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Heidelberg Reports Preliminary Figures

Thursday, May 04, 2006

Press release from the issuing company

May 3, 2006 -- Preliminary figures indicate that Heidelberg increased sales and earnings in financial year 2005/2006 (April 1, 2005 to March 31, 2006). "The worldwide economic boom has stabilized over the past year", stated Bernhard Schreier, Chief Executive Officer of Heidelberger Druckmaschinen AG. "This development has proved of great benefit to us over the past financial year. Moreover, it looks like the positive trend in the print media industry is set to continue throughout the current financial year." Preliminary sales by the Heidelberg Group during the period under review grew 12 percent to 3.586 billion Euro (previous year: 3.207 billion Euro). At 1.149 billion Euro, sales in the fourth quarter alone were roughly 18 percent up on the corresponding quarter of the previous year (previous year: 976 million Euro). Preliminary incoming orders in the financial year just closed were 3.605 billion Euro (previous year, including orders received at drupa: 3.508 billion Euro) and were therefore around three percent higher than last year’s already high figure. Preliminary incoming orders in the fourth quarter rose significantly to 880 million Euro compared to the previous year (780 million Euro). At around one billion Euro, the preliminary order backlog at March 31, 2006 was on a par with the previous year’s very high figures. In the period under review, the Heidelberg Group increased its preliminary operating profit to 277 million Euro, 31 percent up on the previous year (continuing operations previous year: 211 million Euro). This produced an EBIT yield of 7.7 percent of sales. Adjustments for exchange rate movements, the sales structure, high levels of R&D expenditure and increased product launch and material costs had a negative impact on the preliminary operating profit. At 135 million Euro, preliminary net profit more than doubled in comparison to the previous year (previous year, including discontinuing operations: 59 million Euro). This corresponds to a return on sales after tax of 3.8 percent. At 143 million Euro, free cash flow was well above expectations - and already included the transfer of pension funding provisions amounting to 124 million Euro. "In the last financial year we increased our earnings and financial power even further", stated Heidelberg’s CFO, Dr. Herbert Meyer. "Thanks to the stability in the industry and improved cost structures at the Heidelberg Group there is potential to take this even further. Economic risks such as exchange rate movements and raw material and energy prices are still very much a factor though." As of March 31, 2006, the Heidelberg Group had a workforce of 18,716 worldwide (previous year: 18,679). Results in the Press and Postpress Divisions In the Press Division (offset printing), preliminary sales in the financial year just closed rose by approx. 12 percent to 3.142 billion Euro. Preliminary incoming orders in the period under review increased by two percent on the previous year to around 3.146 billion Euro. The preliminary operating profit for 2005/2006 was 248 million Euro (previous year: 187 million Euro). In the Postpress Division (finishing) preliminary sales in the period under review rose by around 14 percent to 398 million Euro. Preliminary incoming orders increased by 15 percent to 413 million Euro. The division’s provisional operating result for the period under review was -3 million Euro (previous year: -2 million Euro). The preliminary operating result in the Postpress Division was burdened by a one-off goodwill depreciation of 6.5 million Euro which did not affect payments. Preliminary sales in all regions were up on the previous year. Preliminary incoming orders also grew, except in the Eastern Europe and North America regions. In the North America region, however, incoming orders in the fourth quarter alone rose by 15 percent compared to last year. Share buyback On November 8, 2005, the Management Board of Heidelberger Druckmaschinen AG decided to initiate a share buyback program covering up to five percent of its capital stock. 2,857,777 bearer shares (3.3 percent of the outstanding shares) had been repurchased as part of the simplified capital retirement by March 31, 2006. The company’s capital stock now amounts to 212,609,799.68 Euro and is divided into 83,050,703 bearer shares. The share buyback program will continue to run until a total of five percent of the capital stock has been acquired. The repurchased shares are earmarked for capital retirement and employee share participation programs.




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