News
KBA accuses Heidelberg of selling stock at 'deep discounts'
Heidelberg has declined to respond to accusations by KBA sugggesting that it was selling stock at "deep discounts", but pointed to its declining net debt as evidence that this is not the case.
KBA, which released its preliminary results for 2009 at the end of last week, said its management was "deeply concerned that other companies appear to be using state aid to preserve excess capacities by building for [sic] inventory and selling off stock at deep discounts".
Despite not naming Heidelberg explicitly in its official statement, Klaus Schmidt, KBA senior-vice president for marketing and communications, told PrintWeek that he believed Heidelberg was using these funds to sell discounted stock to the point where customers were buying new presses below the prices they were paying two years ago.
He argued that this damaged the market by reducing the asset value, not just of new purchases, but also of existing equipment, making it more difficult for printers to finance any purchase.
Referencing Heidelberg's €850m of state funding, Schmidt pointed out that KBA had rebalanced its books without the need for such government help, additional debt or drawing on credit lines.
"When you can buy a press for 30% to 40% less than a year ago, you have an advantage," he said. "But you have no security on existing equipment."
Heidelberg declined to comment on the accusations, but said that the continued improvement of its net debt position over the past year (30 Sept 2008-09) from €721m to €675m, along with a reduction in customer financing, was not in line with KBA's accusation.
KBA's preliminary results statement added that state aid given "to individual companies can distort competition for the rest of the field. Jobs secured at the tax-payer's expense are ultimately lost elsewhere".
Schmidt said that reducing staff levels at KBA had been "very painful".
"We are fighting for our people," he added. "All those very skilled, young people... Why should we accept that the tax payer kills us, but our competitor carries on?"
Heidelberg: declining debt refutes KBA claims
Comments
William Joyce - 08 February 2010
Is Klaus Schmidt claiming that the 'state aid' given to a.n. other press manufacturer was or would not have been available to KBA had it chosen to seek it? Is he suggesting that the German state has decided to back one press manufacturer and not another? Or is it simply a case that one press manufacturer has opted to use one source of finance and another has opted not to -- even though it could have done so if it wished? Is it not also the case that the 'state aid' with which a.n. other is allegedly being so profligate is either in the form of a repayable loan on which interest is charged or a guarantee for such a loan from commercial sources?
Mr Schmidt presumably does not think that it is bad a priori for any company to borrow, after all he himself refers to reduced press values impairing the ability of printers to finance purchases. Is it Mr Schmidt's contention that it is OK for printers to borrow to to fund purchases of [KBA] presses but not OK for a.n. other to borrow as part of its business plan?
There also seems to be a fairly wide spread in just how cheap Mr Schmidt thinks presses have actually become. Are they cheaper than they were two years ago or 30 to 40% less than a year ago?
Albert Einstein - 08 February 2010
Has this guy cracked under the strain ??? Heidelberg are selling stock at reduced prices, so what, who can afford to have millions of euros tied up in stock. Stop crying FFS, if you can't stand the heat get out the kitchen.
The Voice of Reason - 09 February 2010
Having to pay 8% on the bail out money the German government stumped up to keep them afloat, turning metal into cash seems a good idea to me.
Anyway if people are worried about sheetfed presses being sold cheap, the sticker price may be lower but by the time the finance boys have put their 10% plus on the deal, payments may well be comparable to when presses were more expensive but money was cheaper.
The money is no longer free, so the presses are worth less.
Stuart Mason - 09 February 2010
We're looking at new Heidelberg presses for this year, I for one would be delighted to pay more to stabalise the marketplace. Providing that Elvis does the sale and Lord Lucan provides the funding.
Get real KBA, wake up and smell the blanket wash.
deviated vocals - 10 February 2010
Hi Stuart, presses? Times are good..well done! and good luck! (send me a private message and give me a sneaky peakie??)
I guess the problem with cheaper presses is the value of any trade in for all us guys, as we cant get good money for any outstanding finance settlements. We just ordered a sm74 10p today and a host of other kit and it was the low value of the older kit still with finance that hurt.
but if its balanced by lower new presses then everyones a winner. although i guess getting good rates of finance is key.
personally i think the rates are as good as a few years ago if the capital is in place to back the deal.
but for some other companies access to finance is restricted and that can only help us.
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