Report of Dürr Aktiengesellschaft on the first half of 1999

08/12/1999

Dürr group continues its positive development

• Sales increased further
• Incoming orders above target
• New opportunities as global service provider

With group sales amounting to DM 798 million, up 5.6% on the year-earlier level, the Stuttgart-based Dürr AG has continued its positive development in the first six months of the current year. The worldwide leading supplier of paint finishing systems, industrial cleaning systems and manufacturing support services is confident about 1999 as a whole. From today's point of view, the Board of Management sees good chances of sales and incoming orders exceeding the preceding year's levels again, thus setting new records.

The incoming orders came to DM 1,096 million in the first six months of 1999, which is about half of the target values set for the entire year. Since the incoming orders in the first half of last year (DM 1,449 million) were strongly influenced by a single very large systems order, the current value is still below the comparable period of 1998.

With orders on hand of DM 2,122 million at the end of the first half of 1999, utilization of Dürr group capacities is assured until far into the year 2000.

The financial index EBITDA achieved DM 35.6 million, improving by 18.3% on the year-earlier level (DM 30.1 million). Earnings before taxes have been substantially affected by amortization of goodwill from acquired companies, amounting to DM 21.7 million which is slightly below the comparable year-earlier figure of DM 22.3 million.

About DM 20.9 million were invested in tangible assets in the first half of 1999 (1998: DM 15 million). The number of employees increased to 6,696 as of June 30. That includes, for the first time, the 2,503 employees of Premier, the acquired specialist service provider.

Premier group: Leader in manufacturing support services

With the acquisition of Premier Manufacturing Support Services Inc. of Cincinnati, Ohio effective April 1, 1999, Dürr now has its third business unit with a promising future. Services are an ideal extension of the Dürr systems program in equipment manufacturing and offer a counterweight to more cyclical demand in equipment business. Premier is a specialist operating in as much as 10 countries in the growth market of manufacturing support services for the automobile industry.

Dürr Systems group: Promising market situation in paint finishing systems

By receiving several orders for paint shops from Germany and Eastern Europe, the Dürr Systems group (paint finishing and application systems, automation and conveyor systems, and environmental systems) consolidated its position as a global market leader. Even though the overall project situation is stable, the automobile industry has different economic trends in different regions. The car sales boom in the USA and in Europe are bolstering existing capital spending propensity in those regions. Dürr owes its tremendous market success to its innovative and competitive range of application technology products, since the automobile industry shows a worldwide trend towards highly efficient and environmentally sound paint finishing systems.

Dürr Ecoclean group: Success with an extended range of systems

Continuing its gratifying development, Dürr Ecoclean has fortified its position as an international market leader. As several automakers are adopting new generations of engines and transmissions, a high demand for efficient cleaning and filtration systems exists most prominently in the USA. Henry Filters, a US firm acquired last year, shows growth in Europe. Thus, for example, a large order for several emulsion and filtration systems worth a total of almost DM 20 million was placed by GM for the new aluminum engine production department of the Opel factory in Kaiserslautern.

Outlook for 1999 as a whole

The Board of Management expects the positive development of the first half to continue in 1999. In this respect Dürr benefits from the competition among automakers, which results in a continuing demand for efficient, environmentally sound and increasingly flexible production facilities. Accordingly, the US Dürr Systems companies have received engineering projects for which large orders are expected in the second half of the year. In respect to earnings, Dürr intends to match last year's high results. Prospects of exceeding last year's records set for sales and incoming orders are quite good.