Annual General Meeting 2007 - Speech Bernhard Schreier |
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| 07/26/2007 |
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Not to be published until the speech begins!
Speech for the Annual General Meeting of Heidelberger Druckmaschinen AG
Bernhard Schreier
Chief Executive Officer
Thursday July 26, 2007
Congress Center Rosengarten, Mannheim
The spoken word applies
Chart: Titel
Chart: Welcome
Dear shareholders,
Shareholders' representatives,
Representatives of the media,
Ladies and Gentlemen,
On behalf of the Management Board of Heidelberger Druckmaschinen AG, I would like to welcome you all to our Annual General Meeting here in the Congress Center Rosengarten in Mannheim.
Chart: Summary of financial year 2006/2007
Ladies and Gentlemen,
The 2006/2007 financial year ending on March 31 was a good year for Heidelberger Druckmaschinen AG. Incoming orders rose seven percent to 3.85 billion Euro. With the exception of the Asia-Pacific region, the volume of orders in all regions was at least ten percent up on the previous year.
Sales were six percent higher than the previous year at 3.8 billion Euro. The increase was 8.5 percent after adjustments for exchange rate movements. We therefore achieved and, in some cases, even exceeded the goal we set ourselves in the previous year of increasing sales by around five percent.
We succeeded in improving the operating result by 20 percent to 362 million Euro. This corresponds to a return on sales of 9.5 percent. Net profit for the year virtually doubled to 263 million Euro.
The free cash flow was in the region of 229 million Euro and thus far in excess of our target of 150 million Euro.
The value contribution, which is defined as the difference between EBIT or ROCE and capital costs climbed 30 percent to 110 million Euro. We therefore also achieved our goal of earning more than our capital costs and generated a value contribution of around six percent. The EBIT itself has doubled within two years.
Chart: Development of the global economy
I would now like to look at the reasons for this development in greater detail.
The print media industry and with it Heidelberger Druckmaschinen is heavily dependent on the general economic climate - and the climate last year was altogehter good. The global economy grew by 5.4 percent, up once again by one half a percentage point on the previous year. What is particularly pleasing is that the engines driving the economy on our own domestic market here in Germany have finally sprung into action. Gross Domestic Product grew by 2.7 percent in 2006, three times faster than in the previous year.
The economies of the most important sales markets in Europe, but also in the U.S. and the major emerging economies in Asia enjoyed even greater growth. GDP in China, our fourth most important market after Germany, the U.S., and the United Kingdom, saw a rise of almost 11 percent, with India not far behind at 9 percent. This growth is expected to continue in 2007, albeit at a slightly lower rate.
Chart: Print media industry
The print media industry has also profited from the stable development of the global economy as a whole. This applies mainly to Germany and the U.S. and, consequently, to those countries that suffered particularly badly from the severe crisis that the industry went through over the period 2001 to 2004.
Print shop capacity utilization in the United States, one of our key markets, climbed back above the 80 percent threshold for the first time. In doing so, it was virtually on a par with the high level achieved before the crisis. Developments in Germany continued to proceed well. Business climate indicators that assess future development have once again attained good levels in both countries. However, increasing energy and paper costs that are difficult to pass on to end users are impacting on our customers' results.
Developments in the major threshold countries, particularly in China and India, where we are seeing the emergence of numerous new printshops, remain pleasing. Despite the strong growth they are experiencing, these countries still have a lot of catching up to do when it comes to print products.
Note: The complete statement of CEO Bernhard Schreier may be downloaded on the right-hand side of the page.
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