EANS-News: ElringKlinger benefits from international positioning and increases sales by 9.1% in fiscal 2012

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annual report

Dettingen/Erms (euro adhoc) - Dettingen/Erms, March 28, 2013 +++
In 2012, the ElringKlinger Group again saw its business expand at a
faster rate than global vehicle production. Despite the protracted
weakness of the European automotive market, the Group managed to
increase its sales revenue by 9.1% to EUR 1,127.2 (1,032.8)million,
which was slightly above target. Earnings before interest and taxes
(EBIT) stood at EUR 136.0 (148.7) million. Adjusted for non-recurring
income from the sale of the Ludwigsburg industrial park in the
previous year (EUR 22.7 million), EBIT edged up by 7.9%. The Group's
adjusted net income for the annual period, after non-controlling
interests, rose by 9.6%.

Original Equipment remains growth driver

Benefiting from growth of around 4% in global vehicle production
and a significant number of new product ramp-ups, sales revenue
generated in the largest of the Group's segments, Original
Equipment, surged by EUR 79.7 million to EUR 906.9 (827.2)
million. In this context, the Cylinder-head Gaskets division
expanded at the most pronounced rate in percentage terms.

Significant gains in Asia and Americas

The widespread malaise affecting vehicle markets in Western
Europe, which has seen car sales contract by almost a quarter in
the last five years, also had an impact on ElringKlinger's sales
performance. However, whereas sales generated in Europe
(excluding Germany) fell by almost 1% during the financial year
2012 as a whole, the Group managed to expand revenue by 24.9% in
Asia and by 19.9% in the NAFTA region over the same period.
Factoring in exports, the ElringKlinger Group now generates
almost half of its Original Equipment sales in Asia and the
Americas.

Acquisitions contribute to revenue growth in 2012

The consolidation of those acquired companies that had not been
included in the Group financial statements in 2011, or that had
only been accounted for on a pro-rata basis, contributed an
incremental EUR 19.3 million to Group sales in 2012. In 2011,
the Swiss exhaust gas purification specialist Hug Engineering AG
had only been included in the scope of consolidation for a
period of eight months, while the Hummel-Formen Group had only
been accounted for in the Group accounts for three months. The
company formerly trading as ThaWa GmbH was consolidated as from
January 1, 2012. In the 2012 financial year as a whole, these
entities contributed EUR 48.2 million to Group revenues.
Including the former Freudenberg companies purchased at the
beginning of 2011, the acquired entities accounted for EUR 98.0
million in sales revenue. The contribution made by acquired
companies to Group earnings before taxes remained in negative
territory at minus EUR 4.2 million, despite gradual improvements
made within this area. Of this figure, a total of EUR 2.3
million was attributable to purchase price allocations.

Wheras the German and Italian site of the former Freudenberg
entities were already clearly profitable in 2012, the French
subsidiary ElringKlinger Meillor SAS suffered from the effects
of an anemic vehicle market in Western Europe and the reduction
of stock levels seen among some customers, and thus posted
negative earnings before taxes. By contrast, the performance of
exhaust abatement specialist Hug Engineering AG was more
encouraging, with the company achieving turnaround in the fourth
quarter, when Hug made its first positive contribution to group
earnings before taxes. The company secured a number of contracts
for the supply of exhaust gas purification systems for power
plants, ships and locomotives during this period.

Adjusted operating result for 2012 up 8.2%

The ElringKlinger Group also succeeded in translating revenue
growth into an improved operating result. The Group posted an
operating result of EUR 138.9 (151.1) million. In this context,
it should be noted that the previous year had included a one-
off exceptional gain of EUR 22.7 million from the sale of the
Ludwigsburg industrial park. Adjusted for this non-recurring
item, the Group managed to improve its operating result by
8.2%.

Adjusted EBIT up by 7.9%

In 2012, earnings before interest and taxes were adversely
affected by foreign exchange losses of EUR 2.9 million.
Therefore, at EUR 136.0 (148.7) million, EBIT was noticeably
lower than the Group's operating result. Compared to the
previous year's figure (EUR 126.0 million), adjusted for the
one-time gain on disposal of the industrial park, this
corresponds to an increase of 7.9%. As a result of the weaker
fourth quarter EBIT did not increase to the extent originally
targeted (EUR 145 to 150 million). The adjusted EBIT margin
remained virtually unchanged at 12.1% (12.2%). Adjusted for the
dilutive effect that the acquired entities had on earnings, the
ElringKlinger Group achieved an EBIT margin of around 13.5% in
its core business.

Adjusted net income after non-controlling interests outpaces
revenue growth

Pre-tax earnings thus amounted to EUR 123.8 (136.6) million.
Excluding the above-mentioned exceptional gain recorded in the
previous year, the ElringKlinger Group managed to increase its
earnings before taxes by 8.7%. With the tax rate having fallen
to 27.8% (28.6%), net income after non-controlling interests
totaled EUR 85.9 (94.9) million. Adjusted for the one-time gain
of EUR 16.5 million after taxes in the previous year, the Group
saw net income, after non-controlling interests, expand by 9.6%.

Operating cash flow up by more than half

Net cash from operating activities was significantly higher than
in the previous year, rising by 50.7% to EUR 112.3 (74.5)
million. Although slightly down on the previous year's figure,
capital expenditure remained high in fiscal 2012. The Group
invested EUR 103.1 (112.7) million in new machinery and
equipment for the introduction of new products and additional
automation of production processes.

Order intake remains positive

In 2012 as a whole, order intake within the ElringKlinger Group
rose by 4.2% to EUR 1,134.8 (1,089.0) million. In the fourth
quarter of 2012, however, order intake contracted slightly at
EUR 260.8 (272.6) million. As of December 31, 2012, order
backlog totaled EUR 456.0 (448.4) million, thus exceeding the
previous record by 1.7%.

Further growth planned for sales and earnings in 2013

ElringKlinger expects to see stagnating to slightly expanding
global vehicle production in 2013. Against this backdrop, it
will be targeting revenue growth of between 5 and 7% in 2013.
Should global car production only stagnate, revenue growth is
likely to be positioned at the lower end of this range. The
operating margin attributable to ElringKlinger's core business
will be diluted by the as yet below-average profit margins of
the acquired entities and the associated purchase price
allocations as well as the up-front costs relating to the E-
Mobility division. However, the resulting adverse effects on
earnings will be less pronounced in 2013. Overall, ElringKlinger
anticipates that earnings before interest and taxes (EBIT),
adjusted for one-time effects, will expand faster than sales
revenue. Adjusted EBIT is expected to range from EUR 150 to 155
million in 2013 (EUR 136.0 million in 2012).

Further inquiry note:
ElringKlinger AG
Investor Relations / Corporate Communications
Stephan Haas
Max-Eyth-Straße 2
72581 Dettingen
Fon: +49 (0)7123-724-137
E-Mail:stephan.haas@elringklinger.com

end of announcement euro adhoc
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company: ElringKlinger AG
Max-Eyth-Straße 2
D-72581 Dettingen/Erms
phone: +49(0)7123 724-0
FAX: +49(0)7123-7249000
mail: info@elringklinger.com
WWW: http://www.elringklinger.com
sector: Automotive Equipment
ISIN: DE0007856023
indexes: MDAX, CDAX, Classic All Share, Prime All Share
stockmarkets: free trade: Berlin, München, Düsseldorf, regulated dealing:
Stuttgart, regulated dealing/prime standard: Frankfurt
language: English