Heidelberg Presents Figures for First Six Months

For the first six months of financial year 2006/2007 (April 1 to September 30, 2006), Heidelberger Druckmaschinen AG (Heidelberg) increased its sales and earnings over the previous year. Heidelberg Group sales in the first six months were six percent up on the comparable figure for the previous year at 1.628 billion Euro (previous year: 1.529 billion Euro). Incoming orders during the period climbed 13 percent to 1.996 billion Euro (previous year: 1.760 billion Euro). The order backlog of 1.343 billion Euro at the end of the second quarter was at the same high level as the previous quarter.

“Our customers are continuing to invest in cutting-edge and efficient presses to boost their productivity, a development that is having a positive effect on our order situation,” stated Heidelberg CEO, Bernhard Schreier. “The annual average volume of incoming orders has now grown consistently for three financial years in a row. During the first six months of the current financial year, the growth in sales and incoming orders was particularly strong in industrial countries such as the USA and Germany. Our forecast for the full financial year 2006/2007 remains on track.”

The Heidelberg Group recorded a result of operating activities of 118 million Euro in the first half year (previous year: 72 million Euro). This includes one-off effects worth 25 million Euro – among other things for the sale of the Linotype holding. The net profit after six months more than doubled to 68 million Euro (previous year: 31 million Euro).

“The improvement in results in the first half year shows that Heidelberg has made further progress towards improving its profitability,” stated Heidelberg CFO, Dirk Kaliebe. “The launch of new products and measures to improve competitiveness have made their mark on results. We will continue to do everything we can to improve our competitive edge.”

As at September 30, 2006, the Heidelberg Group had a workforce of 19,093 worldwide (previous year: 18,774). Some 300 new employees were added to the workforce during the first six months of the year.

Increased sales and results in the divisions in the first half year
In the Press Division (offset printing), sales rose to 1.423 billion Euro in the first six months (previous year: 1.330 billion Euro). Incoming orders in the period under review amounted to 1.762 billion Euro (previous year: 1.557 billion Euro). The result of operating activities in the first half year totaled 96 million Euro (previous year: 64 million Euro).

In the Postpress Division (finishing), half-yearly sales were 186 million Euro (previous year: 174 million Euro). Incoming orders were 215 million Euro (previous year: 178 million Euro). The result of operating activities achieved break-even (previous year: minus two million Euro).

Sales in the EMEA, North America, Latin America and Eastern Europe regions in the first half year exceeded the comparable figures for the previous year. In the Asia/Pacific region, sales figures were almost on a par with the high levels of the previous year. The temporary suspension of the tax exemption in China had a decelerating effect on incoming orders and sales.

Outlook for financial year 2006/2007 confirmed
For financial year 2006/2007, the company anticipates that sales will be around five percent up on financial year 2005/2006. Heidelberg plans to increase its result of operating activities to around ten percent of sales during the current financial year.

Additional transfer of funding to Heidelberg Pension Trust e.V.
Thanks to an additional funding of 50 million Euro, Heidelberg was able to reduce pension provisions in its balance sheet as at September 30, 2006 to 148 million Euro. At the end of the first half year 2006/07, the Heidelberg pension fund totaled around 520 million Euro. The Management Board, as already reported, had decided back in February 2006 to transfer the funding of pension obligations for existing and retired employees through a Contractual Trust Arrangement (CTA).

Second share buyback program launched for up to five percent of share capital
The share buyback program initiated last week by the Management Board to repurchase up to five percent of the company’s share capital (up to 4,152,535 shares) starts today and will run till January 19, 2008 at the latest. In initiating the program, the Management Board drew upon the relevant authorization granted by the Annual General Meeting on July 20, 2006. The repurchased shares are earmarked for cancellation or for use in employee share participation programs.

“The ongoing improvement in our financial strength enables us to start a further share buyback program,” stated CFO Dirk Kaliebe. “This will allow us to further optimize Heidelberg’s financial structure.”

The complete report for the first half of 2006/2007 will be available online at www.heidelberg.com.