Successful Conclusion to the First Three Quarters of the Year by Heidelberger Druckmaschinen AG

Heidelberger Druckmaschinen AG (Heidelberg) has reported a successful conclusion to the first nine months of the current financial year 1998/99. With sales of 5.334 billion D-Mark (4.805 billion D-Mark in the previous year), the world market leader in print systems increased sales to the end of the third quarter (1 April 1998 to 31 December 1998) by 11 percent on the same period in the previous year.

With after-tax profits of 344 million D-Mark (312 million D-Mark in the previous year), the Heidelberg Group improved profits by 10.3 percent on the same period in the 1997/98 financial year. "Given this increase, we are expecting a positive overall performance for the 98/99 financial year", says Chairman of the Managing Board, Hartmut Mehdorn.

The Heidelberg Group received orders during the first three quarters of the financial year valued at 4.855 billion D-Mark. This is almost 12 percent below the comparable figure for the previous year (5.495 billion D-Mark). The nine-month figures show a marked economic slowdown in Great Britain, and definite caution in new investments in Latin America and the Asia/Pacific region. The takeover of the former EAC sales companies and the acquisition of the Stahl Group will not be reflected in the Heidelberg Group accounts until the end of the financial year (31 March 1999).

With the approval of the German Federal Cartel Office and the US authorities, the takeover of Stahl was completed on 30 December 1998.

The marked growth in consolidated sales, up 529 million D-Mark on the previous year, can be attributed to nearly all sales regions with the exception of Asia and Latin America. With an increase of some 400 million D-Mark, Heidelberg's Central Europe region performed particularly well. The main source of growth lay in sales of sheetfed products in Germany and France.

The Eastern Europe region doubled its sales, with marked improvements in the performance of the sales companies in Austria and - despite the economic crisis in Russia - in the Eastern European companies. In the NAFTA region (USA, Canada, Mexico), Heidelberg's main area of sales growth was the web offset sector. Sales of equipment were also good in the sheetfed and prepress segments. As a result of Group representations dealing directly with Heidelberg customers, sales in the Middle East/Africa region doubled on the previous year.

With the acquisition of the Stahl Group, Heidelberg has paved the way for the full integration of the folders, gatherer-stitchers, book-sewing machines and thread-sealing machines produced by Stahl, Brehmer and Baumfolder, into the product portfolio of the Finishing Business Unit.

The pleasing development in sales of finishing products can be mainly attributed to the sales regions in the USA and Germany. In the web sector, performance in the field of commercial/publication products continues to be very positive.
During the current financial year, the Heidelberg workforce has grown by 1,330 to 19,245 (deadline 31 December). This excludes the recently acquired EAC sales companies and the employees of the Stahl Group. The increase is largely due to the inclusion of the new sales companies in France, Brazil and Mexico, as well as the Eastern European sales companies in Estonia and Poland.