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Strong increase of operating earnings in the first half of 2006

08/10/2006

• Incoming orders significantly above last year; continuing good project situation
• Gross margin further increased
• Earnings after taxes in the second quarter strongly improved and positive
• FOCUS program on track

Stuttgart, August 10, 2006 – The Dürr Group’s incoming orders increased in the first six months of 2006 by 16% on the previous year’s period (€ 728.4 million) to € 845.3 million. The improvement was mainly driven by growth in the Paint and Assembly Systems division. The Measuring and Process Systems division showed incoming orders up 4% in the first half of the year; the first quarter’s decline was more than offset in the second quarter. In-coming orders from Asia rose 76.5% on the previous year. We received strategically important orders from Southern Europe in the second quarter. Business in the Americas held steady at an unsatisfactory level.

Consolidated sales in the first six months of 2006 came to € 626.3 million and was thus 4.7% below the previous year’s level (€ 656.9 million), as expected. The main reason for that was relatively weak incoming orders in the second half of 2005, which found expression at a time lag in sales. Orders on hand stood at € 929.9 million on June 30, 2006, which was € 206.4 million more than at the end of 2005.

Earnings significantly improved

The gross margin rose on annual average to date by 0.6 percentage points to 17%. The main reason for the plus was already realized efficiency gains and the service business, whose importance is growing. The decline of selling and administrative costs in the second quarter also deserves mention. The costs of implementing FOCUS, for which we were unable to create provisions last year due to IFRS accounting rules, are stated separately at € 3.7 million. EBITDA reached € 16.4 million in the first six months of 2006 (previous year: € 14.7 million), and EBIT doubled from € 3.0 million in the previous year’s period to € 6.0 million.

Interest expenses declined by € 5.2 million on the first half of 2005 to € 13.1 million. Net financial debt amounted to € 122.2 million on June 30, 2006, compared with € 334.0 million on the same date last year. The net loss at the end of the first six months of 2006 came to € ‑3.3 million (previous year: € ‑12.5 million). In the second quarter of 2006, positive earnings after taxes of € 1.3 million were achieved after € ‑5.9 million in the previous year’s period, despite significantly lower reported sales (down by € 46.6 million to € 317.0 million). The equity ratio rose significantly to 23% as of June 30, 2006 (June 30, 2005: 18%).

Ralf Dieter, CEO of Dürr AG commented, “We are satisfied with the development in the year to date. Notwithstanding the expected decline of sales in the second quarter, we improved earnings and were in the black. Thanks to the FOCUS measures, we made visible progress on improving our cost structure in the second quarter. We expect a significant upturn of sales in the second half of the year, based on the strong incoming orders of the first half. We should also make further earnings progress�.

FOCUS: Process improvement in the implementation phase

All FOCUS projects have already started up on schedule. In the framework of these projects, our internal processes have been examined for improvement potential. Implementing that potential in the FOCUS projects is the company’s top priority. Eight of the projects were already completed by March 31 of this year. Another five were wrapped up in the second quarter of 2006.

Outlook

Because of the positive demand trend in modernization and service business and for new plants, especially from Asia and Eastern Europe, Dürr expects higher incoming orders in 2006 than in the previous year. Sales in 2006 will be at least at the previous year’s level. Dürr expects a significant increase of operating earnings for 2006 because of the initiated FOCUS measures. Net interest results will improve compared with 2005. Overall, the company expects slightly positive earnings for 2006, which will remain a year of transition and implementation. Our medium-term return target is 4% based on earnings before taxes and 8% based on EBITDA.

The Dürr Group is one of the world’s leading suppliers of products, systems, and services for automobile manufacturing. Its range embraces important parts of the vehicle production value chain. As a systems supplier, Dürr designs and builds paint shops and final assembly plants. Dürr also supplies cleaning and filtration systems used in the production of engine and transmission components as well as balancing and diagnostic systems for vehicle components and general industrial applications. Dürr's major customer groups are automobile manufacturers and suppliers as well as the engineering, the chemicals-, pharmaceutical-, coating- and aerospace industries.

Conatact:

Dürr AG
Günter Dielmann
Corporate Communications & Investor Relations
Phone: +49 (0)711 136-1785
Fax: +49 (0)711 136-1716
E-Mail: corpcom(at)durr.com

Note: All figures refer to continuing operations of the Dürr Group unless indicated otherwise. The balance sheet for the first half of 2006 no longer includes values for the Measuring and Process Technologies business unit, which was sold, but the balance sheet for the first half of 2005 does. We are thus complying with a provision of IFRS 5. Accordingly, the values on the balance sheet are only comparable to a limited extent.