Agreement Signed on Safeguarding the Future of Heidelberg's German Sites

• Management Board and employee representatives agree on a package solution running for three years up to March 31, 2008
• Cost savings of around 100 million Euro - rising up to 2008 and then constant
• No redundancies for operational reasons or significant relocations of production over the next three years
• Investments in development, production and training to be maintained

The Management Board and employee representatives have today agreed a package solution and framework agreement designed to safeguard employment, cut personnel costs and improve competitiveness at the German sites of Heidelberger Druckmaschinen AG (Heidelberg). The agreement, which will extend up to March 31, 2008, will safeguard existing jobs and achieve substantial cost savings. In addition to non-recurring effects, the savings will rise to around 100 million Euro by 2008 and will then be maintained at this level.

CFO and Personnel Director of Heidelberger Druckmaschinen AG, Dr. Herbert Meyer, states: "After controversial and difficult negotiations which threatened to collapse on more than one occasion, we have arrived at a solution that is acceptable to all parties in the negotiations. This solution will increase competitiveness, safeguard jobs and also take account of market dynamics. Achieving a balance between innovation, safeguarding the future, increasing competitiveness and participation of the workforce in the company's success was difficult, but ultimately led to a package solution that factored in all these various interests."

The following agreements have been reached on the key components of this solution with its five primary areas of focus - safeguarding the future, working hours, participation in the company's success, framework wage agreements, and ruling out redundancies for operational reasons:

• The package solution has been agreed for a period of three years up till March 31, 2008, will apply to the German sites of the Heidelberg Group, and will be implemented through a supplementary collective wage agreement and plant agreement.
• Safeguarding the future and innovation: Investments in research, development and production will be maintained at the current level. There will be no significant relocations of production. Ongoing training will be intensified. Apprentices levels will amount to at least six percent in total.
• Working hours: Working hours will be extended from May 1, 2005, without any additional remuneration but maintaining in full the existing flexible arrangements. As a rule, overtime supplements will no longer be paid. As recompense, additional direct pension provision will be put in place by 2010. Part-time working for older employees will be continued in its present form until 2009.
• Participation in the company's success: Bonus payments have been reduced and the method of calculating these has been revised.
• Implementation of new collective wage agreement: The new standardized collective wage agreement for both waged and salaried employees (ERA) will be introduced on January 1, 2007. Future increases in collectively agreed wages will not apply in individual cases where existing wage levels are already higher than the new collectively agreed wage. There will be no increase in collectively agreed wages in 2007.
• No redundancies for operational reasons: The parties to the negotiations do not anticipate any redundancies for operational reasons during the period of the agreement. Collectively agreed termination pay has been agreed in the event of exceptions to this rule.

Management Board and key executives are also playing their part in cutting personnel costs by waiving their salaries to a comparable degree.

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

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.