First quarter results for the 2000/2001 business year

BERU Group increases adjusted net profit by 17% in the first quarter

Ludwigsburg, August 23, 2000 ¬ó BERU Group has continued double-digit growth in the first quarter (April 1, until June 30, 2000) of the new 2000/01 business year. Sales revenue increased by 10.8% to DM 114.7 mn. The steady trend towards diesel cars in addition to last year´s acquisitions in the field of ignition technology for petrol engins and electronics markedly contributed to the growth of the Group. Adjusted for the one-off income from the sale of the stake in Optek Technology, Inc., USA, profit after taxes increased by 16.7% to DM 10.5 mn. By setting up the business field Electronics and Sensor Technology BERU corresponds to the strategic repositioning of its future corporate activities towards automotive electronics and sensor technology.

High EBIT margin remains stable

Compared to the first quarter last year the sale of the stake in the Texan sensor products manufacturer Optek Technology Inc., Carrollton, USA had a significant effect on profit. The sale contributed DM 9.7 mn to other operating income last year, that is DM 5.0 mn after taxes.

Correspondingly, the operating result at DM 18.1 mn came in below last year at DM 26.2 mn. Excluding the one-off result of the Optek sale first quarter EBIT was up 9.7% from DM 16.5 mn to DM 18.1 mn. Adjusted EBIT margin remained at 15.8% (15.9%) almost at the high level achieved last year.

Correspondingly, the operating result at DM 18.1 mn came in below last year at DM 26.2 mn. Excluding the one-off result of the Optek sale first quarter EBIT was up 9.7% from DM 16.5 mn to DM 18.1 mn. Adjusted EBIT margin remained at 15.8% (15.9%) almost at the high level achieved last year.

Lower taxation

Taxation, which was at 48.5% last year, decreased to 46.4%. BERU benefitted from its increasingly international Group structure. Profit after taxes decreased from DM 14.0 to DM 10.5 mn. Adjusted for the one-off income from the sale of the stake in Optek profit after taxes increased from DM 9.0 mn by 16.7% to DM 10.5 mn.

Number of employees rises

The integration in the scope of consolidation of the recently acquired subsidiaries BERU Automotive Co. Ltd., Shihung City, Korea and BERU S.A. de C.V., Civac-Jiutepec, Mexico, the Spanish electronics company Simes S.A. de C.V., Vitoria (now BERU Microelectr¬ónica, S.A.) in addition to the acquired product line Electronic Tire Pressure Monitoring Systems resulted in a rising number of employees. BERU Group employed 1.955 as compared to 1.589 a year ago. At the same time the build up of research and development capacities in the field of electronics resulted in a pick-up of personnel expenses as a percentage of sales to 31.0 (30.1)%. Material expenses as a percentage of sales decreased from 33.7% to 33.6%.

Sustained growth in Diesel Cold Start Technology

As the world-wide market leader in its core business field diesel cold start technology the company participated in the ongoing diesel boom in Europe. New registrations of diesel passenger cars in Germany within the first six months increased by 19%. In Europe more diesel car registrations were up 20% ,world-wide growth was slightly below 15%. BERU grew its Diesel Cold Start business in line with the market trend from DM 51.4 mn to DM 59.0 mn by 14.8%.

Acquisitons make sales in Ignition Technology for petrol engines rise

In Germany the overall passenger car market showed signs of weakness within the first six months of 2000. New registrations of passenger cars were down 11%. In contrast to the weak market BERU sales within that business field rose by 5.6% to DM 39.9 (37.8) mn. First integration of BERU S.A. de C.V., Civac-Jiutepec, Mexico in the scope of consolidation contributed markedly.

Build up of third business field Electronics and Sensor Technology

By building up the third business field Electronics and Sensor Technology BERU Group has implemented its strategic focus on car electronics and sensor applications and has prepared for the expected sales expansion in these high growth segments. This business field also includes ignition systems and electronic control units for the oil and gas burner industry. Overall this area of activity contributed DM 15.8 mn to total sales, up 10.5% from last year´s DM 14.3 mn.

BERU aims at further growth for the full year

Based upon the strong trend in diesel cars BERU´s management is confident to be able to increase sales by 6-7% although the automotive market in Europe and particularly in Germany develops modestly. DVFA-earnings are planned to increase in line with sales.

Consolidated Profit and Loss Account BERU Aktiengesellschaft, Ludwigsburg
First quarter 2000/2001 (ended June 30, 2000)

in DM mn	Q1 2000/2001	Q1 1999/2000	change in %
Sales	114.7	103.5	10.8
Change in inventory of finished products and work-in-process	4.7	4.5	4.4
Other own work capitalised	0.3	0.1	200.0
Other operating income*	2.4	10.7	-77.6
Material costs	-38.5	-34.9	10.3
Personnel expenses	-35.6	-31.2	14.1
Depreciation	-9.8	-8.0	22.5
Other operating expenses*	-20.1	-18.5	8.6
Profit/loss before investment and financial results and taxes	18.1	26.2	-30.9
Investment and financial results	1.5	1.0	50.0
Income from ordinary activities	19.6	27.2	-27.9
Extraordinary expenses	0.0	0.0
Pre-tax profit	19.6	27.2	-27.9
Taxes on income**	-9.1	-13.2	-31.1
Profit after taxes (PAT)***	10.5	14.0	-25.0
Preliminary DVFA- Earnings per share (in DM)	1.0	0.9	11.1
* sale of Optek		9.7
** taxes on Optek		4.7
*** Profit after taxes excluding OPTEK sale	10.5	9.0	16.7

Cash Flow Statement of the Group

in DM thou	06/30/2000 2000/2001	06/30/1999 1999/2000
Net income	10,507	13,967
Depreciation on intangible fixed assets and tangible assets	9,793	7,974
Result of the disposal of fixed assets	-	-15
Increase in special item for investment subsidies	-	273
Increase of inventories	-14,580	-10,976
Decrease in trade accounts receivable	2,751	10,614
Decrease of other assets and prepaid expenses	2,926	496
Decrease in other accruals (increase last year)	-2,808	9800
Increase in trade accounts payable (decrease last year)	13,973	-1,901
Increase in other liabilities and accrued expenses	1,310	686
Change in receivables from and liabilities to affiliated companies	-1,465	-2,144
Inflow of funds from operating activities	22,407	28,774
Deposits from the disposal of fixed assets	-	47
Payments for investments in fixed assets	-19,541	-8,250
Outflow of funds for investment activities	-19,541	-8,203
Changes in liabilities due to banks	-564	7,767
Outflow of funds for financing activities	-564	7,767
Effective changes in overall funds	2,302	28,338
Total funds at beginning of period	153,574	157,750
Total funds at end of period	155,876	186,088

Consolidated Cash Flow

in DM mn	06/30/2000 2000/2001	06/30/1999 1999/2000
Net income	10.5	14.0
Depreciation	9.8	8.0
	20.3	22.0

BERU group is a listed public company since October 1997. The company is the leading manufacturer of diesel cold start systems with an estimated worldwide market share of 40% for glow plugs. In the field of ignition technology for gasoline engines BERU is one of the four major manufacturers in Europe. The company also produces suppressor devices, sensors, ignition systems for the oil and gas burner industry as well as electronic controlling devices. Almost all OE-manufacturers of automobiles, commercial vehicles and engines are BERU´s customers. The company´s headquarters are located in Ludwigsburg.