Strategy

Dürr is one of the world's leading suppliers of systems services and products for the car making industry. We are present on the ground with our sales, services, engineering and manufacturing capabilities at all locations where cars are manufactured. We also supply the aviation industry, the mechanical engineering sector, and the chemical, pharmaceutical and printing industries.We achieve about 85% of our sales in the automotive business. About 60% of our activities are in plant engineering, 40% are in the machinery industry. Dürr is directly represented with 47 business locations and 25 production sites in 21 countries.

We offer intelligent, energy-saving and eco-friendly solutions that have a major influence on enhancing the quality and flexibility of our customers' production and assembly processes. The aim of Dürr's research work is the development of innovative products to reduce our customers' costs per unit, and to guarantee compliance with high environmental standards at the same time.

The Dürr Group is represented in the market with two divisions that are subdivided into six business units. The Paint and Assembly Division offers production and paint finishing systems for all aspects for the car and aviation industry. Machinery supplied by Measuring and Process Systems is used in the manufacture of engines and transmissions and in final assembly.

The aim we are pursuing is to increase our profitability on a sustained basis. For us, the continuous optimization of our business processes is an ongoing issue. Apart from the increased internationalization of our portfolio, our efforts are also focused on the extension of our service business. This is achieved thanks to the widespread sale of our machinery and equipment to customers around the world. About 60% of all automotive paint shops and about 50% of all assembly plants work with Dürr technology.

We want to continuously improve our consultancy services with more than 100 employees and with the experience gained from 1500 projects. We also want to grow in specific sectors such as the aviation industry. We will rely on our strengths: innovative power and turnkey competence, global presence, especially in growth markets, and the experience and know-how of our workforce of about 6000 employees. 

We conducted an analysis of the perspectives and potential of our business units and the Group as a whole in the second half of 2007 and used the results to draft our Dürr 2010 strategy. The four cornerstones of this strategy are: increasing customer benefit, pursuing growth initiatives, optimizing processes, and value creation. The subsequent chart gives an overview about the four cornerstones and the measures based on the cornerstones.

Flexible financing solution

In summer 2008 Dürr arranged a new corporate financing package. First of all we increased Dürr AG's capital stock by just under 10%, which means we were able to cash in € 43.6 million net in July. In September we signed a contract for a syndicated loan of € 440 million. The loan is split up into a revolving credit line of € 200 million and a guarantee line of € 240 million. As a next step we will redeem € 100 million, i.e. one half of our corporate bond at 105.250% in mid-October. The bond was issued in the year 2004 with a coupon of 9.75%. We are planning to buy back the remaining 50% of the corporate bond in the third quarter of 2009 at 102.625%.

 

The new financing arrangement will on the one hand improve the Group's equity basis, and on the other hand will reduce interest expenses significantly. We expect this to have positive effects on earnings after tax as early as the year 2009, and expect these effects to be again significantly enhanced in 2010. In addition the new financing arrangement will give us more financial freeway and more flexibility.