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Heidelberg Presents Figures for First Six Months: Sales and incoming orders up

Thursday, November 10, 2005

Press release from the issuing company

At 1.53 billion Euro, sales generated by Heidelberg in the first six months of financial year 2005/2006 (April 1 to September 30, 2005) were 12 percent up on the comparable figure for the previous year (previous year: 1.37 billion Euro). In the second quarter alone, sales amounted to 869 million Euro, an increase of 100 million Euro or 13 percent compared to the figure for the same quarter the previous year (previous year: 769 million Euro). Incoming orders in the first six months amounted to 1.76 billion Euro (last year’s figure of 1.91 billion Euro for this period was influenced by drupa in May 2004). Incoming orders for the second quarter were significantly up on the previous year’s figure. At 874 million Euro, they exceeded the incoming orders for the same quarter the previous year (previous year: 764 million Euro) by 110 million Euro or 14 percent. The order backlog as at September 30, 2005 was 1.2 billion Euro. The positive trend for sales and incoming orders continued for Heidelberg in the second quarter of financial year 2005/2006. Compared to the first quarter, sales increased by 32 percent or 209 million Euro. Although incoming orders remained fairly steady at 874 million Euro, this figure once again significantly exceeded expectations. According to Heidelberg CEO, Bernhard Schreier, "The recovery of the print media industry has continued during the first six months of our financial year. Sales and incoming orders at Heidelberg were up on the previous year’s figures in virtually every region and we believe that the same will be true for the second half of the financial year." The Heidelberg Group recorded an operating result of 71 million Euro in the period under review (continuing operations previous year: six million Euro). The second quarter alone brought an operating profit of 64 million Euro (continuing operations previous year: 27 million Euro). This corresponds to an operating return on sales of 7.4 percent. The net profit for the first six months of the year was 33 million Euro (previous year including discontinuing operations: minus 59 million Euro). According to Heidelberg CFO, Dr. Herbert Meyer, "The improvement in the operating result for the first six months shows that Heidelberg has made further progress in this respect and is on the right track to further improving its profitability. The lower personnel expenses at the German sites resulting from the agreement to safeguard the company’s future also had an effect for the first time. Nonetheless, exchange rate movements and developments in raw material and energy prices still present a risk which could have a negative effect on results for the financial year as a whole." As of September 30, 2005, the Heidelberg Group had a workforce of 18,774 worldwide (previous year: 19,082). Sales and results improve significantly in the divisions, particularly in the second quarter In the Press Division (offset printing), sales rose by 12 percent to 1.33 billion Euro in the first six months (previous year: 1.19 billion Euro). Incoming orders in the period under review amounted to 1.55 billion Euro (previous year: 1.69 billion Euro). The result of operating activities for the first six months totaled 63 million Euro. The same period of the previous year returned a break-even result. In the second quarter alone, the result of operating activities was 56 million Euro. In the Postpress Division (finishing), half-yearly sales amounted to 174 million Euro (previous year: 150 million Euro). Incoming orders totaled 178 million Euro (previous year: 179 million Euro). The result of operating activities in the period under review improved in relation to the previous year's figure to minus two million Euro (previous year: minus 12 million Euro). Postpress achieved a positive result for the first time in the second quarter, making a profit of two million Euro. Sales up in virtually all regions The comparison of incoming orders with the first six months of the previous year is distorted by the fact that drupa was held in 2004, but in all regions except Eastern Europe the figures for the second quarter improved considerably compared to the same quarter the previous year. A comparison of the sales figures for the six-month period shows increases for all regions, with Eastern Europe the only region to have a slightly negative figure for the period. Outlook for financial year 2005/2006 confirmed The company expects to see moderate growth in sales for the current financial year 2005/2006 on a comparable basis. During the current financial year, Heidelberg is planning to improve on both the result of operating activities for financial year 2004/2005 of 167 million Euro and the net profit of 61 million Euro. Management Board decides to buyback up to five percent of the company’s shares The Management Board of Heidelberger Druckmaschinen Aktiengesellschaft today decided to initiate a share buyback program. Between November 9, 2005 and January 19, 2007 at the latest, the company intends to acquire shares amounting to up to five percent of its capital stock (up to 4,295,424 shares). The Management Board is putting into effect the Annual General Meeting’s decision of July 20, 2005 to authorize the buyback of shares amounting to up to ten percent of its capital stock (up to 8,590,848 shares) by January 19, 2007. The repurchased shares are earmarked for capital retirement and employee share participation programs. Shares will be repurchased exclusively through the stock exchange. The Annual General Meeting’s authorization states that the price per share (excluding incidental acquisition expenses) paid by Heidelberger Druckmaschinen Aktiengesellschaft must not deviate by more than ten percent in either direction from the share’s average closing price on the XETRA or an equivalent successor system on the Frankfurt Stock Exchange during the last five trading days prior to entering into the purchase commitment. Heidelberger Druckmaschinen Aktiengesellschaft has instructed the financial institution repurchasing the shares to comply with the terms of trade detailed in Article 5 of Commission Regulation (EC) No. 2273/2003 of December 22, 2003. In particular, it may not buy back more than 25 percent of the average trading volume for a given day. The company will not acquire shares at a price above that of the last independent transaction or (if this is higher) above that of the highest current independent bid price at the trading platform where the buyback is made. Notification of transactions will be provided in accordance with the EC Regulation, and Heidelberger Druckmaschinen Aktiengesellschaft will provide regular updates on the progress of the share buyback program at www.heidelberg.com.




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