Heidelberg Concludes Employee Negotiations to Adjust Production Levels

HEIDELBERG, GERMANY—March 30, 2012—The Management Board and Workers’ Council of Heidelberger Druckmaschinen AG have reached an agreement regarding the implementation of the “Focus 2012” efficiency program. The consensus reached provides for reductions in personnel costs, more flexible working time arrangements, and worldwide job cuts through socially acceptable measures that will result in a head count of below 14,000 by mid-2014.

As of Dec. 31, 2011, Heidelberg had 15,666 employees worldwide (including trainees and apprentices).

Highlights:

• Socially acceptable measures to reduce global head count to below 14,000 by mid-2014.
• Negotiations result in redundancy agreements, including use of transfer company, along with a permanent reduction in working hours and more flexible working times.
• Innovative model results in immediate capacity reduction of around 15 percent and ensures balanced age structure.
• Sales structures adapted - realignment of research and development.
• Total measures help ensure sustainable cost savings totaling some €180 million by financial year 2013/2014, with up to a third thereof already in financial year 2012/2013.
• “Focus 2012” aims to deliver an operating result excluding special items of around €150 million in financial year 2013/2014.

As Heidelberg CEO Bernhard Schreier explained, “The outcome of the negotiations will enable us to adjust capacities to meet demand and achieve the announced savings as planned. In consultation with the Workers’ Council and the IG Metall union, we have devised a responsible concept for making the required cost and capacity reductions on a socially acceptable and sustainable basis through the global job cuts announced.”

Taken together, these measures will help achieve the targeted annual savings of around €180 million from financial year 2013/2014. Up to a third of these savings will already be achieved in financial year 2012/2013. The necessary one-off expenditure amounts to approximately €150 million, most of which will be posted during the current 2011/2012 financial year.