Heidelberg Concludes Negotiations on Planned Job Cuts

HEIDELBERG, GERMANY—10/07/2009—The management and employee representatives of Heidelberger Druckmaschinen AG (Heidelberg) have agreed on a reconciliation of interests and a redundancy plan for around 1,300 job cuts at the company's German sites in Heidelberg, Wiesloch/Walldorf, Amstetten, Brandenburg, Ludwigsburg, and Mönchengladbach. A reconciliation of interests and a redundancy plan were concluded at the Mönchengladbach site back in August. A further 200 employees have agreed to leave the company on a mutually acceptable basis, making a total of 1,500 job cuts at the German sites in financial year 2009/2010.

Thus, the company realizes its package of cost-cutting measures. The core element of this package is to achieve cost cuts equivalent to a reduction in personnel capacities of up to 5,000 jobs worldwide by financial year 2010/2011. Together with the measures now agreed, the company is reducing its global headcount by around 4,000. The additional savings will be made by dispensing with collectively agreed payments and payments above the general pay scale, and by agreeing flexible working time models to adapt personnel capacities to the order situation. The Management Board and executives are also foregoing remuneration to a comparable extent in order to help lower personnel costs. The agreed package of measures will result in these costs being cut by more than EUR 250 million during the current financial year compared to the previous year.

"Following constructive discussions, we have found a reasonable solution for everyone involved," stated Heidelberg CEO Bernhard Schreier. "These painful cuts are essential to counter the effects of the most serious crisis of our industry and create a stable position for the company's future," he added.

In addition to the agreed severance arrangements, Heidelberg is offering all employees affected the opportunity to move to a transitional company for 12 months as of March 1, 2010. The measures now agreed with the Works Council and the IG Metall union will be implemented by the end of March 2010. All costs associated with this restructuring have already been incorporated in the accounts for financial year 2008/2009.

The agreement on job cuts means that all the company's planned cost-cutting measures are under way. By financial year 2010/2011, this should generate annual savings in the order of EUR 400 million.

As of June 30, 2009, the Heidelberg Group employed 18,353 staff worldwide.