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Heidelberg Presents Nine-Month Figures, Sales up 6%

Press release from the issuing company

Jan 31 -- In the first nine months of financial year 2006/2007 (April 1, 2006 - December 31, 2006), Heidelberg returned figures for sales, incoming orders and operating result that were up over the previous year. Sales by the Heidelberg Group during the period under review climbed around six percent to 2.589 billion Euro (previous year: 2.437 billion Euro). Incoming orders after nine months amounted to 2.913 billion Euro, around seven percent up on the same period of the previous year (2.725 billion Euro). The order backlog of 1.280 billion Euro at December 31, 2006 was once again on a very high level. "The favorable development in the print media industry has continued thanks to the positive trend in the economy as a whole in 2006," stated Heidelberg CEO Bernhard Schreier. "Capacity utilization and production activity in print shops both increased in the two key markets Germany and the U.S." The Heidelberg Group recorded an operating result of 202 million Euro in the period under review (previous year: 144 million Euro). This corresponds to a return on sales of 7.8 percent. The net profit after nine months - including a positive non-recurring effect resulting from a corporate income tax credit in the third quarter of 73 million Euro - was 180 million Euro (previous year: 65 million Euro). Earnings per share after nine months were 2.21 Euro (previous year: 0.76 Euro), of which 0.89 Euro were attributable to the additional tax revenue. "We were able to make further progress towards increasing our productivity in both the third quarter and the nine months as a whole," stated Heidelberg CFO Dirk Kaliebe. "We are also making use of the resulting improved cash flow to implement the share buyback program." As at December 31, 2006, the Heidelberg Group had a workforce of 19,156 worldwide (previous year: 18,700). This represents an increase of around 400 since the end of the last financial year. Nine-month sales and results show improvement in the divisions In the Press Division (offset printing), sales rose to 2.251 billion Euro in the first nine months (previous year: 2.130 billion Euro). Incoming orders in the period under review amounted to 2.551 billion Euro (previous year: 2.395 billion Euro). The operating result after the first three quarters amounted to 157 million Euro (previous year: 121 million Euro). The positive business development within the press division was also affected by the considerably high demand for the large format, especially for the Speedmaster XL 105. In the current fiscal year Heidelberg is particularly investing in new technologies as there are Anicolor and a new generation of sheetfed printing presses of a larger format (Speedmaster XL 142/162). In the Postpress Division (finishing), sales amounted to 309 million Euro, 14 percent up on the figure 12 months ago (previous year: 271 million Euro). Incoming orders rose by around 13 percent to 333 million Euro (previous year: 294 million Euro). The operating result for the period under review amounted to seven million Euro (previous year: two million Euro). Sales and incoming orders in the EMEA, North America, Latin America and Eastern Europe regions in the first nine months exceeded the comparable figures for the previous year. In the Asia/Pacific region, figures fell short of the high levels of the previous year. Primarily the suspension of the import duty exemption in China in the second and third quarter slowed down incoming orders and sales. The restoration of the import duty exemption on March 1, 2007 suggests that the expected improvement in the order and supply situation for the Chinese market will be deferred to the new financial year. Share buyback On November 7, 2006, Heidelberger Druckmaschinen AG launched a second share buyback program: a total of up to five percent of the company's capital stock - a maximum of 4,152,535 shares - is to be repurchased on the stock market by January 2008 at the latest. At the end of the quarter, on December 31, 2006, the company had bought back 909,422 shares, equivalent to 1.1 percent of the share capital. Outlook for financial year 2006/2007 unchanged For financial year 2006/2007, the company anticipates that sales will be approximately five percent up on financial year 2005/2006. Heidelberg plans to increase its operating result to approximately ten percent of sales during the current financial year.