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Report of Dürr Aktiengesellschaft on the business development during the first nine months of 2000

10/25/2000

• EBITDA nearly doubled
• Significant increase in sales and incoming orders
• New major contracts received from the automotive industry

The Dürr technology group reached its target results during the first nine months of the financial year 2000 and significantly increased its sales, incoming orders and order backlogs compared to the preceding year's period under review. Apart from internal increases, this growth trend can mainly be attributed to the acquisition of the Carl Schenck group, effective 1st April 2000.

Included in the figures drawn up for the Dürr group in US GAAP format were figures statistically established for the second and third quarter of the year for Carl Schenck AG, which is reporting in line with the HGB accounting principles. In the figures concerning the Dürr business units, the figures concerning the corresponding Schenck corporate divisions have not yet been taken into account, whereas the companies of Alstom Automation S.A. (now known as Dürr-AIS S.A.), of which 50 % were taken over, were included at their equity level.

Group sales totaled euro 1,183 million at the end of the period under review and thus increased by euro 629 million, or 88 %, from the preceding year. More than half of the growth volume can be put down to acquired companies.

EBITDA (earnings before interest, taxes, depreciation and amortization) could be nearly doubled (+ 96 %) compared to the preceding year (euro 30.5 million) and amounted to euro 59.8 million. Earnings before taxes rose by 18.1 % to euro 19.6 million from the preceding year ( euro 16.6 million).

Incoming orders amounted to euro 1,519 million in the first nine months. This is an increase by 110 % compared to the preceding year's period under review (euro 723 million). Order backlogs totalling euro 1,397 million considerably exceeded the preceding year's level of euro 1,026 million (+ 36 %). This means that the Dürr group's capacity keeps being well utilized.

As at 30.09.2000, the Dürr group employed a total of 11,247 employees around the globe.

Paint Systems business unit: new major orders

Paint Systems recorded sales worth euro 598.2 million, EBITDA amounted to euro 25.8 million, and incoming orders totalled euro 771.6 million.

The Paint Systems business unit was able to consolidate its top position in body painting. System contracts received in France show that the access to the French market has been improved due to the take-over of the management of Dürr-AIS. This business unit also received major contracts in the United States of America and Eastern Europe. Furthermore, the positive trend was influenced by efficiency-increasing and expansion investments in existing production systems.

Automotion business unit: successful total systems

This business unit's sales amounted to euro 48.3 million in the period under review. EBITDA totaled euro 2.6 million, and incoming orders were worth euro 148.4 million.

In cooperation with Schenck's Test and Automation Systems corporate division, Dürr Automotion is one of the top system suppliers for final vehicle assembly. Due to the existing efficiency-increasing potential, Dürr sees the need for increased capital investment in this sector of the automotive production. Dürr and Schenck are currently implementing a final assembly system for a German carmaker that is a leading edge technology as regards profitability and efficiency. Automotion received further important contracts in Eastern Europe, the United States of America and Brazil.

Environmental business unit: pronounced propensity to invest

With systems for exhaust air purification and water treatment, this business unit recorded sales worth euro 61.3 million, incoming orders amounted to euro 45.2 million, and EBITDA totalled euro -2.3 million.

Dürr Environmental reports a good project position despite the sometimes fierce competition. In the United States of America demand remains on a very high level. In Europe, propensity to invest has picked up mainly with regard to exhaust air purification systems. The "Total Solution" concept which was developed by Dürr and proved to be quite a success in the United States of America is to be increasingly supplied in the future in Europe too. In this connection Dürr Environmental will be responsible not only for the supply of abatement systems, but also for keeping within emission limits during operation. The business unit's result remains burdened until the end of the year by high financial expenses related to a large scale project which serve Dürr as a basis for developing a new technology platform with excellent marketing perspectives.

Protecs business unit: growth impetus in the system business

Protecs' sales totalled euro 115.8 million, EBITDA amounted to euro 10.1 million, and incoming orders were at euro 161.0 million.

This business unit has consolidated its top position as a supplier of industrial cleaning and filtration systems to the automotive industry and other industries. A growth impetus results mainly from the development of new engine and transmission generations and the continuous trend to award larger order packages to system suppliers.

Services business unit: technical services in great demand

Services' sales were worth euro 85.7 million, EBITDA totalled euro 4.7 million, and incoming orders amounted to euro 88.6 million.

The Services business unit represented by the Premier group, records a good demand for manufacturing support services from the automotive industry. Apart from the full-service contract for several years received in Poland, Premier also got major contracts in Great Britain, Brazil and the United States of America. There is a growing demand not only for systems cleaning and materials logistics, but also for technically sophisticated services.

Carl Schenck group: continued growth

The Carl Schenck group's sales amounted to euro 376.8 million in the first nine months of the financial year compared to euro 287.1 million in the preceding year's period under review (+31 %). Incoming orders amounted to euro 448.4 million, up 35 % from the preceding year's level of euro 331.2 million. EBITDA were euro 14.6 million due to lower extraordinary items, down from euro 19.1 million in the preceding year's period under review (- 24 %). Order backlogs amounted to euro 333.4 million (previous year euro 277.5 million/ + 20 %).

The strongest growth impetus came from Schenck's German and North American companies. Due to the successful integration of the North American companies Motorama and Interautomation, the Test and Automation Systems corporate division was able to increase its system capabilities. The range of services to be performed for the automotive industry which have recently been in great demand, was also broadened, e.g. in vehicle development.

Process Systems, as well as Balancing and Diagnostic Systems, two other Schenck corporate divisions, profit from the sustained recovery in demand shown in important markets. The Process Systems corporate division continued to focus on its markets on the basis of new world market competitive Mechatronic products for different industries. The Balancing and Diagnostic Systems corporate division increased its Diagnostic activities and helped to further reduce production costs thanks to a continuous standardization and modularization of its portfolio of products.

The cooperation between the corresponding Schenck and Dürr business units in the automotive industry continues according to plan.

New INTX business unit

As a corporate venture capital company, Dürr's new INTX business unit with its lead company INTX AG will on the one hand find leading edge technologies developed by external companies, above all by start-up companies, and make them available to the Dürr group, and on the other hand advance the marketing of innovative technologies of the Dürr group in new markets.

Outlook for all of 2000

Overall, there still is a satisfactory investment situation in the markets of the Dürr group, although at the moment it is very hard to predict any possible effects of the significant oil price increases on the medium-term business trend.

In the automotive industry, Dürr's most important market, priority continues to be given to investment incentives such as increase in productivity, cost cutting, quality enhancement and aspects of environmental protection, which are independent of an increase in production volumes. Against this backdrop, Dürr will exceed its sales target of euro 1.7 billion set for the financial year of 2000 and achieve a two-digit percentage growth rate in its earnings before taxes.