Press release BoxID: 172441 (ElringKlinger AG)
  • ElringKlinger AG
  • Max-Eyth-Str. 2
  • 72581 Dettingen / Erms
  • Contact person
  • Stephan Haas
  • +49 (7123) 724-137

ElringKlinger increases sales and earnings in first quarter of 2008

EBIT growth of 8% / Net income after minority interest rises by 23% / Order backlog up 18% year on year

(PresseBox) (Dettingen / Erms, ) The ElringKlinger Group recorded growth in both sales and earnings in the first quarter of 2008. Group sales rose by 6.4% to EUR 162.8 (153.0) million. The automotive supplier achieved solid gains in Europe, South America and Asia. In particular, ElringKlinger benefited from new product ramp-ups as well as growing demand for specialty gaskets and shielding components used in the exhaust tract.

Although ElringKlinger's key automobile markets in Europe and North America remained stagnant or contracted sharply in the reporting period and the early placement of the Easter holidays in the first quarter meant a reduction in available working time by two to three days, the Group managed to lift sales revenue in its Original Equipment segment by 7.5% to EUR 114.8 (106.8) million. In North America, strike action at another automotive supply company based in the US resulted in a shortfall in production at one of ElringKlinger's major customers and thus to a fall in delivery call-offs. In the Aftermarket segment, ElringKlinger was able to make slight gains in the first quarter of 2008. The prevailing weakness of the US dollar had an adverse effect on key markets such as the Middle East and South East Asia, where customers were faced with higher prices. Overall, the Aftermarket segment generated EUR 26.2 (25.9) million in sales in the first three months of 2008. The Engineered Plastics segment, which is currently making preparations for the start of large-scale production of a new injection-moldable high-performance PTFE by the name of Moldflon®, succeeded in increasing sales by 7.2% to EUR 18.4 (17.2) million.

Elevated energy costs and the continuing rise in the price of materials burdened profitability as did pre-expenses at ElringKlinger Kunststofftechnik GmbH. The cost of sales rose by 7.6%, and the gross profit margin came in at 33.0%, down from 33.8% a year ago. Within this context, it should be noted that provisions recognized in connection with ElringKlinger's employee profit-sharing program rose by EUR 0.8 million year on year. Additionally, the Group recorded one-off costs of EUR 0.3 million relating to the full takeover of its Spanish subsidiaries. Selling as well as general and administrative expenses climbed at a slower rate than sales. Research and development expenses amounted to EUR 7.9 million, after EUR 7.6 million in the first quarter of 2007. The main focus was on new sealing concepts and, within the New Business Areas division, on efforts to implement the recently developed diesel particulate filter concept at an industrial level. In addition, the Group continued its development work on fuel cell components.

Supported by improvements in efficiency levels and a higher degree of capacity utilization, the Group managed to lift earnings before interest, taxes, depreciation and amortization (EBITDA) by 8.2% to EUR 40.5 (37.4) million. Depreciation and amortization increased by EUR 0.9 million. Earnings before interest and taxes (EBIT), including positive exchange rate effects of EUR 0.2 mn, rose by 8.1% to EUR 29.2 (27.0) million. Operating profit increased by 5.5%. Earnings before taxes rose by 7.0% to EUR 27.6 (25.8) million.

Prompted mainly by Germany's corporate tax reform, the tax rate fell to 28.6% (35.3%). Net income rose by 18.0% in the first quarter of 2008 to EUR 19.7 (16.7) million. Net income after minority interests increased by 22.9% to EUR 18.9 (15.4) million. Thus, earnings per share reached EUR 0.98, compared with EUR 0.80 in the same quarter a year ago.

At EUR 23.9 (14.1) million, the Group invested significantly more in property, plant and equipment over the course of the first three months of 2008 than during the same period a year ago. The main focus was on expansion of capacities and projects aimed at operational streamlining. The expansion of earnings and improvements to working capital contributed to a 50.4% increase in net cash from operating activities, which rose to EUR 26.1 (17.3) million.

The ElringKlinger Group can tackle the rest of the financial year with a solid level of orders in hand. At the end of the first quarter, order backlog was 18.2% up on last year's first-quarter figure, reaching EUR 247.4 (209.3) million. The growth rate of order intake, which rose by 7.1% to EUR 165.1 (154.1) million, slightly exceeded that of sales in the first quarter. Without having accounted for acquisitions, the ElringKlinger Group is targeting organic growth in sales of 5 to 7% for the 2008 financial year. Adjusted for non-recurring effects, net income after minority interests (profit attributable to shareholders of ElringKlinger AG) is to grow at a more pronounced rate. In 2007, profit had been buoyed by exceptional income of EUR 3.2 million after taxes from insurance payments in connection with the fire at an ElringKlinger plant in Germany and one-time income of EUR 5.5 million from the revaluation of deferred tax items - prompted by Germany's corporate tax reform. In addition, the pro rata sales and earnings of the newly acquired SEVEX Group, Switzerland, and the interest held in Marusan Corporation, Tokyo, will contribute.