Heidelberg's incoming orders dropped by more than 40% in the third quarter of the current financial year to 560m euros (£506m) as it continued to experience customer reluctance to invest in new presses.

Sales for third quarter came in at €750m, around 19% down on the previous year of €929m. However, the group's operating result for the quarter excluding special items broke even thanks to a raft of on-going cost-cutting measures.

Heidelberg anticipates cost-savings of up to €180m in the next financial year with that figure rising to the €200m mark in 2010-2011.

For the nine months to December 31, sales were €2.21bn, down from Euro €2.568bn, while incoming orders were down in all regions bar Latin America.

Operating result excluding special items came in at a loss of €45m compared to €177 in 2007.

George Clarke, managing director of Heidelberg UK, said: The real challenge is getting costs into line and Heidelberg has been determined to make the necessary corrections to do that."

He said: "There is more work to be done to make sure we come out of this stronger."

According to the manufacturing giant, it expects the industry's "reluctance to invest" not to change in the short term.

Clarke said: "Everybody supplying printing presses and capital equipment is struggling at the moment. Companies are still investing but it is those that don't have the compelling reason to that are holding off."

Bernhard Schreier, chief executive of Heidelberg, said that despite a drop in investments, "one key factor in our favour is that we were quick to introduce stringent cost management measures."

He added scaled-down production, short-time working and a cut in research and development had all had a positive impact on the group's situation.

Heidelberg shares were up 14% to €3.20 at the time of writing.