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Heidelberg to cut 1000 jobs, Divest Web Division, Digital Repositioned, Two Board Members Resign

Press release from the issuing company

November 26, 2003 -- Today, the Supervisory Board of Heidelberg agreed to a proposal by Heidelberg’s Management Board to streamline its organization and divest its activities in research, development and production of web offset presses. Heidelberg’s Management is in negotiations with potential partners for its Web Systems business, which include close cooperation for the installed base and future customer care. In the Digital division, Heidelberg must adapt capacities and will refocus its activities. The Management Board will present an appropriate solution by the end of the current fiscal year. The Postpress division will become a separate entity, focusing entirely on the requirements of the postpress equipment market. All this allows Heidelberg to concentrate its resources on sheetfed offset printing and all its related value chain, including prepress, press, postpress and workflow management. Heidelberg’s worldwide sales and service network will continue to offer competent support and consulting for Heidelberg's own products and products from first class partners to all its customers. "Heidelberg will continue to provide products for premium quality print results. Our target markets will mainly be commercial, packaging and label printers", said Bernhard Schreier, CEO of Heidelberg. As a consequence of all these changes, Heidelberg will adapt its organizational structure. The divisional structure will be streamlined to a leaner functional organization, leading to a further reduction of the workforce by up to 1,000 employees worldwide. Within the Board, Bernhard Schreier as CEO will additionally be responsible for the worldwide sales and services network, as well as for R&D and operations. Dr. Klaus Spiegel will assume responsibility for the entire product portfolio and marketing, and Dr. Herbert Meyer will remain CFO. Wolfgang Pfizenmaier (56) and Holger Reichardt (49) will resign from the Management Board in mutual and friendly agreement with the Supervisory Board. The new focus will influence the coming year-end financials. While sales and operating profit targets for the financial year remain unchanged, additional one-time-costs of up to 400 million Euro will arise for restructuring and, to a greater part, book losses in connection with the planned divestment of Web Systems and the repositioning of Digital and Postpress. "Overall, the new focus will significantly improve our profitability and cash flow in the short and medium term, and thus enables us to achieve the financial targets we have set for the company", said Herbert Meyer, CFO of Heidelberg. WhatTheyThink.com will have more analysis and commentary on this news as it becomes available.