First quarter results for the 2001/02 business year

BERU achieves 35% earnings increase in Q1

Ludwigsburg, August 16, 2001 ¬ó BERU Group achieved an increase in earnings of 35.0% in the first quarter of its business year 2001/02 (April 1, until June 30, 2001). While Group sales rose by 10.9% to 65.0 (58.6) million Euros, net income increased disproportionately from 5.4 million Euros to 7.3 million Euros. The ongoing trend towards diesel cars, the growth in electronics as well as the realized acquisitions in Ignition Technology for petrol engines have contributed to the expansion of the Group.

Operating margin remains at high level

Despite significant financial pre-investments for the Electronic Tire Pressure Monitoring Systems division the operating margin remained at the high level of 15.7 (15.8)%. Earnings before interest and taxes (EBIT) increased by 10.9% to 10.2 (9.2) million Euros. The financial result rose to 1.1 (0.8) million Euros. Yet for the full business year BERU expects the financial result to come in below the previous year´s level due to the company´s short-term investment horizon and decreasing interest rates. Profit before taxes rose by 13.0% to 11.3 (10.0) million Euros.

Net income up 35%

Taxation of the Group, which was 42.6% at the end of the year, decreased sharply to 35.4%. The company set on its world-wide expansion and is now benefitting from its increasingly international structure. Further Germany´s new tax reduction legislation had its first impact as a result of BERU´s non- calendar fiscal year. Besides a tax-free capital gain of 0.6 million Euros from the sale of shares held in the US company Stoneridge, Inc., Warren/ Ohio contributed. For the business year BERU expects taxation to come in slightly below the previous year´s level. Net income increased by 35.2% to 7.3 million Euros. Adjusted earnings per share (according to DVFA/SG) rose to Euro 0.67 (0.51).

Share of personnel expenses lowered

The number of employees in the Group decreased slightly. After 2,095 employees at the end of the financial year, BERU employed 2,083 people at the end of the first quarter. Despite high personnel expenses necessary for building up the research and application engineering teams for Electronic Tire Pressure Monitoring, the share of personnel expenses decreased to 30.6 (31.1)%. Material costs as a percentage of sales meanwhile increased to 39.2 (33.6)%. Main causes for this increase were the changing product mix due to the consolidation of Hyunil Electronics Co., Ltd., Chungju, South Korea and the ascending share in the automotive electronics business entailing a higher share of material costs. As usual the company stepped up inventories in the first quarter to be prepared for the disproportionately stronger sales during the winter quarters.

Growth across all business areas

With its world-wide market share of 40% in diesel cold-start technology for passenger cars BERU has again profitted from the ongoing diesel boom in Europe. Reaching 32.7 (30.2) million Euros in sales in the area Diesel Cold- start Technology, BERU topped the previous year by 8.3%. Due to shrinking sales of water glow plugs - non- motor applications for heating the vehicle water circuits and car interior - and due to a lower production volume in the US, BERU´s sales increase in glow plugs did not quite match the world-wide market growth in diesel engine production for passenger cars, which amounted to approxemately 10%. In the US, the light truck segment, featuring a disproportionately high diesel share, was down by 7% BERU reduced notedly its shipments to a major US customer that manufacturers diesel engines for Ford, amongst others for the Ford Explorer which has been suffering from lower demand due to the tire-related problems being discussed in public. Market share with European customers has remained steady.

Ignition Technology for petrol engines posts increase in a weak market

Despite a weak demand of passenger cars in Europe and in the US, Ignition Technology for petrol engines grew sales by 9.3% to 22.3 (20.4) million Euros. The main causes for the upward trend were additional sales of ignition coils, a strong after-market business and the consolidation of Huynil Electronics, Co., Ltd., Chungju/South Korea that contributed 3.5 million Euros to Group sales. Hunyil has around two-thirds of its sales in ignition technology products.

Electronics and Sensor Technology

Electronics and Sensor Technology achieved a disproportionately high growth rate. Sales rose by 25.0% to 10.0 (8.0) million Euros. The company continues to focus on the developement and production of Electronic Tire Monitoring (ETPM) Systems contributing 1.8 million Euros (+ 38,5%) to sales. A further increase could not be reached because of a delay in the start of production of two luxury class series which will feature the BERU system as a standard equipment. First test results of the National Highway and Transportation Safety Agency (NHTSA) shave shown that direct measuring, sensor-based technology as applied in the BERU system is preferred to indirect measuring ABS-based solutions. In ETPM BERU expects additional sales of 100 - 150 million Euros from 2004 on.

Management positive on full year

Though facing a difficult market environment, BERU management is confident to benefit from the major trends diesel and electronics. BERU aims at enforcing its technological leadership position with its diesel instant- start system ISS and growing diesel sales at least in line with the market. Besides BMW and VW, two other major OEMs have shown their intention to apply the ISS technology. For the full business year, management plans to grow organic sales by 6% and to increase earnings in line. Takeovers for expanding the product portfolio in the after-market and core business, as well as acquisitions of new technologies in electronic applications and sensor Technology are planned to contribute further.

Consolidated Profit and Loss Account BERU Aktiengesellschaft, Ludwigsburg
First quarter 2001/2002 (ended June 30, 2001)

	2001/2002 EUR mn	2000/2001 EUR mn	change in %
Sales	65.0	58.6	10.9
Change in inventory of finished products and work-in-process	3.8	2.4	58.3
Other own work capitalized	0.1	0.1	0.0
Other operating income	2.0	1.2	66.7
Material costs	-25.5	-19.7	29.4
Personnel expenses	-19.9	-18.2	9.3
Depreciation	-4.7	-5.0	-6.0
Other operating expenses	-10.6	-10.2	3.9
Profit before investment and financial result and taxes	10.2	9.2	10.9
Investment and financial result	1.1	0.8	37.5
Income from ordinary activities	11.3	10.0	13.0
Pre-tax profit	11.3	10.0	13.0
Taxes on income	-4.0	-4.6	-13.0
Share in profits by other shareholders	-	-	0.0
Net income	7.3	5.4	35.2
Preliminary DVFA-earnings per share (in Euro)	0.67	0.51	31.4

Cash Flow Statement of the Group
First quarter 2001/02 (ended June 30, 2001)

	2001/2002 EUR mn	2000/2001 EUR mn
Net income (incl. shares in results by minority shareholders)	7.3	5.4
Depreciation on intangible fixed assets and tangible assets	4.7	5.0
Increase in accruals	-1.4	-1.4
Other expenses/income not affecting cash flow	-0.2	-
Profit arising from the disposal of intangible fixes assets and tangible assets	-0.7	-
Increase in inventories, trade receivables as well as other assets not allocated to investment or financing activities	-1.4	-3.7
Increase in liabilities arising from trade receivables as well as other liabalities not allocated to investment or financing activities	2.9	6.2
Cash flow from current business activity	11.2	11.5
Deposits arising from the disposal of fixed assets	-	-
Payments for investments in fixed assets	-2.3	-10.0
Deposits arising from the disposal of intangibel assets	-	-
Payments for investments in intangible assets	-	-
Deposits arising from the disposal of financial assets	1.7	-
Payments for investments in financial assets	-0.6	-
Payments for acquisitions of consolidated companies	-0.4	-
Cash flow from investment activity	-1.6	-10.0
Payments for dividends	-	-
Deposits arising from taking-up finance credit	0.8	-
Payments arising from finance credit amortization payments	-0.6	-0.3
Cash flow arising from financing activity	0.2	-0.3
Changes in funds affecting cash flow	9.8	1.2
Changes in funds not affecting cash flow	-	-
Changes in funds resulting from consolidated companies	-	-
Total funds at the beginning of the period	74.6	78.5
Total funds at the end of the period	84.4	79.7

Sales by segments (distribution channels)
First quarter 2001/02 (ended June 30, 2001)

	2000/2001 EUR mn	1999/2000 EUR mn
OEM	42.1	38.5
After-market	19.1	17.9
General industry	3.8	2.2
	65.0	58.6

Consolidated Cash flow
First quarter 2001/02 (ended June 30, 2001)

	30/06/2001 EUR mn	30/06/2000 EUR mn
Net income	7.3	5.4
Depreciation	4.7	5.0
Change in long-term accruals	0.0	0.0
	12.0	10.4

Consolidated Balance Sheet as at June 30, 2001

Assets	30/06/2001 EUR mn	31/03/2001 EUR mn
Fixed assets
Intangible assets	14.5	15.2
Property. plant and equipment	70.8	72.4
Financial assets	16.5	16.6
	101.8	104.2
Current assets
Inventories	45.1	36.3
Accounts receivable and other assets
Trading accounts receivable	46.3	53.6
Accounts receivable from affiliated companies	3.2	2.9
Other assets	4.6	5.0
	54.1	61.5
Marketable securities	13.1	17.6
Liquid assets	71.3	57.0
	183.6	172.4
Deferred charges and prepaid expenses	1.1	1.1
	286.5	277.7
Equity and liabilities	30/06/2001 EUR mn	31/03/2001 EUR mn
Shareholders´ equity
Subscribed capital	26.0	26.0
Capital surplus	73.2	73.2
Earnings reserves	66.9	66.9
Retained earnings	21.7	14.4
Other shareholders´ equity	2.0	2.0
	189.8	182.5
Special items from investment subsidies	2.0	2.2
Provisions
Provisions for pensions and similar obligations	10.9	10.9
Other provisions	41.2	42.6
	52.1	53.5
Liabilities
Liabilities due to banks	15.5	15.3
Trade accounts payable	18.3	16.1
Notes	1.5	1.0
Accounts due to affiliated companies	0.4	0.9
Other liabilities	6.8	6.1
	42.5	39.4
Deferred expenses and accruals	0.1	0.1
	286.5	277.7

Corporate background: 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.