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Heidelberg CFO Comments on Profits, Electronic Print, Postpress, Digital

Press release from the issuing company

February 27, 2003 -- Yesterday, Heidelberg's Chief Financial Officer Herbert Meyer told investors gathered in Frankfurt that Heidelberg hopes to return to its fiscal 2001 earnings margin of 9.5% before interest and taxes. Dow Jones and other news agencies reported the comments and noted that the company posted an EBIT margin of 7.1% in fiscal 2002. Analysts expect the margin to decline in the current year ending March 31. Heidelberg lowered its earnings guidance in early February for fiscal 2003, and now expects to post a net loss between EUR50 million and EUR70 million. Meyer defended the company's strategy of providing a full range of products and services to the print industry, despite posting losses in three of its four divisions. Currently, Heidelberg is only earning a profit at its core sheetfed division, where it has a clear lead with a market share of 47% versus 15% for its nearest competitor. Meyer told investors that Heidelberg has a strategic advantage since the company is the only supplier that offers both digital and offset printing machines. Dow Jones further reported that Meyer acknowledged the importance of digital offerings. While losses at its Digital division increased this year, Meyer believes it's "a huge and important upcoming technology of the future." He noted that 70% of color digital printing machines will go to commercial printers which is Heidelberg’s core customer base. Additionally Meyer also said the company wants to overtake Mueller Martini and Bobst in three years to become the number one provider of postpress products and services. Electronic print will not erode the company's business over the long term according to Meyer. He thinks that print will grow and pointed to markets such as China and eastern Europe, where the company has invested in building up distribution networks. Dow Jones quoted him as saying that "40% of our sales come from emerging markets, twice as high as our competitors."