• Contact
• Locations
• German

Letter to shareholders First half of 1997

08/08/1997

• Incoming orders at record level
• Earnings situation improved
• Technological lead with robot systems

Dear Shareholders,

Your company has continued to develop well in the first six months of the current year.

Dürr achieved record incoming orders of DM 1,421.0 million. This is 60 % above the total in the previous year (DM 886.4 million) and thus, already after only six months, amounts to almost 80 % of orders received in 1996.

Group sales increased by 4 % compared with last year (DM 603.0 million) to DM 627.0 million. At the end of June 1997, order backlog stood at DM 2,328.0 million, or 43 % above last year's level (DM 1,623.0 million). This will ensure utilization of the group's capacities beyond the end of the year.

At DM 17.6 million, earnings before taxes exceeded last year's result of DM 16.1 million (+ 9 %); in plant construction, the first half of the year is typically the weaker in earnings for accounting reasons.

In the first half of the year, capital expenditure on property, plant, and equipment amounted to DM 12 million; for 1997 as a whole, DM 26 million is planned (last year: DM 22 million).

The number of employees in the group increased slightly. Altogether, 3,356 persons were employed by Dürr at the end of the period under review, or 0.9 % more than at the same time a year earlier (3,325 employees).

Orders: Emphasis in Europe, Latin America, and Southeast Asia

Positive conditions continue to exist for the automobile industry in nearly all regions of the world. Dürr is benefiting from this. In Europe, the emphasis of the industry's capital spending remains in Germany and Great Britain. A large order from Daimler-Benz for its plant in Bremen (worth about DM 350 million) confirms this trend. In Central and South America, incoming orders from Mexico and Brazil resulted in double-digit growth rates. Noteworthy among orders from Brazil were those placed by Daimler-Benz and Chrysler and a turn-key order worth DM 260 million from Audi for its plant in Curitiba. In North America, incoming orders in the first half of 1997 matched the high volume of the previous year. In Southeast Asia, a positive market trend may be observed due, in particular, to the build-up of new capacities in the automobile industry. Dürr therefore expects an increase of incoming orders from this region. A favorable capital spending climate also prevails in India and China, where Dürr has recently established its own companies. The Dürr subsidiary in China, for example, already managed to book a large order worth DM 110 million from General Motors Shanghai at the beginning of the year.

Continuous expansion of market presence

The group is continuously expanding its international presence. In the scope of these efforts, wholly owned subsidiaries have been established in Shanghai, China and in Chennai (formerly Madras), India. Dürr has also increased its market position in Europe in recent months. In May, the group acquired a majority holding in its long-standing French distribution partner Hayes S.A. In a further step, it has taken over the body conveyor technology division of a leading French supplier, Sietam Industries S.A. This unit will be operated in the future as a wholly owned subsidiary of Hayes S.A. under the name Sietam Automotion S.A. The French automobile industry has strongly welcomed these activities.

Technological lead ensures market position

Dürr released its own industrial robot system into the market last spring. The Dürr Ecopaint robot features higher painting precision and reduced operating and investment costs. In combination with a newly developed paint supply system, it allows paint losses to be reduced up to 20 %. The Ecopaint robot furthermore permits the use of a large variety of colours with short colour changing times.

Dürr shares: Double-digit value increase

The value of your shares rose in the first six months of this year from DM 48.70 on January 1st to DM 72.00 on June 30th. This positive trend has continued beyond the period under review.

Outlook

Lively project activity may be observed in all relevant regions thanks to positive fundamentals worldwide. A stable demand trend is regarded as assured. We therefore expect the favorable development of business to continue. For 1997 as a whole, the Dürr group foresees significant growth of incoming orders over last year's total. As already indicated in the first half of the year, an increase of order backlog is expected at the end of the year. Group sales will also rise and again surpass last year's above-average total. Group earnings are also forecast to improve substantially compared with 1996.