• Contact
• Locations
• German

Results (IFRS) January 1 to March 31, 2006 - Dürr gets off to a good start in 2006

05/11/2006

• Incoming orders well up compared to the first quarter of 2005
• Earnings improved versus a year earlier - but still burdened by FOCUS implementation
• Progress of Group-wide FOCUS program well on track

In the first three months of 2006 the Dürr Group booked incoming orders worth - 429.9 million, an increase of 33% versus the first quarter of 2005. This improvement was attributable to growth in the Paint and Assembly Systems division. Particularly notable is the growth in Asian business, which accounted for close to 40% of total incoming orders in the first quarter of 2006. In 2005 Asia contributed just 12.5% to sales revenue. By contrast, investment activity in the North American automobile industry remained subdued, although Dürr succeeded in winning a largish modernization order. The development of incoming orders in Application Technology"s robotics business was also positive.

Group sales revenue in the first three months of 2006 came to - 309.3 million, an increase of 5.5% year on year (Q1 2005: - 293.3 million). Orders on hand as of March 31, 2006 were worth - 840.2 million (March 31, 2005: - 918.9 million). This was - 116.7 million more than at the end of 2005.

The gross margin improved by 0.4 percentage points to an average of 16.6% for the year to date. In the first quarter of fiscal 2006 there were costs according to plan associated with FOCUS which were reflected above all in higher general administrative expenses. These costs more or less matched the savings and productivity improvements achieved to date. EBITDA reached - 3.4 million in the first three months of 2006 (Q1 2005: - 2.7 million), while a loss of - 1.5 million was posted at the EBIT level after a loss of - 2.0 million a year earlier. The first quarter closed with a net loss of - 4.6 million (Q1 2005: - -6.5 million). Interest expense came to - 6.4 million, a decrease of - 2.4 million versus the first quarter of 2005. The equity ratio rose to 22.4% as of March 31, 2006 (March 31, 2005: 15.5%). At - 120.0 million, cash and cash equivalents were little changed versus year-end 2005. Net financial debt as of March 31, 2006 came to - 104.1 million, down from - 358.0 million a year earlier.

Implementation of FOCUS on track

Dürr launched the FOCUS program in mid-August 2005 with the goal of achieving sustainable improvements in the Group"s profitability and financial structure. The company is concentrating on its core business as a supplier of plant and engineering equipment to the automobile industry, which will contribute roughly 90% of Group sales revenue in 2006. At the same time, with FOCUS Dürr is optimizing its positioning in the sales markets and tapping the growth potential that exists in the global automobile markets. The financial restructuring was completed at the end of 2005. Dürr AG"s CEO Ralf Dieter says of the current progress of FOCUS: "As of March 31, 2006 8 of the 30 FOCUS projects have been completed. All the other projects have been started. We are making good headway with process improvements. For example, we are working to cut project lead times and production throughput times by as much as 30% in some areas. Implementation will take place in the coming quarters. As of March 31, 2006 we have cut another 219 jobs under the FOCUS program versus year-end 2005 after a reduction of 332 jobs already in 2005. We are satisfied on the whole with our progress".

Outlook

In light of the positive development of demand in the modernization and services business and in new investment in plant and equipment Dürr expects a higher volume of incoming orders than last year. Sales revenue in 2006 will be more or less on a par with last year"s level since some of the new orders booked in the first quarter of 2006 will not be completed until 2007. The most important task in 2006 will be the rigorous implementation of FOCUS. First benefits of the program will be felt already in 2006. On this assumption Dürr expects a strong increase in earnings at the operating level. The interest result will improve versus 2005. Bottom line, the company forecasts a small net profit after tax for 2006. The target in the medium term is a return of 4% at the pre-tax level and 8% at the EBITDA level.

Note: All figures relate to the Dürr Group"s continuing activities. The divested Measuring and Process Technologies unit is included in the balance sheet figures but not in the P&L and cash flow figures for the first quarter of 2005; this is in compliance with a provision of IFRS 5.

The Dürr Group is a world-leading supplier of products, systems and services for automobile manufacture. The portfolio covers important parts of the value chain in the production of a vehicle: as a system supplier Dürr designs and installs paint shops and final assembly lines. Dürr also supplies cleaning and filtration systems used in the manufacture of engine and transmission components as well as balancing and diagnostic systems for vehicle components and general industrial applications.