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Dürr achieves all-time high for incoming orders

12/01/1999

Thanks to several major contracts for new paint shops to be built for Volkswagen in Germany, Poland and Spain, DaimlerChrysler in Germany and also for General Motors in the USA totaling about 400 m DM (204 m euro), the Dürr Group, Stuttgart has already now exceeded last year's record level of incoming orders (1998: 2,128 m DM / 1,088 m euro) and will thus achieve a new all-time high in the business year 1999. Contract awards for further system projects, for which engineering contracts have already been signed this year, are due for decision in the very near future.Dürr is also expecting a new all-time high in sales (1998: 2,108 m DM / 1,078 m euro) in the current business year. Earnings are expected to reach at least the same high level as in the previous year. Medium-term development prospects are also judged to be positive by the globally active Dürr Group. For the business year 2000 and beyond, Dürr further expects a notable increase in sales and earnings.

New strategic focus as supplier of production systems to the automotive industry

The reason for the positive assessment of business developments is the fact that, apart from the good order situation, the portfolio of products and services has been expanded beyond the existing business units, namely Paint Finishing Systems, Industrial Cleaning Techniques and Manufacturing Support Services. As one of its new main strategic targets, Dürr will in future focus on the expansion of its successful systems business by offering production systems for further sections of the automotive value chain, such as powertrain production and final assembly.

As a first step in this direction, Dürr acquired a 50% stake in the French Alstom Division Automotive and Painting Systems (Alstom Automation S.A.) at the end of September, assuming management responsibilities at this time, with the option of completely taking over the company later. Alstom Automation is not only the leading French supplier of paint shop systems to the automotive industry and its component suppliers, but also has capabilities in final vehicle assembly. In order to extend the range of complete systems solutions for powertrain manufacturing and for final assembly more quickly and comprehensively, Dürr wants to take over Carl Schenck AG, Darmstadt, one of the leading international suppliers of automation, diagnostic and test systems in these areas.

In April, Dürr had already made inroads into the growth market of services by acquiring Premier Manufacturing Support Services Inc., Cincinnati, USA, an international service provider to the automotive industry.

As the final conclusion of the contracts of sale for Alstom Automation and for Schenck is still subject to the approval of the competition authorities and, in the case of Schenck, of supervisory bodies, these acquisitions are not included in the figures of 1999. The acquisitions will be financed by an optimized mix of capital market instruments.

Structural reorganization of Dürr AG as strategic management holding

Dürr AG will back its dynamic growth starting with the beginning of the year 2000 by introducing a new management structure. Instead of having local subsidiaries as its primary organizational criterion as up to present, Dürr AG will, in future, be subdivided into five business units: Paint, Environmental, Power Train, Automotion and Services. The reorganization as a strategic management holding creates more clearly defined responsibilities for the worldwide activities of each business unit and allows synergies to be utilized in Purchasing, Sales, Research and Development and in Administration.

Good prospects for profitable growth

"We are expecting to achieve the doubling of sales to about 4 bn DM within five years announced in 1998 probably already in 2001" says Hans Dieter Pötsch, Chairman of the Board of Management of Dürr AG. With the new strategic focus, the acquisitions, especially of Alstom Automation and Schenck, and also with Dürr's leading position in its market segments, Dürr sees excellent prospects for a dynamic growth in sales and earnings in the coming years.