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August 17, 1998 Heidelberger Druckmaschinen AG profits up 49% Successful first quarter / improvement in web press turnover Heidelberg - The demand for presses and printing systems remains at a high level worldwide. Heidelberger Druckmaschinen AG (Heidelberg) achieved a turnover of DM 1.743 billion in the first three months of the 1998 / 99 fiscal year (April 1 to June 30). This represents a 15.9% increase on the same period last year (DM 1.505 billion). Profits after tax rose 48.6% to DM 110 million (same period last year: DM 74 million). The improvement in profits was attributable primarily to the sheetfed and web sectors. An upturn in turnover over recent months, particularly in South America and Eastern Europe, has gone a long way to compensating the stagnating demand in Asia. The Group has also succeeded in improving its cost structures and, consequently, in responding to the high price and cost pressures on the international market. Developments in the individual sectors Web press enjoyed a significant rise in turnover - from DM 184 million to DM 308 million in the quarter in question. This represents an increase of 67%. Sales of the M-3000 (Sunday Press) showed particular improvement (up 120%). The web press production facilities in Dover (USA) and Montataire (France) are currently working at full capacity. Sheetfed presses continue to be the main pillar of sales. Turnover in this sector rose a good 8% to DM 1.126 billion. The prepress and finishing sectors also developed well. The Group's workforce in the first quarter of the 1998 / 99 fiscal year rose to 18,336. Heidelberg took on 421 new employees during the quarter - the majority of which were used to reinforce the new sales companies in Eastern Europe. New regional structure Following the restructuring operations, Heidelberg's sales organization is now divided into six regions: Asia / Pacific, Central and South America, Central Europe, Eastern Europe, Middle East and Africa, and the NAFTA. The regions are free to pursue their own marketing operations and can therefore respond directly to local needs. North America continues to be the largest market. Around one third of Heidelberg's turnover is earned in the NAFTA states (USA, Canada and Mexico). These are then followed by Germany,

the UK, Japan and France. The share of turnover earned abroad rose slightly to 81% (same period last year: 78%). The graphics business of the East Asiatic Company (Copenhagen) will be incorporated into the Heidelberg Group with retroactive effect from May 1. Heidelberg now sells its own products in 23 Asian and African countries as well as in Scandinavia. Heidelberg expects this move will deliver enhanced customer support during the emerging Asian crisis and will thus lead to higher growth rates in these regions over the medium-term.

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