Gallus Group, a Swiss manufacturer of narrow web label presses and other products for the printing and converting industry, reports a drop in sales of 18 percent, from CHF289 million (US$243 million) in 2007 to CHF237 million (US$200 million) for 2008.

“The recession, which began in 2008, triggered a sudden drop in demand for label printing machines due to reduced consumption, especially in the USA, and in particular because of a high level of uncertainty amongst customers regarding the development of the global economy,” says Peter J. Hauser, chairman of Gallus Group. “The business with national and global customers, particularly for highly productive and versatile label printing machines, had a stabilizing effect. Early and flexible capacity adjustments and ongoing investments in innovation strengthen the competitive position of the Gallus Group in a tougher environment.”

A recent acquisition in the folding carton equipment market had an impact on the bottom line, Hauser reports. “The complete takeover and development of the folding carton business, completed in 2006, and renamed Gallus Stanz- und Druckmaschinen GmbH, made a disproportionately large contribution to the decline in sales in 2008. Several large-scale ventures which were acquired in 2007 and 2008 will only start contributing to sales in 2009.” The folding carton business, he adds, is being developed with a range of wide web, roll-fed presses and diecutters for inline production of folding cartons and cardboard products.

Gallus President Klaus Bachstein says that the company’s North American sales volume in 2008 was similar to that of 2007. “We felt the decline in North America already in 2007, versus very good prior years.”

The company expects that performance for 2009 will be similar to that of 2008, Bachstein says. “However,” he adds, “forecasting for the second half of 2009 is still a challenge.” Gallus continues to invest in innovation, he notes, “and will bring interesting news at Labelexpo Europe 2009.”

Gallus is based in St. Gallen, Switzerland, and employs 640 people worldwide. Heidelberger Druckmaschinen AG has held a minority stake in the company since 1999.