EANS-Adhoc: Preliminary annual results for 2010: Upturn in automobile markets delivers above-average gains for ElringKlinger

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14.03.2011

Dettingen/Erms, March 14, 2011 +++ Fiscal 2010 saw the
ElringKlinger Group recover well from the crisis-induced effects of
sluggish sales within the international automotive industry, with
revenue up 37.4% to EUR 795.7 (579.3) million based on provisional
figures. Despite one-off charges, the Group's operating result stood
at EUR 116.0 (63.3) million, thus exceeding last year's figure by
83.3%. Net income after minority interests grew by 97.6% to EUR 65.6
(33.2) million.

Dynamic growth for Original Equipment In conjunction with several new
product start-ups, the surprisingly dynamic expansion of production
output within the automobile sector led to particularly strong growth
in the Original Equipment segment. Original Equipment recorded a
45.1% increase in sales, taking its total to EUR 606.9 (418.2)
million.

Benefiting from a significant rise in capacity utilization, alongside
measures implemented during the crisis for the purpose of
streamlining cost structures, the Group's financial performance
improved visibly compared to the previous year. The cost of sales
rose at a less pronounced rate than revenue, up 30.4% to EUR 556.1
(426.3) million.

Higher R&D expenditure on E-Mobility At EUR 43.7 (35.7) million,
ElringKlinger's research and development expenditure continued to
rise. In response to significant customer interest in the Group's new
cell contact systems for lithium-ion batteries, the workforce was
further expanded within the newly created E-Mobility division during
the fourth quarter of 2010.

Non-recurring expenses in the fourth quarter In the fourth quarter of
2010 earnings were impacted by one-off charges in connection with the
migration of shielding technology activities from the site in
Dettingen/Erms, Germany to El-ringKlinger Abschirmtechnik (Schweiz)
AG, Switzerland as well as relocation costs associated with Changchun
ElringKlinger Ltd. in China, where a new plant with double the
previous floor-space is scheduled to open in May 2011. In total,
these items resulted in other operating expense of EUR 1.8 million.
The discontinuation of the Aftermarket sales business of the Spanish
subsidiary ElringKlinger S.A.U. and the takeover of these functions
by ElringKlinger AG resulted in termination costs of EUR 0.5 million.

Furthermore, provisions of EUR 1.7 million were created - also in the
fourth quarter - in response to a ruling of the German Federal Labor
Court in December 2010 on the interpretation of the Framework
Collective Pay Agreement (Auslegung der Bestimmungen des
Entgeltrahmentarifab-kommens - ERA). The purpose of this one-off
provision is to hedge against potential settlement payments for the
company´s obligations under the structural fund established by the
Framework Collective Pay Agreement. The changes to accounting
policies formerly applied by the Group particularly with regard to
inventories, receivables, warranties and contingent losses resulted
in additional non-recurring expense of EUR 0.5 million in relation to
provisions. More extensive flexitime accounts as a result of higher
capacity utilization necessitated an increase in provisions by EUR
1.1 million in the fourth quarter.

Operating result up 83% In total, the Group's operating result rose
by EUR 52.7 million year on year to EUR 116.0 (63.3) million.
Compared to the previous year, which had been severely impacted by
the crisis, the Group's operating result thus expanded by 83.3% in
2010, i.e. at a more pronounced rate than revenue. The operating
margin reached 14.6% (10.9%). Earnings before interest and taxes
(EBIT), which in contrast to the operating result takes account of
currency gains and losses, was adversely affected by net currency
losses of EUR 9.3 (0.0) million in 2010. At EUR 106.7 (63.3) million,
EBIT grew by 68.6% in 2010. EBITDA rose by EUR 54.4 million to EUR
188.9 (134.5) million.

At EUR -22.1 (-13.9) million, net finance costs were significantly
higher than in the previous financial year. This item was impacted in
particular by foreign currency effects. The remeasurement at the end
of the reporting period of liabilities relating to the financing of
ElringKlinger's acquisition of the SEVEX Group, Switzerland, led to
finance costs of EUR 8.9 million, of which EUR 2.9 million were
attributable to the fourth quarter. As a result, earnings before
taxes for the ElringKlinger Group amounted to EUR 94.0 (49.4) million
in 2010. Compared to the previous financial year, this represented an
increase of 90.3%.

Net income up 97% Net income rose by 97.1% year on year, reaching EUR
68.6 (34.8) million. Profit attributable to minority interests
declined as a result of the additional interests acquired by
ElringKlinger AG in 2010. Consequently, profit attributable to
shareholders of ElringKlinger AG rose by 97.6% to EUR 65.6 (33.2)
million. This resulted in earnings per share of EUR 1.11 (0.58).

Order intake expands further in fourth quarter of 2010 The Group saw
a substantial recovery in its order intake. In the fourth quarter of
2010, incoming orders for the ElringKlinger Group reached EUR 227.3
(172.8) million, the highest ever level for a final quarter. In 2010
as a whole, order intake for the Group rose by 44.7% to EUR 886.6
(612.9) million.

Outlook Based on the assumption of continued stability in terms of
economic performance and an expansion of global vehicle production of
approximately 3%, ElringKlinger anticipates organic revenue growth of
between 5% and 7% in 2011. This will be complemented by a revenue
contribution of an estimated EUR 49 million from the consolidation of
the Metal Flat Gaskets division acquired from the Freudenberg Group.
As a result of the division's inclusion in the scope of consolidation
of the ElringKlinger Group, the Group's operating margin for fiscal
2011 as a whole will be temporarily diluted, due to the fact that the
divisional operating margin is currently lower than the aver-age
figure for the Group and in view of the purchase price allocation of
around EUR 1.5 million. The dilutive effect on the Group's operating
margin is expected to be equivalent to around 0.6 to 0.8 percentage
points. The objective is to lift the operating margin of the newly
acquired business towards a level of 10% by the end of 2011 with the
help of integration measures currently being implemented as well as
extensive automation and process alignment. The aim is to guide the
former Freudenberg sites towards the level of the ElringKlinger Group
in 2012, similar to the timeline applied to the integration of the
Swiss SEVEX Group in 2008.

Despite the aforementioned dilutive effects, material prices trending
higher and the fact that various products are still within the
start-up pipeline, Group EBIT is expected to grow at a more
pro-nounced rate than sales revenue, rising by 15 to 25%. The Group
anticipates that it can return to its pre-crisis EBIT margin of
between 16 and 18% in 2012.

A conference call has been scheduled for 10:30 CET on March 14, 2011,
for the purpose of presenting the Group's preliminary results. The
detailed results for the 2010 financial year will be published as
part of a Financial Statements Press Conference and Analysts' Meeting
on March 29, 2011.

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

Further inquiry note:

ElringKlinger AG
Investor Relations /Corporate Communications
Stephan Haas
Tel.: +49 (0) 7123 724 137
E.Mail: stephan.haas@elringklinger.com

Branche: Automotive Equipment
ISIN: DE0007856023
WKN: 785602
Index: MDAX, CDAX, Classic All Share, Prime All Share
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