Heidelberg increases sales in first half year by just under 5 percent, profits below expectations / Cost-cutting program launched successfully

Heidelberg, Germany (PROTEXT/ots) - Following a good firstquarter (April 1 to June 30) for fiscal 2001/02 (sales up 8percent and operating result up just under 22 percent), theevents in the USA had a clear impact on HeidelbergerDruckmaschinen AG's (Heidelberg) second quarter results. Salesby the Heidelberg Group were Euro 2.3 billion in the first halfyear (April 1 - September 30, 2001), around 5 percent up on thesame period last year (just under Euro 2.2 billion). Theoperating result fell during the period by Euro 43 million toEuro 110 million. The profit after tax was Euro 62 million, downEuro 20 million on the first half of the previous fiscal year. "Sales in September in particular were poor, being around Euro100 million below expectations", stated Bernhard Schreier,Heidelberg's CEO. Web Systems sales were especially weak, being29 percent down on last year's figures. The Heidelberg Groupreceived orders during the first half year of Euro 2.54 billion(17.4 percent below the figure recorded in drupa year 2000).Incoming orders were up around 25 percent, however, compared topre-drupa year 1999/2000 (around Euro 2 billion). As at September 30, 2001, the Heidelberg Group employed around26,000 staff worldwide. Developments in the divisions Sales for the half year in the Sheetfed Division climbed morethan 16 percent to Euro 1.57 billion (previous year: Euro 1.35billion). The operating result was Euro 263 million (previousyear: Euro 212 million) and thereby exceeded last year's figureby a satisfying 24 percent. The Finishing Division recorded sales of Euro 176 million(previous year: Euro 173 million). The profit of Euro 7 million(previous year: Euro 11 million) just failed to match the highlevel achieved for the 2000/01 half year. Sales and operating results for the Digital and Web SystemsDivisions fell below last year's levels. Sales for the WebSystems Division were Euro 218 million, down from Euro 307million the previous year. The operating loss grew to aroundEuro 91 million (previous year: loss of Euro 24 million). The Digital Division recorded sales of Euro 333 million(previous year: Euro 364 million). The operating loss was Euro69 million (previous year: loss of Euro 46 million). The saleslaunch of the NexPress digital color press in September wentparticularly well. "With over 80 machines already sold, we willeasily exceed our target of 100 systems for the year as awhole", stated Bernhard Schreier. This boded well, he explained,for the company's future development. Progress in the regions quite positive A comparison of the regions shows just how severely thecurrent situation is being impacted by the economic developmentsin the USA. Sales in all regions showed positive development,with the exception of the NAFTA region, where they fell by Euro137 million or 18.9 percent over the previous year. Sales in theAsia/Pacific Region, Eastern Europe and Latin America, however,recorded double digit growth rates. The important Central Europeregion grew by just under 9 percent. Cost-cutting program introduced "We are looking to a comprehensive cost-cutting program todrive the company towards growth and safeguard our earningspotential", stated Dr. Herbert Meyer, CFO at Heidelberg. Toensure Heidelberg achieves its target of Euro 100 millionsavings in the current fiscal year, fixed-term employmentcontracts will not be extended, no new employees will beappointed, overtime will be cut back, and lasting reductionswill be made in administrative costs. Prospects for fiscal 2001/2002 In its sales and results forecasts for the year as a whole,the company had previously assumed that the economic recovery inthe USA would begin in the second half of the current fiscalyear. Developments now suggest there will be a further economicdownturn in the USA with consequences for business in Europe andAsia. "Despite the cost-cutting measures that have beenintroduced, we now believe that last year's results can nolonger be matched if customers become increasingly uneasy aboutmaking investments", explained Dr. Herbert Meyer. Henevertheless anticipated that sales for the second half offiscal 2001/02 would be just above the figure for the first half."The profit after taxes for the fiscal year as a whole will liebetween Euro 200 and 220 million (Euro 283 million in 2000/01)." HEIDELBERG-

Sept. 30, 2001 Sept. 30, 2000 Change Group

EUR m.

EUR m.

in % Net sales

2.300

2.195

+4,8 Digital

333

364

-8,5 Sheetfed

1.573

1.351

+16,4 Web Systems

218

307

-29,0 Finishing

176

173

+1,7 Incoming orsers

2.539

3.073

-17,4 Digital

374

409

-8,6 Sheetfed

1.600

2.024

-20,9 Web Systems

382

426

-10,3 Finishing

183

214

-14,5 Order backlog

1.847

2.263

-18,4 Digital

152

149

+2,0 Sheetfed

1.167

1.653

-29,4 Web Systems

437

356

+22,8 Finishing

91

105

-13,3 Operating profit

110

153

-28,1 Digital

-69

-46

-50,0 Sheetfed

263

212

+24,1 Web Systems

-91

-24

-279,2 Finishing

7

11

-36,4 Net profit

62

82

-24,4 Return on sales in % 2,7

3,7 Sales by regions Sept. 30, 2001 Sept. 30, 2000 Change Share

01/02

EUR m.

EUR m.

in %

in % Central Europe

869

800

+8,6

37,8 Eastern Europe

132

118

+11,9

5,7 NAFTA

586

723

-18,9

25,5 Central+South America

90

60

+50,0

3,9 Asia/Pacific 559

432

+29,4

24,3 Middle East/ Africa

64

62

+3,2

2,8 Group

2.300

2.195

+4,8

100,0 Important note: This press release contains statements about the future thatare based on assumptions and estimates made by the management ofHeidelberger Druckmaschinen Aktiengesellschaft. Even if themanagement is of the opinion that these assumptions and estimatesare accurate, future actual developments and future actualresults may differ significantly from these assumptions andestimates due to a variety of factors. These factors can includechanges to the overall economic climate, changes to exchangerates and interest rates and changes in the graphic artsindustry. Heidelberger Druckmaschinen Aktiengesellschaftprovides no guarantee that future developments and the resultsactually achieved in the future will agree with the assumptionsand estimates set out in this press release and assumes noliability for such. Photographs are available on the Internet atwww.journalist.heidelberg.com.

ots Original Text Service: Heidelberger Druckmaschinen AGInternet: http://www.presseportal.de

Further information:Heidelberger Druckmaschinen AG Corporate Communications ThomasFichtl Tel.: +49-6221-92 47 47 E-mail:thomas.fichtl@de.heidelberg.com

Subscribers please note that material bearing the slug"PROTEXT" is not part of CTK's news service and is not to bepublished under the "CTK" slug. Protext is a commercial serviceproviding distribution of press releases from clients, who areidentified in the text of Protext reports and who bear fullresponsibility for their contents.