Restructuring of Heidelberg Group continues - further improvement in result in first quarter of financial year 2014/2015

Heidelberg (ots) -

- Adjustments to postpress portfolio

- Positive operating result (EBITDA) of EUR 6 million in first
quarter despite predicted decrease in sales

- Outlook: EBITDA margin of at least 8 percent in financial year
2015/2016 getting closer

As already announced, Heidelberger Druckmaschinen AG (Heidelberg)
is systematically pressing ahead with restructuring the Group. The
strategic focus announced at the beginning of the financial year was
to streamline the postpress portfolio. This is expected to yield an
annual improvement in the result of some EUR 30 million, most of this
from financial year 2015/2016 onward. In operational terms, the first
quarter of financial year 2014/2015 (April 1 to June 30, 2014) went
as expected. The operating result (EBITDA) was up on the previous
year and moved back into positive figures, even though sales in the
reporting period fell as anticipated. Thanks to a higher order
backlog at the end of the first quarter, the company is expecting an
increase in sales in the following quarters.

"Measures aimed at boosting efficiency have enabled us to achieve
an operating profit even in light of the persistently volatile market
environment. Realigning our portfolio will help us to further improve
our profitability," said Heidelberg CEO Gerold Linzbach.

While being around 14 percent down on the figure for the same
quarter of the previous year (EUR 504 million), Group sales in the
first quarter were in line with expectations at EUR 435 million. This
development can be explained by the strong year-end rally in the
preceding quarter, renewed negative exchange rate effects, and a
slackening of business in the Asia/Pacific region. In the other
regions, sales matched the previous year's level.

Group restructuring leads to continuing improvements in financial
result

Both EBITDA and EBIT in the first quarter were once again up on
the same quarter of the previous year. EBITDA excluding special items
was positive at EUR 6 million, following a negative figure in the
previous year (EUR -2 million). At EUR -11 million, the result of
operating activities (EBIT) excluding special items was also better
than the previous year's figure of EUR -20 million. The operating
result has therefore been continuously improving for just under two
years now. There were no special items in the quarter under review.
Due to lower financial income and the refinancing in the previous
year, the financial result for the first quarter was EUR -17 million
(previous year: EUR -12 million).Nevertheless, income before taxes
improved from EUR -33 million to around EUR -28 million. Overall, the
net result for the first quarter was in line with expectations at EUR
-34 million (previous year: EUR -38 million).

Primarily due to the net loss for the quarter and payments
totaling EUR 12 million for the Focus efficiency program, the free
cash flow after the first quarter was negative at EUR -66 million
(previous year: EUR 0 million). Accordingly, the net debt rose to EUR
297 million (previous year: EUR 258 million) but remains at a low
level. This enabled us to maintain the leverage (ratio of net debt to
EBITDA excluding special items for the last four quarters) at our
target value of 2.

"In addition to continuously improving the operating result over
the past two years, we have also succeeded in getting the debt back
down to a low level," said Heidelberg CFO Dirk Kaliebe. "At the same
time, we placed our financing on a stable footing, which lays the
financial foundation for restructuring the company," he added.

Portfolio repositioning progresses

As already announced, the Group is systematically removing low-
margin products from its portfolio. At the beginning of August, for
example, the company announced the strategic realignment of its
Postpress Commercial and Postpress Packaging business areas. This
will involve discontinuing production capacities, developing and
manufacturing products and solutions through OEM partners in future,
and/or outsourcing activities to partners. A total of around 650
employees worldwide will be affected. The Group expects these
measures to yield an annual improvement in the result of some EUR 30
million, most of this from financial year 2015/2016 onward.

Outlook: EBITDA margin of at least 8 percent in financial year
2015/2016 getting closer

The actual development of sales and the result in financial year
2014/2015 will depend to a great extent on implementation of the
portfolio optimization measures initiated. Heidelberg currently
expects that sales in financial year 2014/2015 will match those in
the previous financial year. As in the previous year, sales are once
again likely to be higher in the second half of the financial year
than in the first.

Having succeeded, as forecast, in achieving a positive annual
result in financial year 2013/2014, the declared goal for financial
year 2014/2015 is to further improve the company's operating
profitability so as to get closer to the medium-term target of an
operating margin in terms of EBITDA of at least 8 percent and improve
the net result, despite the higher interest payments for financial
liabilities. Provided the initiatives to improve margins and optimize
the portfolio are successfully implemented in the current financial
year, the company expects to be able to achieve an EBITDA margin of
at least 8 percent of sales by financial year 2015/2016.

As at June 30, 2014, the Heidelberg Group had a global workforce
of 12,454, excluding 493 trainees (previous year: 13,162, excluding
507 trainees).

Images and further company information are available in the press
portal of Heidelberger Druckmaschinen AG at www.heidelberg.com.

The Q1 interim financial report 2014/2015 can be accessed at
www.heidelberg.com.

Other dates:

The figures for the second quarter of financial year 2014/2015 are
due to be published on November 12, 2014.

Important note:

This press release contains forward-looking statements based on
assumptions and estimations by the Management Board of Heidelberger
Druckmaschinen Aktiengesellschaft. Even though the Management Board
is of the opinion that those assumptions and estimations are
realistic, the actual future development and results may deviate
substantially from these forward-looking statements due to various
factors, such as changes in the macro-economic situation, in the
exchange rates, in the interest rates and in the print media
industry. Heidelberger Druckmaschinen Aktiengesellschaft gives no
warranty and does not assume liability for any damages in case the
future development and the projected results do not correspond with
the forward-looking statements contained in this press release.

For further information, please contact:
Heidelberger Druckmaschinen AG

Corporate Public Relations
Thomas Fichtl
Phone +49 (0)6221 92-5900
Fax: +49 (0)6221 92-5088
E-mail: thomas.fichtl@heidelberg.com

Investor Relations
?Robin Karpp
?Phone: +49 (0)6221- 92 6020
Fax: +49 (0)6221- 92 5189
E-mail: robin.karpp@heidelberg.com