According to figures released this morning, pre-tax profit fell from €199m in 2007/2008 to a €347m loss and sales at the press giant also fell by 18.3% to €3bn for the year ending 31 March 2009, in line with its preliminary results released last month.

According to Schreier, the year was "one of the most difficult in the company's history", and he cited the global economic crisis and its effect on the demand for print and the tightening of credit, both of which made it harder for printers to invest in equipment.

"As a result, orders fell by 22% in the German printing press sector last year, and the VDMA (the German Engineering Federation) is predicting they will slump by a further 21% during the current year," said Schreier.

To help mitigate the firm's woes, Schreier confirmed that the manufacturer had refinanced its debt with its primary lenders, subject to securing guarantees from the German federal and state governments.

"The appropriate federal bodies have already indicated their agreement in principle, and the relevant state economic committee is meeting today," said Schreier. Although he added that the refinance would lead to a sharp rise in costs and "weigh heavily on our financial result".

According to press reports, the firm is seeking a guarantee to the tune of €400m and a loan of €300m.

The company has already embarked on a major cost-cutting initiative to combat the downturn. Around 1,400 roles have been cut since the start of the 2008/2009 financial year, which had a positive effect on cash flow in the second half. It is understood the total figure of job cuts will reach 5,000 cuts when the measures are complete.

However, amongst all of the bad news, Schreier said that there are some positives in the results, namely stronger performance in the service and consumables divisions.

He was also optimistic for the medium-term future, identifying the packaging sector and emerging markets as key areas of growth for the firm.

"We are convinced that in the medium term the printing press market will return to its pre-crisis level, albeit with different regional strengths," he said.

"We believe that business from the emerging markets will make up for lower sales in industrialised nations, and we are well placed to adapt to this trend."

Read Jo Francis's blog on Heidelberg's announcement