layout.xml

<Layout xmlns="urn:speedata.de:2009/publisher/en"
  xmlns:sd="urn:speedata:2009/publisher/functions/en">

  <Pageformat height="6cm" width="13cm"/>
  <Trace grid="yes"/>

  <!-- data is the root element -->
  <Record element="data">
    <!-- isOK == true when the goal is reached -->
    <SetVariable variable="isOK" select="false()"/>

    <!-- Let's reduce the font size until the text is at most three grids high -->
    <SetVariable variable="fontsize" select="14"/>

    <While test="not($isOK)">
      <DefineFontfamily name="tmp" fontsize="{$fontsize}" leading="{$fontsize * 1.2}">
        <Regular fontface="sans"/>
      </DefineFontfamily>

      <!-- a group is a virtual area, which grows as needed -->
      <Group name="tmp">
        <Contents>
          <PlaceObject>
            <Textblock width="10">
              <Paragraph fontfamily="tmp">
                <Value select="sd:dummytext()"/>
              </Paragraph>
            </Textblock>
          </PlaceObject>
        </Contents>
      </Group>

      <!-- break if text is <= 3
          ( the < is not allowed in XML inside quotes, so this is written as &lt;
      -->
      <Switch>
        <Case test="sd:group-height('tmp') &lt; 3">
          <SetVariable variable="isOK" select="true()"/>
        </Case>
        <Otherwise>
          <SetVariable variable="fontsize" select="$fontsize * 0.9"/>
        </Otherwise>
      </Switch>
    </While>
    <!-- nothing has been placed in the PDF yet, so do this now -->
    <PlaceObject groupname="tmp"/>
  </Record>

</Layout>