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Heidelberg Reports 8% Sales Growth, Operating Profit Rises 22%

Wednesday, August 08, 2001

Press release from the issuing company

Heidelberger Druckmaschinen AG (Heidelberg) remained firmly on course for continued growth in the first quarter (April 1 to June 30) of the 2001/2002 fiscal year. During this period, sales of the Heidelberg Group increased by about 8% to 1.1 billion euros compared to 997 million euros in the first quarter of the previous year. As expected, orders received, at 1.3 billion euros, remained beneath the high level of the previous year (1.8 billion euros), which had been heavily influenced by drupa, the world’s largest trade show for the graphic arts industry, which takes place every four years. Compared to the first quarter of the year before drupa, 1999/2000 (1 billion euros), however, it was up 24%. At drupa in May 2000, the company took in orders worth 1.5 billion euros. ”Based on the results of the first quarter, we are confident of our ability to improve both sales and profits further during the course of the fiscal year as a whole,” explained Heidelberg’s CEO Bernhard Schreier. The operating profit rose in the period under review by nearly 22% to 45 million euros. Heidelberg also benefited from the German tax reform for the first time. The combined effect was that aftertax profits developed very gratifyingly, showing a significant rise from 21 to 29 million euros. ”The development of profits at the beginning of the new fiscal year once again underscores Heidelberg’s earning ability, even in the currently difficult economic environment,” says CFO Dr. Herbert Meyer. Profit per share increased by 36% from 0.25 to 0.34 euro. Development in the Divisions in Line with Expectations Sales in Heidelberg’s Digital Division increased by just under 5% to 161 million euros. The operating profit dropped from minus 24 million euros to minus 39 million euros as expected, due to expenditures associated with the market launch of the company’s digital color presses and the expansion of its company’s own sales and distribution network. In September of this year, Heidelberg will begin marketing the new NexPress digital color press. Here too, the company is poised to occupy a leading position in the world market. The Sheetfed Division was able to continue its success. Particularly in the Central Europe and Asia/Pacific regions, growth was above-average. Sales increased by 17% to about 730 million euros; the operating profits soared by 46% to 117 million euros. In the Web Systems Division, sales of about 100 million euros were made. Due to sales, forerunning costs and non-recurring items the operating profit dropped by 12 million euros to minus 36 million euros compared with the previous year. Heidelberg scored one significant success in the newspaper market in the United States, where the company sold the first Mainstream 80 newspaper web press to ”The Roanoke Times” in Virginia in August. The Finishing Division racked up sales of 83 million euros, of which the NAFTA and Asia/Pacific regions accounted for about 50%. The operating profit was around 3 million euros. Positive Development in the Regions In the Central European region, Heidelberg extended its strong position by pushing up sales by over 14% to 433 million euros. In NAFTA (the United States, Mexico and Canada), sales declined owing to the sluggish U.S. economy, but only by 5% to 291 million euros. The Central and South America region developed exceptionally successfully, with sales climbing from 28 to 51 million euros. The Asia/Pacific region was influenced by favorable conditions in China in particular, registering sales of 210 million euros. The other regions also profited from increasing market demand. As of June 30, 2001 the Heidelberg Group employed approximately 26,000 persons.




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