Reluctance to Invest Continues to Affect Developments in the Printing Industry - Heidelberg Presents Figures for First Half of Fiscal Year 2003/2004

• Incoming orders in second quarter 35 percent up on first quarter
• Sales for first half-year still low at around 1.5 billion Euro
• Operating result: Loss compared to previous quarter almost halved
• Uncertain economic climate continues to make forecast for full fiscal year impossible

During the first six months (April 1 to September 30) of fiscal year 2003/2004, Heidelberger Druckmaschinen AG (Heidelberg) recorded sales of around 1.5 billion Euro (previous year: 1.9 billion Euro). Adjusted for currency and consolidation effects, this represents a fall of 15 percent compared with the previous year. Incoming orders during the same period amounted to 1.8 billion Euro (previous year: 2.0 billion Euro). Order levels during the second quarter were better than for the months April to June, particularly in the Sheetfed Division and, under regional aspects, in the countries of Asia and Eastern Europe. "The global reluctance to invest and the economic and structural problems facing our industry have not changed significantly in the first half of the current fiscal year", stated Bernhard Schreier, CEO of Heidelberger Druckmaschinen AG. "The current economic climate does not allow concrete sales and profit forecasts for fiscal year 2003/2004. We must wait and see over the coming weeks and months to what extent the positive development from the second quarter proves to be sustainable."

The operating result for the half-year was -93 million Euro (previous year: 36 million Euro). The net result was -129 million Euro (previous year: 13 million Euro). "Despite sales being only slightly up on the first quarter, we were able to virtually halve the operating loss in the second quarter to -34 million Euro (previous quarter: -59 million Euro). The cost-cutting measures introduced are already beginning to bite. Personnel costs in the second quarter, for example, were seven percent down versus the first quarter", stated Dr. Herbert Meyer, CFO at Heidelberg. "We will continue to drive forward our efficiency-enhancing and cost-cutting measures in order to achieve the planned improvements in results."

As of September 30, 2003, the Heidelberg Group had a workforce of some 23,700 worldwide (previous year: 25,000). Overall, Heidelberg is looking to reduce staffing levels worldwide by around 3,200 over the period April 1, 2002 to March 31, 2004, some 400 jobs being cut in the second quarter of the current fiscal year alone.

Sheetfed fares much better in second quarter; development in Asia and Eastern Europe very stable
Sales in the Sheetfed Division climbed 70 million Euro from 492 million Euro in the first three months of the fiscal year to 564 million Euro. Incoming orders rose from 551 million Euro in the first quarter to 752 million Euro in the second. The Digital Division's sales, incoming orders and result also improved on the figures for April to June, though levels were still low. Orders received by Web Systems were well up on the first quarter, while Postpress recorded increases in both sales and incoming orders.

Only Digital returned figures that improved on the first half of last year. Incoming orders for this Division grew ten million Euro over the same period last year to 111 million Euro, with the operating result improving to -17 million Euro (previous year: -38 million Euro). The operating result for Sheetfed was -7 million Euro (previous year: 137 million Euro).

The Asia and Eastern Europe regions continued to develop well. Despite the difficulties facing the industry, the figures for both regions were on a par with those for the first half of last year.

Working time measures extended
As a result of the continuing reluctance of commercial printers on many markets to invest, most noticeably on the key markets USA and Germany, Heidelberg will continue to adapt its production capacities in the Sheetfed Division to the order situation by extending job safeguards and short-time working up to and including May 2004. In Germany, the Heidelberg, Wiesloch, Amstetten and Brandenburg sites will be particularly affected by these measures.

Heidelberg is continuing to improve its cost structures in all divisions of the Company and is currently in negotiations in this respect with regard to the Digital and Web Divisions.

For further information:
Heidelberger Druckmaschinen AG
Investor Relations
Dirk Kaliebe
Tel: +49 (0)6221 92 60 20
Fax: +49 (0)6221 92 60 61
E-mail: dirk.kaliebe@heidelberg.com