EANS-Adhoc: ElringKlinger AG / ElringKlinger gears up for weak automotive markets after fiscal 2008

--------------------------------------------------------------------------------
Disclosure announcement transmitted by euro adhoc. The issuer is responsible
for the content of this announcement.
--------------------------------------------------------------------------------

annual report

30.03.2009

Dettingen/Erms, March 30, 2009 +++ Consolidated sales generated
by the ElringKlinger Group in fiscal 2008 rose by 8.2% to EUR
657.8 (607.8) million as a result of contributions from the
acquisition of the Swiss SEVEX Group and the expansion of the
interest held in ElringKlinger Marusan Corporation, Japan. In
the fourth quarter, business performance was impacted by the
severe slump in demand recorded in automobile markets in North
America and Europe. The operating result fell by 38.3% in 2008.
By contrast, cash flow from operating activities was close to the
record level posted a year ago.

Within the Original Equipment segment, which encompasses OEM
business with vehicle producers, sales rose by 9.4% to EUR 476.5
(435.5) million. Buoyed in particular by growth in Eastern Europe
and the domestic market, the Aftermarket segment managed to
expand by 3.5% to EUR 98.1 (94.8) million. The ElringKlinger
Group achieved its most visible growth in the Asian markets. In
this region, sales were propelled by 21.0% to EUR 73.7 (60.9)
million.

Compared to the previous year, the ElringKlinger Group invested
EUR 6.6 million more in the development of new products and
technologies, among them fuel cells and battery components.
Research and development costs increased by 22.3% to EUR 36.5
(29.9) million. Capital expenditure on property, plant and
equipment was raised by EUR 41.3 million to EUR 132.2 (90.9)
million. The emphasis was on replacement and expansion
investments at the Group's sites in Germany and Asia, in addition
to preparations for new product ramp-ups at enterprises within
the recently acquired SEVEX Group in the United States and China.

In the fourth quarter of 2008, the significant downturn in demand
for new vehicles prompted a reduction in the volume of components
requested by the vehicle industry as part of their production
scheduling. In turn, this affected also the international
subsidiaries and associated companies of the ElringKlinger Group.
Despite this situation, net cash from operating activities
amounted to EUR 98.2 (99.3) million, which was comparable to the
high level achieved in the previous financial year.

Operating result down
Commodity prices still hovering well above the long-term average
together with significantly higher energy costs had an adverse
effect. Earnings were also put under pressure by provisions of
EUR 15.9 million for commodity-related hedging of high-grade
steel alloy surcharges. The special payment agreed as part of the
most recent collective wage settlement resulted in non-recurring
expenses of EUR 1.1 million in the fourth quarter of 2008. The
operating result contracted by EUR 47.2 million, or 38.4%, to EUR
75.8 (123.0) million in 2008. Before the purchase price
allocation (EUR 3.6 million) in connection with the corporate
acquisitions and adjusted for the non-recurring effects in 2008 -
bargain purchase associated with interests acquired in Marusan
Corporation, Japan (EUR 5.8 million), one-time payment relating
to the collective pay increase (EUR 1.1 million) and one-off
income from insurance benefits (2008: EUR 0.7 million; 2007: EUR
5.0 million) - the operating result stood at EUR 74.1 (118.0)
million. The operating margin came in at 11.5%. Excluding the
expenses associated with recognition of provisions for
commodities-related hedging transactions (EUR 15.9 million), the
adjusted operating result fell by 23.7% year on year to EUR 90.0
million. Deducting from the operating result an amount of EUR 4.3
million attributable predominantly to negative foreign currency
effects, EBIT stood at EUR 71.5 (121.0) million in fiscal 2008.

As a result of higher interest expenses, net finance costs
amounted to EUR 15.8 (8.1) million. This figure included a
foreign currency loss of EUR 5.0 million attributable to the
closing-rate recognition of purchase price financing in
connection with the acquired SEVEX Group, denominated in Swiss
francs. Thus, the ElringKlinger Group achieved earnings before
taxes of EUR 60.0 (114.9) million. Adjusted for the non-recurring
factors outlined above, earnings before taxes and purchase price
allocation stood at EUR 58.2 million. This corresponds to a
decline of 47.0% compared to the equivalent adjusted figure in
fiscal 2007 (EUR 109.9 million). Without the expenses
attributable to the provision recognized in consideration of
commodities-related hedging transactions (EUR 15.9 million),
adjusted earnings before taxes amounted to EUR 74.1 million in
2008.

The Group's income tax rate fell to 28.1% (30.1%) in 2008. Net
income declined by 46.2% to EUR 43.2 (80.3) million. After

eliminating minority interest, profit attributable to
shareholders of ElringKlinger AG amounted to EUR 39.8 (75.9)
million. Before purchase price allocation and having eliminated
the non-recurring factors, profit attributable to shareholders of

ElringKlinger AG was EUR 38.7 (67.2) million. The previous year's
figure had included one-time items equivalent to EUR 3.2 million
from insurance reimbursements for the factory fire in Runkel and
EUR 5.5 million in connection with the remeasurement of deferred
taxes. Earnings per share declined to EUR 0.69 in 2008 (2007: EUR
1.32, adjusted for 1:3 stock split).

Proposed dividend of EUR 0.15
With the consent of the Supervisory Board, the Management Board
will propose to the Annual General Meeting a dividend of EUR 0.15
(2007: EUR 0.47, adjusted for 1:3 stock split) per share. The
proposed dividend takes account of the decline in net income and
the very challenging conditions currently experienced within the
industry as a whole.

Order backlog down 15% year on year
The sudden slump in demand for automobiles in the fourth quarter
of 2008 was reflected in the direction taken by incoming orders.
Order intake for the Group as a whole was down 3.6% to EUR 621.3
(644.7) million. Order backlog within the ElringKlinger Group
contracted by 14.9%, falling to EUR 208.6 (245.1) million as at
December 31, 2008.

Difficult outlook for 2009
Since the fourth quarter of 2008, the global vehicle markets have
been in a situation that provides little scope for forward
planning. The relatively good basis for planning that existed until
now has been eroded mainly by the significant fluctuation - both
upward and downward - in the volumes requested by vehicle
manufacturers as part of their forward production scheduling as
well as adjustments to orders by customers. Owing to the
historically exceptional market circumstances, the issuance of
forecasts is very difficult. In view of the global recession and
uncertainties as to the short-term performance of the vehicle
sector as a whole, ElringKlinger is currently making preparations
for several different scenarios.

These range, in the best case, from matching the sales and EBIT
figures of fiscal 2008 under the assumption that the global
automobile markets recover significantly by the beginning of the
second half of 2009 to the scenario of a decline in vehicle
production within the Northern American and European markets by a
further 20 to 25%, coinciding with a contraction of vehicle sales
within the emerging markets. Should this latter scenario eventuate,
ElringKlinger anticipates Group sales in the region of EUR 580 to
600 million and an EBIT margin of 8 to 10% for fiscal 2009 as a
whole. This includes sales revenues from planned product launches
as well as sales and earnings contributions from the SEVEX Group
and ElringKlinger Marusan Corporation. In the first two months of
2009 the markets declined at a significantly more pronounced rate
than previously assumed as part of the negative scenario. In
January, vehicle sales declined by more than 25% in Europe and by
37% in the United States. The fall in vehicle production figures
was even more extensive. If this extremely low level of vehicle
sales continues over 2009 as a whole, ElringKlinger cannot rule out
that Group sales recede towards EUR 500 million. Even in this case,
ElringKlinger will be targeting an EBIT margin of 5 to 8%,
supported by a Group-wide streamlining program of EUR 10 million
already initiated with regard to general and personnel expenses and
in the area of purchasing, as well as more intensive working
capital management. Capital expenditure (excl. tools) is to be
reduced from approx. EUR 95 million in 2008 to a maximum of EUR 40
million in 2009. Investments made for the purpose of company
streamlining as well as expenses earmarked for research and
development will remain unchanged.

Due to the fall in production output at vehicle manufacturers as a
result of extended factory vacations, short-time working and
current stock levels, the ElringKlinger Group anticipates that
business performance in the first six months of 2009 will be
significantly weaker than in the second half. The first signs of a
gradual upturn in the automobile market are not expected until the
second half of 2009 and, more visibly, the year 2010. The decline
in commodity and material prices recorded for the first time in
many years is beginning to have a positive medium-term effect on
the overall cost situation.

Within this challenging environment, it has become evident, that
technological expertise, financial strength and a solid equity base
are increasingly important when it comes to acquiring new customer

projects and development contracts. ElringKlinger has the
opportunity to benefit from this development and enhance its
competitive position. Offering a range of products designed to
contribute significantly to the reduction of fuel consumption and
CO2 emissions, the company considers itself well positioned to
again generate organic growth of 5 to 7% in the medium term, as
well at the very least, proportionate growth in earnings.

end of announcement euro adhoc
--------------------------------------------------------------------------------

ots Originaltext: ElringKlinger AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Stephan Haas

Phone: +49 (0) 7123 724 137

E-Mail: stephan.haas@elringklinger.de

Branche: Automotive Equipment
ISIN: DE0007856023
WKN: 785602
Index: MDAX, Classic All Share, Prime All Share
Börsen: Börse Frankfurt / regulated dealing/prime standard
Börse Berlin / free trade
Börse Düsseldorf / free trade
Börse München / free trade
Börse Stuttgart / regulated dealing