Financial Year 2004/2005: Heidelberg Presents Nine-Month Figures

Unless otherwise stated, the following information relates to the continuing operations of the Heidelberg Group. These include the Press, Postpress and Financial Services divisions. The Digital Division was sold and deconsolidated on May 1, 2004, the Web Systems Division on August 6, 2004. The figures for the previous year have been adjusted to reflect the new segmentation. This now provides a comparable basis for the stated figures.

Continuing operations

• Sales climb by around 8 percent on the same period last year
• Incoming orders in third quarter on the level of previous quarter
• Operating result of 69 million Euro in third quarter further improved
• Outlook for the year unchanged

In the first nine months of financial year 2004/2005 (April 1 to December 31, 2004), Heidelberger Druckmaschinen AG (Heidelberg) achieved net sales of 2.23 billion Euro(previous year: 2.07 billion Euro). In the third quarter alone, sales totaled 860 million Euro, making it the best-performing quarter in terms of sales for the current financial year so far (Q2: 769 million Euro, Q1: 602 million Euro). Incoming orders in the period under review stood at 2.73 billion Euro, a good 13 percent up on the same period of the previous year (approx. 2.43 billion Euro). "The growth in the global economy also increased capacity utilization in printshops", said Bernhard Schreier, CEO of the Company. "We will increase sales in the continuing operations and will attain our year-end objectives as planned."

The operating result of the Heidelberg Group was 69 million Euro in the third quarter (previous year: 38 million Euro), a clear improvement on the results of the previous quarters (Q2: 27 million Euro, Q1: -21 million Euro). In the first nine months overall, the Group recorded a positive operating result of 75 million Euro (previous year: 37 million Euro). "By realigning the Heidelberg Group and applying consistent measures to reduce structural costs, we have succeeded in increasing our operating return on sales to 8 percent within the third quarter," said Heidelberg's CFO, Dr. Herbert Meyer. "To strengthen the competitiveness of the Heidelberg Group, we plan to further reduce manufacturing costs, with particular emphasis on personnel costs. Discussions with employee representatives are already underway."

Including the losses of 62 million Euro for the discontinued Digital and Web Systems divisions, the profit after taxes for the Heidelberg Group after nine months was -18 million Euro (previous year: -725 million Euro). "We have succeeded in further improving Heidelberg's financial strength through tight asset management", said Dr. Meyer. "This is reflected in the free cashflow of 138 million Euro in the third quarter."

As of December 31, 2004, the Heidelberg Group had a workforce of some 18,800 worldwide (previous year: 23,400). This fall is partly due to the deconsolidation of the Digital and Web Systems divisions in the current financial year and the workforce reduction as part of the Company's efficiency-enhancing program.

Performance in the Press and Postpress divisions improved
In the Press Division, sales rose by approx. 10 percent in the first nine months to Euro 1.94 billion. Incoming orders in the period under review increased by a good 14 percent on the previous year to around Euro 2.4 billion. The operating result in the third quarter alone stood at 61 million Euro (previous year: 24 million Euro), thereby demonstrating the additional earnings potential associated with growing volumes.

In the Postpress Division, sales over the nine-month period amounted to 244 million Euro. Incoming orders rose by a good 7 percent to approx. 280 million Euro. Cost-cutting measures enabled this division to achieve a positive operating result of 2 million Euro in the third quarter.

In all regions, incoming orders at the end of the nine-month period were up on the previous years - by around 13 percent on average.

Outlook for financial year 2004/2005 unchanged In the current financial year 2004/2005, Heidelberg is aiming for an increase in sales of at least 5 percent over the previous year on a comparable basis. The Company is projecting an improvement in earnings over the previous year. Its target is to achieve an operating return on sales, including all special effects, of about 5 percent. Overall, Heidelberg is projecting net profit in at least the mid-double-digit million Euro range.

The report on 3rd Quarter 2004/2005 is available at www.heidelberg.com.

The table with the figures is available on our Press Lounge at www.heidelberg.com.

For further information:
Heidelberger Druckmaschinen AG
Corporate Communications
Thomas Fichtl
Tel.: +49 (0)6221 92 47 47
Fax: +49 (0)6221 92 50 69
E-Mail: thomas.fichtl@heidelberg.com

Important note:
This Press Information contains statements about future development that are based on assumptions and estimates by the management of Heidelberger Druckmaschinen Aktiengesellschaft. Even if the management is of the opinion that these assumptions and estimates are accurate, future actual developments and future actual results may differ significantly from these assumptions and estimates due to a variety of factors. These factors can include changes to the overall economic climate, changes to exchange rates and interest rates and changes in the graphic arts industry. Heidelberger Druckmaschinen Aktiengesellschaft provides no guarantee that future developments and the results actually achieved in the future will agree with the assumptions and estimates set out in this press release and assumes no liability for such.