Grammer confirms provisional figures for 1999

Amberg, 28th April 2000 – Grammer AG, a manufacturer of seats, seating systems and car accessories and active throughout the world, largely confirmed the provisional figures for the financial year 1999 which it published in January. In the year under review the Group turnover increased by 37% up to 1,102.6 million DM (Previous year 804 million DM). Once again it was the car accessories division which expanded the most, recording an increase of 60% up to 711.2 million DM (Previous year 444 million DM). The proportion of the overall turnover acounted for by the car accessories division went up to 65%. About 26% of Group sales were accounted for by driver's seats, which increased by 7% up to 290.6 million DM (Previous year 272 million DM). Turnover for passenger seats increased by 34% up to 96.2 million DM (Previous year 72 million DM). This is the equivalent of 9% of Group turnover.

At the balance sheet press conference in Munich held today, the executive board confirmed that fast expansion was an essential element of company strategy. But growth was placing the company under a great deal of pressure, which had exerted a significant and detrimental effect on the results. In particular, the difficulties in the car accessories division, achieving a breakthrough into the Brazilian market, as well as the introduction of SAP R/3 throughout virtually the entire Group resulted in the group having an operating loss (EBIT) of -4.8 million DM (Previous year, profit of 37.5 million DM). The result from normal business activity dropped so that the company made a loss of -23.2 million DM (Previous year, it made a profit of 31.0 million DM). These figures included non-recurring costs incurred in 1999 of about 30 million DM.

The annual deficit in the Group was -60.6 million DM (Previous year, the company made a profit of 18.4 million DM), as a result of provisions being formed for the planned program of restructuring measures and the additional costs already incurred for this. Altogether, the restructuring measures have reduced the extraordinary result for 1999 by 30.5 million DM. No more costs are expected for these measures in the current financial year. According to the DVFA/SG the company made a loss of -30.8 million DM (Previous year, there was a profit of 18.4 million DM), this is the equivalent of a loss of -4.40 DM (Previous year, profit of 2.63 DM) per share.

The executive board is cautiously optimistic for the current financial year 2000. The first operational measures of the restructuring plan have already been put into practice and significant savings have been achieved in the first quarter of 2000. In the first three months the EBIT in the Grammer Group was 14.6 million DM (Previous year, 7.8 million DM). Compared with the comparable period of the previous year, turnover increased by 10% up to 303.6 million DM (Previous year, 276.1 million DM).

The market position and the demand for Grmmer products is good all down the line. Grammer intends to increase its turnover by about 13% up to 1.25 billion DM in the Group for the whole of 2000. The EBIT target of about 40 million DM already published is certainly achievable as a result, although the effects of the structural measures in the restructuring programme will only be felt in full in 2001. In 2000 Grammer is expecting a reduced loss in Brazil, and it is reckoned that Brazil will only make a positive contribution to Group results for the first time from 2001 onwards. This year particular attention has been focussed on reinforcing the equity base. The seach for solutions has included discussions with financial partners.

The annual statement of accounts for 1999 can also be downloaded from our website.