Grammer business picked up appreciably in first-half 2000

The company will probably outperform its full-year earnings forecasts

Amberg, August 22, 2000 – Grammer AG, Amberg, an international manufacturer of seats, seating systems and car fittings, reports decidedly positive sales and earnings trends for first-half 2000. Thanks to the cost-cutting measures already implemented on the basis of the restructuring agenda launched at the beginning of the year, the Group has to date markedly reduced costs. As a consequence, the sales volume, which rose 21 percent from DM 529.7 million for first-half 1999 to DM 641.2 million compared with a far lower level of costs. EBIT for first-half 2000 thus came to DM 33.2 million – which corresponds to growth of almost 77 percent compared with the figure of DM 18.8 million for the same period in 1999. Group earnings from ordinary operations leaped about 53 percent from DM 12.1 million to DM 18.6 million. Calculated according to the DVFA/SG formula, earnings per share came to DM 1.90, up from DM 0.89 the prior year.

Appreciable earnings expected for 2000 as a whole In the first six months of 2000 Grammer took new orders for all three product divisions and capacity is therefore fully utilized until well after the end of 2000. On this bedrock of ongoing strong demand, Grammer has confirmed that it intends to boost sales 13 percent in 2000 from DM 1.1 billion to DM 1.25 billion. At the same time, the Company expects to book appreciable earnings both before and after taxes, even though the beneficial impact of the restructuring agenda will first really be felt in 2001. From today’s vantage point, Grammer will most probably top the EBIT target of some DM 40 million, compared with a loss of DM 4.8 million in 1999.

Sales growth mainly outside Germany Group sales grew primarily thanks to superb business outside Germany, which surged 56 percent from DM 181.9 million to DM 283.7 million. Sales booked in-side Germany rose slightly from DM 347.8 in first-half 1999 to DM 357.5 million for the first six months of 2000. A segment comparison reveals that sales by the Driver’s seats Division increased some 18 percent from DM 146.7 million to DM 173.3 million, those recorded by the Automotive equipment likewise climbed 18 percent from DM 339.5 million to DM 400.7 million. The strongest growth in percentage terms was scored by the Passenger seats Division, where sales rocketed some 62 percent from DM 39.5 million to DM 63.8 million. Other Group sales fell from DM 4.0 million to DM 3.4 million. As at the end of June, the Grammer Group payroll stood at 6,763 staffers, up from 5,498 the prior year.

Investments financed from own resources Investments in tangible and intangible fixed assets in first-half 2000 came to DM 27.7 million, compared with DM 35.4 million the prior year. One focus was on establishing a competence center in Haselmühl nr. Amberg, where Grammer has pooled its testing, prototype production and metals lab facilities. In addition, investments were committed to new tools and machinery, in particular in connection with new product start-ups. In the period under review, these outlays were all financed from cash flow, which rose for the Group on a year-on-year basis from DM 32.5 million to DM 44.5 million.

Strengthening of the capital base planned As at June 30 2000, equity capital totaled DM 85.0 million or 11 percent of the Group balance sheet total compared with nine percent as at year-end 1999. Against this background, a prime goal of Grammer AG is to strengthen its capital base.