Successful realignment reflected in strong incoming orders at drupa, creating basis for further growth in year as a whole

Heidelberg (ots) -

- Successful realignment: Customers invest in industrial print
production and digitization
- Business development in first quarter of 2016/2017 shaped by drupa
industry trade show:
+ Incoming orders of EUR 804 million boost order backlog by 67
percent
+ Net sales (EUR 486 million) and operating result (EBITDA EUR 1
million) below that of previous year - restrained investment
activity ahead of drupa and trade show costs impact quarterly
result (net result after taxes EUR -37 million)
- Positive free cash flow of EUR 6 million
- Year-end and medium-term targets in reach

As expected, the first quarter of financial year 2016/2017 (April
1, 2016 to June 30, 2016) at Heidelberger Druckmaschinen AG
(Heidelberg) was shaped by the industry trade show drupa, which took
place in late May/early June. Under its "Simply Smart" motto,
Heidelberg took the industry's digitization and thus the company's
strategic realignment to the next level. The new products and
solutions resulted in a high demand for all the company's offerings
related to industrial print production and digitization. Accordingly,
incoming orders rose to EUR 804 million as at June 30. Compared to
the previous quarter, the order backlog, which is a measure of the
Group's future operational development, increased by 67 percent from
EUR 460 million to EUR 768 million. This strong demand is a solid
basis for achieving the targets for the year as a whole.

"Thanks to a good showing at drupa, Heidelberg has made a solid
start to the new financial year. The high level of incoming orders at
the trade show is particularly strong evidence of this," said
Heidelberg CEO Gerold Linzbach. "Our innovations have set new
standards for industrial printing in the digitized era. The high
level of acceptance on the market gives us a very optimistic outlook
for the future."

Business development in first quarter of 2016/2017 shaped by drupa
industry trade show

As expected, the usual restrained investment activity ahead of the
trade show saw net sales in the first quarter drop in comparison to
the previous year to EUR 486 million (previous year: EUR 563
million). The loss of profit contributions due to this drop, drupa
costs of approximately EUR 10 million, and higher personnel costs due
to collective wage agreements all had a negative impact on the result
in the period under review, as anticipated. Consequently, EBITDA
excluding special items was EUR 1 million (previous year: EUR 46
million). The previous year's figure also included a positive
non-recurring effect of EUR 19 million from the initial consolidation
of Printing Systems Group (PSG). At EUR -3 million, special items
were only low (previous year: EUR -15 million) and the negative
financial result was slightly higher than the previous year's level
due to the early repayment of the 2011 corporate bond. At the end of
the quarter, Heidelberg had a net result after taxes of EUR -37
million (previous year: EUR -4 million).

Positive free cash flow of EUR 6 million in first quarter

Despite payments for portfolio optimization and the necessary
accumulation of inventories for drupa orders, free cash flow improved
in the quarter under review from EUR -35 million in the previous year
to a positive figure of EUR 6 million. Compared to the end of
financial year 2015/2016, shareholder's equity dropped to EUR 167
million, primarily due to the lower actuarial interest rate used to
value pension obligations. Consequently, the equity ratio on the
balance sheet date was 8 percent, compared to 13 percent in the
previous quarter. The net debt was at a low level of EUR 263 million
(March 31, 2016: EUR281 million) and the leverage continued to be
below the target value of 2 at 1.8.

"We want to grow this year, too, and achieve a moderate increase
in net profit after taxes," said Dirk Kaliebe, CFO. "The balanced
financing framework also gives us the freedom to further strengthen
the business model through targeted acquisitions."

Successful realignment: Customers invest in industrial print
production and digitization

The feedback from customers about the repositioning of Heidelberg
was extremely positive. Heidelberg used drupa to unveil its "Fire"
digital printing portfolio, which attracted a great deal of attention
among visitors to the show and recorded sales success across all
product categories. In industrial digital printing, Heidelberg joined
forces with Fujifilm to set a new benchmark for packaging printing
with the world premiere of the Heidelberg Primefire 106. The success
of the launch was underlined by the numerous sales concluded with
companies in Europe, the United States, Brazil, China, and Japan.
Heidelberg sold the 1000th Versafire - its solution for digital
commercial printing - at drupa. The number of these digital systems
sold at the trade show alone matched the total for the whole of
financial year 2014/2015. In the label market, which is enjoying
strong growth, the Gallus Labelfire digital press attracted a great
deal of interest from visitors. Further sales concluded during the
show confirmed the success of the digital label printing solutions.
Thanks to the Fire family, the company has established its position
on the market as a digital print supplier.

Through the concept of autonomous printing, Heidelberg is also
leveraging the opportunities presented by digitization and sparking a
paradigm shift in industrial print production with sheetfed offset
presses. The investments made by customers confirm the industry shift
towards greater automation and productivity, and towards
software-based integration. The flagship press - the Speedmaster XL
106 - turned out to be the most sold machine at the show. Long
perfectors and models for the packaging market, which is continuing
to grow, were in particular demand. The backbone for new service
portfolios is the Heidelberg cloud, which records and analyzes data
from over 10,000 networked machines and 15,000 Prinect software
linkups. On this basis, for example, Heidelberg offers its customers
preventive service programs to improve machine availability and boost
the productivity of the entire print shop.

"Our showing at drupa confirmed that we're on the right track with
our strategic realignment based on the growth segments of digital and
services. We're focusing on the right areas to achieve our future
objectives," summed up Linzbach.

Year-end and medium-term targets in reach Thanks to strong
incoming orders and the increase in the order backlog, Heidelberg has
its sights set firmly on its year-end targets for 2016/2017.
Consequently, it is still forecasting a growth in sales of up to 4
percent. Despite the inputs associated with the accelerated expansion
of digital and service business, the EBITDA margin before special
items is expected to remain at the level of the previous year. At the
same time, the company is looking to improve the financial result by
reducing the interest burden. With this, Heidelberg is aiming for a
moderate increase in its net result after taxes against the previous
year. In the medium term, the successful reorganization of Heidelberg
is set to enable growth in Group sales of up to 4 percent per year,
taking the total to some EUR 3 billion. This includes a high
profitability level with an EBITDA margin in the range of 7 to 10
percent.

The interim report for the first quarter of financial year
2016/2017, image material, and additional information about the
company are available in the Press Lounge of Heidelberger
Druckmaschinen AG at www.heidelberg.com.

Next date on company calendar:

The figures for the first half of financial year 2016/2017 are due
to be published on November 9, 2016.

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.

Contacts for further details:
Heidelberger Druckmaschinen AG

Corporate Public Relations
Thomas Fichtl
Phone: +49 6222 82- 67123
Fax: +49 6222 82- 67129
E-mail: Thomas.Fichtl@heidelberg.com

Investor Relations
Robin Karpp
Phone: +49 (0)6222 82-67120
Fax: +49 (0)6222 82-99 67120
E-mail: robin.karpp@heidelberg.com