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Dürr announces preliminary figures for 2004 and new group structure

02/23/2005

Preliminary Figures

According to preliminary figures, the Dürr Group achieved consolidated sales of Euro 2,132 million in 2004 (previous year: Euro 2,271.9 million). Adjusted for currency effects, sales decreased by 2.8 %. At Euro 1,820 million, incoming orders were in the expected order of magnitude, after having increased to Euro 2,356.2 million in the previous year due to a large order. Calculated on a comparable basis, earnings before taxes amount to Euro 11.3 million (previous year: Euro -5.7 million) and are hence at the upper end of the guidance released in November.

The business units performed as follows::

In the Paint Systems business unit, total incoming orders declined, as expected, to Euro 790 million, after having risen to an above-average Euro 1,400.1 million in the previous year due to a large order. Total sales decreased by about 8 % on the previous year to Euro 1,153 million.

Total incoming orders in the Final Assembly Systems business unit amounted to Euro 342 million. They were thus below the year-earlier level (Euro 405.4 million), but that included extensive conveyor system deliveries to the Paint Systems business unit. Due to the weakness of the US dollar and planned reduction of business volume in the United States, total sales declined by about Euro 70 million from the previous year's level to Euro 374 million.

The Services business unit, which is very strongly represented in the United States, managed to increase total sales and incoming orders by 8 % to Euro 159 million despite the dollar's weakness. Calculated at the previous year's exchange rates, the increase would have amounted to 14 %.

The Ecoclean business unit managed to raise total incoming orders by 4 % to Euro 184 million, mainly as a result of increases in US business, while total sales declined to Euro 184 million (previous year: Euro 208.1 million).

The Measuring Systems business unit increased total incoming orders to Euro 420 million (previous year: Euro 369.7 million) and total sales to Euro 384 million (previous year: Euro 364.9 million).

New group structure

Effective March 1, 2005, the Dürr Group will be organized in two divisions instead of the previous five business units. Paint Systems and Final Assembly Systems, which both operate in plant engineering and systems business, will be combined in the new Paint and Assembly Systems division. Stephan Rojahn, Chairman of Dürr AG's Board of Management, will head that division. The Ecoclean and Measuring Systems (Schenck) business units, which are geared to mechanical engineering and process technology, will form the new Measuring and Process Systems division, for which Ralf Dieter will be responsible in the Board of Management.

The Services business unit (Premier Group) is to be sold to Voith AG. The negotiations are very far along. Regulatory approval is being sought. Investment bank Lazard is handling the transaction. The decisive consideration for selling is that synergy between the plant engineering and services business has proven significantly smaller than expected at the time when the Services unit was acquired as a result of customers' ordering practices. Voith and Dürr intend to work together in the future in the area of automobile factory services.

For the Development Test Systems division of Schenck, which offers highquality test systems for vehicle development, Dürr is examining various strategic options that range from a minority holding to a sale. In that connection, a goodwill writedown in the amount of about Euro 26 million is being taken.

Dürr is preparing its 2004 financial statements according to IFRS (switching from US GAAP) and in that connection will report continuing and discontinued operations separately. The most important preliminary figures are presented below:

*including goodwill writedowns of about Euro 26 million

Focusing on core areas of competence

By assuming this new structure, Dürr is focusing on its core areas of competence. Those are in paint and final assembly systems for the automotive industry, where Dürr has many years of experience, and in mechanical engineering, where it mainly offers balancing systems and process technology.

In order to be less dependent on the economic upturns and downturns of the automotive industry, Dürr is going to take more advantage of market opportunities outside the automotive industry, for example, with process technology for the mining and basic materials industries and with production systems for the aircraft industry. Business fields outside the automotive industry already accounted for about 17 % of sales in 2004 (previous year: 14 %).

Annual savings of Euro 10 million from streamlining structures

In the framework of the group's new group structure, the divisions are being streamlined, and the number of companies reduced by about one-third - that means fewer duplicate structures, bundled areas of competence, and clear lines of responsibility. Dürr expects volume effects especially in administration, purchasing, development, and assembly. Worldwide, about 100 jobs will be eliminated. In that connection, Dürr is offering age part-time regulations and intercompany transfers to expanding areas. Dürr expects the new structure to save about Euro 10 million per year from 2006 onward. Also, the sale of the Services unit will further reduce debt.

The new structure will increase the Group's market "strike capability." The elimination of division boundaries will allow more speed and efficiency in the processing of orders. Also, it will be possible to give customers better coordinated service on the principle of "one face to the customer."

Outlook

Earnings improvement in 2005

"Portfolio streamlining and optimization of business processes as well as cooperation in the group are important steps on the path to higher earning power in fiscal 2005," says Dürr AG CEO Stephan Rojahn. Dürr is countering risks posed by the strong euro and increased raw material prices with its SPRINT SQUARED earnings enhancement program. Dürr will present its complete 2004 financial statements at a press conference for that purpose on April 21, 2005.

Note: All data is preliminary. They have not been approved by the Supervisory Board nor examined by the auditor yet.