ElringKlinger defies market weakness with revenue growth in first quarter

ElringKlinger AG  / Key word(s): Interim Report08.05.2013 07:51Dissemination of an Ad hoc announcement according to § 15 WpHG, transmittedby DGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement.---------------------------------------------------------------------------Dettingen/Erms (Germany), May 8, 2013  +++  The ElringKlinger Group managedto drive consolidated revenue forward in the first quarter of 2013 despitethe marked slump witnessed throughout Europe's car markets. Sales revenueincreased by 1.1% to EUR 286.8 (283.8) million. At EUR 35.8 (37.3) million,earnings before interest and taxes (EBIT) fell 4.0% short of the Group'sbuoyant earnings performance recorded in the previous year.  Net incomeafter non-controlling interests totaled EUR 23.8 (24.2) million.Dynamic business in Asia compensates for downturn in Western EuropeSupported by new product ramp-ups and an increase in revenue from sales inAsia in excess of 20 %, ElringKlinger managed to compensate for the morethan 10 % decline in car production figures over the course of the firstthree months of 2013 in Western Europe. Including exports, the Groupgenerated almost half of its Original Equipment revenue in Asia as well asNorth and South America in the first quarter.Performance of acquired companies - Successful turnaround at exhaustspecialist HugBenefiting from the increase in sales, the restructuring measures alreadyimplemented and the deployment of state-of-the-art production technology,the Hug Group has seen a gradual improvement in its earnings performance.While the first quarter of the previous year had produced a pre-tax loss ofEUR 2.0 million, earnings before taxes were already showing a steadyimprovement over the course of 2012. In the first quarter of 2013, salesrevenue increased to EUR 11.0 (7.0) million, while earnings before taxesimproved year on year to EUR 1.0 million.By contrast, the protracted malaise afflicting car markets in WesternEurope also took its toll on capacity utilization levels at the formerFreudenberg company ElringKlinger Meillor SAS, France. Whereas the earningscontributions of the two former Freudenberg sites in Gelting (Germany) andSettimo Torinese (Italy) were well within positive territory, the earningsperformance of ElringKlinger Meillor was negative. ElringKlinger iscurrently implementing restructuring measures at this site for the purposeof adapting capacity levels to persistently low demand within the market.In this context, other liabilities of EUR 1.8 million were recognized asearly as the first quarter of 2013, which had a one-time impact onearnings. At the same time, processes are being further automated andsmall-scale serial production is being introduced for the aftermarket lineof business. In total, the former Freudenberg sites acquired in 2011produced revenue of EUR 13.4 (13.7) million in the first quarter of 2013and earnings before taxes of minus EUR 1.5 (0.2) million.Slight contraction in EBITEarnings before interest, taxes, depreciation and amortization (EBITDA)stood at EUR 54.3 (57.0) million. At EUR 18.5 (19.8) million,depreciation/amortization was slightly lower in the first quarter of 2013.The ongoing purchase price allocations relating to Hug Engineering AG andthe Hummel-Formen Group had a negative effect of EUR 0.6 (-0.6) million intotal. Despite the negative aggregate earnings contribution made by theacquired entities and the significant up-front costs associated with theE-Mobility division, the Group's operating result stood at EUR 33.3 (39.0)million. This corresponds to a 14.6% decline compared to the figurerecorded in the same quarter a year ago. However, the operating result wasup considerably on the figure posted in the fourth quarter of 2012 (EUR25.8 million). The staff profit-sharing bonus of EUR 1,300 (1,150) peremployee for members of the ElringKlinger AG, ElringKlingerKunststofftechnik GmbH and Elring Klinger Motortechnik GmbH workforce, asagreed for the financial year 2012, has already been accounted for in otherliabilities and resulted in additional staff costs of EUR 3.7 (3.3) millionin the first quarter of 2013. While the non-recurring restructuringexpenses of EUR 1.8 million attributable to the French site in Nantiat hadan adverse effect on earnings, the transition to full consolidation of thenewly acquired Korean joint venture ElringKlinger Korea Co., Ltd, Changwon,produced positive one-time income of EUR 1.4 million.Earnings before interest and taxes, which in contrast to the operatingresult include foreign exchange gains and losses, fell by 4.0% to EUR 35.8(37.3) million. Foreign exchange gains of EUR 2.5 (-1.7) million had apositive effect on Group EBIT in the first quarter of 2013. The as yetnegative impact on Group EBIT from contributions made by the acquired HugGroup, Hummel-Formen Group and former Freudenberg companies was equivalentto EUR 0.6 (-0.6) million in total. The EBIT margin was 12.5% (13.1%).Adjusted for the dilutive effects attributable to the as yet lessprofitable acquisitions, the EBIT margin within the Group's core businesswould have reached 14.0%, despite the significant up-front costs associatedwith E-Mobility.Net finance costs down due to foreign exchange effectsNet finance costs were reined back by EUR 4.7 million year on year to EUR0.3 (5.0) million, primarily as a result of significant foreign exchangegains, but also due to lower market interest rates. In total, the Grouprecorded foreign exchange gains of EUR 2.5 (-1.7) million. At EUR 33.0(34.0) million, earnings before taxes were down 2.9% compared to theprevious year.Net income remains stable year on year Benefiting from a lower tax rate, the ElringKlinger Group was able to matchlast year's first-quarter performance by again posting net income of EUR24.6 (24.6) million in the first quarter of 2013. Net income attributableto non-controlling interests rose to EUR 0.8 (0.4) million, primarily as aresult of the significant improvement in earnings contributed by HugEngineering AG, Switzerland. Correspondingly, net income attributable tothe shareholders of ElringKlinger AG fell by 1.7% to EUR 23.8 (24.2)million.Positive order intakeIncoming orders were up significantly compared to the fourth quarter of2012, when order intake had totaled EUR 260.8 million. In the first threemonths of 2013 order intake increased by 23.9% year on year to EUR 333.9(269.4) million. As of March 31, 2013, order backlog for the ElringKlingerGroup stood at EUR 503.1 (434.0) million, up 15.9% on the figure recorded ayear before. Thus, the ElringKlinger Group is supported by a solid orderbacklog when it comes to achieving sales growth targeted for the annualperiod as a whole.Forecast for the full year confirmedThe company confirms its forecast for the full year. For 2013 ElringKlingerstill expects global auto industry to rather stagnate or to see modestgrowth at best. Against this backdrop the ElringKlinger Group plans toincrease sales revenue by 5 to 7% in 2013 in terms of organic growth.Should global car production merely stagnate in 2013, revenue growth ismore likely to be positioned at the lower end of this range. The operatingmargin attributable to ElringKlinger's core business will still be dilutedin 2013 as a result of the as yet below-average aggregated profit marginsof the acquired entities and the associated purchase price allocations.However, the dilutive effects in 2013 are expected to be less pronouncedcompared to the previous year. Additionally, the substantial up-frontexpenses and start-up costs incurred in the E-Mobility division, which willbe working on several projects as they progress through the start-up phaseduring the second half of the year, also have to be taken into account.Despite these factors, however, ElringKlinger believes that it will be in aposition to expand its earnings before interest and taxes (EBIT), adjustedfor one-time charges, at a faster rate relative to revenue growth. AdjustedEBIT for the financial year 2013 as a whole is expected to be in the rangefrom EUR 150 to 155 million (EUR 136.0 million in 2012).08.05.2013 DGAP's Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de--------------------------------------------------------------------------- Language:     EnglishCompany:      ElringKlinger AG              Max-Eyth-Straße 2              72581 Dettingen/Erms              GermanyPhone:        071 23 / 724-636Fax:          071 23 / 724-459E-mail:       stephan.haas@elringklinger.deInternet:     www.elringklinger.deISIN:         DE0007856023WKN:          785602Indices:      MDAXListed:       Regulierter Markt in Frankfurt (Prime Standard), Stuttgart;              Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München End of Announcement                             DGAP News-Service ---------------------------------------------------------------------------