BERU achieves slight revenue growth in H1

(Ludwigsburg, August 14, 2007) BERU Aktiengesellschaft, Ludwigsburg, increased its sales revenues in the first half of 2007 by 0.5% to EUR 224.2 million, despite unfavorable market conditions (H1 2006: EUR 223.0 million). This development was assisted by the strong growth of the Electronics and Sensor Technology and Ignition Technology divisions. BERU’s operating profit (EBIT) of EUR 24.4 million for the period represents an operating margin of 10.9%. In the first half of 2006, EBIT amounted to EUR 30.9 million and the EBIT margin was 13.9%. BERU posted net profit for the first half of EUR 18.5 million (EUR 20.8 million). First-half earnings per share amounted to EUR 1.80 (EUR 2.06).

Growth for Original Equipment – weak Aftermarket segment

BERU expanded its business with automobile manufacturers in the first half of the year and increased sales revenues in the Original Equipment segment by 3.0% to EUR 154.5 million (EUR 150.0 million). Sales revenues in the high-margin Aftermarket segment decreased by 4.7% to EUR 56.3 million (EUR 59.1 million) as a result of the mild winter weather in the first quarter of the year. Although sales revenues stabilized in the second quarter of 2007, they were still lower than projected.

Lower sales for Diesel Cold-Start Technology – strong growth for TSS

The sales revenues of BERU’s Diesel Cold-Start Technology division decreased to EUR 82.6 million in the first half of this year (EUR 95.7 million) because of the weak aftermarket business as well as ongoing price pressure and intense competitive. But sales revenues should rise again as of 2009 due to the worldwide trend towards diesel engines and the launch of innovative new products such as the pressure-sensor glow plug (PSG) and the ceramic glow plug.

Despite declining unit sales of cars with gasoline engines in Western Europe, the Ignition Technology division developed positively in the first half of 2007. Its sales revenues increased by 6.9% to EUR 65.2 million (EUR 61.0 million), due in particular to the significant increase in unit sales of ignition coils.

BERU’s strongest growing division, Electronics and Sensor Technology, generated sales revenues of EUR 76.4 million, an increase of 15.2% compared with the prior-year period (EUR 66.3 million). This growth was primarily due to an increase in sales revenues of more than 80% for the tire-pressure monitoring system (TSS). Significant revenue growth is also anticipated in this area in the second half of the year.

Double-digit operating margin

First-half EBIT amounted to EUR 24.4 million (EUR 30.9 million), representing a margin of 10.9% in relation to sales revenues (13.9%). This margin reduction is due on the one hand to the price reductions that are increasingly demanded by automobile manufacturers and which cannot be fully offset by internal cost cutting. In addition, BERU continues to be faced with rising costs of raw materials. As a result of productivity advances, improvements in internal processes, further optimization of production structures and better purchasing conditions, BERU intends to compensate for at least a part of the pressure on prices and margins in the future, and thus to maintain the high quality of its margins.

Sound balance-sheet structure

BERU continued to strengthen its sound balance-sheet structure during the reporting period. The equity ratio at June 30, 2007 was 74.1%, compared with 72.2% at December 31, 2006. The balance-sheet total of EUR 471.7 million at June 30, 2007 was slightly lower than at December 31, 2006 (EUR 474.0 million).

Total investment in property, plant and equipment amounted to EUR 11.7 million in the first half of 2007 (EUR 14.1 million). BERU thus continues to make sustained investment at a higher rate than the average for the industry. The Company was in a position to finance all of its investments completely out of its cash earnings.

Executive Board confirms forecast for 2007

“Despite the currently difficult market environment, we continue to assume that the Group’s sales revenues will grow at a low single-digit rate in 2007 and that we will achieve earnings before interest and taxes of EUR 47-50 million in full-year 2007. However, our net profit will not equal the high level of last year”, stated CFO Marcus Knödler. The high level of net profit in the prior-year period was partially caused by an exceptional tax gain in an amount of EUR 7.0 million from the capitalization of corporate income-tax credits.

2008 is expected to be another year of consolidation, while the launch of new products and new orders should lead to stronger growth once again starting in 2009.

The interim report can be found on the Internet at: http://www.beru.com/half_year_report"> http://www.beru.com/half_year_report

BERU’s business development in the first half of 2007 (January 1 – June 30, 2007)

Based on preliminary, unaudited figures

Consolidated income statement

EUR million	H1 2007	H1 2006
Sales revenues	224.2	223.0
Changes in inventories and work in progress and own work capitalized	2.7	-3.1
Other operating income	2.4	6.2
Cost of materials	-93.9	-85.1
Personnel expenses	-60.5	-57.9
Depreciation and impairments	-15.6	-17.4
Other operating expenses	-33.9	-34.0
Other taxes	-1.0	-0.8
Profit on ordinary activities (EBIT)	24.4	30.9
Financial income	2.4	0.8
Profit before income taxes	26.8	31.7
Income taxes	-8.3	-10.9
Net profit	18.5	20.8

Consolidated balance sheet

EUR million	June 30, 2007	Dec. 31, 2006
Assets
Non-current assets	204.6	202.9
Current assets	267.1	271.1
Equity and liabilities
Equity1	352.4	345.1
Non-current liabilities	42.1	44.6
Current liabilities	77.2	84.3

¹including minority interest

Other figures

	H1 2007	H1 2006
Investment in property, plant and equipment (EUR million)	11.7	14.1
Number of employees (June 30)	2,596	2,562