Figures for January 1 to September 30, 2003 (US GAAP) - Dürr shows positive result at the end of three quarters

11/13/2003

• Earnings improvement in the third quarter
• Increase of incoming orders and of sales
• Earnings for the year burdened by one-time charges in the fourth quarter

The Dürr Technology Group achieved earnings before taxes of Euro 10.2 million in the third quarter of 2003 (previous year: Euro 9.9 million) under continuing difficult market conditions. That means earnings before taxes of Euro 5.3 million for the first nine months of 2003 (previous year: Euro -5.7 million).

Earnings before taxes improved in the first nine months of 2003 by Euro 11.0 million compared with the previous year¥s period, which was influenced by restructuring charges. It should be noted that they were burdened by pressure on margins, sluggish product business, and one-time charges for capacity adjustments and location revisions. The expenses of closing the loss-making pre-manufacturing operation in Darmstadt (Germany), which was decided in October 2003, are not included yet in the result for the first three quarters of 2003. They will be charged to earnings in the fourth quarter of 2003.

In the framework of the SPRINT SQUARE earnings enhancement program, Dürr managed to reduce selling, administrative and other operating expenses in the first nine months of 2003 by Euro 20.7 million to Euro 231.5 million. Personnel costs fell by Euro 37.0 million to Euro 436.7 million. Due to the reduction of net debt, net interest expense declined to Euro 15.9 million (previous year: Euro 23.7 million). Earnings before interest expense, taxes, depreciation, and amortization (EBITDA) for the first nine months of 2003 amount to Euro 47.2 million (previous year: Euro 50.0 million), and consolidated net income to Euro 2.7 million (previous year: loss of Euro 3.0 million). Earnings per share come to Euro 0.19 (previous year: Euro -0.21).

Boosting its earning power is Dürr's highest priority. "We are doing everything in our power to cut costs, improve our business processes , optimize our location and product portfolios, and advance innovations. Only in this way can we achieve our earnings goals and maintain our leading market position," says Stephan Rojahn, CEO of Dürr AG.

Incoming orders and sales above previous year¥s figures

The Dürr Group's incoming orders increased by 8.1% in the first nine months of 2003 to Euro 1,918.8 million (previous year: Euro 1,775.1 million). Consolidated sales rose by 7.3% to Euro 1,530.8 million (previous year: Euro 1,427.2 million). This increase at a high level is primarily due to the overall positive development of systems business. Calculated at previous year¥s exchange rates, incoming orders would turn out higher by an additional Euro 209.9 million, and sales by an additional Euro 118.5 million.

Orders on hand in the Dürr Group amounted to Euro 1,734.0 million on September 30, 2003 (previous year: Euro 1,514.7 million; +14.5%). This high amount is primarily due to strong incoming orders in the Paint Systems business unit and is not uniformly distributed throughout the Group. Consequently capacity utilization in the individual business units, product lines, and regions continues to vary greatly.

The number of employees in the Dürr Group was up as of September 30, 2003 to 12,830 (previous year: 12,608). New projects in the Services business unit, which had 4,452 employees at the end of September (previous year: 3,996), are the reason for the increase. On the other hand, Dürr reduced personnel capacities in its four engineering business units by 234 compared with September 30, 2002 to 8,378 employees.

Dürr limited capital expenditures on property, plant, and equipment in the first nine months of 2003 to Euro 11.9 (previous year: Euro 12.8 million; -7.0%). One point of emphasis was the remodeling of our development center for painting technology in Bietigheim-Bissingen (Germany) (Euro 1.9 million).

Dürr increased research and development (R&D) expenditures posted in the consolidated statements of income to Euro 27.9 million in the first three quarters of 2003 (previous year: Euro 25.3 million) despite a continuing difficult economic environment. Added to that are project-related R&D expenditures. The most important innovation projects were the realization of an integrated wet-in-wet painting process as well as new and further developments in robot and dip-painting technologies and in final assembly conveyor systems.

Paint Systems business unit

At Euro 1,188.5 million, total incoming orders in the Paint Systems business unit were significantly higher than in the first nine months of 2002 (Euro 985.0 million). That is primarily due to a large order for three paint systems in North America received from General Motors in the first quarter of 2003.

The good development of systems business in North America more than offset the slight decline of incoming orders in Europe. Total sales rose by Euro 98.5 million to Euro 841.2 million. The third quarter developed better than the first half in respect to EBITDA, which came to Euro 23.5 million after the first nine months of 2003 and was thus only slightly lower than the previous year¥s amount (Euro 24.7 million). The result was burdened by adjustments for old orders in environmental systems business in the USA. Because of projects, the number of employees rose slightly to 2,792 as of September 30, 2003 (previous year: 2,782). It will fall to just over 2,700 by year's end (previous year: 2,837).

Final Assembly Systems business unit

In the Final Assembly Systems business unit, total incoming orders stood at Euro 351.2 million at the end of three quarters and were thus slightly above the previous year¥s figure (Euro 345.1 million). Total sales rose to Euro 264.1 million (previous year: Euro 250.0 million). A plus in total sales of about 20% is expected for the year as a whole. These increases are attributable to successes in all operating areas of the business unit: vehicle final assembly, conveyor systems outside final assembly business, and deliveries to the Paint Systems business unit. The business unit managed to expand its market share in the area of vehicle final assembly despite appreciable capital spending restraint in the automotive industry. It improved EBITDA significantly to Euro 7.2 million (previous year: Euro 4.1 million). The number of employees fell to 1,603 (previous year: 1,617) as of September 30, 2003 despite the growth of sales.

Services business unit

In the Services business unit, which generates the bulk of its sales in North America, the euro's revaluation against the US dollar had an appreciable impact. Due to translation effects, total incoming orders (Euro 106.2 million; previous year: Euro 109.3 million), total sales (Euro 106.2 million; previous year: Euro 107.5 million), and EBITDA (Euro 7.4 million; previous year: Euro 7.5 million) remained at their nine-month levels of 2002. At previous year¥s exchange rates, however, total incoming orders and total sales would be up by 17.4% each, and EBITDA by 21.6%. Because of new service orders, the business units raised its personnel capacities by 456 employees, primarily in China, Great Britain, Germany, and USA (previous year: 3,996) as of September 30, 2003.

Ecoclean business unit

While Ecoclean's total sales increased slightly in the first nine months to Euro 150.0 million (previous year: Euro 146.8 million), total incoming orders came to Euro 131.8 million and EBITDA to Euro 5.8 million, and were thus below their previous year¥s levels (Euro 172.3 million and Euro 7.8 million). The declines are substantially due to continuing weakness of the North American market.

The result also reflects the influence of growing price pressure. Ecoclean is countering the cautious capital spending behavior of many customers by developing innovative products featuring lower investment and operating costs and by reducing its own costs. The number of employees fell by 118 to 963 as of September 30, 2003 (previous year: 1,081) due to capacity adjustments in the USA and Spain.

Measuring Systems business unit

Because of continuing capital spending restraint in major customer sectors, total incoming orders in Measuring Systems declined to Euro 279.2 million in the first nine months of 2003 (previous year: Euro 292.7 million). At Euro 253.8 million, total sales were at their previous year¥s level (Euro 259.2 million) despite unfavorable exchange rates and difficult market conditions. In contrast to the unsatisfactory sales trend in Europe and North America, a plus was achieved in Asia, where Measuring Systems is continuously expanding its position. EBITDA rose to Euro -2.8 million from Euro -7.9 million in the year-earlier period. The business unit is meeting the stiff price competition with extensive cost-cutting measures. The number of employees declined to 2,965 as of September 30, 2003 (previous year: 3,072). Closing the pre-manufacturing operation in Darmstadt will eliminate roughly 350 more jobs by the end of 2004. The expenses for this measure will be charged to earnings in the fourth quarter 2003.

The Corporate Center's EBITDA for the first nine months of 2003 amounted to Euro 6.1 million (previous year: Euro 13.8 million). This figure primarily comprises headquarters costs and special projects.

Outlook

Dürr expects positive consolidated earnings before taxes for the year 2003 even after deduction of all one-time charges and the burdens caused by exchange rate movements. Sales will probably be slightly above previous year's level (2002: Euro 2,082.1 million).

You can find the complete Interim Report for the first nine months of 2003 on the Internet at www.durr.com.