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Annual General Meeting July 18, 2008 Heidelberger Druckmaschinen AG
Annual General Meeting
July 18, 2008
Heidelberger Druckmaschinen AG
Welcome!
Annual General Meeting 2008
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Business development – growth targets not attained in the face of difficult market conditions
Figures in € million
2006/2007 2007/2008Sales revenue 3,803 3,670
Incoming orders 3,853 3,649
Order backlog 1,018 874
Operating result 302 268
EBIT margin 7.9% 7.3%
Net profit 144 142
Free cash flow 229 215
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Annual General Meeting 2008
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Mixed picture for incoming orders in the various regions • EMEA: Below high level of
previous year, boom in Germany• Eastern Europe: Good sales
growth• North America: Marked falls in
incoming orders and sales• Latin America: Brazil excellent,
Mexico below previous year• Asia/Pacific: Higher demand in
China; high exchange rates dampen the picture
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Asia/Pacific23% (23%)
LatinAmerica6% (5%)
Eastern Europe
12% (11%)
North America15% (16%)
EMEA44% (45%)
€ 3,649 million(€ 3,853 million)
Previous year in brackets
Annual General Meeting 2008
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Press and Postpress Divisions:Sales and results below previous year
Sales EBIT2006/2007 2007/2008 2006/2007 2007/2008
Press 3,321 3,213 314 239
Postpress 445 427 7 -7
Financial Services 37 30 41 36
Heidelberg Group 3,803 3,670 362 268
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In € millions (each from April 1 to March 31)
Annual General Meeting 2008
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Earnings – net profit on a par with previous year's adjusted figures
Figures in € million
2006/2007 2007/2008Sales revenue 3,803 3,670
Incoming orders 3,853 3,649
Order backlog 1,018 874
Operating result 302 268
EBIT margin 7.9% 7.3%
Net profit 144 142
Free cash flow 229 215
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Annual General Meeting 2008
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Responsibilities of the Management Board members at Heidelberger Druckmaschinen
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• Sales• Consumables• Product
Management• Marketing• Service
• Research &Development
• Purchasing• Production• Postpress
• Controlling• Finances• IT• Investor Relations• Financial Services
• Corporate Development
• Human Resources• Communications• Compliance
Dr. Jürgen RautertSales & Service
Stephan PlenzTechnology & Operations
Dirk KaliebeCFO
Bernhard SchreierCEO
Valid from July 1, 2008
Annual General Meeting 2008
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drupa 2008 – competitive edge strengthened
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Annual General Meeting 2008
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drupa 2008 – move into new format highly promising
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drupa 2008 – innovations well positioned
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drupa 2008 – the print media industry's most comprehensive platform of printing presses
XL 105 XL 145 XL 162
CD 102
SM 102SM 52 Anicolor
SM 52
XL 75
SM 74
29“ 40“ 64“57“20“
Profes-sionalClass
PeakPerfor-mance
Annual General Meeting 2008
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drupa result illustrates Heidelberg's leading rolein sheetfed offset printing marketOrder volume in drupa quarters … … underlines Heidelberg's market
leadership
drupa order intake at adjusted 2004 level – and more to come in the second quarter
1. Adjusted for discontinued operationsSource: Heidelberg estimates
Heidelberg strengthened market position and performed clearly better than competition
1,100-1,150
Q1 FY 05(drupa 2004)1
1,141
Q1 FY 09(drupa 2008)
€ million
500
1,500
1,000
0
Annual General Meeting 2008
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Preliminary results Q1 FY 09
Figures in € millions
Q1 FY 08 Q1 FY 09Net sales 742 640 to 660
Result of operating activities 26 -35 to -40
Free Cash Flow -81 -200 to -220
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With lower pre drupa order backlog and drupa expenses, results for Q1FY09 are below previous year as already indicated in May
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Heidelberg will implement improvement program of €100 million until FY 11
Main lever Target improve-ment by FY 11
Improvement Program
Restructure Postpress
Restructure Postpress by bundling of functions, production relocation
and site restructuring
Reduce R&D
expenditures
Reduce R&D expenditures by further improving efficiency of R&D
processes
Int. production and purchasing
Use cost advantages of low cost countries and reduce FX exposure
via natural hedging
Reduce structural cost
Reduce all structural cost – primary and personnel cost
€ 20 Mio.
€ 25 Mio.
€ 15 Mio.
€ 40 Mio.
€ 100 Mio.Sum of improvements
€75 million improvements will be realized in FY 10
Annual General Meeting 2008
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Strategy: Heidelberg increase sales in highly attractive packaging businessOpportunity for Heidelberg in packaging Packaging as strategic focus
• Lower cyclicality of packaging business offers growth
opportunity for Heidelberg also in downward cycle
• Growth is facilitated by
• Superior product offering
• Roll-out of proven successful sales concept to further
countries
• Heidelberg only player offering complete solution –
differentiates Heidelberg and gives access to more
customers
• drupa results offer first proof of concept for
Heidelberg's packaging approach
15
% share of Heidelberg sales per segment
~20
~15
65%
FY 08
~25%
~25%
50%
Target
Services
Packaging
Commercial
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Heidelberg will implement improvement program of €100 million until FY 11
Main lever Target improve-ment by FY 11
Improvement Program
Restructure Postpress
Restructure Postpress by bundling of functions, production relocation
and site restructuring
Reduce R&D
expenditures
Reduce R&D expenditures by further improving efficiency of R&D
processes
Int. production and purchasing
Use cost advantages of low cost countries and reduce FX exposure
via natural hedging
Reduce structural cost
Reduce all structural cost – primary and personnel cost
€ 20 Mio.
€ 25 Mio.
€ 15 Mio.
€ 40 Mio.
€ 100 Mio.Sum of improvements
€75 million improvements will be realized in FY 10
Annual General Meeting 2008
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Overview of efficiency program announced today
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Improvement potential
Total improvements of €100 million until end of FY 11, thereof €75 million already until end of FY 10
Personnel implications
Reduction of headcount of around 500 globally in indirect functions by the end of the FY 11
Implementation cost
Implementation costs for program totaling around €100 million until FY 11, thereof approx. €70 million in current FY
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Focus on consumables
• Consumables business exhibits lower cyclicity and offers growth opportunities even in downturns
• Growth is achieved through cooperations and takeovers
• Standardized brand name "Saphira" well positioned on market
Strategy: Expansion of business through services and consumables
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Annual General Meeting 2008
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Strategy: Increase growth on emerging markets – share of total incoming orders around 36 percent
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Eastern Europe
12% (11%)
North America15% (16%)
EMEA44% (45%)
Asia/Pacific23% (23%)
Latin America6% (5%)
€ 3,649 million(€ 3,853 million)
Emerging markets*
Previous year in brackets * "Emerging markets" classified according to World Bank
36%
17%
0%
10%
20%
30%
40%
FY 2007/2008FY 1997/1998
Annual General Meeting 2008
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Thank you very much for your attention!
