Q3 strongest quarter for orders in current financial year

— Sales after nine months at same high level as last year at EUR 2.568 billion

— Operating result of EUR 177 million equivalent to a return on sales of around 7 percent

— Net profit for 2007/2008 to increase to between 4.5 and 5.0 percent of sales

Heidelberger Druckmaschinen AG (Heidelberg) (FWB: HDD) is publishing its financial statements for the first nine months (April 1 to December 31, 2007) of financial year 2007/2008. At EUR 2.568 billion, Heidelberg Group sales during the period under review almost matched last year’s high level (previous year: EUR 2.589 billion). After adjustments for exchange rate movements, sales were 2 percent up. Incoming orders after nine months amounted to EUR 2.824 billion (previous year: EUR 2.913 billion). The success of the traditional Open House events held in October and November at various sales locations in Germany helped the Heidelberg Group achieve incoming orders totaling EUR 958 million in the third quarter alone. In terms of incoming orders, this made the third quarter the strongest so far of the current financial year and represented a 4 percent improvement over last year’s figure. As a result of the volume of incoming orders in the third quarter, the order backlog at December 31, 2007 was slightly up on the previous quarter’s level at EUR 1.196 billion (previous quarter: EUR 1.184 billion).

“As a result of the way business has gone over the past few months and in spite of recent developments in the U.S., we expect to match the previous year’s sales of around EUR 3.8 billion in the current financial year and to attain a result of operating activities in excess of last year’s adjusted figure of around EUR 300 million,” said Heidelberg CEO Bernhard Schreier.

The Heidelberg Group recorded an operating result of EUR 177 million in the period under review (previous year: EUR 202 million). This corresponds to an operating return on sales of around 7 percent. The previous year’s figure of EUR 202 million included a positive one-time effect amounting to around EUR 25 million from the sale of Linotype GmbH. The net profit was EUR 87 million (previous year: EUR 180 million). In the third quarter last year, Heidelberg posted tax revenue of EUR 73 million from a corporation tax credit.

“In the third quarter alone, we achieved a sound operating return on sales of 8.7 percent,” said Heidelberg CFO Dirk Kaliebe. “For the fourth quarter of financial year 2007/2008, we are currently expecting sales well above the EUR 1 billion mark, which means we will match the previous year’s figure. We are predicting an increase in the previous year’s adjusted net profit of 3.8 percent to between 4.5 and 5.0 percent of sales,” he added.

At December 31, 2007, the Heidelberg Group had a workforce of 19,508 worldwide (19,171 at March 31, 2007). Overall, the workforce increased by 337 during the financial year. Adjusted by the number of trainees, the increase is 187, primarily employed in production.

Results in the divisions and regions

In the Press Division (offset printing), sales stood at a level of EUR 2.238 billion in the period under review (previous year: EUR 2.251 billion). Incoming orders amounted to EUR 2.484 billion (previous year: EUR 2.551 billion). The operating result after nine months was EUR 150 million (previous year: EUR 157 million including one-time effects).

In the Postpress Division (finishing), sales after three quarters amounted to EUR 307 million (previous year: EUR 309 million). Incoming orders totaled EUR 317 million (previous year: EUR 333 million). In the period under review, an operating result of EUR -2 million was recorded (previous year: EUR 7 million).

In the Financial Services Division, we have once again been able to lower the capital commitment compared to previous quarters through the consistent support of global, regional and local financing partners. An operating profit of EUR 29 million was recorded in the period under review (previous year: EUR 38 million).

Sales and incoming orders after nine months were slightly below the previous year’s high level in the EMEA, North America, Latin America and Asia/Pacific regions.

There are three main reasons for the North America region being down on the previous year’s incoming order figures for the third quarter. Firstly, the Graph Expo trade show took place during this quarter last year. Secondly, the continuing weakness of the U.S. dollar is making German suppliers less competitive on this market in particular. Thirdly, the difficulties on the real-estate market and the associated speculation regarding a possible recession have also affected the North American print media industry’s readiness to invest.

In the Asia/Pacific region, incoming orders for the third quarter were significantly up on the previous year’s figures on the Chinese market. At our site in Qingpu, near Shanghai, we have made a start on our plans for the third stage of expansion. Sales in the entire region remained below the previous year’s third-quarter and cumulative nine-monthly figures only due to less favorable exchange rates.

The Eastern Europe region’s figures after three quarters were significantly up on the previous year. Heidelberg is enjoying particular success on the region’s two main markets – Russia and Poland.

Germany succeeded in increasing its sales and is on course for a record year.

Heidelberg strengthened its position in the EMEA region in the third quarter by taking over the sales activities of consumables supplier Stielund & Taekker in Denmark and Sweden, together with around 35 employees. This put Heidelberg in a position to establish itself as the company with the highest sales of consumables in the print media industry in the Nordic and Baltic countries.

Heidelberg has also combined all global business with consumables under the name “Saphira”. The company now offers a wide-ranging portfolio for standard print jobs and special applications and covers the full gamut of production requirements in prepress, press and postpress.

Outlook for full financial year 2007/2008

Heidelberg is currently projecting fourth-quarter sales substantially in excess of EUR 1 billion for financial year 2007/2008 so that, despite the economic uncertainties in the U.S. and the impact of a strong euro, particularly in the U.S. and the Asia/Pacific region, the company will achieve sales of around EUR 3.8 billion for the year as a whole.

Worsening exchange rate structures, higher personnel expenses and higher outlays in the raw material and energy sectors have had a particularly negative effect on the result and will continue to do so in the future. Heidelberg has successfully countered this through its efficiency-boosting and cost-reduction measures in all areas, which have compensated for these burdens. As a result, the company is on course to exceed the previous year’s adjusted operating profit of around EUR 300 million in the current financial year.

As things stand at present, the financial result will be down on the previous year due, among other things, to changed capital market conditions. Favored by developments such as the tax reform and internal optimization measures regarding the tax rate, the company intends to boost net profit from an adjusted 3.8 percent of sales last year to between 4.5 and 5.0 percent for the current financial year. Heidelberg is also looking for free cash flow to again account for 4 percent of sales during the current financial year.

The situation in the coming financial years will largely depend on the further development of the global economy and the course of the two-week drupa 2008 trade show, which gets under way on May 29. Heidelberg will continue to focus on its strategic approach of further actively expanding services and placing priority on package printing.

The complete report for the third quarter of 2007/2008 will be available online at http://www.heidelberg.com.

The tables showing the figures as well as further information can be downloaded from the Press Lounge at http://www.heidelberg.com.

Other dates:

The scheduled publication date for the preliminary figures for financial year 2007/2008 is May 7, 2008.

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.