EANS-Adhoc: Sales at ElringKlinger up 40% year-on-year after first nine months

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ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
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9-month report

29.10.2010

Dettingen/Erms, October 29, 2010 +++ The ElringKlinger Group
increased its consolidated sales by 39.8% to EUR 586.2 (419.2)
million in the first nine months of 2010. The sustained recovery
of vehicle markets, in conjunction with new product start-ups and
the Group's strong positioning in Asia, had a positive impact on
business. Improved capacity utilization at production level and
continued cost streamlining helped to propel earnings before
interest and taxes (EBIT) by 99.8% compared to the heavily crisis-
affected first nine months of 2009, taking EBIT for the period to
EUR 85.7 (42.9) million. The third quarter of 2010 saw revenue
increase by 33.8% to EUR 202.5 (151.3) million, while EBIT for
the same period totaled EUR 31.7 (20.3) million, up 56.2%.

Within the Original Equipment segment, which encompasses OEM
business with vehicle producers, sales rose by 49.7% to EUR 443.3
(296.2) million in the first nine months of 2010. The Group
achieved above-average growth rates in Asia and South America in
particular, but also in the US vehicle market, which recovered
visibly following its slump a year ago. Buoyed by an upturn in
foreign sales, revenue generated in the Aftermarket segment rose
by 14.0% to EUR 81.2 (71.2) million.

Marked improvement in earnings situation despite one-off charges

The ElringKlinger Group saw a continued improvement in its
financial performance during the first nine months of 2010. This
was attributable to the program of streamlining implemented
during the economic crisis and, even more so, to the dynamic
increase in the volume of components requested by car
manufacturers as part of their production scheduling. Production
of components supplied to the commercial vehicle industry also
gained momentum, although capacity utilization within this area
of business is still considerably lower than before the economic
crisis.

The cost of sales rose at a less pronounced rate than revenue, as
a result of which the gross profit margin for the first nine
months of 2010 increased to 30.7% (25.5%). Due to the partial-
retirement scheme for personnel employed in the metal and
electrical industry, as enshrined within the 2010 collective wage
agreement for this sector, in the first quarter of 2010 the Group
had to allocate partial-retirement provisions for the entire term
of the agreement until the end of March 2012, which resulted in a
non-recurring increase in staff costs of EUR 1.8 million. In
addition, provisions in connection with employee benefits agreed
retrospectively for the years 2008 and 2009, totaling EUR 2.4
million, were recognized in the first quarter of 2010.

The Group spent EUR 31.8 (28.7) million on research and
development in the first nine months of 2010, 10.8% more than in
the same period a year ago. The company received EUR 2.0 million
(of which EUR 0.6 million in Q3) in government grants for
projects relating to fuel cell and battery technology. Having
secured its first series production contracts for cell contact
systems used in lithium-ion batteries, ElringKlinger has
established a solid foundation for future growth within the field
of "E-Mobility".

Compared to the severely crisis-affected period last year,
operating profit surged by EUR 49.6 million to EUR 91.6 (42.0)
million in the first nine months of 2010. Recording EUR 34.0
(21.4) million in the third quarter of 2010, the ElringKlinger
Group succeeded in matching the substantial result achieved in
the second quarter (EUR 34.3 million), despite fewer working days
and lower contributions from government R&D grants.

Impacted by net foreign currency losses of EUR 6.0 million in the
first nine months of 2010, earnings before interest and taxes
fell slightly short of operating profit. By contrast, the group
had recorded positive foreign exchange effects of EUR 0.9 million
in the same period of 2009. Consequently, EBIT for the first nine
months of 2010 amounted to EUR 85.7 (42.9) million. Despite the
above-mentioned exceptional factors, the EBIT margin reached
14.6% (10.2%) in the first nine months of 2010. In the third
quarter of 2010, ElringKlinger increased EBIT by EUR 11.4 million
to EUR 31.7 (20.3) million. EBIT rose slightly compared to the
second quarter of 2010, despite the fact that staffing levels
were raised by 4.2% in response to more extensive production. The
EBIT margin for the third quarter was 15.7% (13.4%).

Earnings before taxes more than doubled after nine months

Net finance costs amounted to minus EUR 15.5 (-9.9) million for
the first nine months of 2010. While the Group's net interest
result improved during the first nine months of 2010, 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 6.0
million. Earnings before taxes rose to EUR 76.1 (32.1) million in
the first nine months of 2010. In the third quarter, pre-tax
earnings increased by 69.6% to EUR 28.5 (16.8) million.

Due to the significant rise in revenue contributed by
ElringKlinger Group companies located in countries with below-
average tax rates, the income tax rate for the current annual
period to date was lower than in the same period a year ago,
falling to 25.9% (28.7%). Therefore, after minority interests of
EUR 2.5 (1.3) million, net income for the first nine months of
2010 was EUR 53.9 (21.6) million. In the third quarter of 2010,
profit attributable to shareholders of ElringKlinger AG increased
by 69.8% to EUR 19.7 (11.6) million.

Basic and diluted earnings per share totaled EUR 0.94 (0.37) in
the first nine months of 2010. In the third quarter, earnings per
share stood at EUR 0.34 (0.20).

Annual forecast revised upward for third time

The increase in incoming orders continued over the course of the
first nine months of 2010. In the third quarter, order intake was
up 29.4% year-on-year, increasing to EUR 214.7 (165.9) million.

Based on the assumption that automobile markets will continue to
recover and the economic climate will remain stable,
ElringKlinger has again revised upward its revenue and earnings
targets for fiscal 2010. Driven by organic growth, sales revenue
is now expected to increase to between EUR 745 and 755 million
(previously EUR 690 to 710 million). The cylinder-head gasket and
exhaust system division of the Freudenberg Group will not
contribute to ElringKlinger Group revenue until the scheduled
closing of the acquisition (Q1 2011). Therefore, revenues from
this acquisition have not been included in the projected revenue
figure for 2010. Earnings before interest and taxes (EBIT) are
expected to increase at a more pronounced rate than sales in 2010
to between EUR 105 and 110 million (previously EUR 90 to 95
million).

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/Erms

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
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