DDS has an excellent sales and service organization that is specialized in providing support for high volume printers. Besides this, DDS has a strong product portfolio which also includes the color printers of our strategic partner Konica Minolta and the Océ VarioPrint 4000 and 6000 series. Other machines on display at drupa were the Océ JetStream 750, 1500 and 3000. These printing systems enable full color printing at speeds of 714 to 2,865 ppm, the highest speed currently available in the market. At the drupa trade fair this product series attracted a great deal of attention, as did the Océ ColorStream 10000.
Wide Format Printing Systems
WFPS has the most extensive direct distribution power in wide format in the digital printing industry. This distribution strength has been further enhanced in the graphics market following the acquisition of the French company Intersoft, a distributor of printers, scanners and print media that focuses on promotional material in retail chains. In addition, Intersoft develops and sells specialized workflow software that enables promotional campaigns to be implemented faster and at a local level.
WFPS has a very strong product portfolio for the wide format graphics market. At the drupa trade fair WFPS announced that its product portfolio would be further strengthened by adding the Océ Arizona 200 GT and Roll Media options. The Océ Arizona 200 GT is eminently suitable for customers with lower print volumes who still want the same quality as the successful Océ Arizona 250 GT.
Océ has also launched the innovative Océ CrystalPoint color technology, a fundamentally new and environmentally friendly technology that combines the benefits of toner and inkjet. The first product to incorporate Océ CrystalPoint technology, the Océ ColorWave 600, is a wide format color system that is twice as fast as competitive systems. It was greeted with great enthusiasm by our customers. The required time to ramp up production means that the impact of the Océ ColorWave 600 on revenues will become visible only at the end of 2008.
Improvement of business processes
As its third strategic thrust Océ is improving its business processes, which enables it to reduce its cost base. The savings program that was announced in April this year will bring down costs by Euro 80 million in 2008. These savings are being realized via three types of initiatives: corporate excellence projects, a reduction in out of pocket expenses and a cutback in the number of jobs. Of the announced reduction of 350 jobs, 80% has already been realized. In response to the economic situation and elaborating on the program of 2008, further costs savings have been identified. Océ will reduce costs additionally by Euro 50 million in 2009. This will lead to the loss of around 600 jobs. We will implement this reduction in a careful and structured manner and it will be focused on all countries and disciplines, with the exception of sales. All savings referred to above are exclusive of volume effects, inflation and restructuring charges. The expected one-off total restructuring costs will amount to Euro 45 million in 2008 and Euro 20 million in 2009.
Outlook 2008
The Océ strategy, based on strengthening distribution power, a full-line and competitive product portfolio and optimizing the business processes are continued unabated. We are of the opinion that this strategy and the additional measures we are taken to reduce costs will enable us to counter the impact of the adverse economic conditions as much as possible. In view of the uncertain economic situation we are not giving any forecast for the results for the full 2008 financial year.
Board of Executive Directors Océ N.V.
July 3, 2008
Keys to terminology:
Non-recurring revenues: revenues from the sale of machines, software and professional services.
Organic growth: the development of the results after adjustment for exchange rate effects and the impact of substantial acquisitions or disposals.
Recurring revenues: revenues from services, inks, toners, media, rentals, interest and business services.
RoCE: Return on Capital Employed: operating income on an annual basis after normalized taxes [20%] as a percentage of average Net Capital Employed [total assets excluding cash and cash equivalents, less non-interest bearing liabilities adjusted for derivatives.]
Wide Format printing: wide format printing [bigger than A3].
The full report can be downloaded at the international website http://www.oce.com/en/Investor/QR/2008-Q2.htm
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