Investment Activity in the Printing Industry Remains Weak - Heidelberg Presents Figures for the First Quarter of Fiscal Year 2003/2004.

Business Editors

HEIDELBERG, Germany--(BUSINESS WIRE)--July 24, 2003

Heidelberger Druckmaschinen AG (FWB:HDD):

-- Sales in first quarter down 15 percent on previous year after

adjustment for exchange rate movements

-- As expected, lacking contribution margins lead to a negative

result for the first quarter

-- Cost-cutting measures already taking effect

During the first three months of fiscal year 2003/2004 (April 1 to June 30), Heidelberger Druckmaschinen AG (Heidelberg) (FWB:HDD) recorded sales of around Euro 720 million (previous year: Euro 930 million). Incoming orders were Euro 760 million (previous year: Euro 1.1 billion), whereas last year's figure had benefited from the IPEX trade fair held in Birmingham, UK, in April 2002.

"The reluctance to invest among commercial printers in virtually all markets continued during the first quarter. The weak demand in the USA and Europe had a particularly strong impact on the Sheetfed division in this quarter", stated Bernhard Schreier, CEO of Heidelberger Druckmaschinen AG. "The current economic climate does not allow concrete sales and profit forecasts for the current fiscal year."

The operating result of the Heidelberg Group was Euro -59 million (previous year: Euro 21 million profit). The net result for the period under review was Euro -77 million (previous year: Euro 12 million profit). "As expected, the lack of contribution margins led to a negative result for the first quarter", stated Dr. Herbert Meyer, CFO at Heidelberg.

As of June 30, 2003, the Heidelberg Group had a workforce of some 24,100 worldwide (previous year: around 24,700). Since April 1, 2002, the Company has reduced its staffing levels worldwide by around 2,300 on a comparable basis, including approximately 600 in the first quarter of 2003/2004. Overall, Heidelberg is looking to reduce its staffing levels worldwide by around 3,200 over the period April 1, 2002, to March 31, 2004.

Developments in the divisions:

Weak sales in Sheetfed led to a negative result for the first

quarter,

first signs of improvement in Web Systems and Digital

Sales in the Sheetfed Division fell from around Euro 700 million to Euro 500 million. Incoming orders dropped by almost 35% to Euro 551 million. Customers in the major Western markets, in particular, are deferring investments in large printing systems. This situation is being further exacerbated by increasingly tough competition from Japanese manufacturers that has emerged as a result of exchange rate influences. The Sheetfed Division recorded an operating result of Euro -18 million (previous year: Euro 74 million profit), among other things due to lower capacity utilization.

In the Digital and Web Systems Divisions, sales remained stable and the operating result improved. "Initial successes of the site concentration in the Digital Division and of staff cutbacks in Web Systems had a positive effect on results", stated Dr. Herbert Meyer. "Sluggish demand also affected the Postpress Division. This sector can only expect an improvement in results after the site consolidations have been concluded", he added.

Business in the regions mostly restrained

Restrained sales developments in all regions reflected the continuing weakness in global demand for investment goods. Only the Eastern Europe region came close to repeating the satisfactory figures of the previous year, with sales of around Euro 70 million. In the Asia/Pacific region, China remains a growth market. In this country, Heidelberg expanded its position during the first quarter of 2003/2004.

The table with the figures and further information are available on the Press Lounge at www.heidelberg.com.

Important note

This Press Information contains statements about future development that are based on assumptions and estimates by the management of Heidelberger Druckmaschinen Aktiengesellschaft. Even if the management is of the opinion that these assumptions and estimates are accurate, future actual developments and future actual results may differ significantly from these assumptions and estimates due to a variety of factors. These factors can include changes to the overall economic climate, changes to exchange rates and interest rates and changes in the graphic arts industry. Heidelberger Druckmaschinen Aktiengesellschaft provides no guarantee that future developments and the results actually achieved in the future will agree with the assumptions and estimates set out in this press release and assumes no liability for such.