Preliminary Figures for the Financial Year 2004/2005: Heidelberg's Earnings Turnaround

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.

• Sales up 3 percent to 3.2 billion Euro
• Incoming orders climb by 8 percent to 3.5 billion Euro
• Net profit of 61 million Euro achieved
• Free cash flow of 154 million Euro well above expectations
• Agreement signed on safeguarding the future of Heidelberg's  German sites

Earnings by Heidelberger Druckmaschinen AG (Heidelberg) turned around in financial year 2004/2005 (April 1, 2004 to March 31, 2005). "Even if the markets and the global economy did not exhibit the robust growth that we had hoped for, particularly in recent months, the figures nevertheless show that we are on the right track and that our measures are beginning to take hold," stated Bernhard Schreier, CEO of Heidelberger Druckmaschinen AG.

Preliminary sales of the Heidelberg Group during the period under review grew three percent to 3.207 billion Euro (previous year: 3.114 billion Euro) and by five percent after adjustments for exchange rate movements. Sales of the largest division, the Press Division (offset printing), increased by around five percent to 2.797 billion Euro, or by seven percent after adjustments for exchange rate movements. The free cash flow was well above the previous year at 154 Euro million, and thereby clearly exceeded expectations.

Incoming orders in the financial year just closed were 3.508 billion Euro (previous year: 3.247 billion Euro) and were therefore eight percent higher than last year's figure. The order backlog at March 31, 2005 was noticeably higher that one year ago. It exceeded one billion Euro and, consequently, was almost 300 million Euro higher than at the end of the financial year 2003/04.

"The preliminary operating profit - including the operating loss from Nexpress - improved from 10 million Euro to about 160 Euro million", explained Heidelberg's CFO, Dr. Herbert Meyer. "Through the deep restructuring of Heidelberg we achieved this major improvement in earnings which will have continuing effects." The preliminary operating profit of the continuing operations improved by 33 million Euro to 207 million Euro, or 6.5 percent on sales. The preliminary net profit for the Heidelberg Group amounts to 61 million Euro (previous year: 695 million Euro). This corresponds to a return on sales after tax of 1.8 percent.
 
As of March 31, 2005, the Heidelberg Group had a workforce of 18,679 worldwide (previous year: 22,782).

Results in the Press and Postpress Divisions improved
In the Press Division (offset printing), preliminary sales in the financial year just closed rose by approx. five percent to 2.797 billion Euro. Incoming orders in the period under review increased by 10 percent on the previous year to around 3.087 billion Euro. The preliminary operating profit for 2004/2005 was 183 million Euro (previous year: 151 million Euro). 

In the Postpress Division (finishing), sales in the period under review were 348 million Euro. Incoming orders were 359 million Euro. The operating profit in this division improved to -2 million Euro (previous year: -18 million Euro).

Sales in all regions were up on the previous year, with the exception of North America. Incoming orders improved on last year's figures in all regions, climbing around 8 percent on average.

Agreement signed on safeguarding the future of Heidelberg's German sites
Following tough negotiations, an agreement was reached today between the Management Board and employee representatives. A framework agreement was concluded that sets out the conditions for extending working hours while at the same time cutting personnel costs. The agreement is to last until March 31, 2008. It will safeguard existing jobs and achieve cost savings of about 100 million Euro, increasing annually and being full effective by 2008. "After controversial and difficult negotiations, we have arrived at a solution that is acceptable to all parties. This solution will raise earnings in the long term and will help to increase further the competitiveness of the Heidelberg Group", stated Dr. Herbert Meyer, CFO at Heidelberg. The savings would help cushion the negative effects of price increases for materials and the strong Euro.

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.

HEIDELBERG GROUP	April 1, 2004 to March 31, 2005	April 1, 2003 to March 31, 2004¹
	Million EUR	Million EUR	Change in %
Net Sales	3,360	3,746	-10.3
Press	2,797	2,670	+4.8
Postpress	348	359	-3.1
Financial Services	62	85	-27.1
Continuing Operations	3,207	3,114	+3.0
Discontinuing Operations	153	632	n.a.
Incoming Orders	3,700	3,852	-3.9
Press	3,087	2,807	+10.0
Postpress	359	355	+1.1
Financial Services	62	85	-27.1
Continuing Operations	3,508	3,247	+8.0
Discontinuing Operations	192	605	n.a.
Order Backlog	1,046	953	+9.8
Press	966	680	+42.1
Postpress	80	69	+15.9
Financial Services	0	0	n.a.
Continuing Operations	1,046	749	+39.7
Discontinuing Operations	0	204	n.a.
Operating Profit	167	79	+111.4
Press	183	151	+21.2
Postpress	-2	-18	n.a.
Financial Services	26	41	-36.6
Continuing Operations	207	174	+19.0
Discontinuing Operations	-40	-95	n.a.
Special Items	-13	-335
Financial Result	-47	-251
Income Before Taxes	108	-506
Net Profit	61	-695
Return on Sales in %	1.8%	-18.6%

1) Restated figures due to the reclassification of Financial Services

Regional Split	April 1, 2004 to March 31, 2005	April 1, 2003 to March 31, 2004¹
Incoming Orders by Region	Million EUR	Million EUR	Change in %	Share 04/05
EMEA	1,547	1,455	+6.3	41.8
Eastern Europe	436	410	+6.3	11.8
North America	701	946	-25.9	18.9
Latin America	145	142	+2.1	3.9
Asia Pacific	871	899	-3.1	23.5
Heidelberg Group	3,700	3,852	-3.9	100
Sales by Region
EMEA	1,396	1,452	-3.9	41.5
Eastern Europe	367	378	-2.9	10.9
North America	607	923	-34.2	18.1
Latin America	138	142	-2.8	4.1
Asia Pacific	852	851	+0.1	25.4
Heidelberg Group	3,360	3,746	-10.3	100

1) Restated figures due to the reclassification of Financial Services

Continuing Operations
Incoming Orders by Region	April 1, 2004 to March 31, 2005	April 1, 2003 to March 31, 2004¹
Continuing Operations	Million EUR	Million EUR	Change in %	Share 04/05
EMEA	1,498	1,313	+14.1	42.7
Eastern Europe	435	404	+7.7	12.4
North America	587	566	+3.7	16.7
Latin America	144	127	+13.4	4.1
Asia Pacific	844	837	+0.8	24.1
Continuing Operations	3,508	3,247	+8.0	100
Discontinuing Operations	192	605
Heidelberg Group	3,700	3,852	-3.9
Sales by Region
EMEA	1,364	1,273	+7.1	42.5
Eastern Europe	366	365	+0.3	11.4
North America	518	554	-6.5	16.2
Latin America	137	130	+5.4	4.3
Asia Pacific	822	792	+3.8	25.6
Continuing Operations	3,207	3,114	+3.0	100
Discontinuing Operations	153	632
Heidelberg Group	3,360	3,746	-10.3

1) Restated figures due to the reclassification of Financial Services