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BERU’s sales revenues increase by 8%Following very high sales revenues and earnings in the first half of the year, as expected the third quarter was more difficult due to seasonal effects. Nonetheless, BERU achieved growth in both sales revenues and earnings for the first nine months in an increasingly difficult market environment. “Our EBIT margin of 12.4% puts us in the top third of the industry as a whole. We continue to expect to achieve our growth and earnings targets for full-year 2006”, stated Marco von Maltzan, Chairman of the Executive Board of BERU AG, when commenting on business developments in the first nine months of 2006. When comparing with prior-year figures, it is necessary to realize that BERU changed over its financial year to the calendar year effective April 1, 2005. The period of January 1 to March 31, 2005 that is included in the comparative nine-month period was actually the fourth quarter of the 2004/05 financial year, which ended on March 31, 2005. Positive developments in all sales segments BERU increased its nine-month revenues in the Original Equipment segment by 9.1% to EUR 216.3 million (EUR 198.3 million). In the Aftermarket segment, which accounted for 28% of total sales revenues, BERU achieved 7.8% growth in the first nine months to EUR 90.3 million (EUR 83.8 million). BERU also strengthened its market position in the General Industry segment, posting sales revenues of EUR 19.5 million (EUR 18.9 million). Growth in Ignition Technology and in Electronics & Sensor Technology In the Ignition Technology division, sales revenues increased by 7.8% from EUR 84.3 million to EUR 90.9 million. This growth was a result of strong unit sales of spark plugs and ignition coils as original equipment, as well as strong aftermarket sales. The youngest division of Electronics and Sensor Technology developed very positively: During the period under review, it posted sales revenues of EUR 97.6 million, which was 32.2% higher than in the prior-year period (EUR 73.8 million). The key sources of this growth were the TSS tire-pressure monitoring system and the PTC auxiliary heating system for vehicle interiors. On the other hand, BERU’s core division of Diesel Cold-Start Technology posted a slight decrease in sales revenues of 3.7% for the first nine months of this year. This was partially due to high pressure on prices from customers, but also because production cuts by some vehicle manufacturers led to lower unit sales of original equipment. Growth in all regions In regional terms, sales revenues in BERU’s most important market of Europe excluding Germany expanded by 5.1% to EUR 157.4 million (EUR 149.8 million). And in Germany itself, BERU’s domestic market, sales revenues rose by almost 10% to EUR 97.8 million (EUR 89.1 million). The strongest revenue growth of 16.7% to EUR 35.6 million was recorded in North America (EUR 30.5 million), while sales revenues of EUR 27.6 million were generated in Asia (EUR 24.9 million). Sales revenues in the remaining international markets amounted to EUR 7.7 million (EUR 6.7 million). The proportion of sales revenues generated outside Germany of 70.0% was at the same level as a year earlier. High liquidity BERU significantly improved its liquidity in the first nine months of the year. Net financial assets increased by EUR 14.4 million to EUR 87.2 million (EUR 72.8 million). Liabilities to banks decreased as a result of debt repayments from EUR 11.1 million to EUR 0.2 million, so that BERU is now virtually debt free. With its high level of liquid funds, the company has sufficient resources at its disposal not only to finance further organic growth, but also for potential acquisitions. BERU has consistently continued its investing activities in more efficient production facilities at its plants in Germany and abroad. In the first nine months of this year, EUR 21.2 million, or 6.5% of sales revenues, was invested in production equipment in German and international markets (EUR 28.0 million). This investment was financed completely out of the available cash flow. For the full year, an investment ratio of approximately 7.5% is expected. The BERU Group employed 2,541 people worldwide as of September 30, 2006 (June 30, 2006: 2,562). BERU further on track BERU maintains its forecast for full-year 2006 of achieving total sales revenues at the top end of a target corridor between EUR 425 million and EUR 435 million combined with an operating profit (EBIT) of at least EUR 52 million. “The Company is confident of performing better than the industry average also in the future, as a result of new product launches in the three divisions and further efficiency enhancements,” stated Chairman of the Executive Board Marco von Maltzan. “We currently see ourselves confronted by intense pressure on prices and margins worldwide. But we can only partially offset the expected continuation of high raw-material prices through productivity advances, and due to the tough competition there is a limit on how much of these price rises we can pass on to customers. For the coming two years, we therefore currently anticipate somewhat lower growth in sales revenues and earnings than in recent years.“ BERU business developments in the first 9 months of 2006 (January 1 – September 30, 2006) on the basis of preliminary, unaudited figures:
¹ based on preliminary, unaudited figures ² as of June 30, 2006
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