Announcements

ElringKlinger supplies battery systems for solar vehicle made by Sono Motors

- Contract secured for development and production of battery systems for all-electric solar vehicle made by German mobility company Sono Motors

- Overall volume of several hundred million euros over scheduled period of eight years

- Battery systems to be produced at an ElringKlinger site in Germany

- Start of series production planned for second half of 2019

Dettingen/Erms (Germany), May 9, 2018 +++ ElringKlinger AG has secured a high-revenue contract within the area of battery technology from Munich-based company Sono Motors. The purpose of the agreement is to develop and produce complete battery systems for a fully electric solar vehicle. The purchase order covers a total volume of several hundred million euros over a period of eight years. The start of series production is scheduled for the second half of 2019.

"In securing this contract, we managed to convince a next-generation vehicle manufacturer of the innovation and performance offered by our battery technology," says CEO Dr. Stefan Wolf. "ElringKlinger will develop and produce a battery system at one of its domestic plants. This is an important statement of intent for Germany as a business location."

Sono Motors is pursuing an entirely new approach when it comes to its all-electric drive concept. The vehicle it has developed, the Sion, is positioned within the budget segment of the market and is targeted primarily at customers in urban areas. Its battery can be recharged either via the power supply grid or by means of solar cells integrated into the bodywork of the vehicle. This provides the basis for CO₂-neutral driving. What is more, the battery is also designed to provide energy - turning the car into a "mobile power station." The battery system supplied by ElringKlinger is to allow an actual range of 250 km. The vehicle is to be launched onto the market in the second half of 2019.

ElringKlinger plans to use a new fully automated production line for the manufacture of this battery system. The battery system developed by ElringKlinger features a modular design, which provides greater flexibility when it comes to incorporating specific client requirements. It will be based on a 48 V module that is capable of producing aggregate system voltages of up to 800 V. The modules, which include components such as the cell housing and the cell contact system, are controlled by a battery management system that monitors the voltage and the temperature of the individual battery cells, in addition to ensuring effective power supply. Featuring the battery modules and the battery management system, the purchase order covers an end-to-end battery system.

ElringKlinger has been mass-producing components for lithium-ion batteries, such as cell contact systems and module connectors, since 2011. They are used in various hybrid and battery-powered vehicles. In addition, the Group develops and manufactures complete battery modules and systems as well as aggregate energy storage units.

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Strategic Communications
Max-Eyth-Straße 2
72581 Dettingen/Erms
Germany
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter[at]elringklinger.com

About ElringKlinger AG
As an automotive supplier, ElringKlinger has become a trusted partner to its customers - with a firm commitment to shaping the future of mobility. Be it optimized combustion engines, high-performance hybrids, or environmentally-friendly battery and fuel cell technology, ElringKlinger provides innovative solutions for all types of drive systems. ElringKlinger's lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO₂, while those equipped with alternative propulsion systems benefit from an extended range. In response to increasingly complex combustion engine technology, the Group also continues to make refinements with regard to gaskets in order to meet the highest possible standards. This is complemented by solutions centered around thermal and acoustic shielding technology. Additionally, the Group's portfolio includes products made of the high-performance plastic PTFE which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 9,600 employees at 45 ElringKlinger Group locations around the globe.

ElringKlinger maintains strong growth during fiscal year with key strategic milestones

- Revenue grows substantially by 6.8% to EUR 1,664 million and by as much as 8.1% in organic terms

- EBIT before purchase price allocation up slightly year on year at EUR 142 million; EBIT margin of 8.5% before purchase price allocation

- Proposed dividend stable at EUR 0.50

- Key strategic milestones: closing of transaction for investment in hofer, cooperation agreement with Chinese battery manufacturer CITC, sale of Hug Group agreed

- Guidance for 2018: organic revenue growth of 2 to 4 percentage points above market growth; EBIT margin before purchase price allocation around 9%

- New dedicated Management Board role for E-Mobility as of April 1, 2018

Dettingen/Erms (Germany), March 27, 2018 +++ Over the course of the 2017 financial year, ElringKlinger AG achieved a number of important strategic milestones for the sustained development of its business. In February and March, a transaction covering its investment in the hofer Group was formally concluded. As a result, the ElringKlinger Group now produces complete electric drive systems, primarily for the premium sports and luxury car segment. Within the area of battery technology, ElringKlinger signed a cooperation agreement in November with Chinese battery manufacturer CALB via that entity's parent company CITC. Together, the focus will be on supplying battery systems to automotive markets around the globe. Additionally, ElringKlinger reached an agreement in December with a major French automotive supplier covering the sale of Hug Engineering AG. This divestment will allow ElringKlinger to concentrate fully on efforts to further develop its e-mobility business.

As CEO Dr. Stefan Wolf pointed out: "In implementing these strategic measures, we have brought the Group further in line with the mobility market of the future. Thus, ElringKlinger's product portfolio includes high-performance fuel cell systems as well as battery systems and complete electric drive units." The Group's prospects are outstanding in all these areas. "We are currently working on a string of projects covering all of these fields, and there is significant potential with regard to new drive technologies," said Dr. Wolf.

Strong growth in revenue
ElringKlinger AG again recorded strong revenue growth in the fourth quarter of 2017. Compared with the particularly solid final quarter of 2016, the Group managed to lift its sales revenue by a further 3.0% in the last three months of 2017, taking the quarterly total to EUR 419.3 (407.2) million. Against this backdrop, revenues totaled EUR 1,664.0 million in the 2017 financial year as a whole. This corresponds to a year-on-year increase of 6.8%. Taking into account the effects of foreign exchange movements and acquisitions, organic growth was as much as EUR 126 million or 8.1% in the financial year just ended.

EBIT up slightly year on year
At EUR 141.8 million, EBIT before purchase price allocation was slightly up on the previous year's figure (EUR 140.4 million). This corresponds to an EBIT margin of 8.5 (9.0)%. The Group benefited from the favorable effects of revenue growth as well as cost streamlining at the Swiss site in Sevelen. However, these positive contributions to earnings were almost completely offset by additional costs incurred in connection with the implementation of a Group-wide ERP system in Sevelen, the visible increase in commodity prices, and the follow-on costs associated with consistently high volumes ordered by customers in the NAFTA region as part of their production scheduling.

As became evident over the course of the year, the impact of foreign exchange movements on net finance costs, which stood at EUR 27.3 (11.5) million, also had a dilutive effect on Group earnings. With lower income tax expenses of EUR 36.3 (41.5) million and a slight reduction in non-controlling interests of EUR 3.9 (4.1) million, net annual income attributable to shareholders totaled EUR 69.9 (78.6) million. Calculated on this basis, earnings per share stood at EUR 1.10, which was down on the prior-year figure of EUR 1.24.

Proposed dividend payment remains stable
A fundamental principle adopted by ElringKlinger is to provide shareholders with an appropriate return on their investment. In keeping with this policy, the Supervisory Board and Management Board will jointly propose to the Annual General Meeting, scheduled for May 16, 2018, a stable dividend payment of EUR 0.50 per share. The dividend ratio will therefore improve to 45 (40)%.

Highly successful placement of Schuldscheindarlehen
The Group's key performance indicators with regard to its balance sheet remain solid. Its equity ratio was 44.0 (47.2)% at the end of the financial year, which is still well within the target range of 40 to 50% of total assets.

Furthermore, the financial year just ended saw the Group complete the very first placement of a Schuldscheindarlehen (loan granted to the company against a form of promissory note) in its corporate history. Due to strong demand, the issue volume originally planned was doubled to EUR 200 million; the average interest rate is 1.23%. The cash proceeds were used for the purpose of extinguishing existing liabilities. The Schuldscheindarlehen replaces the overnight maturities of short-term liabilities with maturities of five, seven, and ten years, thus considerably improving the Group's overall debt maturity structure.

Capex ratio scaled back substantially, operating free cash flow down year on year
At 9.3%, the capex ratio (capital expenditure on property, plant, and equipment and on investment property) for the 2017 financial year was well below the prior-year figure of 11.0%. Despite a disciplined approach, ElringKlinger put in place key measures over the course of the year and made targeted investments for future growth. In Fremont, USA, for example, a new production facility was equipped for the manufacture of lightweight structural components. At the same time, a new plant was built at the Hungarian site in Kecskemét, which will focus on the production of door module carriers and shielding parts. Last but not least, a new logistics building commenced operations at the company's headquarters in Dettingen/Erms.

As regards working capital, the Group initiates and continuously implements measures aimed at optimizing procurement processes and inventory levels, while also actively controlling trade payables. Overall, net working capital amounted to EUR 553.3 (524.6) million, which corresponds to 33.3% of Group revenue. Due to the Group's earnings performance and the level of net working capital, and despite a disciplined capex approach, its operating free cash flow has not improved. Instead, as expected, operating free cash flow was down on the prior-year figure at EUR -66.6 (-3.8) million.

Outlook: industry operating in a challenging environment - ElringKlinger anticipates sustained growth
Looking to the future, the level of global uncertainty in recent months has become more pronounced. National interests are becoming more widespread, thereby undermining the position of multinational institutions and eroding trade agreements. At the same time, tariffs or barriers to entry pose a threat to free trade. Meanwhile, the automotive industry is having to contend with stricter emission standards - a genuine challenge for the sector as a whole. Additionally, ongoing debate surrounding an inner-city ban on diesel-powered vehicles as well as recent court judgments and a wave of new accusations against manufacturers or suppliers are causing uncertainty among consumers. The result is a challenging industry backdrop exposed to a number of influencing factors. Operating within this environment, it is increasingly difficult to make projections that go beyond a short-term horizon.

Given its very solid order books and its extensive portfolio of innovative products, the Group remains confident that it can outpace growth within the global automotive market in the short and in the medium term. For 2018, ElringKlinger expects to expand at a rate that is 2 to 4 percentage points above global market growth. Industry experts predict global market growth of between 1.9 and 4.3%, while ElringKlinger's projections point to growth of 2 to 3%.

Projected revenue growth - together with further cost streamlining at the Swiss site - will have a positive impact on earnings, while elevated commodity prices and consistently strong demand in the NAFTA region will have a dilutive effect on earnings. Overall, ElringKlinger is targeting an EBIT margin before purchase price allocation of around 9%. In the medium term, the Group will be looking to achieve a step-by-step improvement in profitability.

New dedicated Management Board role for E-Mobility
ElringKlinger recently confirmed its strong strategic commitment to electromobility in organizational terms, too, by creating a dedicated function within the Management Board for the areas of battery technology and fuel cell technology as well as for the integration of its hofer investees. Former Chief Operating Officer Theo Becker will assume overall responsibility for this future-looking field of business as from April 1, 2018. At the same time, Reiner Drews, who has until now headed the Cylinder-head Gaskets and Specialty Gaskets divisions, will take up the role of Chief Operating Officer.

In addition, at its recent meeting the Supervisory Board extended by five years, i.e., up to January 31, 2023, the contract of Chief Financial Officer Thomas Jessulat.

* Proposal to 2018 AGM
 

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Investor Relations / Corporate PR
Max-Eyth-Straße 2
D-72581 Dettingen/Erms
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter[at]elringklinger.com
 

About ElringKlinger AG
As an automotive supplier, ElringKlinger has become a trusted partner to its customers - with a firm commitment to shaping the future of mobility. Be it optimized combustion engines, high-performance hybrids, or environmentally-friendly battery and fuel cell technology, ElringKlinger provides innovative solutions for all types of drive systems. ElringKlinger's lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO₂, while those equipped with alternative propulsion systems benefit from an extended range. In response to increasingly complex combustion engine technology, the Group also continues to make refinements with regard to gaskets in order to meet the highest possible standards. This is complemented by solutions centered around thermal and acoustic shielding technology. Additionally, the Group's portfolio includes products made of the high-performance plastic PTFE which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 9,600 employees at 45 ElringKlinger Group locations around the globe.

Disclaimer
This release contains forward-looking statements. These statements are based on expectations, market evaluations and forecasts by the Management Board and on information currently available to them. In particular, the forward-looking statements shall not be interpreted as a guarantee that the future events and results to which they refer will actually materialize. Whilst the Management Board is confident that the statements as well as the opinions and expectations on which they are based are realistic, the aforementioned statements rely on assumptions that may conceivably prove to be incorrect. Future results and circumstances depend on a multitude of factors, risks and imponderables that can alter the expectations and judgments that have been expressed. These factors include, for example, changes to the general economic and business situation, variations of exchange rates and interest rates, poor acceptance of new products and services, and changes to business strategy.

ElringKlinger creates dedicated Management Board role for
e-mobility - Reiner Drews appointed COO

Dettingen/Erms (Germany), March 23, 2018 +++ Having focused to an increasing extent on electromobility, ElringKlinger will now introduce a dedicated Management Board function for this area. It is to be headed by Theo Becker. Reiner Drews will be appointed Chief Operating Officer as from April 1, 2018. The Management Board contract of Chief Financial Officer Thomas Jessulat has been extended.

At its meeting on March 23, 2018, the Supervisory Board of ElringKlinger AG passed a resolution for the introduction of a fourth area of Management Board responsibility. Theo Becker, former Chief Operating Officer of the ElringKlinger Group, will assume overall responsibility for this newly created function. Theo Becker will focus on the areas of battery technology and fuel cell technology, in addition to overseeing the integration of the hofer Group. These areas had already been part of his remit as a member of the Management Board. In creating a new Management Board role dedicated to e-mobility, the company has emphasized the importance of this field of business to ElringKlinger's future operations.

Reiner Drews (48), who has been employed at ElringKlinger since September 1, 2006, is currently responsible for the Speciality Gaskets and Cylinder-head Gaskets divisions. As from April 1, 2018, he will take over Management Board responsibility from Theo Becker for manufacturing operations, the German plants, and the area of quality assurance.

"We are delighted that in Reiner Drews as COO we have appointed an acknowledged operations expert, thereby tapping talent developed within our own ranks. Given the current scale of ElringKlinger's business, it is important that Theo Becker can focus entirely on our new fields of business. For ElringKlinger, the area of new drive technologies, in particular, holds tremendous opportunities for the future," says Chief Executive Officer Dr. Stefan Wolf.

In addition, the Supervisory Board extended the contract of Thomas Jessulat (48), Chief Financial Officer of ElringKlinger, by five years as from January 1, 2019, i.e., until December 31, 2023.

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Investor Relations / Corporate PR
Max-Eyth-Straße 2
D-72581 Dettingen/Erms
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter[at]elringklinger.com

About ElringKlinger AG
As an automotive supplier, ElringKlinger has become a trusted partner to vehicle manufacturers - with a firm commitment to shaping the future of mobility. Be it optimized combustion engines, high-performance hybrids, or environmentally-friendly battery and fuel cell technology, ElringKlinger provides innovative solutions for all types of drive systems. ElringKlinger's lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO₂, while those equipped with alternative propulsion systems benefit from an extended range. In response to increasingly complex combustion engine technology, the Group also continues to make refinements with regard to gaskets in order to meet the highest possible standards. Additional solutions include thermal and acoustic shielding components as well as particulate filters and end-to-end exhaust gas purification systems for engines used in stationary and mobile applications. The Group's portfolio is complemented by products made of the high-performance plastic PTFE which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 9,300 people at 45 ElringKlinger Group locations around the globe.