DGAP-Adhoc: ElringKlinger AG: ElringKlinger posts 6% revenue growth in second quarter despite Europe's sluggish car markets

ElringKlinger AG / Key word(s): Half Year Results

09.08.2013 07:50

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Dettingen/Erms, August 9, 2013 +++ Despite the continued weakness shown
by car markets throughout Europe, the ElringKlinger Group succeeded in
maintaining its forward momentum in consolidated sales and EBIT over the
course of the second quarter of 2013. Sales revenue increased by 6.0% to
EUR 303.3 (286.0) million. Earnings before interest and taxes (EBIT) rose
by 2.6% to EUR 39.3 (38.3) million. Net income after non-controlling
interests edged up to EUR 26.2 (25.3) million during the same period.

Buoyant sales in Asia

Fueled in particular by important new product launches and an expansion in
business by almost 20% in Asia, ElringKlinger managed to offset the adverse
effects of a 20-year low in Western European vehicle sales and a 5%
downturn in car production in the first six months. In the first half of
2013, the Group generated well in excess of half its Original Equipment
revenue - including exports - from sales in Asia as well as North and South
America. Thus, ElringKlinger was able to expand its consolidated revenue by
3.6% in total during the first half of the year, taking the figure to EUR
590.1 (569.8) million.

Swing in earnings at exhaust specialist Hug

Benefiting from strong demand in the US retrofit sector as well as new
projects relating to inland vessels and exhaust gas purification systems
for stationary, natural-gas-fired power plants, underpinned by the use of
state-of-the-art production technology, the Hug Group managed to increase
its revenues and earnings before taxes by a substantial margin. In the
second quarter of 2013, sales revenues more than doubled to EUR 18.2 (8.4)
million, up from EUR 11.0 (7.0) million in the first quarter of 2013. While
the Hug Group had incurred a loss of EUR 0.9 million before taxes in the
second quarter of 2012, it posted positive pre-tax earnings of EUR 3.8
million in the second three months of 2013. At the same time, the company
managed to improve its earnings performance compared to the first quarter
of 2013 (EUR 1.0 million).

By contrast, the ongoing slump in France's vehicle market, where new car
registrations were down a further 11.2% in the first half of 2013, also had
an impact on capacity utilization at former Freudenberg Group company
ElringKlinger Meillor SAS, France. At EUR 26.3 (27.0) million in the first
half of 2013, revenue generated by the three former Freudenberg sites as a
whole was down on the previous year. ElringKlinger implemented
restructuring measures in France for the purpose of adapting local capacity
levels to the protracted weakness in demand. These measures produced
charges of EUR 1.8 million in the first quarter. All together, with
first-quarter sales at EUR 13.4 (13.7) million, the three former
Freudenberg sites posted earnings before taxes of minus EUR 1.5 (0.2)
million, which includes one-time restructuring costs. Second-quarter
revenue stood at EUR 12.9 (13.3) million, with sequentially improved
pre-tax earnings of EUR 0.3 (0.3) million.

Operating result up 9.9% in second quarter

At EUR 74.5 (76.5) million, the Group's operating result for the first six
months of 2013 was slightly down on the figure recorded for the same period
a year ago. The ongoing purchase price allocations relating to Hug
Engineering AG and the Hummel-Formen Group had a negative effect of EUR 0.8
(-1.2) million in total. Business relating to truck components still proved
sluggish. Additionally, the second quarter in particular saw more
pronounced start-up costs within the E-Mobility division relating to serial
production projects that are scheduled for ramp-up towards the end of 2013.
At the same time, compared to the same period a year ago, the Aftermarket
segment put in a lower earnings contribution as additional sales expenses
were allocated for the purpose of driving market expansion forward in
France and North America. Having contracted by 14.6% in the first quarter,
the Group's earnings at an operating level grew significantly in the second
quarter of 2013. In this period, the ElringKlinger Group saw its operating
result improve by 9.9%, taking the figure to EUR 41.2 (37.5) million. In
this context, the swing in earnings at Hug Engineering AG made a major
contribution to the group's operating margin. It stood at 13.6% (13.1%) at
the end of the second quarter of 2013.

Earnings before interest and taxes (EBIT) - in contrast to the operating
result, this indicator includes foreign exchange gains and losses - totaled
EUR 75.1 (75.6) million in the first six months of 2013. Whereas EBIT had
benefited from foreign exchange gains of EUR 2.5 million in the first
quarter, it was impacted by foreign exchange losses of EUR 1.9 million in
the second quarter. Nevertheless, compared to the preceding quarter, EBIT
expanded by EUR 3.5 million to EUR 39.3 (38.3) million in the second
quarter of 2013.

The Group's EBIT margin in the first half of 2013 stood at 12.7% (13.3%).
In the second quarter, the EBIT margin rose by 0.5 percentage points
quarter on quarter to 13.0% (13.4%). Adjusted for the dilutive effects
attributable to the acquisitions of the former Freudenberg companies and
the Hummel-Formen Group, the EBIT margin for the ElringKlinger Group as a
whole reached 13.4% in the second quarter - despite substantial start-up
costs in the E-Mobility division.

In the first half of 2013, net finance costs fell by EUR 2.1 million year
on year to EUR 5.2 (7.3) million, primarily as a result of positive foreign
exchange effects in the first quarter. In the second quarter, foreign
exchange losses contributed to a quarter-on-quarter increase in net finance
costs. Having stood at EUR 0.3 (5.0) million in the first quarter, net
finance costs totaled EUR 4.9 (2.3) million in the second quarter. While
earnings before taxes for the first half as a whole matched the previous
year's figure precisely (EUR 69.3 million), the second quarter saw pre-tax
earnings rise by 2.8% to EUR 36.3 (35.3) million.

Net income after minorities up 3.6% in second quarter

Benefiting from a lower tax rate, the ElringKlinger Group managed to lift
net income by 5.1% year on year in the first six months of 2013, taking the
figure to EUR 53.2 (50.6) million. The significant increase in earnings
contributed by Swiss-based Hug Engineering AG, however, took net income
attributable to non-controlling interests to EUR 3.3 (1.1) million. On this
basis, net income attributable to shareholders of ElringKlinger AG stood at
EUR 50.0 (49.5) million at the end of the first half of 2013. In the second
quarter, net income after non-controlling interests was up 3.6% at EUR 26.2
(25.3) million. Earnings per share rose to EUR 0.79 (0.78) in the first six
months of 2013. In the second quarter earnings per share totaled EUR 0.41
(0.40).

Further growth in order intake

Following on from an increase in the volume of new orders in the first
quarter to EUR 333.9 (269.4) million, order intake in the second quarter of
2013 stood at EUR 374.1 (337.1) million, up 11.0% on the same period in
2012. As of June 30, 2013, the value of order backlog stood at EUR 573.8
(485.1) million, up 18.3% on the equivalent figure for the previous year.

Annual forecast confirmed: revenue and earnings growth for annual period

ElringKlinger has confirmed its forecast for the annual period as a whole.
At best, the Group anticipates that the automobile industry as a whole will
expand slightly over the course of the year. Against this background, the
Group will be looking to generate organic revenue growth of 5 to 7% in
2013. Should global car production merely stagnate in 2013, revenue growth
is more likely to be positioned at the lower end of this range. The
operating margin attributable to ElringKlinger's core business is likely to
be diluted slightly in 2013 as a result of the as yet below-average
aggregated profit margin of the acquired entities and the associated
purchase price allocations. However, the dilutive effects in 2013 are
expected to be less pronounced compared to the previous year. Additionally,
the substantial up-front expenses and start-up costs incurred in the
E-Mobility division, which will be ramping up a number of serial production
projects during the second half of the year, also have to be taken into
account. Despite these factors, however, ElringKlinger believes that it
will be in a position to expand its earnings before interest and taxes,
adjusted for one-time charges, at a faster percentage rate relative to
revenue growth. Adjusted EBIT for the financial year 2013 as a whole is
thus expected to range from EUR 150 to 155 million (EUR 136.0 million in
2012).

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Language: English
Company: ElringKlinger AG
Max-Eyth-Straße 2
72581 Dettingen/Erms
Germany
Phone: 071 23 / 724-636
Fax: 071 23 / 724-459
E-mail: stephan.haas@elringklinger.de
Internet: www.elringklinger.de
ISIN: DE0007856023
WKN: 785602
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Stuttgart;
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München

End of Announcement DGAP News-Service

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