Dürr technology group is growing further

08/10/2000

• EBITDA nearly doubled
• Strong growth in sales and incoming orders
• Leading supplier of integrated production systems and services

The Dürr technology group has continued its earnings-oriented growth trend in the first six months of the year 2000 by significantly increasing sales and earnings. Carl Schenck AG, consolidated since April 1, with whom Dürr as a systems specialist is cultivating new markets, especially in the automotive industry, but also in other industries, has contributed considerably to this development.

In the financial statement of the Dürr Group for first six months based on the US-GAAP format, values have been determined statistically for Carl Schenck AG for the second quarter of 2000. The values for the Dürr business units do not yet include the activities of the respective Schenck corporate divisions. The subsidiaries of the acquired company Alstom Automation (now Dürr-AIS) have been included at their equity level.

Earnings before tax (EBT) of EUR 12.5 m exceed the previous year level of EUR 11.1 m by 12.6 %. Earnings before tax were influenced mainly by amortizations on the goodwill of acquired companies. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 34.2 m, which is a rise of 88 % compared to the previous year's figure (EUR 18.2 m). Sales in the Dürr Group totalling EUR 684 m in the first six months of this year were 68% above last year's level of EUR 408 m. Besides increases in Dürr's traditional business (+ 26 %), the acquired companies accounted in particular for the strong growth. In incoming orders amounting to EUR 912 m, Dürr saw an increase of 63 % on last year's level (EUR 560 m).

Orders on hand have risen by 18 % to EUR 1,275 m (EUR 1,085 m in the previous year) which means that the capacities of the Dürr Group will be utilized well into the next fiscal year. The number of people employed in the Dürr Group rose compared to the end of 1999 (7,255) to 11,052 people as at 30.6.2000. Thereof 3.938 people are Carl Schenck employees.

One of the main reasons for the Dürr Group's positive development in the first six months of this year is the generally favourable investment climate in the automotive industry. Here Dürr profited in particular from contracts involving modernization and streamlining of production systems. The economic upswing in important markets such as the electronics and chemical industry has had a positive effect on activities in the non-automotive industry.

Paint Systems business unit: successful also in the non-automotive industry

The Paint Systems business unit achieved sales of EUR 357 m and EBITDA of EUR 18.5 m in the first six months. Incoming orders stood at EUR 436 m. The business unit was able to considerably increase its order volume in vehicle body painting through modifications and updating of existing systems. Increases were also achieved by the biggest Dürr business unit in the non-automotive industry with painting facilities for plastic components.

Automotion business unit: good prospects in the systems business

Sales achieved by the Automotion business unit stood at EUR 33 m in the first six months of the year 2000. EBITDA stood at EUR 2.2 m, incoming orders at EUR 120 m. The high level of demand in the automotive industry, in particular in final vehicle assembly, results mainly from the necessity of developing further streamlining benefits with systems of a higher efficiency. An example for this is the major contract handled jointly by Dürr Automotion and the Schenck corporate division Test and Automation Systems for a complete final assembly line covering a value of EUR 75 m to be installed at the Opel works in Rüsselsheim.

Environmental business unit: buoyant project situation

The Environmental business unit achieved sales of EUR 33 m, EBITDA of EUR -2.0 m and orders on hand of EUR 33 m. The specialist for environmental systems in the Dürr Group is benefiting from a good project situation in its markets. In Europe in particular, demand has picked up since the previous year. Demand in the USA remains at the same high level. High outlays incidental to a major project have continued to have a burdening effect on earnings, however, as a result, Dürr has been able to develop a trendsetting technical solution for the incineration of pollutants contained in waste water.

Protecs business unit: en route to becoming a systems supplier

Sales of the Protecs business unit stood at EUR 71 m, EBITDA at EUR 6.3 m, and orders on hand at EUR 114 m. Together with Schenck's corporate division Balancing and Diagnostic Systems, Dürr Protecs was able to further extend its system capabilities for engine and transmission manufacturing. The Industrial Cleaning Systems and Coolant Filtration Systems product lines are profiting from a strong order backlog and buoyant demand.

Services business unit: steady growth

The Services business unit achieved sales of EUR 55 m, with EBITDA at EUR 3.8 m. Orders on hand stood at EUR 60 m. The markets for manufacturing support services in the automotive industry are characterized by steady growth. The Services business unit has extended its capabilities by adding technical training and further education services to its range.

Carl Schenck AG on a growth trend

The Carl Schenck Group achieved sales of EUR 238 m in the first six months of the current fiscal year. This is equivalent to a rise of 29 % compared to the comparable period of the previous year. Incoming orders reached EUR 292 m (+30 %). EBITDA stood at EUR 6.1 m. Schenck is expecting sales of over EUR 500 m for the whole year. In earnings, Schenck is - for accounting reasons - expecting proportionately higher increases for the second six months of this year compared to the first six months, and anticipates the operative result over the whole year to reach the same level as a year earlier.

Further growth expected

Thanks to the extension of its systems and services capabilities, Dürr - together with Carl Schenck - has excellent growth prospects for business with the automotive industry. For all stages of the value chain covered, Dürr expects a consistently high level of demand. Dürr expects the positive business environment to provide further support in the growth trend. In particular in Asia, South America and in several states of Eastern Europe a revival of project activities is expected.

"By making further investments in new technologies we will continue our transformation process from a hardware-based plant manufacturer to a software-based technology group. "By "By investing in new technologies Dürr will continue its transformation from a hardware-based plant manufacturer to a software-based technolgy group. For the fiscal year 2000, Dürr is expecting Group sales of over EUR 1.7 bn, and a double-digit percentage rate at growth in earnings", says Dürr's Chairman of the Board, Hans Dieter Pötsch.