EANS-Adhoc: ElringKlinger sales up 34% in first quarter of 2011

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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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3-month report

12.05.2011

Dettingen/Erms (Germany), May 12, 2011 +++ Benefiting from the
sustained strength of car markets as well as new product
rollouts, the ElringKlinger Group saw its sales revenue expand
by 33.8% to EUR 244.5 (182.7) million in the first quarter of
2011. The recently acquired metal flat gaskets business from the
Freudenberg Group was included in the consolidated group for the
first time and contributed EUR 14.4 million in sales revenue.
The Group's operating result rose by 39.7% to EUR 32.7 (23.4)
million. ElringKlinger propelled net income after minority
interests by 52.9% to EUR 20.8 (13.6) million.

The ElringKlinger Group recovered well from the adverse effects
of the sales crisis previously blighting the international
vehicle industry. Against the backdrop of expansive global car
production and several new product rollouts, the Original
Equipment segment in particular generated significant growth in
the first quarter of 2011. The dynamic rise in demand was
particularly evident in Asia, but also in the United States. In
total, revenue from sales in the Original Equipment segment
increased by 40.2% to EUR 191.2 (136.4) million and by 29.9%
adjusted for the acquisition. Thus, ElringKlinger again outpaced
global vehicle production in terms of percentage growth.

First-time contribution of metal flat gaskets business acquired
from Freudenberg

The acquisition by ElringKlinger AG of Freudenberg Group´s metal
flat gaskets business was closed effective from January 1, 2011,
and the acquired entities were included in the scope of
consolidation of the ElringKlinger Group as of the first quarter
of 2011. In total, the three acquired companies contributed
revenue of EUR 14.4 million to the consolidated sales of the
ElringKlinger Group, primarily in the area of Original
Equipment. The contribution made to earnings before taxes
generated by the ElringKlinger Group was minus EUR 1.1 million
and includes charges of EUR 0.2 million attributable to the
purchase price allocation. As part of measures implemented for
the purpose of restructuring and raising efficiency levels, the
Group recorded non-recurring staff costs of EUR 0.8 million in
the first quarter of 2011. The issue of cost savings and
synergies is currently being addressed.

Operating profit rises faster than sales revenue

The Group's financial performance remained solid in the first
quarter of 2011. Alongside measures implemented throughout the
Group for the purpose of raising efficiency levels, higher
capacity utilization had a positive effect on earnings. By
contrast, the Group was faced with rising costs with regard to
personnel and materials. Consequently, the cost of sales rose by
37.9% to EUR 177.7 (128.9) million. Having been brought forward
by ElringKlinger from April to February 2011, the collective
wage increase of 2.7% for the Group's German sites resulted in
higher staff costs in the period under review. Provisions for
the staff profit-sharing bonus of EUR 1,000 per employee for
members of the ElringKlinger AG, ElringKlinger Kunststofftechnik
GmbH and Elring Klinger Motortechnik GmbH workforce, as agreed
for the financial year 2010, were recognized as early as the
first quarter of 2011, and resulted in expenses of EUR 2.5
million in total.

The ElringKlinger Group increased its research and development
costs by 11.1% to EUR 12.0 (10.8) million. Alongside R&D
directed at several new applications for existing technologies,
the Group focused in particular on expanding its activities in
the new area of E-Mobility, which now employs 50 engineers and
technicians. While this area incurred significant input costs,
it has yet to generate tangible sales; the first revenue
contributions are scheduled for the second half of the year.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) were up EUR 11.6 million on last year's figure for the
first quarter, taking the total to EUR 53.3 (41.7) million.

On the back of revenue growth and solid utilization of
production capacities, the Group once again recorded a
disproportionately high increase in its operating profit when
compared to the rate of expansion in sales revenue in the first
quarter of 2011. Operating profit rose by 39.7% or EUR 9.3
million to EUR 32.7 (23.4) million. As a result, the Group's
operating margin stood at 13.4% in the period under review,
despite a significant increase in material costs, the expenses
associated with the staff profit-sharing bonus and the downward
pressure exerted on earnings by the acquisition of the former
Freudenberg division. Adjusted for the dilutive effects of the
Freudenberg acquisition, ElringKlinger's core business achieved
an operating margin of 14.7%.

Earnings before interest and taxes (EBIT), which in contrast to
the operating result takes account of foreign exchange gains and
losses - increased by 43.5% to EUR 32.0 (22.3) million, a figure
that includes net foreign exchange losses of EUR 0.7 million.
The EBIT-margin for the first quarter of 2011 thus came in at
13.1%. Adjusted for the dilutive effects from the acquisition it
stood at 14.4%.

As a result of lower interest expenses, net finance costs
improved to EUR 3.8 (4.5) million in the first quarter of 2011.
Earnings before taxes thus rose by 52.9% to EUR 28.9 (18.9)
million.

The ElringKlinger Group generated net income of EUR 21.4 million
in the first quarter of 2011, compared to EUR 14.1 million in
the same quarter a year ago. After minority interests of EUR 0.7
(0.5) million, profit attributable to the shareholders of
ElringKlinger AG amounted to EUR 20.8 (13.6) million. Basic and
diluted earnings per share - based on the higher figure of
63,359,990 shares outstanding after the seasoned equity offering
of October 6, 2010 - stood at EUR 0.33 (0.24).

Positive outlook for business: order intake expands further

Order intake remained robust, rising by 29.9% to EUR 260.5
(200.5) million. As at March 31, 2011, order backlog stood at
EUR 369.0 (260.0) million, up 41.9% on the figure recorded in
the same period a year ago.

On the basis of a stable economic performance and the growth
rates anticipated in the automotive markets, the ElringKlinger
Group expects to generate organic revenue growth of between 5 and
7% in 2011. This will be complemented by a revenue contribution
of approx. EUR 50 million from the consolidation of the Metal
Flat Gaskets division acquired from the Freudenberg Group. Due to
the fact that the divisional operating margin is still
considerably lower than the average figure for the Group, the
total operating margin in 2011 will be temporarily diluted by an
estimated 0.6 to 0.8 percentage points. The objective is to
gradually increase the operating margin of the newly acquired
business to around 10% by the end of 2011 and to guide it towards
that of the ElringKlinger Group in 2012 with the help of
integration measures already initiated as well as extensive
automation and an alignment of internal production processes.

Despite the aforementioned dilutive effects, start-up costs in
the area of E-Mobility and the upward trend in commodity prices,
Group EBIT is expected to rise by 15 to 25%, i.e. at a more
pronounced rate than sales revenue targeted by the Group.

Closing of majority takeover of Swiss-based Hug Group

Acquisitions may produce additional revenue and earnings
contributions. Following approval by the Federal Cartel Office,
the transaction relating to the acquisition by ElringKlinger AG
of a 66.7% interest in the Hug Group, a Swiss exhaust treatment
specialist, was closed on May 11, 2011. The Hug Group expects to
generate sales revenue of around CHF 60 million (approx. EUR 46
million) in its current financial year. ElringKlinger anticipates
that the inclusion of the acquired entity in its consolidated
group will take place effective from May 1, 2011, as a result of
which Hug will contribute to the Group's revenue and earnings in
2011 on a pro-rata basis.

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
Max-Eyth-Straße 2
72581 Dettingen
Phone: +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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