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Quarterly figures per US GAAP - Dürr with profit in the first quarter of 2004

05/14/2004

• Earnings before taxes of Euro 4.3 million
• SPRINT SQUARE earnings enhancement program showing effects
• Sales significantly increased

With earnings before taxes of Euro 4.3 million (first quarter of 2003: Euro -14.5 million), the Dürr Group returned to the profit zone in the first quarter of 2004, after finishing fiscal 2003 with earnings before taxes of Euro -6.9 million due to restructuring. For the full year 2004, the Board of Management expects earnings before taxes to exceed the figure before restructuring expense (Euro 18.7 million) reached in fiscal 2003.

The Dürr Group's gross margin improved in the first quarter of 2004 to 17.3 %, while having amounted to 16.1 % in 2003. Earnings before interest expense, taxes, depreciation, and amortization (EBITDA) increased to Euro 16.3 million from Euro -0.1 million in the previous year's period. Dürr managed to improve net financial expense from Euro -5.5 million to Euro -4.6 million. With consolidated net income of Euro 2.2 million (first quarter of 2003: net loss of Euro 8.4 million), earnings per share amounted to Euro 0.16 (first quarter of 2003: Euro -0.59). It should be noted here that Dürr has determined in an internal review that order-specific receivables were overvalued, and accruals undervalued, in the financial statements for the first quarter of 2003. The company has subsequently adjusted the affected items in the statements of income for that quarter. In its report on the first quarter of 2003 released on May 14, 2003, Dürr had shown earnings before taxes of Euro -5.4 million, EBITDA of Euro 9.1 million, a consolidated net loss of Euro 2.8 million, and earnings per share of Euro -0.20. The adjustment had no effects on the consolidated financial statements of December 31, 2003 as the effects listed were reversed in subsequent quarters.

The earnings improvement is primarily attributable to the SPRINT SQUARE earnings enhancement program. Stephan Rojahn, Chairman of Dürr AG's Board of Management, emphasized, "After adopting SPRINT SQUARE last year, Dürr is now focusing resolutely on implementing the program's more than 200 individual measures, with the aim of substantially improving profitability."

Incoming orders return to normal level

Consolidated incoming orders in the first three months of 2004 amounted to Euro 415.1 million and thus returned to a normal level, as expected, after the extraordinarily high previous year's figure of Euro 1,123.8 million. Orders on hand also accordingly went down to a normal level. As of March 31, 2003, they stood at Euro 1,345.6 million, having amounted to Euro 2,097.6 million on the previous year's date.

Sales significantly increased

Dürr was able to raise consolidated sales by 21 % to Euro 486.7 million (first quarter of 2003: Euro 403.8 million). The increase is primarily the result of completing a large contract in North America.

Number of employees adjusted

In the framework of the SPRINT SQUARE program, Dürr reduced personnel capacities in Paint Systems, Final Assembly Systems, Ecoclean, and Measuring Systems, its engineering business units. In America and Europe, it eliminated 515 jobs in those units in the 12 months from March 31, 2003. In contrast, it added 111 jobs in Asia during the same period. The net number of employees in the engineering business units decreased from March 31, 2003 by 424 employees, or 4.9 %, to 8,165. On the other hand, the Services business unit expanded personnel capacity because of new orders to 4,432 employees (March 31, 2003: 4,289). Altogether, the Dürr Group had 12,597 employees on March 31, 2004. That is 281, or 2.2 %, fewer employees than on March 31, 2003. From the end of 2003, the number of employees in the Group was reduced by 150, or 1.2 %.

Outlook

Dürr expects at best a moderate economic recovery for 2004. Against that background, the company assumes that the automotive industry will continue to exercise capital spending restraint. After last year's loss under the influence of special factors, the Board of Management expects earnings before taxes for 2004 to exceed the figure before restructuring expense (Euro 18.7 million) reached in fiscal 2003.

Information on the business units

At Euro 212.4 million, total incoming orders in the --Paint Systems__ business unit were, as expected, lower than the figure for the first quarter of 2003 (Euro 877.1 million), which was far above normal due to a large order from General Motors (GM). The business unit received relatively large orders for paint systems in China and Germany. On the whole, however, a slowing of capital spending by automobile manufacturers and their suppliers was observed. Because of the high orders on hand at the beginning of the year, total sales amounted to Euro 272.9 million and thus significantly surpassed the previous year's figure (Euro 208.0 million). Together with positive effects from the SPRINT SQUARE program, the higher sales led to significantly improved earnings before taxes of Euro 8.3 million (first quarter of 2003: Euro -2.9 million).

At Euro 58.1 million, total incoming orders in the Final Assembly Systems business unit likewise registered a decline. However, the previous year's figure of Euro 170.2 million was also above average, because it includes conveyor technology orders within the Group for the large GM contract. Total sales rose in the first quarter to Euro 81.5 million (first quarter of 2003: Euro 70.6 million). That is primarily due to progress on the large contract for GM. Under billing influence, earnings before taxes improved more than proportionately relative to total sales to Euro 2.3 million (first quarter of 2003: Euro -0.5 million).

In the Services business unit, Dürr continued its positive business trend in the first quarter of 2004. The business unit, which is very strongly represented on the US market, managed to increase total incoming orders to Euro 35.8 million (first quarter of 2003: Euro 35.1 million), and total sales to Euro 35.9 million (first quarter of 2003: Euro 35.6 million), despite the weakness of the US dollar. Adjusted for exchange rate effects, total incoming orders would have grown 11.7 %, and total sales by 9.8 %, compared with the previous year's figures. The increases are mainly due to new orders acquired in 2003 by Services in China and from Japanese manufacturers in the United States. Earnings before taxes fell from Euro 1.7 million to Euro 1.4 million. Expenditures for expanding the business area of transportation equipment management were the main reason for that. Adjusted for exchange rate effects, earnings before taxes would have amounted to Euro 1.5 million.

Because of continuing postponements of capital investments by the automotive industry in Europe and the United States, total incoming orders in the Ecoclean business unit decreased from Euro 47.4 million to Euro 31.5 million. Total sales rose slightly to Euro 41.8 million (first quarter of 2003: Euro 40.5 million), while earnings before taxes fell from Euro 0.9 million to Euro 0.5 million) due to utilization problems in North America.

Despite partly continued difficult market conditions, the Measuring Systems business unit increased total incoming orders by 12.3 % to Euro 93.1 million (first quarter of 2003: Euro 82.9 million). Total sales improved by 11.0 % to Euro 80.0 million (first quarter of 2003: Euro 72.1 million). Business development was positive particularly in Asia, but a slight market upturn was also discernible in North America. Earnings before taxes reflect the first positive effects of restructuring carried out under the SPRINT SQUARE program. The amount still fell below positive territory at Euro -2.9 million, but improved by Euro 7.0 million versus the previous year's figure (Euro -9.9 million).

Earnings before taxes in the Corporate Center amounted to Euro -5.3 million in the first quarter of 2004 (first quarter of 2003: Euro -3.8 million). That figure includes headquarters costs, special projects, and especially interest expenses incurred for strategic acquisitions.

The Dürr Group is one of the world's leading suppliers of production systems and manufacturing support services for the automotive industry. In fiscal 2003, Dürr achieved sales of about Euro 2.3 billion with 12,750 employees.