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DJ DGAP-Adhoc: Heidelberger Druckmaschinen AG: Heidelberger Druckmaschinen AG steps up package of cost-cutting measures significantly

Heidelberger Druckmaschinen AG / Strategic Company Decision 

26.03.2009 

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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- Heidelberger Druckmaschinen AG steps up package of cost-cutting measures
significantly
- Savings to be achieved by 2011 increased from approximately EUR 200
million to around EUR 400 million
- Incoming orders for the fourth quarter of 2008/2009 down on the previous
quarter
- Plans to shed up to another 2,500 jobs
- Agreement on safeguarding the company's future to be terminated with
effect from June 30, 2009 

Given the way business has developed during the fourth quarter to March 31,
2009, Heidelberger Druckmaschinen AG (Heidelberg) must reckon on incoming
orders for this fourth quarter will be below the figure for the previous
quarter and will fail to reach the EUR 500 million mark. 

The company is therefore once again stepping up its package of cost-cutting
measures significantly. The savings to be achieved by financial year
2010/2011 are being doubled from the previous level of EUR 200 million to
EUR 400 million. It is estimated that EUR 170 to 190 million will be
required to implement the cost-cutting programs. 

The package of measures includes up to 2,500 further job cuts. In order to
be able to make the necessary personnel adjustments - among other things
through compulsory redundancies - Heidelberg is terminating the collective
agreement on safeguarding the company's future that was last extended in
October 2007. This will take effect from June 30, 2009. The company intends
to negotiate the additional personnel adjustments with employee
representatives and the union. 

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Information and Explaination of the Issuer to this News: 

Heidelberg steps up package of cost-cutting measures significantly 

- Savings to be achieved by 2011 increased from approximately EUR 200
million to around EUR 400 million
- Incoming orders for the fourth quarter of 2008/2009 down on the previous
quarter
- Plans to shed up to another 2,500 jobs
- Agreement on safeguarding the company's future to be terminated with
effect from June 30, 2009 

Faced with the continuing poor demand resulting from the global economic
and financial crisis, the Management Board of Heidelberger Druckmaschinen
AG (Heidelberg) has decided to take further measures to ensure the
company's competitiveness and efficiency. By financial year 2010/2011,
these measures by the world market leader for printing presses - including
the existing initiatives - are intended to result in total savings in the
order of EUR 400 million (previous target EUR 200 million) compared to
financial year 2007/2008. As a result, the company will be much better
equipped to face future challenges and will also be well placed when the
crisis is over. 

2009 has seen a continuation of the reluctance to invest that has been in
evidence since the fall of 2008. This is due primarily to printshops' low
capacity utilization and the difficulty being experienced by the press
manufacturer's customers in securing bank loans. Heidelberg must reckon on
incoming orders for the fourth quarter of 2008/2009 being below EUR 500
million and thus lower than the figure for the previous quarter, which was
itself already weak (Q3: EUR 560 million). No improvement is expected in
the short term, which means that a further downturn in sales can be
expected in financial year 2009/2010 as a whole. The company is therefore
planning to reduce capacities and structural costs still further to provide
a decisive response to the fall in orders. 

Determined response to the crisis from Heidelberg
'The global financial and economic crisis has continued to hit the
mechanical engineering sector hard over recent months,' said Chief
Executive Officer Bernhard Schreier. 'We introduced a cost-cutting program
last year in response to this crisis. The difficult economic situation has
meant a further slump in demand and there are no signs of any improvement
in the short term. In this situation, it is up to the management team to
maintain the company's competitiveness and efficiency. We have made the
necessary structural adjustments to optimize our company's earnings on a
sustainable basis and ensure it is primed for the upturn when it comes,' he
added. 

Cost-cutting measures
Planned measures include a further reduction of personnel and non-personnel
costs in research and development (R&D), production, administration, and
sales. Investments will be scaled down and the production of packaging
products will be concentrated at the main plant in Wiesloch-Walldorf. Most
of the savings will be made in financial year 2009/2010. 

In order to achieve these savings, it is planned to roughly double the
2,500 job cuts that were originally intended. 

The company estimates that EUR 170 to 190 million will be required to
implement the entire cost-cutting program. 

Termination of the agreement on safeguarding the company's future
In order to be able to make the necessary personnel adjustments - among
other things through compulsory redundancies - Heidelberg is terminating
the collective agreement on safeguarding the company's future that was last
extended in October 2007. This will take effect from June 30, 2009. The
company intends to negotiate the additional personnel adjustments with
employee representatives and the union. 

'When we extended the agreement on safeguarding the company's future two
years ago, there was no way of predicting that the global economy would
take such a dramatic downturn. Given the worldwide financial market crisis,
we regret that we are left with no alternative but to terminate the
agreement. This is the only way we can ensure our competitiveness and
efficiency, something that is also in our workforce's interests,' said
Bernhard Schreier. 

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 6221 92 5900
Fax: +49 6221 92 5069
E-Mail: thomas.fichtl@heidelberg.com 

26.03.2009  Financial News transmitted by DGAP 

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Language:     English
Issuer:       Heidelberger Druckmaschinen AG
              Kurfürsten-Anlage 52-60
              69115 Heidelberg
              Deutschland
Phone:        +49 (0)6221 92-60 21
Fax:          +49 (0)6221 92-51 89
E-mail:       investorrelations@heidelberg.com
Internet:     www.heidelberg.com
ISIN:         DE0007314007
WKN:          731400
Indices:      MDAX
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart 

End of News                                     DGAP News-Service 

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(END) Dow Jones Newswires

March 26, 2009 07:05 ET (11:05 GMT)