Dürr well positioned after record year in 2008 – action plan for 2009

03/18/2009

• Good capital structure and secure long-term financing improve market opportunities
• Action plan: Cost reduction, capacity adjustment, product and market offensive
• Order situation expected to pick up as from Q2 2009

 

Stuttgart, March 18, 2009 – After a successful 2008 Dürr is facing the global economic downswing strengthened and proactively. The Group has a solid financial position, with an equity ratio of over 31%, low financial debt, and firmly committed credit lines until 2011. “The automobile and aicraft industries will also be placing important strategic projects in 2009 where Dürr has good chances of success”, Dürr’s CEO Ralph Dieter said when presenting the results for 2008. A detailed action plan has been initiated providing not only for spending cuts and capacity reductions but also for a product and market offensive to generate additional demand. Dürr expects a moderate decline in business volume and earnings in 2009.

“Dürr is well prepared for the crisis and will emerge from it strengthened. Over the past years we have made the Group much leaner, more flexible and efficient. Numerous innovations have also been brought to market that offer lower life cycle costs for our customers and are energy efficient. We will be marketing them intensively,” Dürr’s CEO Dieter commented. Latest innovations include the EcoDryScrubber energy-saving painting booth concept, energy audits, and energy-saving balancing and cleaning machines for fuel-efficient automobile engines. As part of its “Dürr 2010” strategy Dürr is also expanding its business with the aircraft industry as well as with Japanese automobile manufacturers. Here, the company recently signed a cooperation agreement with Parker Engineering of Japan. Internally, Dürr is focusing on strict cost containment, tight inventory and receivables management, and flexible working time instruments. In addition, the company has downsized its previously loss-making final assembly conveyors business, concentrating on profitable core products. Capacities in France and the USA are being adjusted to demand. This will result in 250 job cuts by the end of the first quarter of 2009.

Targets for 2008 largely achieved

Dürr largely achieved its targets in 2008. Sales were increased by 8.5% and EBIT by 30%. Group net profit more than doubled to € 46.3 million. On this basis, Dürr will be proposing a dividend of € 0.70 per share for 2008 (2007: € 0.40 per share) to the Annual General Meeting on April 30.

The equity ratio and net financial debt reached their best year-end levels for ten years at 31.4% and € 34.4 million, respectively. Operating cash flow in 2008 was clearly positive at € 30.9 million even though the automobile industry postponed several ready-to-sign orders in December so the expected prepayments were not received. € 10 million of the € 200 million credit line Dürr negotiated in September 2008 was drawn at the end of 2008. “Our financial strength is an important competitive advantage today. This is apparent from talks with our customers, who are seeking solid partners in view of the market downturn,” Dürr’s CFO Ralph Heuwing commented.

Thanks to strict cost management, selling and administrative expenses rose by 1.2% and thus at a much slower pace than sales. Excluding one-off expenses of € 9.4 million, most of which was attributable to the early redemption of 50% of Dürr’s corporate bond, the financial result improved by € 4.1 million to € -16.9 million. This was mainly due to the lower average net debt. Adjusted for the deliberately reduced final assembly conveyors business, new orders were down 14% to € 1,464.0 million, for which the postponement of orders worth about € 200 million at the end of the year was responsible.

Outlook

Dürr expects a moderate decline in business volume and earnings in 2009. Current talks with customers in the automobile industry confirm that a number of strategically important projects should be awarded in the course of this year. From today’s vantage point, Dürr therefore expects new orders to pick up from the second quarter. The orders on hand worth € 925 million at the end of 2008 and the recurring services business, which is being further expanded, cover a good part of 2009 sales. The final assembly/conveyors business and the aircraft business, which is still in the process of being built up, will achieve the turnaround in 2009 after combined losses of roughly € 10 million in 2008. In addition, the global IT harmonization, more efficient business processes, and capacity adjustments will produce positive earnings effects. The financial result will improve thanks to the bond redemption and the resulting reduction in interest expense.

The Dürr Group is a supplier of plant and equipment that commands leading global market positions in its areas of activity. Business with the automotive industry accounts for about 85% of its sales. Dürr also supplies innovative manufacturing and environmental technologies for the aircraft, mechanical engineering, chemical and pharmaceutical industries. The Dürr Group operates in the market through two divisions. The Paint and Assembly Systems division supplies production and painting technologies, mainly for automotive body & chassis manufacturing. The equipment and systems supplied by the Measuring and Process Systems division are used, among other things, for engine and transmission production and for final vehicle assembly. Dürr is present in 47 locations in 21 countries around the world. The group achieved sales of € 1.6 billion with approximately 6,100 employees in 2008.

Contact:

Dürr AG

Günter Dielmann/Mathias Christen

Corporate Communications & Investor Relations

Phone +49 (0)711 136-1785/-1381

Fax +49 (0)711 136-1716
E-mail corpcom(at)durr.com   

 

 

KEY FIGURES (IFRS)

All figures refer to the Dürr Group’s continuing operations.

  

in € million	2008	2007	Changes in %
Dürr Group
Incoming orders	1,464.0	1,781.5	-17.8
Orders on hand (December 31)	925.0	1,082.0	-14.5
Sales revenues	1,602.8	1,476.6	8.5
EBIT (Earnings before financial result and tax)	72.7	55.7	30.4
Earnings after tax	33.7	21.2	59.0
Group earnings after tax (including discontinued operations)	46.3	22.2	108.6
Cash flow from operating activities (operating cash flow)	30.9	85.9	-64.0
Free cash flow	-14.5	40.6	-
Capital expenditure	24.3	26.5	-8.3
Total assets (December 31)	1,088.0	1,074.8	1.2
Equity (with minority interests) (December 31)	341.4	257.1	32.8
Net financial debt1 (December 31)	34.4	61.8	-44.3
Net working capital (December 31)	151.8	128.9	17.8
ROCE (return on capital employed) (December 31)	16.8	15.0	-
Employees (December 31)	6,143	5,936	3.5
Earnings per share (in €)	1.81	1.33	36.1
Group earnings per share (including discontinued operations) (in €)	2.57	1.39	84.9
Dividend per share (in €)	0.70	0.40	75.0
Division  Paint and Assembly Systems
Incoming orders	1,028.0	1,362.5	-24.6
Sales reveneues	1,191.6	1,088.9	9.4
EBIT ( Earnings before financial result and tax)	48.6	32.7	48.6
Employees (December 31)	3,595	3,551	1.2
Division Measuring and Process Systems
Incoming orders	436.0	419.0	4.1
Sales revenues	411.2	387.7	6.1
EBIT (Earnings before financial result and tax)	30.8	23.2	32.8
Employees (December 31)	2,499	2,338	6.9

 

¹ Excluding finance leases.

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