DGAP-News: ElringKlinger AG / Key word(s): Half Year Results07.08.2014 / 07:41---------------------------------------------------------------------Dettingen/Erms, August 7, 2014 +++ Despite the adverse currency effectsassociated with the strength of the euro, the ElringKlinger Group managedto expand Group revenue by 12.6% to EUR 333.5 (296.1) million in the secondquarter of 2014. Compared with the second quarter of the previous year,which had been the company's strongest in terms of earnings performance in2013, earnings before interest and taxes (EBIT) rose by a further 1.2% toreach EUR 41.5 (41.0) million. Net income after taxes and non-controllinginterests increased by 8.8% to EUR 28.5 (26.2) million.The ElringKlinger Group continued to expand at a faster rate than theglobal vehicle markets in the first six months of 2014. The expansion inrevenue was underpinned by a modest rise in new vehicle registrations inWestern Europe as well as by buoyant demand in China and North America. Atthe same time, new product ramp-ups and structural growth within many ofthe product groups helped to drive revenue upwards.Thus, revenue grew by 13.9% to EUR 657.5 (577.1) million in the first halfof 2014. Expressed in organic terms, i.e. without the effects ofconsolidation and foreign exchange rates, revenue grew by 11.7% (10.2% inthe second quarter). Although the second quarter included fewer workingdays, revenue generated during this period rose to EUR 333.5 (296.1)million, which was also up on the figure recorded in the first quarter (EUR324.0 million). Particularly strong tooling revenue in preparation forprojects focused on lightweight engineering was a key factor in drivingsales forward during this period. The negative effect on consolidatedrevenue of translating sales into the Group currency - the euro - wasequivalent to EUR 15.4 million in the first half (EUR 6.8 million in thesecond quarter).Due to the necessary retrospective application of IFRS 11 as regards thepresentation of comparative prior-year figures, the joint ventureElringKlinger Marusan Corporation, Tokyo, Japan, was no longer accountedfor on a proportionate basis but rather in accordance with the equitymethod. As a result, the Group revenue figure originally presented for thefirst half of 2013 was reduced by EUR 13.0 mn to EUR 577.1 million (and byEUR 7.2 million to EUR 296.1 million in the second quarter), the differencebeing attributable to this subsidiary's revenue contribution originallyincluded at a proportionate rate of 50%. In the first half of 2014, bycontrast, the entity was fully consolidated as a result of the assumptionof control effective from December 31, 2013, and was accounted for in Grouprevenue with its total revenue of EUR 23.2 million. The additional revenuecontribution in the first half of 2014 thus stood at EUR 11.6 million. Whendetermining organic revenue growth, the joint venture was accounted for asif the entity had remained subject to proportionate consolidation, as wasoriginally the case.Further year-on-year growth in EBIT in Q2 2014Despite the up-front and start-up costs incurred in the new E-Mobilitydivision (minus EUR 4.1 million), the operating result for the first halfof 2014 exceeded the previous year's first-half figure by 13.3% to reachEUR 83.6 (73.8) million. Full consolidation of ElringKlinger MarusanCorporation diluted the Group's EBIT margin by around 0.3 percentagepoints.In the second quarter of 2014, the Group achieved earnings before interestand taxes (EBIT) of EUR 41.5 (41.0) million, thereby slightly exceeding thefigure posted in the prior-year quarter, which had been the strongest interms of revenue and earnings. At EUR 4.0 (3.9) million, EBIT generated bythe company's exhaust gas specialist, the Hug Group, was again up on theprevious year's figure. However, due to the nature of its projects andfactors relating to the product mix, the second-quarter figure was down EUR3.7 million on that recorded in the first quarter of 2014 (EUR 7.7 mn). Asa result of the extremely weak performance of the Brazilian market, theearnings contribution of ElringKlinger's subsidiary in Brazil was aroundEUR 1.0 million short of the original target.Before purchase price allocation, adjusted EBIT stood at EUR 85.3 millionin the first half of 2014 and EUR 42.3 million in the second quarter. Theadjusted EBIT margin before purchase price allocation was 12.7% in thesecond quarter of 2014.For the purpose of improved comparability, as from January 1, 2014,ElringKlinger no longer includes foreign exchange effects, which are mainlyattributable to financing activities, in the financial indicator EBIT.Thus, as is standard, EBIT corresponds to the company's operating resultreported in the income statement. Applying the former method ofcalculation, EBIT - which in contrast to the operating result includedforeign exchange gains and losses from financing activities - would haveamounted to EUR 42.7 (38.4) million in the second quarter of 2014.Low interest rates and positive effects associated with foreign exchangerates, contributing EUR 1.3 (0.5) million, prompted a reduction in netfinance costs by EUR 0.6 million to EUR 4.7 (5.3) million. Net financecosts amounted to EUR 2.1 (5.5) million in the second quarter of 2014.While the same quarter a year ago had been adversely affected by foreignexchange losses of EUR 2.5 million, the second quarter of 2014 producedforeign exchange gains of EUR 1.2 million. The difference of 0.6 millionbetween the net finance costs previously reported for the second quarter of2013 (EUR 4.9 million) and the figure now disclosed (EUR 5.5 million) forthat period is due to the earnings contribution made by ElringKlingerMarusan Corporation, which until December 31, 2013, had been accounted foron the basis of proportionate consolidation and, under the provisions ofIFRS 11, has now been consolidated retrospectively using the equity method.Thus, earnings before taxes were up 15.4% in the first half of 2014, takingthe total to EUR 78.9 (68.4) million. In the second quarter, theElringKlinger Group earned 11.6% more before taxes with earnings beforetaxes rising to EUR 39.5 (35.4) million.Net income after non-controlling interests up 8.8% in second quarterThe significant increase in earnings before taxes resulted in higher incometax expenses for the Group. In the first half of 2014 the Group's tax raterose to 25.2% (22.2%). Net income attributable to non-controlling interestswas lower year on year. Net income attributable to the shareholders ofElringKlinger AG rose by 13.0% to EUR 56.5 (50.0) million in the first sixmonths. In the second quarter, net income after non-controlling interestswas up 8.8% at EUR 28.5 (26.2) million.On this basis, earnings per share for the first half stood at EUR 0.89(0.79). In the second quarter of 2014, earnings per share amounted to EUR0.45 (0.41).Order backlog at record level - Continued rise in order intake from highbaseIn the second quarter of 2014, order intake rose by a further 3.5% comparedto the buoyant second quarter of 2013, taking the figure to EUR 380.0(367.0) million. Compared to the first quarter of the current financialyear, the Group saw order intake expand by 14.7%. Thus the ElringKlingerGroup is supported by a solid order backlog when it comes to achievingsales growth targeted for 2014. After a figure of EUR 602.6 millionrecorded at the end of the preceding quarter, order backlog reached EUR649.1 (569.9) million as of June 30, 2014 - a new record for the Group.Annual forecast confirmed - Revenue and earnings growth expected in FY 2014The company has confirmed its forecast for the full year of 2014. Based onthe assumption that global car production will expand by 2 to 3%, theElringKlinger Group has retained its forecast that - on the back of revenuetotaling EUR 1,175.2 million in 2013 (ElringKlinger Marusan Corporationincluded on a proportionate basis) - its revenue will grow by 5 to 7%organically in 2014, thus outpacing the market as a whole in terms ofpercentage growth. On top, the full consolidation of ElringKlinger MarusanCorporation, Japan, is expected to contribute close to EUR 25 million inadditional revenue for the Group. Full inclusion of the lower-marginsubsidiary within the Group's scope of consolidation will have a dilutiveeffect on the Group EBIT margin in 2014 (approx. minus 0.3 percentagepoints). At the same time, the introduction of Euro VI is expected to leadto improved capacity utilization with regard to the production oflightweight components for the truck market over the course of the year.Additionally, revenue streams attributable to battery technology areexpected to expand and the level of organic growth projected for revenue islikely to be accompanied by earnings contributions. In total, these factorswill provide a slight boost to the Group's EBIT margin. Adjusted fornon-recurring items, EBIT is to rise to a level of EUR 160 to 165 million.Contact:For further information, please contact:ElringKlinger AG - Investor Relations/Corporate PRStephan HaasMax-Eyth-Straße 272581 Dettingen/ErmsTel.: +49 (0)7123-724-137E-Mail: stephan.haas@elringklinger.com ---------------------------------------------------------------------07.08.2014 Dissemination of a Corporate News, transmitted by DGAP - aservice of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de---------------------------------------------------------------------Language: English Company: ElringKlinger AG Max-Eyth-Straße 2 72581 Dettingen/Erms Germany Phone: 071 23 / 724-0 Fax: 071 23 / 724-9006 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 News DGAP News-Service --------------------------------------------------------------------- 281232 07.08.2014
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