Dürr Lays the Foundation for Further Growth

04/23/2002

• Operating results up 17 %
• 1Q 2002: Sales and incoming orders higher
• Growth expected in Final Assembly Systems and Measuring Systems

The Dürr Technology Group, one of the leading suppliers of manufacturing systems for the automotive industry, increased sales and improved its operating results despite the difficult circumstances prevailing in fiscal year 2001. In 2002, in view of a still restrained world economy and automotive business, Dürr expects incoming orders, sales and earnings, excluding restructuring effects, to remain at levels similar to last year's. Dürr is strengthening its ability to compete by pushing ahead with the program, already introduced, to streamline its business units, by drawing even more on synergies and by intensifying programs to increase profitability throughout the Group. Dürr has great confidence, therefore, that it will be able to benefit above average from economic recovery in 2003.

Improved results

In fiscal 2001 Dürr's operating results - EBITDA (earnings before interest, taxes, depreciation and amortization) - increased by 17 % to Euro 135.3 million (year earlier: Euro 115.3 million). Earnings before taxes (EBT) reached Euro 47.3 million, representing an increase of 13 % (year earlier: Euro 41.8 million). Net income rose by 39 % to Euro 24.7 million (year earlier: Euro 17.8 million). The earnings figures for fiscal 2000 have been restated retroactively because of originally not fully recorded contractrelated accruals. Significant earnings increases were achieved in 2001 by the Paint Systems, Ecoclean and Services business units. The Measuring Systems business unit, which combines various divisions of the Schenck Group, fell short of its earnings targets.

Dürr improved its earnings per share to Euro 1.73 (year earlier: Euro 1.31 previous year, +32 %). At the annual meeting, Dürr AG's Board of Management and Supervisory Board will recommend the payment of a dividend of Euro 1.10 per share as in the previous year; the dividend yield thus amounts to 4.6 %.

Sales and incoming orders higher

In fiscal 2001, consolidated sales for the Group rose by 7.8 % to Euro 2,201 million (year earlier: Euro 2,042 million). The total sales for the business units were as follows: Paint Systems, at Euro 1,095 million, almost matched the very high level of the previous year (year earlier: Euro 1,189 million). Sales increased at Automotion by 23 % to Euro 546 million (year earlier: Euro 444 million), at Ecoclean by 26 % to Euro 277 million (year earlier: Euro 220 million), and at Services by 9 % to Euro 134 million (year earlier: Euro 123 million). Measuring Systems contributed Euro 313 million to total Group sales (year earlier: Euro 235 million in the previous year, consolidated for nine months). Dürr was able to extend its market position and technological edge in all core business fields. R&D expenditures - including projectrelated R&D expenditures - totaled approximately 6 % of sales, advancements in robot technology for new paint systems and more flexibility. Capital expenditures on tangible assets totaled Euro 35.9 million. The points of emphasis were in the IT area and in targeted expansion and improvement of efficiency at individual sites.

Dürr's consolidated incoming orders amounted to Euro 2,063 million and exceeded the previous year's figure (Euro 1,970 million) by 4.7 %. The marked weakness in US markets was offset by orders from China and Europe. Orders on hand at the end of 2001 were valued at Euro 1,167 million (year earlier: Euro 1,106 million previous year, +5.5 %) and will ensure good capacity utilization in fiscal 2002. Due to changes in the scope of consolidation and new projects in the Services business unit, the number of employees rose to 12,675 at the end of the year (year earlier: 11,558, +9.7 %).

Business development in first quarter 2002:

While the project situation in Europe and China was good, development in North and South America was below average. On balance, incoming orders rose in the first quarter of fiscal 2002 by 15 % in comparison with last year to a total of Euro 486 million (year earlier: Euro 421 million). Sales were up 12 % at Euro 395 million (year earlier: Euro 354 million). On March 31, 2002, orders on hand showed an increase of 11 % at Euro 1,258 million (year earlier: Euro 1,137 million). As a result of new projects in the Services business unit, the total number of Group employees stood at 12,410 on March 31, 2002 (year earlier: 12,134, +2.3 %).

Earnings were affected by the restructuring programs currently being implemented mainly at German and American companies in the Schenck Group. Against that background, Dürr registered EBITDA of Euro 2.6 million (year earlier: Euro 27.0 million) and earnings before taxes (EBT) of Euro -14.8 million (year earlier: Euro 7.8 million). Most of the restructuring measures should be largely completed by the third quarter of 2002 and positive effects are expected thereafter. Dürr expects business development for the full year at last year's level; positive influences on profitability as the year progresses will partly offset the high cost of restructuring measures at the beginning of the fiscal year. The main goal in the medium term is for the newly established Final Assembly Systems and Measuring Systems business units to join the Paint Systems, Ecoclean, and Services business units in contributing above average to profitable growth.

Turnaround program for Measuring Systems / Integration of Final Assembly Systems

With the aim of substantially strengthening the competitiveness of the Measuring Systems business unit, which comprises Carl Schenck AG measurement technology activities, Dürr has initiated a turnaround program for less profitable Schenck companies. Staff numbers at the German companies will be reduced by up to 200 and the business model will be realigned to concentrate on expanding and profitable market segments. As a result, Measuring Systems sales are expected to increase over the next three years by about Euro 150 million to Euro 550 million. The return on sales target is above 6 %.

Dürr also sees good prospects for Final Assembly Systems. This business unit, which was newly established at the beginning of the year and includes several Dürr and Schenck companies, offers a unique range of systems for final vehicle assembly. Dürr has completed a turnkey final assembly facility for Opel at Rüsselsheim, which is currently regarded as one of the most modern and productive of its kind. According to Hans Dieter Pötsch, Chairman of the Dürr AG Board of Management, "We want the Final Assembly Systems unit to repeat in the area of final vehicle assembly the success story of our Paint Systems unit, where we are clearly Number One in the world with our turnkey competence." In the next three years, sales are expected to rise to an annual volume of about Euro 550 million, and a return on sales of 6 % is to be achieved. Provided approval is given at the Schenck annual meeting, plans will proceed for the sale of some Schenck companies to the Dürr Final Assembly Systems business unit as a basis for better utilization of synergy potential. In this connection, Dürr will not pursue its declared intention of acquiring all shares in Carl Schenck AG by means of a squeeze-out.

Focused strategy offers great opportunities

With its broadened strategy as a supplier of production systems and related services for all major links in the value chain of automobile manufacturing, Dürr is gearing itself to the needs of its customers. In that dynamic key industry, Dürr sees excellent opportunities for profitable growth, for example, in providing engineering services for assembly facilities, in supplying systems for development and production of power train components, in introducing emission-free powder-coating systems, and in providing manufacturing support services. Capital investment in modern production systems to increase productivity, efficiency, quality and environmental protection still has high priority for manufacturers, who face intense competition in the automotive industry. All the world's major automobile manufacturers are Dürr customers. As a market leader offering top technologies through its business locations in 26 countries around the world, Dürr is in a very good position to handle fluctuations in demand. "We are optimistic about our future because system partners like Dürr will become more and more important for automobile manufacturers and their component suppliers in maintaining their competitiveness as their industry undergoes structural change" says Dürr's Chairman of the Board of Management, Hans Dieter Pötsch.

Outlook

For fiscal 2002, Dürr expects development in the economy to remain subdued, especially in the first half of the year. Despite the prevailing general uncertainties, the project situation looks positive on the whole and especially so in Europe and China.

Judging the situation as it appears today, the Board of Management expects incoming orders and sales for the Dürr Group in 2002 to be much as in the previous year. The goal is to achieve the same level in earnings as in 2001 before restructuring effects. The measures to improve competitive capability and streamline business units throughout the Group will be followed through to full implementation. Dürr is very confident that it will emerge from this period of market weakness with new strength and that it will benefit above-average from an onset of economic recovery in 2003.