April 3, 2007--Oce N.V. CEO Rokus van Iperen: "Wide Format Printing Systems booked an increase of almost 5% in revenues in the first quarter of 2007. The main drivers of this growth are our successful colour products. Sales of our black and white range are also developing well. In DDS revenues still showed a decline in the first quarter, but the order portfolio at the end of the quarter is substantially higher than one year ago. Positive customer reactions to our own new products and third-party products will further boost the growth in sales. As a result there will be an increase in the number of printing systems installed in the market, bringing improved results for DDS as the year progresses." Total revenues in the first quarter were Euro 729.2 million and increased organically by 0.8%1) compared to the first quarter of 2006 (including exchange rate effects: -3.3%). Non-recurring revenues remained stable on an organic basis (including exchange rate effects: -4.0%). Recurring revenues showed an organic increase for the sixth quarter in succession, moving up by 1.1% (including exchange rate effects: -3.0%) compared to the first quarter of 2006. The gross margin amounted to 41.6% of revenues, which was the same as in the first quarter of 2006. Operating expenses amounted to 38.7% of revenues (2006: 38.4%). After adjustment for exchange rate effects, operating expenses were at the same level as in the first quarter of 2006. Operating income was Euro 21.3 million (2006: Euro 23.7 million, including a one-off positive contribution of Euro 8.1 million net). During the first quarter of 2007 a net amount of Euro 5.5 million was capitalised on R&D costs (2006: Euro 0.4 million). A substantial proportion of income was achieved in countries with a relatively low tax burden. In addition, deferred income tax claims arising from tax-offsettable losses were capitalised. On balance this resulted in a positive taxation contribution of Euro 0.8 million to the net result (first quarter of 2006: Euro 0.7 million). Net income increased from Euro 11.9 million to Euro 12.2 million. Net income attributable to holders of ordinary shares amounted to Euro 0.13 (2006: Euro 0.14) per share. Strategic Business Unit Digital Document Systems Compared to the first quarter of 2006 revenues in the Strategic Business Unit Digital Document Systems (DDS) decreased on an organic basis by 0.7% to Euro 524.2 million. The expected decrease in the fax business continued and amounted to more than 35% in the first quarter. The DDS business, excluding fax, booked an increase of 0.7% in revenues. Non-recurring revenues decreased by 5.2% on an organic basis. This was offset by the fact that the order portfolio was substantially higher compared to the end of the first quarter of 2006 as a result of successful sales of the company's own new products and OEM products. This development is in line with the strategy we have initiated. Recurring revenues developed well. If the declining revenues from fax are excluded, recurring revenues showed an organic increase of 2.7% (+0.8% if fax is included). Oce Business Services grew by almost 6%. The operating income of DDS amounted to Euro 3.2 million (2006: Euro 6.6 million; the latter figure was positively influenced by a release from pension provisions in the United States). Strategic Business Unit Wide Format Printing Systems Revenues in the Strategic Business Unit Wide Format Printing Systems (WFPS) grew organically by 4.8% to Euro 205.0 million. Non-recurring revenues increased strongly organically by 10.7%, the highest increase in eight quarters. Recurring revenues likewise developed well, booking an organic increase of 2.1% particularly thanks to higher sales of toner and ink. Operating income of WFPS amounted to Euro 18.1 million (2006: Euro 17.1 million). Balance sheet and cash flow At the end of the quarter the balance sheet total amounted to Euro 2,567 million. Because of our constant focus on the development of assets the balance sheet has been shortened by Euro 180 million compared to the first quarter of 2006, of which Euro 126 million resulted from exchange rate effects. Free cash flow was Euro 53 million negative (2006: - Euro 64 million). Cash flow from operating activities was Euro 19 million negative (2006: - Euro 52 million). Compared to the fourth quarter of 2006, inventories increased by Euro 33 million, whilst finance lease receivables and trade receivables were Euro 19 million lower. In addition, the first quarter always comprises big seasonally related outflows. The cash flow from investing activities was Euro 34 million negative (2006: - Euro 12 million, including an inflow of Euro 11 million from the sale of part of the existing lease portfolio). Free cash flow for the full 2007 financial year is expected to be at the level of 2006. Strategy 2007-2010: major steps taken Both DDS and WFPS have launched new printing systems. Both Strategic Business Units have strengthened their distribution further. These are major steps towards implementing the strategy 2007-2010. As a result the number of printing systems installed in the market will increase and the degree of utilisation of the service organisation will grow. Digital Document Systems In the first quarter of 2007 DDS completed its cutsheet colour product line with the introduction of various OEM machines that feature speeds of up to 65 pages per minute. In the colour segment the Oce VarioStream 9240 was also introduced at the Oce OpenHouse. As the world market leader in continuous feed digital printing, Oce now offers its customers the possibility of upgrading within one high volume product family from pure black and white printing (Oce VarioStream 9210) to full colour applications (Oce VarioStream 9240). This enables customers to make step-by-step investments to keep pace with the growing market demand for colour, for example in transaction printing or personalised book printing. In the high volume printing segment Oce introduced the Oce VarioPrint 6200 and the Oce VarioPrint 6160. These machines can print 200 and 160 pages per minute respectively on both sides in one single pass and are part of the same series as the Oce VarioPrint 6250 that was launched last year. Sales and the upscaling of production are progressing favourably, with the result that Oce now offers its customers a complete series of high volume cutsheet printers. Expansion of distribution power is an important element in the DDS strategy. This comprises, for example, the roll out of the Imagistics model in Europe, which has been initiated. In addition Oce has entered into a strategic partnership with the Chinese Founder Group which is one of China's biggest technology businesses and holds a strong position in the news and publishing sector. As part of this partnership Founder will sell Oce printing systems. This will allow Oce to boost its growth opportunities in commercial printing in China. Wide Format Printing Systems In Technical Document Systems Oce is market leader in black and white and has the ambition to acquire the same position in colour - based on a balanced mix of products developed in-house and high quality products from OEM partners. In 2006 Oce installed almost 40% more of its own colour machines and 70% more OEM machines in the low volume colour segment. To strengthen the product portfolio further, Oce introduced three additional OEM colour machines in the first quarter of 2007. Within Display Graphics Systems the existing - mainly OEM-based- portfolio was extended in the first quarter with the addition of the Oce Arizona 250 GT. This own machine can print texts and illustrations of photographic quality of up to 2.5 metres in length for indoor and outdoor use. In addition Display Graphics has strengthened its distribution by entering into a strategic partnership with Fujifilm, which will sell the Oce Arizona 250 GT world-wide. This partnership is expected to bring a substantial increase in the number of machine sales. Display Graphics is working hard to scale up production to keep pace with demand. Both the Oce Arizona 250 GT and the partnership with Fujifilm support the accelerated growth strategy in Display Graphics. Outlook 2007 Implementation of our strategy 2007-2010 is proceeding as planned. WFPS made a dynamic start in the first quarter. We expect that this good development will continue. In financial terms DDS did not have a good start, but the development of the underlying business is positive. The growth in recurring revenues, the expansion of our OEM business in the United States and Europe and the increasing sales of the Oce VarioPrint 6250 give us confidence that the results of DDS will improve during the course of the year.