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Dürr in the black in 2005 despite restructuring and lower sales

03/30/2006

• Group realignment and financial restructuring completed
• Outflow of funds from operations stopped in fourth quarter
• Group-wide FOCUS program on schedule
• Rising new orders in first quarter of 2006 supports outlook

Today the Board of Management of Dürr AG will present the annual financial statement approved by the Supervisory Board.

Operating earnings (EBIT before one-off effects) of the Dürr Group's continuing operations in 2005 were positive; they decreased by € 32.3 m on the preceding year to € 3.5 m due to significantly lower sales. Operating earnings already include considerable costs connected with the Group's realignment under the item other operating expenses. Net interest income which decreased by € 10.7 m to € 35.2 m was the second main determinant of earnings development in 2005. In the framework of the group-wide FOCUS program, total one-off expenses of € 73.8 m were incurred, of which € 45.9 m were restructuring costs. High income from the sale of companies (€ 116.1 m) offset those effects, with the result that Dürr achieved positive consolidated earnings after taxes of € 4.3 m in 2005 (preceding year: € 4.7 m).

New orders in continuing operations decreased by 12.3% last year to € 1,216.9 m due to weak demand in plant engineering business (paint shops and assembly plants) and in cleaning technology. Set against that, we are pleased to report significantly higher demand in mechanical engineering and systems business (including painting robots, application technology, and balancing systems) and in environmental and energy systems. Sales revenues decreased by 18.8% to € 1,400.6 m (preceding year: € 1,725.8 m). The main reason for the decline was that revenues in the Paint and Assembly Systems division were down by 23.0%, after above-average sales growth in the preceding year due to a large order from the United States. On the other hand, the Measuring and Process Systems division registered nearly unchanged sales revenues.

"Last year was a very challenging one for us in which we carried out a realignment of the Dürr Group," said CEO Ralf Dieter. "We introduced important structural improvements, started and advanced the FOCUS restructuring strategy, divested loss-making and peripheral operations, and focused on our core business with the automotive industry." He added, "We successfully completed the first part of the FOCUS program – as announced in summer 2005 – with the financial restructuring of the Group.”

Cash and cash equivalents amounted to € 124.7 m at year's end (Dec. 31, 2004: € 46.4 m). Borrowing on our syndicated credit line was also completely repaid as of December 31, 2005. Dürr accordingly reduced its net financial debt to € 84.9 m (Sept. 30, 2005: € 312.2 m). For the first time in several quarters, the outflow of funds from operations was stopped in the fourth quarter of 2005. Our financial ratios improved significantly by the end of 2005 also as a result of a capital increase. The equity ratio stood at 20.9%, compared with 15.5% as of December 31, 2004.

"We were able in 2005 to offset all restructuring expenses and impairment losses with income from divesting peripheral operations, which means from internal resources. Furthermore, debt was considerably reduced," according to CFO Martin Hollenhorst.

In the framework of the group-wide FOCUS program, about 332 jobs out of a planned total of 800 were eliminated by the end of 2005. The regional emphases of that were in the mature markets of North America and Europe. In contrast, personnel increased in Asia. Eight out of more than 30 FOCUS projects have already been completed. Implementation of the FOCUS program is right on schedule.

Outlook: Increased project inquiries at the turn of the year have found expression in a gratifying rise of new orders in the first quarter of 2006 of around € 400 m (on a comparable basis Q1 2005: € 323.3 m). This growth of demand embraces the service and modernization business as well as planning and construction of new plants. Orders for new plants are coming mainly from India and China. Dürr expects a slight decline of sales revenues in the first two quarters, because orders on hand decreased by € 136.4 m to € 723.5 m at the end of last year, and the new orders will only come more strongly to bear later this year. For the full year 2006, the company expects sales revenues to be roughly unchanged compared with 2005. Operating earnings should improve significantly. Dürr expects positive earnings after taxes. This year will remain one of transition and implementation of the FOCUS restructuring program. Only in the course of 2007 will the positive effects of all FOCUS measures be felt.

The Dürr Group is one of the world's leading suppliers of products, systems, and services for automobile manufacturing. Its range of products and services covers important stages of vehicle production. As a systems supplier, Dürr plans and builds complete paint shops and final assembly facilities. Dürr also delivers cleaning and filtration systems for the manufacture of engine and transmission components as well as balancing systems.

Key figures (IFRS) – continuing operations

The Measuring & Process Technologies and Development Test Systems business units and the Premier Group, which were sold in 2005, are no longer included in continuing operations. A distinction between continuing and discontinued operations is no longer necessary in 2006.

¹ EBIT before restructuring expenses, impairment losses, and investment income/loss.

² With the exception of equity, the balance sheet figures for continuing operations in 2005 and 2004 are only comparable to a limited extent. The figures for the sold Measuring & Process Technologies business unit are no longer included in the balance sheet for 2005. However, they were included in the balance sheet for 2004. Dürr is thus complying with a provision of IFRS 5.

³ Excluding finance leases.

Immaterial variances may occur due to roundings in the computation of sums and percentages.