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Heidelberg Confirms Commitment to Customers, Details Future of the Company

Press release from the issuing company

December 16, 2003 -- (WhatTheyThink.com) -- Executives at a press briefing held last week in Germany further elaborated on the future direction of Heidelberg. Media representatives were provided access to top Heidelberg executives including Bernhard Schreier, CEO and Dr. Klaus Spiegel, a member of the Management Board. Essentially, Heidelberg is committed to all their customers and product lines in every sector. The company is aware of the strong and favorable brand that the Heidelberg name carries and will use that brand as leverage with current and future OEM partners and to solidify their relations with customers. However, Heidelberg may not manufacture all products internally. WhatTheyThink.com provides this summary of the comments made last week at the meeting in Germany. Web Offset The web offset sector will be sold as a complete entity - newspaper and commercial web. Schreier anticipates that Heidelberg will continue to sell and service web equipment in the future even after a deal has been concluded with a potential buyer. That being said, Heidelberg will continue to service and sell web equipment but may not manufacture the equipment. Digital Printing Heidelberg is committed to digital and is repositioning their organization to best sell products to their customers. The company is in negotiations with Kodak, which is their partner in the NexPress joint venture, as to how they will continue the structural arrangement. It is possible that Heidelberg will continue to manufacture digital equipment. The important stance in digital is that Heidelberg may not expand manufacturing of digital equipment. The company also is looking into the option to sell digital equipment from other manufacturers in markets where the NexPress 2100 and Digimaster product line may not be the best fit. Postpress The Postpress division will become a separate entity, focusing entirely on the requirements of the postpress equipment market. This positioning is not because Heidelberg expects to sell the division even though parts may be available to potential buyers. An example given was the Idab Wamac operation which will stay with Heidelberg while the digital finishing business may be sold or discontinued. Schreier stated that the separate entity is the best way for postpress to merge into the new Heidelberg structure over time. It is an option that the postpress division may eventually get merged back into the respective divisions once the structure for digital and web becomes clear. Conclusion The jewel of Heidelberg’s portfolio is their sheetfed division and the company will continue to manufacture and sell all products that directly involve sheetfed - prepress, press, postpress and workflow management. In fact, Schreier stated that from the customer’s perspective, Heidelberg will essentially look the same in terms of product offerings - again the only difference being who may manufacture that product. In all sectors, Heidelberg continues to provide sales, support, service and even financing for each offering. The new focus will have a massive impact on the company’s year end financial results which will show a one time write down of up to 400 million Euro. Schreier stated this write down will help the company begin the next fiscal year with a clean balance sheet and a better position to profit in 2004/05. If the economy does not improve, the new Heidelberg will be better positioned to adjust.