ElringKlinger preliminary results point to revenue growth of 5% in third quarter despite foreign exchange losses

ElringKlinger AG  / Key word(s): Preliminary Results/Quarter Results25.10.2013 07:50Dissemination of an Ad hoc announcement according to § 15 WpHG, transmittedby DGAP - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.---------------------------------------------------------------------------Dettingen/Erms, October 25, 2013  +++  Despite the severe weaknessafflicting car markets throughout Western Europe, the ElringKlinger Groupmanaged to drive sales forward by 5.1% to EUR 294.0 (279.8) million in thethird quarter of 2013. The Group's forward momentum in revenue growth wasrestricted to some extent by the effects of foreign currency translation,with the euro appreciating against a number of currencies. Expanding by5.8% to EUR 38.6 (36.5) million, ElringKlinger's operating result moved upat a slightly faster pace compared to sales revenue. Earnings beforeinterest and taxes (EBIT), which - unlike the operating result - includethe effects of foreign exchange gains and losses, were adversely affectedby foreign exchange losses of EUR 3.5 million as well as a non-recurringexceptional charge of EUR 1.5 million in the third quarter and stood at EUR35.1 (36.0) million.Adverse foreign exchange effectsBenefiting from new product launches, more dynamic business in NorthAmerica and continued buoyancy in demand for foreign vehicles in Asia,ElringKlinger was able to compensate for the anemic condition of WesternEuropean automotive markets. By contrast, the direction taken in particularby the US dollar, the Brazilian real and several Asian currencies exerteddownward pressure on sales revenue within the context of foreign currencytranslation. ElringKlinger generates around 40% of its sales revenueoutside the eurozone. If foreign exchange rates had remained unchanged,sales revenue would have been up by 8.6% to EUR 303.8 million, i.e. at arate that is well in excess of growth achieved by the automotive markets.Integration of Hug and Freudenberg bears fruitSales generated by exhaust specialist Hug, in which ElringKlinger now holdsan interest of 93.7%, rose to EUR 13.1 (7.2) million in the third quarter2013, driven in particular by strong demand within the US retrofit marketfor trucks and buses as well as new projects relating to inland shippingand exhaust gas purification for stationary, gas-fired power plants.Earnings before taxes rose from minus EUR 0.7 million to EUR 2.2 million.Despite the continued weakness of the French automotive market and adownturn in sales at the site operated by the former Freudenberg companyElringKlinger Meillor SAS, Nantiat, earnings before taxes generated by theformer Freudenberg plants improved to EUR 0.9 (0.5) million, with revenuestagnating at EUR 11.5 million.Operating result up by 5.8% - EBIT restricted by foreign exchange effectsIn the third quarter, the Group's operating result was influenced to someextent by a non-recurring exceptional charge of EUR 1.5 million associatedwith efforts to unlock new markets in the Aftermarket segment as well assignificant start-up costs in the area of E-Mobility, where severallarge-scale projects are about to be taken forward to the serial productionlevel. Against this backdrop, ElringKlinger recorded an operating result ofEUR 38.6 (36.5) million, which corresponds to growth of 5.8%. On thisbasis, the operating margin in the third quarter of 2013 edged up slightlyyear on year to 13.1% (13.0%). Earnings before interest and taxes (EBIT),which - unlike the operating result - include foreign exchange gains andlosses, were adversely affected by foreign exchange losses of EUR 3.5(-0.5) million and stood at EUR 35.1 (36.0) million.These transactional foreign exchange losses were the key factor behind theyear-on-year increase in net finance costs to EUR 6.3 (3.6) million. Whilenet interest expenses were scaled down to EUR 2.8 (3.1) million, the netresult of foreign exchange gains and losses was considerably weaker than inthe same quarter a year ago at minus EUR 3.5 (-0.5) million. Thus, at EUR32.3 (33.0) million, earnings before taxes were slightly lower than in thethird quarter of 2012.At 30.5% (26.0%), the income tax rate in the third quarter exceeded theprevious year's figure, as a result of which net income afternon-controlling interests contracted slightly to EUR 22.5 (23.3) million.On this basis, earnings per share for the third quarter of 2013 amounted toEUR 0.36 (0.37).Order intake remains strong The Group maintained its high level of order intake. Having alreadyexpanded by 11.0% in the second quarter of 2013 compared to the same perioda year ago, incoming orders rose by 11.5% to EUR 298.2 (267.5) million inthe third quarter. As of September 30, 2013, the value of order backlogstood at EUR 578.1 (472.8) million, up 22.3% on the equivalent figure forthe previous year.Revenue and earnings growth also expected for the financial year as a wholeThe Group anticipates that automobile production at a global level willexpand only slightly in the year as a whole. While the Western Europe carmarket appears to have reached its nadir, there are as yet no clear signsof a fundamental recovery. The Group's operating margin for 2013 will bereduced to some extent by the as yet below-average aggregate profit marginof the entities acquired from Freudenberg. However, the dilutive effectsare expected to be less pronounced compared to the previous year. At thesame time, the E-Mobility division is facing substantial up-front expensesand start-up costs. Several serial production projects are scheduled tocommence within this area at the end of the year.Against this background, the ElringKlinger Group plans to increase salesrevenue by 5 to 7% in 2013 in terms of organic growth. Consequently,ElringKlinger anticipates that EBIT adjusted for non-recurring items willgrow at a more pronounced percentage rate compared to sales revenue in2013, taking the estimated figure to between EUR 150 and 155 million (EUR136.0 million in 2012). Looking forward to the remainder of the financialyear, revenue and EBIT growth may be positioned at the lower end of theseranges if the euro continues to appreciate significantly against othercurrencies that are of relevance to the Group.The announcement of preliminary results for the third quarter 2013 will beaccompanied by a conference call today, October 25th, 2013, at 10:00 a.m.CEST. The full announcement of the results for the third quarter and firstnine months 2013 is scheduled for November 6th, 2013.25.10.2013 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 / 724-0Fax:          071 23 / 724-9006E-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 ---------------------------------------------------------------------------