EANS-Adhoc: ElringKlinger buoyed by upturn in sales and cost reductions in Q3 2009

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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

02.11.2009

Dettingen / Erms, November 2, 2009 +++ Against the backdrop of
the severe slump in car sales within the international vehicle
industry, the ElringKlinger Group was faced with a decline in
consolidated sales revenue by 20.0% to EUR 419.2 (524.0)
million in the first nine months of 2009. Despite this
situation, the Group managed to keep earnings well within
positive territory, generating EBIT of EUR 42.9 (78.4) million.
Net income after minority interests amounted to EUR 21.6 (46.8)
million. The decline in sales slowed considerably over the
course of the third quarter. Up 15.3% on the figure for the
same period last year, which had been adversely affected by
exceptional factors, third quarter EBIT totaled EUR 20.3 (17.6)
million.

Demand picks up over course of the year
The decline in car production figures during the first nine
months of 2009 by 42.9% in the United States and 21.1% in Europe
as a whole prompted a tangible downturn in industry demand
within these regions. By contrast, the ElringKlinger Group
succeeded in maintaining its forward momentum in Asia with an
expansion of sales, particularly in China. The Group also
commenced work on the construction of two new production
facilities in China.

From the second quarter onwards the market as a whole showed
signs of a slight upturn in demand. Despite the protracted
weakness of the commercial vehicle sector and the downturn in
demand recorded by ElringKlinger Kunststofftechnik GmbH in the
field of mechanical and plant engineering, compared with the
second quarter Group sales revenue grew by EUR 13.1 million to
EUR 151.3 (173.8) million in Q3 2009. By contrast, sales revenue
was still down 12.9% on the third quarter of 2008.

In the first nine months of 2009, the ElringKlinger Group
channeled EUR 28.7 (25.2) million into research and development
projects such as fuel cells and battery components as well as
its diesel particulate filter activities, thus expanding R&D
expenses by 13.9% year on year. Capital expenditure in property
plant and equipment stood at EUR 60.5 (85.5) million, the focus
being on operational streamlining and business expansion within
Asia.

Break-even point lowered through cost savings
In response to the dramatic collapse of the market, the
ElringKlinger Group initiated an extensive cost-reduction
program as early as the end of fall 2008. The attendant cost
savings took increasing effect over the course of the first nine
months of 2009. Benefiting also from more moderate commodity
prices and price hedging in connection with alloy surcharges
within the area of high-grade steel, the Group's gross profit
margin gradually improved during the reporting period, rising
from 22.6% in the first quarter to 29.5% (30.0%) in the third
quarter of 2009.

As a result of settlement payments associated with commodity
price hedging, material expenses increased by an additional EUR
3.7 million in the second quarter and an additional EUR 1.3
million in the third quarter of 2009. Due to the rise in the
price of nickel and the concomitant changes to the fair value of
commodity-related derivatives, the Group was in a position to
reverse the majority of provisions recognized in 2008 under
IFRS. Consequently, other operating income increased by another
EUR 9.5 million in the second quarter of 2009 and by EUR 2.9
million in the third quarter. In the second quarter, the balance
between the reduction of provisions and settlement payments had
a positive effect on pre-tax earnings equivalent to EUR 5.8
million. In the third quarter, the positive effect on earnings
was EUR 1.6 million, which included income from the sale of a
contract initially entered into for the purpose of hedging
purchasing prices for raw materials.

Third-quarter EBIT increases year on year
Despite the significant drop in unit output and the associated
decline in capacity utilization within the area of production,
EBIT remained well above break-even in the first nine months of
2009. In the first nine months of 2009, ElringKlinger achieved
EBIT of EUR 42.9 (78.0) million - which includes positive
foreign-currency effects of EUR 0.9 million. In the third
quarter, negative foreign-currency effects of EUR 1.1 million
impacted adversely on EBIT. Despite this, the ElringKlinger
Group managed to post EBIT totaling EUR 20.3 (17.6) million in
the third quarter of 2009. Compared to the same period a year
ago, which had been impacted by non-recurring expenses of EUR
7.0 million in connection with the recognition of provisions
for commodity price hedging, this corresponds to EBIT growth of
15.3%. Within this context, the improvement in revenue as well
as cost-streamlining measures and the contribution from the
reversal of provisions for commodity-related hedging had a
positive effect. In the third quarter, the EBIT margin -
adjusted for the effect on earnings of the reversal of
provisions for commodity-related hedging as well as government
grants of EUR 2.0 million for development projects - was 11.1%.

Generating net cash from operating activities of EUR 96.2
(59.3) million in the first nine months of 2009, the
ElringKlinger Group exceeded last year's nine-month figure by
62.2%, thus revealing its financial capabilities in times of
economic crisis.

At EUR 32.1 (69.8) million, earnings before taxes for the first
nine months of 2009 remained 54.0% down on the figure posted
for the same period a year ago. By contrast, the third quarter
of 2009 saw pre-tax profit increase by 18.3% year on year to
EUR 16.8 (14.2) million.

The tax rate for the first nine months of 2009 stood at 28.7%,
which was slightly lower than the tax rate of 29.1% for the
same period a year ago. Thus, net income for the first nine
months of 2009 totaled EUR 22.9 (49.5) million. With income tax
expense remaining low in the third quarter of 2009, net income
after minority interests increased at a more pronounced rate
than pre-tax profit, up 24.7% to EUR 12.1 million, compared to
EUR 9.7 million in the same period a year ago.

Excluding minority interests, in the first nine months of 2009
profit attributable to the owners of ElringKlinger AG was down
53.9% on last year's nine-month figure and stood at EUR 21.6
(46.8) million. By contrast, the Group managed to lift this
figure by 34.5% year on year in the third quarter of 2009 to
EUR 11.6 (8.6) million.

In the first nine months of 2009, basic and diluted earnings
per share, calculated in accordance with IFRS, contracted from
EUR 0.81 to EUR 0.37. In the third quarter of 2009,
ElringKlinger recorded earnings per share of EUR 0.20 (0.15).

Order intake rises for third consecutive quarter
In the first nine months of 2009, order intake reached EUR
440.1 (515.2) million, thus falling 14.6% short of the figure
recorded for the same period a year ago. By contrast, in the
third quarter of 2009, incoming quarterly orders have risen for
the third time in a row to EUR 165.9 (160.1) million. Compared
to the previous quarter, order intake increased by EUR 17.1
million.

The direction of future sales trends became more discernible in
the nine months just ended, but, regardless of this, the
automotive markets still finds itself in a situation that makes
planning ahead very difficult. ElringKlinger anticipates that -
calculated on the basis of car production figures - the
European vehicle market will shrink by 15% to 20% in 2009 as a
whole, despite the expected forward momentum in the fourth
quarter. In North America, vehicle production in 2009 as a
whole is likely to remain 25% to 30% down on last year's figure
and is not expected to rebound at a more significant pace until
2010.

In the light of this market assessment and assuming that the
economy continues to stabilize during the remainder of the
year, within the current climate the ElringKlinger Group
anticipates that it will generate consolidated sales of between
EUR 540 and 580 million in 2009 as a whole. The EBIT margin is
projected to be 8 to 10%. The current Group-wide program aimed
at reducing costs will continue to make a significant
contribution in terms of partially offsetting the downturn in
demand. ElringKlinger anticipates that it will, at the very
least, achieve the target of EUR 10 million in savings planned
for 2009.

Ende der Mitteilung 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 Investor Relations / Corporate Communications

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
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
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Stuttgart / regulated dealing