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