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EANS-Adhoc: Market recovery and new ramp-ups contribute to 41% growth in ElringKlinger sales during first quarter of 2010
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Dettingen/Erms, May 10, 2010 +++ The ElringKlinger Group propelled its consolidated sales by 40.9% to EUR 182.7 (129.7) million in the first quarter of 2010. The company benefited from the global recovery of automobile markets as well as its strong positioning in Asia and new product ramp-ups. Profiting from cost streamlining and improved capacity utilization in production, the Group's operating result rose to EUR 23.4 (3.7) million, a more than sixfold increase compared to the same quarter a year ago, which had been severely impacted by the market crisis. The Group posted net income, after minority interests, of EUR 13.6 (2.0) million.
Despite the continued weakness within the truck market, the Original Equipment segment, which encompasses business activities with vehicle manufacturers, was able to drive sales revenue forward by 56.2% to EUR 136.4 (87.3) million in the first quarter of 2010. The Group achieved above-average gains in Asia and South America, in particular, but also within the North American automobile market, which is on track for recovery following its severe slump a year ago. Benefiting from an upturn in foreign sales, the Aftermarket segment recorded year-on-year revenue growth of 8.9% in the first quarter of 2010, taking its total to EUR 26.8 (24.6) million.
Significant improvement in earnings performance despite one-off charges At 28.4%, the increase in cost of sales was less pronounced than in the case of sales revenue, which grew by 40.9%. Alongside cost reductions, more extensive utilization of production capacities and new product ramp-ups proved to be the principal drivers. Despite rising material prices, the gross profit margin increased to 29.5% (22.6%), an increase compared to the figure of 28.8% recorded in the preceding quarter. In aggregate, hedging relating to alloy surcharges contained in prices charged for high-grade steel had a positive effect on the Group's operating result in the first quarter of 2010, equivalent to EUR 0.2 million.
Due to the partial-retirement scheme, which is a component of the 2010 collective wage agreement, the Group had to recognize appropriate provisions for the entire contractual term up to the end of March 2012; this resulted in a non-recurring increase in staff costs of EUR 1.8 million in the first quarter of 2010. In addition, provisions in connection with employee benefits agreed for the years 2008 and 2009, totaling EUR 2.4 million, were recognized as early as the first quarter of 2010. These two exceptional items, in combination with the termination of short- time work at the beginning of the year, contributed to higher staff costs and therefore also affected the Group's operating result.
The Group expended EUR 10.8 (9.4) million in research and development, 14.9% more than in the same quarter a year ago. Alongside the development of several new applications for existing technologies, ElringKlinger focused in particular on the expansion of its activities in the field of fuel cells and batteries. In negotiating its first serial production contract for cell connectors used in lithium-ion batteries, ElringKlinger secured a key project within this area during the first quarter of 2010.
Operating result benefits from higher capacity utilization Earnings before interest, taxes, depreciation and amortization (EBITDA) were up EUR 18.5 million on last year's result for the first quarter, taking the total to EUR 41.7 (23.2) million. Owing to the substantial investments seen in previous years, depreciation rose by EUR 3.0 million to EUR 19.4 (16.4) million in the first quarter of 2010.
Compared to the sluggish first quarter of 2009, rising sales, together with the concomitant improvement in the utilization of production capacities at most of the business units in the first quarter of 2010 , led to a pronounced rise in operating profit by EUR 19.7 million to EUR 23.4 (3.7) million which percentage-wise was more pronounced than the increase in sales. Earnings before interest and taxes (EBIT), including a total of EUR 1.1 million in negative foreign currency effects, amounted to EUR 22.3 (6.8) million. Thus, the EBIT margin rose to 12.2% (5.2%) in the first quarter of 2010, despite the exceptional items outlined above. Excluding the exceptional factors attributable to commodity price hedging, higher partial-retirement provisions as well as amounts provisioned for in connection with employee benefits, the EBIT margin stood at 14.4%.
Net finance cost stood at minus EUR 4.5 (-0.3) million in the first quarter of 2010. In this context, it should be noted that the first quarter of 2009 had benefited from positive foreign currency effects equivalent to EUR 3.1 million. While the Group's net interest result improved slightly, the remeasurement at the end of the reporting period of liabilities relating to the financing of ElringKlinger's acquisition of the SEVEX Group, Switzerland, produced finance cost of EUR 2.2 million. In total, earnings before taxes rose by EUR 15.5 million year-on-year to EUR 18.9 (3.4) million in the first quarter of 2010.
EUR 13.6 million in consolidated net income after minority interests Primarily due to the stronger earnings performance of ElringKlinger companies with below-average tax rates, the income tax rate fell to 25.5% (29.4%). On this basis, the ElringKlinger Group generated net income of EUR 14.1 million in the first quarter of 2010, compared to EUR 2.4 million in the same quarter a year ago. After minority interests of EUR 0.5 (0.4) million, net income (profit attributable to shareholders of ElringKlinger AG) in the first quarter of 2010 amounted to EUR 13.6 (2.0) million. This corresponded to earnings per share of EUR 0.24 (0.03).
Forecast for 2010 revised upwards The gradual upturn in order intake, already evident since the second quarter of 2009, continued during the first quarter. Compared to a lackluster order intake in the first quarter of 2009, that was strongly affected by the economic crisis, order intake for the first quarter of 2010 rose to EUR 200.5 (125.4) million. Thus, the upward trend also remained intact in relation to the fourth quarter of 2009 (EUR 173.0 million).
Based on the assumption that automobile markets will continue to recover and that economic conditions will remain stable, and in view of the positive performance of the first quarter of 2010, the ElringKlinger Group has revised upwards its revenue and earnings targets for the annual period as a whole. At present, ElringKlinger is targeting a rise in sales revenue of 10 to 13% (previously 7 to 10%). EBIT is to be expanded by 20 to 25% (previously 12 to 15%), i.e. at a more pronounced rate than sales revenue.
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ots Originaltext: ElringKlinger AG
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