As the company unveiled its results for the nine months to 31 December, Schreier said the recovery in the global economy, and slight increases in advertising revenues were beginning to feed through into print and gave "reason for hope".

Previously introduced cost-cutting measures resulted in an improved result in the third quarter for all divisions, compared with the previous three months.

However, for the first nine months of its financial year all divisions bar sheetfed posted an operating loss, and sheetfeds operating profit slumped from 145m (Euro210m) to just 9.7m.

Net sales fell by 15.5% to 1.7bn, but when currency fluctuations were taken into account the fall was 9%. Heidelberg expects sales for the full year to be down around 10%, and will continue to pursue its target of breaking-even at the operating level (excluding restructuring costs).

Provisions of 363m relating to the major restructure announced at the end of last year helped push the companys net loss to 501m.

Cost-cutting measures so far had led to savings to 79m, with a further 59m expected to be realised.
By the end of the financial year the company will have cut 4,200 jobs worldwide, of which some 3,000 have already been cut.

Heidelberg is attempting to sell its development and production activities in the Web Systems division, and is also repositioning its digital division in order to concentrate its main resources on sheetfed printing.

It is unclear whether the anticipated sale of the Web business to Goss International has foundered. There has been speculation that the sale has stalled over the escalating amount of deficit Goss would be required to take on as part of the deal.

Both sides declined to comment, but an industry source said that if Goss had decided to pull out of discussions, he was uncertain as to who, if anyone, would want to step in.

Heidelbergs management is said to be under pressure to conclude a deal before its financial year-end in March.

In the nine months to December 31 2003, sales for Web Systems division were effectively static at 190m. Incoming web orders fell by 34% and the web order backlog was down 45%. The divisions operating loss was reduced from 59m to 44m.