EANS-Adhoc: ElringKlinger with positive net income in Q1 2009 despite slump in automobile markets

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ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
adhoc with the aim of a Europe-wide distribution. The issuer is solely
responsible for the content of this announcement.
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quarterly report

07.05.2009

Dettingen/Erms, May 7, 2009 +++ In the first quarter of 2009, the
dramatic downturn in the international automobile markets led to
a decline in consolidated sales of 20.3% to EUR 129.7 (162.8)
million within the ElringKlinger Group. The Swiss SEVEX Group,
which was included in the consolidated Q1 accounts for the first
time in 2009, as well as the expanded ownership interest in
ElringKlinger Marusan Corporation, Japan, contributed an
aggregate amount of EUR 17.6 million to sales. Despite adverse
market conditions, the Group recorded a positive operating result
and net income after minorities (profit attributable to owners of
the parent) of EUR 2.0 (18.9) million. At EUR 22.7 (26.1)
million, net cash from operating activities was 13.0% down on the
substantial figure posted in the same quarter a year ago.

Within the Original Equipment segment, which supplies vehicle
manufacturers, sales declined by 24.0 % in the first quarter of
2009 to EUR 87.3 (114.8) million. The aftermarket business
contracted just slightly by 5.8% to EUR 24.6 (26.2) million. In
contrast to the weak markets in Europe and North America,
ElringKlinger achieved revenue growth of 16.5% in Asia as a
whole, taking sales within this region to EUR 16.4 (14.1)
million.

The ElringKlinger Group invested EUR 9.4 (7.9) million in the
development of new products and technologies, including fuel
cells and battery components, which was 19.0% more than in the
same quarter a year ago. By contrast, capital expenditure on
property, plant and equipment as well as intangible assets in the
first quarter of 2009 was scaled back by EUR 1.8 million year on
year to EUR 22.8 (24.6) million.

Positive impact from lower commodity prices yet to materialize
The incipient reduction in raw material prices has yet to have a
significant positive impact on the Group's gross profit margin,
as material used in the first quarter of 2009 was mainly sourced
from existing inventories. As a result, the ElringKlinger Group
has not yet benefited from the general decline in prices
associated with nickel-based alloy surcharges. Owing to
settlement payments to be made in connection with commodity price
hedging, material expenses rose by another EUR 4.0 million in the
first quarter of 2009. Due to their more material-intensive
operations, the inclusion of the former SEVEX Group and
ElringKlinger Marusan Corporation within the consolidated group
contributed to the decline in the Group's gross profit margin to
22.6% (33.0%), too.

Positive operating result despite severe market weakness
Earnings before interest, taxes, depreciation and amortization
(EBITDA) were down 42.6% on last year's first-quarter result.
Owing to substantial investments, depreciation and amortization
rose by EUR 5.0 million in the first quarter of 2009 to EUR 16.4
(11.4) million.
In particular, lower capacity utilization in the majority of the
divisions as well as more extensive depreciation/amortization led
to a disproportionately large reduction in the operating result
in the first quarter of 2009, down 87.2% to EUR 3.7 (29.0)
million. Despite this, ElringKlinger succeeded in reaching
positive territory from an operating perspective, having
benefited from the timely implementation of measures such as the
non-extension of temporary employment contracts, the introduction
of short-time work at its German sites as well as the reduction
of material- and equipment-related expenses and cutbacks in
capital expenditure. Earnings before interest and taxes (EBIT),
which include EUR 3.1 million in foreign currency gains, amounted
to EUR 6.8 (29.2) million. Thus, the EBIT margin was 5.2%.

Despite the rise in interest expense by EUR 1.8 million to EUR
3.4 (1.6) million, the net finance result improved by EUR 1.1
million in total and stood at EUR -0.3 (-1.4) million. This was
attributable mainly to positive foreign exchange effects. The
recognition of liabilities in connection with purchase-related
funding of the Swiss SEVEX Group as at the reporting date
contributed EUR 1.2 million to finance income. Earnings before
taxes declined by 87.7% year on year, to EUR 3.4 (27.6) million.
The inclusion of the former SEVEX Group, Switzerland, contributed
EUR 1.1 million to earnings before taxes, while the proportionate
consolidation of ElringKlinger Marusan Corporation produced a
charge of EUR 0.4 million.

EUR 2.0 million in consolidated net income after minority
interests
The tax rate stood at 29.4% (28.6%). On this basis, the
ElringKlinger Group generated net income of EUR 2.4 million in
the first quarter of 2009, compared to EUR 19.7 million in the
same quarter a year ago. After minority interests, net income
(profit attributable to owners of the parent) amounted to EUR 2.0
(18.9) million. Basic and diluted earnings per share - with
regard to the profit attributable to owners of ElringKlinger AG -
amounted to EUR 0.03 (0.33) in the first quarter of 2009.

The continued downturn in demand for automobiles over the course
of the first quarter of 2009 was reflected in orders. Including
the contribution made by the newly consolidated entities of the
former SEVEX Group and the proportionately consolidated
ElringKlinger Marusan Corporation, Japan, order intake in the
first quarter of 2009 declined by 24.0% to EUR 125.4 (165.1)
million. The order backlog of the ElringKlinger Group contracted
by 17.5% to EUR 204.2 (247.4) million.

Outlook
Since the fourth quarter of 2008, the global vehicle markets have
been in a situation that provides little scope for forward
planning. Owing to the historically exceptional circumstances,
the issuance of forecasts remains difficult. In view of the
global recession and continued significant uncertainties as to
the short-term performance of the vehicle sector as a whole, the
ElringKlinger Group has made preparations for several different
scenarios in 2009. These range, in the best case, from matching
the revenue and EBIT figures of fiscal 2008 under the assumption
that the global automobile markets recover substantially 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 20 to 25%, coinciding with an additional contraction
of vehicle sales within the emerging markets. Should this last
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 revenues from planned
product ramp-ups as well as sales and earnings contributions of
the newly acquired SEVEX Group and ElringKlinger Marusan
Corporation, for which 2009 is the first time in which these
entities have been included in consolidated Q1 accounts (in 2008
effective from April 1 and May 1 respectively). In the first
three months of 2009, however, the markets declined at a more
pronounced rate than previously assumed as part of the negative
scenario. In January and February, aggregate vehicle sales
declined by more than 22% in Europe and by 39% in the United
States. The fall in vehicle production figures was even more
extensive. If the very low level of vehicle sales seen in the
first two months continues over 2009 as a whole, Group sales may
contract in the direction of 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 already initiated
within the area of material expenses, personnel expenses and
purchasing, as well as intensive working capital management.

For the purpose of stabilizing its earnings performance,
ElringKlinger has launched an extensive cost reduction program at
Group level and anticipates that the potential savings associated
with these measures will amount to approximately EUR 10.0 million
in 2009. In general, the company will not be extending temporary
employment contracts. Additionally, ElringKlinger AG has made use
of an option incorporated in the last collective-wage agreement,
which specifies that the second phase of the wage increase of
2.1% scheduled for May 2009 may be postponed to December 2009.
The Group plans to achieve further cost reductions by means of
process optimization. The decline in commodity and material
prices recorded for the first time in years is beginning to have
a positive medium-term effect on the overall cost situation.
Capital expenditure (excluding tooling) will be scaled back to
approximately EUR 40 (95) 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 significant fall in production output throughout most
of the customer base - as a result of extended factory vacations
and the scheduled reduction of working hours -, the ElringKlinger
Group is predicting weaker business performance in the first six
months of 2009 than in the second half of the year. The fact that
production figures for the majority of vehicle manufacturers
again remained significantly below the sluggish sales figures in
the first three months of 2009 and unsold stock has thus been
reduced to a certain extent would appear to suggest, in the
medium term, a gradual return to a more normal level of customer
delivery scheduling at ElringKlinger over the course of the
second half of 2009.

end of announcement euro adhoc
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ots Originaltext: ElringKlinger AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

For further information, please contact:

ElringKlinger AG Corporate Communications / Investor Relations

Stephan Haas

Max-Eyth-Straße 2

72581 Dettingen

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
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