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Heidelberg Lowers Expectations, Sales to Drop By 10% in Current Fiscal Year

Press release from the issuing company

- No significant recovery perceptible on main markets to-date - Management Board passes additional program to enhance efficiency September 4, 2002 -- Based on the latest economic and market estimates, Heidelberger Druckmaschinen AG anticipates sales to fall behind projections for fiscal year 2002/03. “A significant economic recovery seems to be protracted further in the US as well as in Central Europe, and particularly in Germany. Due to the restrained spending activities of the advertising sector, the utilization rate of our customers' capacities still is low, thus leading to an ongoing reluctance to invest. The expected recovery has been undermined by a renewed downtrend in August“, stated Bernhard Schreier, Heidelberg's CEO. Business developments in the current second quarter also show that, compared to the first quarter, incoming orders are unlikely to reach the expected level. Heidelberg's Management Board therefore expects sales to fall 10 percent below the figure of 5 billion euros achieved in the past fiscal year. In order to limit the negative effects on the profit, the Managements Board passes an additional program including cost-cutting measures to the amount of 200 million euros, which will become fully effective no later than in the next fiscal year. "These measures aim at streamlining and flexibilization to ensure that our strategic outlining as the leading solution provider for the print media industry can be realized with enhanced efficiency", the Company's CFO, Dr. Herbert Meyer, explained.