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Dürr 9-month results: Turnaround proceeding as planned

11/14/2006

• Incoming orders above last year; project pipeline well filled
• Earnings after taxes positive
• Q4 outlook: Strong growth in sales and earnings
• Group-wide FOCUS program to be channeled into continuous improvement process

Stuttgart, November 14, 2006 – The Dürr Group’s incoming orders were up 18.1% in the first nine months of 2006. EBIT improved to € 14.3 million from € 8.3 million in the same period last year. Earnings after taxes came to € 0.1 million (previous year: € -14.4 million). A net profit of € 3.4 million was achieved alone in the third quarter, after a loss of € -1.9 million still in the same quarter last year. A stronger-than-expected falloff of the US market prevented a more pronounced earnings swing. Dürr continues to expect a strong fourth quarter and to achieve its full-year targets. Ralf Dieter, CEO of Dürr AG, commented: “The level of project inquiries remains brisk. We therefore expect a continued positive development of incoming orders in the next quarters".

In the third quarter incoming orders were up 23.8%. The good order situation is due to a targeted expansion of the services business and to system orders from the growth regions of China, India and Eastern Europe. Orders out of Asia were up 76.8% in the first nine months. At € 984.0 million, consolidated sales were marginally down from the year-earlier level (€ 993.3 million).This was mainly due to the relatively weak order intake in the second half of 2005, which fed through to sales revenues in the first half of 2006. In the third quarter of 2006 sales already picked up by 6.3% compared to the previous year´s period and stood at € 357.6 million.

Turnaround with positive earnings after taxes

In the first nine months of 2006 efficiency improvements and the growing services business had a positive impact on earnings. The adjustments in the USA were intensified in the third quarter in response to the falloff of the market there.

EBIT reached € 14.3 million in the first nine months (previous year: € 8.3 million). Earnings after taxes came to € 0.1 million (previous year: € -14.4 million). A net profit of € 3.4 million was achieved in the third quarter (previous year: € -1.9 million). This development is also due to a € 12.0 million improvement in our financial expense figure to € -13.8 million in the first nine months of 2006.

Operating cash flow saw an improvement of € 56.0 million over the year-earlier period but, at € -79.8 million, was still negative. This was due in the main to cash outflows for the FOCUS program and to postponements in the final billing of orders to the fourth quarter. The equity ratio improved to 22.8% at September 30, 2006 (September 30, 2005: 16.8%). Net financial debt amounted to € 164.4 million, down from € 350.9 million a year earlier. At September 30, 2006 the syndicated loan facility was not drawn.

FOCUS: Project progress on track

So far Dürr has completed 16 of the total of 47 projects initiated under the Group-wide FOCUS program; another four are due to be completed shortly. The projects that are still in progress will be channeled into a continuous improvement process in the first quarter of 2007. These mainly involve projects for optimizing internal processes. The number of employees at September 30, 2006, was down 395 from the end of 2005 as part of FOCUS; 332 jobs were cut in 2005. The bulk of the roughly 800 job cuts planned in Western Europe and North America have therefore been realized. In Asia, on the
other hand, Dürr has continued to increase headcount. Here the number of employees has grown since the beginning of the year by 70 people.

Outlook

Dürr expects a double-digit percentage increase in incoming order volume in 2006. The positive trend in sales revenues in the third quarter is continuing at a stronger pace in the fourth quarter of 2006, based for the most part on progress in the processing of the systems orders which Dürr received in its plant engineering business in the course of the year and on the good order book situation in the mechanical engineering business. All in all, the company expects sales in 2006 to be at least level with the previous year.

Dürr expects a significant earnings improvement in the traditionally strong fourth quarter on the back of the growth in sales revenues, an attendant increase in gross profit and slightly lower selling and administrative expenses. Fourth-quarter EBIT should at least match the aggregate figure for the first three quarters. On this basis, a significant increase in operating earnings is expected for the full year 2006. Dürr remains confident that earnings after taxes for 2006 will be slightly positive. At the end of 2006 net financial debt should be slightly lower than at September 30, 2006, since Dürr expects a positive cash flow in the fourth quarter for the first time for several quarters.

For 2007 Dürr forecasts a slight rising trend in incoming orders and sales revenues. The target margins 2008 are 4% with respect to earnings before taxes and 8% at the EBITDA level and remain unchanged. The margins for 2007 as a whole may still fall short of the targets since the effects of FOCUS will only feed through fully in the course of the year.

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. Approximately 90% of consolidated sales are derived from business with automobile manufacturers and suppliers. Other important customer groups for Dürr are engineering and the chemicals, pharmaceutical, coating and aerospace industries.

Unless indicated otherwise, all figures refer to the continuing operations of the Dürr Group. The balance sheet at September 30, 2006, no longer includes values for the Measuring and Process Technologies unit which has been sold but the balance sheet at September 30, 2005 does. We are thus complying with a provision of IFRS 5. Accordingly, the balance sheet figures are comparable only to a limited extent.