Q1 2007: Dürr with good order cushion

05/10/2007

• Incoming orders well up year on year
• Operating earnings positive and improved

Stuttgart, May 10, 2007. The Dürr Group profited in the first quarter of 2007 from the strong demand in the automobile industry, especially from Eastern Europe. Incoming orders were up 18% to € 508.3 million after Dürr had already achieved growth of 33% in the same quarter last year. While sales revenue was level with the year-earlier quarter in constant currency, opera-ting earnings (EBIT before one-time expenses) improved and were positive to the tune of € 3.1 million. A loss of € 0.9 million had still been incurred in the first quarter of 2006. For 2007 the industrial equipment and machinery supplier expects sales growth of between 5 and 10% and a further significant earnings improvement.

The Paint and Assembly Systems division made the biggest contribution to the growth in order intake, with an increase of 20%; the Measuring and Process Systems division booked 10% more orders. At the two turnaround candidates, Factory Assembly Systems and Cleaning and Filtration Systems, new orders were up 89% and 20%, respectively.

Ralf Dieter, CEO of Dürr AG, commented: “We are very pleased with the order situation and have a good level of capacity utilization for the next twelve months. Business in Eastern Europe is acquiring growing importance. From this region alone we received orders worth € 150 million in the first quarter. To respond to the increasing demand we are strengthening our presence in Russia and will be represented in St. Petersburg as well as Moscow.

Orders on hand amounted to € 1,006.2 million at March 31, 2007 (March 31, 2006: € 840.2 million), an increase of € 201.0 million versus the end of 2006. Consolidated sales for the first quarter of 2007 came to € 304.1 million (Q1 2006: € 309.3 million). Sales at the Cleaning and Filtration Systems and Factory Assembly Systems business units were still down year on year.

The gross margin, which reflects the ratio of sales to the cost of sales, remained constant at 16.6%. The capacity underutilization in Cleaning and Filtration Systems and in Factory Assembly Systems had an impact here. An added factor was the execution of long-term paint system projects which had been taken on at poorer margins in spring 2006. On the other hand, the benefits from the FOCUS measures were felt in internal pro-cesses. Administrative and selling expenses decreased by 6.8% and 6.7%, respectively.

The net result came to € -2.1 million (Q1 2006: € -4.6 million). Cash flow from operating activities improved strongly by € 18.8 million to € -9.0 million. It was still influenced by the relatively weak revenue situation in the first quarter, which will probably improve significantly in the further course of the year.

The number of employees at March 31, 2007 was 2.1% lower than a year earlier at 5,670. Since the end of 2006 the number of employees has risen by 20 employees owing to the strong demand.

The equity ratio rose to 23.7% at March 31, 2007 (March 31, 2006: 22.4%). Net financial debt amounted to € 123.7 million at March 31, 2007 as compared with € 96.5 million at the end of 2006. Financing requirements were met fully from cash and cash equivalents.  

Unchanged positive outlook

In view of the investment projects announced by many automobile manufacturers Dürr expects that the Group’s order intake in 2007 will at least match the high level achieved in 2006. The company expects a significant earnings improvement in 2007. A further improvement is expected in 2008. This is supported by the fact that, given the good project situation, Dürr can be more selective in taking on orders. The target return for 2008 is unchanged at 4% based on earnings before taxes and 5% at the operating earnings level (EBIT before one-offs). Based on the new Group structure the pro forma EBITDA target return is 6.5%; previously, Dürr had targeted up to 8%.

TheDürr Group is one of the world’s leading suppliers of products, systems, and services for automobile manufacturing. Its range embraces important stages in the vehicle production process. As a systems supplier, Dürr designs and builds paint shops and final assembly plants. Dürr also supplies cleaning and filtration equipment used in the production of engine and transmission components as well as balancing and diagnostic systems for vehicle components. Business with automobile manufacturers and their suppliers accounts for about 90% of consolidated sales. Other important customer groups are the mechanical engineering sector and the chemical, pharmaceutical, coating, and aviation industries.  

Key figures in € m	Q1 2007	Q1 2006
Incoming orders	508.3	429.9
Orders on hand (March 31)	1,006.2	840.2
Sales revenues	304.1	309.3
Operating earnings (EBIT before one-time expenses)	3.1	-0.9
One-time expenses	0.1	0.6
Earnings after taxes	-2.1	-4.6
Earnings per share (in €)	-0.13	-0.29
Cash flow from operating activities	-9.0	-27.8
Cash flow from investing activities	-6.6	19.7
Cash flow from financing activities	-13.2	4.1
Equity (incl. minority interests) (March 31)	243.6	242.9
Net financial debt (March 31)	123.7	104.1
Net working capital (March 31)	155.5	166.7
Employees (March 31)	5,670	5,792

All statements refer to the continuing operations of the Dürr Group. The figures have been calculated on the basis of IFRS.