Financial Year 2004/2005: Heidelberg Presents Figures for First Half Year

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 up eight percent on the same period last year
• Incoming orders of 1.9 billion Euro in first half year, clear increase of 23 percent on previous year
• Operating result in the black after first six months
• Outlook for the year unchanged

In the first six months of financial year 2004/2005 (April 1 to September 30, 2004), Heidelberger Druckmaschinen AG (Heidelberg) recorded net sales of 1.37 billion Euro (previous year: 1.26 billion Euro). In the second quarter alone, sales totaled 769 million Euro, an increase of 167 million Euro or 28 percent on the first quarter. Incoming orders during the first half year were 1.9 billion Euro (previous year: 1.55 billion Euro). "After the difficult last three years, the print media industry is gradually picking up," said Bernhard Schreier, CEO of the company. "The high order levels, boosted by drupa, will start to show up in the company's sales figures over the next few quarters."

The operating result of the Heidelberg Group was 27 million Euro in the second quarter (previous year: 11 million Euro). In the first half year overall, the Group achieved a positive operating profit of six million Euro.

Heidelberg's CFO, Dr. Herbert Meyer, explains: "Despite high non-recurring trade-show costs, we already achieved a positive operating result after six months. Our efficiency-enhancing measures are taking hold, while increasing sales are delivering profit contributions and putting us on course to meet our targets for the year as a whole."

Including the losses of 62 million Euro for the discontinued Digital and Web Systems divisions, the profit after taxes for the Heidelberg Group was -59 Euro million for the period under review (previous year: -129 million Euro).

As of September 30, 2004, the Heidelberg Group had a workforce of some 19,000 worldwide (previous year: 23,700). Overall, staff levels decreased by around 3,700 in the first half year. Most of these staff members were transferred to Kodak and Goss when the Digital and Web Systems divisions were sold. By the end of the financial year, the number of Heidelberg employees will be reduced by a further 300, as planned.

Positive developments in the Press and Postpress divisions:
In the Press Division (offset printing), sales rose by ten percent in the first six months to around 1.2 billion Euro. In the second quarter, sales stood at 674 million Euro, an increase of 161 million Euro or more than 30 percent on first quarter sales. At 1.7 billion Euro, incoming orders for the first half year saw an increase of around 27 percent. Despite the burden of tradeshow costs, the operating result for the second quarter was 22 million Euro (same period last year: 14 million Euro).

In the Postpress Division, sales increased in the first six months to 150 million Euro (previous year: 143 million Euro). Incoming orders rose to 179 million Euro (previous year: 166 million Euro). The operating result improved to -12 million Euro (same period last year: -22 million Euro). With the delivery of the first drupa orders, Heidelberg's sales in the Eastern Europe region rose again for both the quarter and the first half year compared to the same periods last year. In the North America region, incoming orders increased by 23 percent to 271 million Euro. The Graph Expo trade show in October yielded satisfactory results with order levels of 105 million US-Dollar confirming the slight upward trend. In parallel with the stable economic growth in the Asia/Pacific region, the volume of business is also growing in this area: at 355 million Euro for the first half year, sales were around 12 percent up on the previous year. Incoming orders for this region were down on the same quarter last year, because the IGAS trade show that takes place in Tokyo every four years heavily influenced the previous year's figures.

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 five 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 five percent. Overall, Heidelberg is projecting net profit in at least the mid-double-digit million Euro range.

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