EANS-Adhoc: Annual results for 2009: ElringKlinger defies industry crisis with cost streamlining and upturn in sales during second half

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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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30.03.2010

Dettingen/Erms, March 30, 2010 +++ Against the backdrop of the
severe slump in sales within the international vehicle industry, the
ElringKlinger Group was faced with a decline in sales revenue by
11.9% to EUR 579.3 (657.8) million in 2009. Despite this situation,
the Group achieved earnings before interest and taxes (EBIT) of EUR
63.3 (71.5) million. Net income after minority interests fell by
16.6% to EUR 33.2 (39.8) million.

Demand picks up over course of year With car production figures
plunging by more than a quarter in total within the vehicle markets
of Western Europe, the US and Japan during 2009, ElringKlinger was
impacted by a significant decline in demand, particularly in the
first half of the year. By contrast, the second half saw a marked
improvement in demand. The more favorable business performance of the
subsidiaries in Asia and South America as a result of market
conditions in these regions, in addition to the solid development of
the Group's Aftermarket segment, provided additional buoyancy.
Despite the continued weakness seen within the area of commercial
vehicles and at ElringKlinger Kunststofftechnik GmbH, revenue from
Group sales rose by 19.6% in the fourth quarter of 2009 compared with
the uninspired final quarter of 2008.

Continued investments and R&D during the crisis At EUR 35.7 (36.5)
million, ElringKlinger maintained its high level of expenditure on
research and development during the crisis, channeling funds into
projects such as fuel cells, particulate filter coating and battery
components, the aim being to further improve its competitive
position. In 2009, ElringKlinger received EUR 3.6 (1.2) million in
grants from government-funded programs for new development projects.
Capital expenditure on property, plant and equipment as well as
investment property remained well above average from a multiyear
perspective, at EUR 89.7 (132.2) million, and was directed primarily
at streamlining projects and preparations for new product start-ups.

Break-even point lowered through cost savings The ElringKlinger Group
responded to the severe market slump as early as the end of fall 2008
by initiating a comprehensive cost-reduction program targeted at
general expenses and staff costs, the positive effects of which were
seen over the course of 2009. As the year progressed, more moderate
material prices also contributed to the gradual improvement in
ElringKlinger's gross margin, which edged up from 22.6% in the first
quarter to 28.8% in the fourth quarter of 2009. Settlement payments
associated with commodity price hedging added an extra EUR 9.6
million to material expenses in 2009. Due to the rise in the price of
nickel and the concomitant changes to the fair value of
commodity-related derivatives, the Group used or reversed the
majority of provisions that had previously been recognized in 2008.
Correspondingly, other operating income rose by an additional EUR
13.2 million in 2009. The net result of the reduction in provisions
on the one hand and the settlement payments on the other was a
positive contribution of EUR 3.6 million (Q1 EUR -3.9 million, Q2 EUR
+5.8 million, Q3 EUR +1.6 million) to earnings before income taxes.
In total, there was no significant earnings effect from commodity
price hedging in the fourth quarter of 2009 (EUR +0.2 million).

EBIT contracts by 11.5% With sales beginning to improve,
cost-reduction measures gradually taking effect and material expenses
coming down at a more pronounced rate over the course of the year,
the Group´s operating result gradually improved. The operating result
also benefited from the above-mentioned reversal of provisions for
alloy surcharge hedging, which had been prompted by price
developments within the area of nickel. Compared to the previous
year, which, as outlined, had been impacted by the recognition of
provisions of EUR 15.9 million for commodity-related hedging
transactions, EBIT contracted by EUR 8.2 million to EUR 63.3 (71.5)
million in the period under review. The EBIT margin remained
unchanged year-on-year at 10.9%.

At EUR -13.9 (-15.8) million, net finance cost was lower than in the
previous year, having benefited from a reduction in net debt as well
as exchange rate differences. As a result, earnings before taxes for
the ElringKlinger Group amounted to EUR 49.4 (60.0) million in 2009.
Compared to the previous year, this corresponds to a decline of
17.7%, slightly more pronounced than in the case of sales.

At 29.5% (28.1%), the income tax rate was slightly higher in 2009.
Thus, net income stood at EUR 34.8 (43.2) million, which was 19.4%
down on last year's figure. Due to the additional interests acquired
by ElringKlinger AG, profit attributable to minority interests
declined to EUR 1.6 (3.3) million. Profit attributable to the owners
of the parent, ElringKlinger AG, i.e. net income after minority
interests, fell by 16.6% to EUR 33.2 (39.8) million in 2009. On this
basis, earnings per share amounted to EUR 0.58 (0.69) in 2009.

With net cash of EUR 148.8 (98.2) million from operating activities,
the ElringKlinger Group exceeded last year's figure by 51.5% and
reaffirmed its financial capabilities even in times of economic
crisis.

Dividend to rise After allocation of EUR 9.6 (2.3) million to revenue
reserves, net retained earnings, i.e. distributable profit, for
ElringKlinger AG amounted to EUR 11.5 (8.6) million. With the consent
of the Supervisory Board, the Management Board will propose to the
Annual General Meeting a higher dividend of EUR 0.20 (0.15) per share
for the 2009 financial year.

Order intake up for fourth quarter in succession Following a major
slump in the fourth quarter of 2008, which continued into the first
quarter of 2009, the rest of the year was marked by a substantial
recovery. In the fourth quarter of 2009, new orders for the
ElringKlinger Group reached EUR 172.8 (106.1) million, the highest
fourth-quarter level ever recorded by the Group. In 2009 as a whole,
order intake for the Group fell by 1.4% to EUR 612.9 (621.3) million
due to base effects.

Successful entry into battery technology Within the area of
combustion engines, ElringKlinger has been benefiting from the
growing trend towards more efficient, downsized and turbocharged
engines, having established an extensive product portfolio tailored
to this market. As regards hybrid vehicles, which are equipped with
both a combustion engine and an electric drive unit, as well as
purely electrically powered vehicles, the company will in future be
able to supply newly developed components for rechargeable
lithium-ion batteries. In creating a dedicated Battery Technology
division, ElringKlinger acknowledged from an organizational
perspective the growing importance of this new product group for the
company. The company succeeded in advancing to SOP level an
innovative solution to connect lithium- ion cells and modules.
Alongside cell connector modules, ElringKlinger also developed
high-performance plastic housing modules for the purpose of cell
mounting and covering. The advanced connector solution for
high-performance lithium-ion batteries is to be applied to hybrid
vehicles as well as purely electrically powered cars. Pursuing this
route, ElringKlinger has managed to take pole position ahead of many
competing concepts, as well as securing its first contract for the
supply of these components. The associated revenue potential from
this contract for 2011 is expected to be within the mid-single-digit
million range. ElringKlinger anticipates that its new technological
solution will also unlock opportunities relating to other projects.

Outlook for 2010 Although the direction of future sales trends became
more discernible over the course of 2009, the automobile market
remains in a situation that leaves confined scope for projections.
ElringKlinger believes there will be a significant shift in demand
from the largely stagnating triad markets towards the developing
countries of Asia and is preparing itself accordingly with the
construction of two new plants in China. For 2010, the ElringKlinger
Group anticipates organic sales growth of 7 to 10%. Earnings before
interest and taxes are expected to rise at a more pronounced rate of
12 to 15%. Within this context, growth will be driven primarily by
the company's subsidiaries.

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

Further inquiry note:

Stephan Haas

Telefon: +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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