Grammer sales surge 25 percent in Q1

Grammer sales surge 25 percent in Q1

EBIT rockets

Optimistic forecasts for 2001

Amberg, May 8 2001 – Grammer AG, Amberg, the globally active manufacturer of seats, seating systems and automotive components, has posted further gratifying results in Q1, which traditionally sees strong sales and earnings, and thus buttressed the optimistic forecasts for financial 2001 as a whole. In the first three months of 2001 Group sales surged almost 25 percent on a y-o-y basis from DM 303.6 million to DM 377.9 million; EBIT has soared from DM 14.6 million to DM 29.0 million.

This trend will slow slightly in the further course of the year. For 2001 as a whole Grammer is expecting Group sales to grow some ten percent (2000: DM 1.3 billion). Most probably, earnings will grow far more swiftly, as the full costcutting potential of the successfully implemented restructuring program will come to bear in 2001.

Sales climb for automotive components

Thanks to a sales increase of almost 32 percent from DM 191.2 million to DM 251.6 million, in Q1 Grammer’s automotive components operations, the largest product division, accounted for a greater share of Group sales, namely almost twothirds of Group sales. The key factors behind this growth: specifically brisk demand from manufacturers of highquality vehicles and several new model launches. The driver’s seats division succeeded in pushing sales up 23 percent from DM 81.8 million to DM 100.3 million. In particular, the introduction of our new MSG 90.5 truck seat had a positive impact here. The passenger seats division saw sales dwindle some 17 percent from DM 28.6 million to DM 23.8 million owing to postponed orders from clients active in Deutsche Bahn’s highspeed rail section and the poor economic situation in Turkey. Other Group sales totaled DM 2.2 million, compared with DM 2.0 in the same period the prior year. The Grammer Group secured the lion’s share of the increased Q1 sales outside Germany. There, the volume rose on a y-o-y basis by 43 percent from DM 125.1 million to DM 179.1 million. Sales inside Germany grew over 11 percent on a quarterly comparison from DM 178.5 in Q1 2000 to DM 198.8 million.

Earnings surge

Owing to the high business volume and the consistent progress made with the restructuring program, earnings from ordinary operations rocketed from DM 6.1 million to DM 21.7 million. Aftertax earnings for Q1 2001 mushroomed from DM 4.3 million to DM 16.7 million. EPS calculated according to the DVFA/SG method came to DM 2.38 (DM 0.61 in Q1 2000) or _ 1.22 (_ 0.31).

Investments financed from cash flow

Grammer group investments through to the end of March were pruned to DM 11.8 million as against DM 19.6 million in Q1 2000 – and completely sourced from cash flow of DM 32.4 million as opposed to DM 20.0 million in firstquarter 2000. Group depreciation for the quarter fell slightly from DM 14.4 million the prior year to DM 14.0 million.

As at March 31, 2001 the Grammer Group world payroll totaled 7,610 staff, as compared with 6,696 as at March 31, 2000. Personnel expense rose by comparison from DM 72.5 million to DM 77.8 million. As a ratio of sales, personnel expense fell from 23.9 to 20.6 percent.

New financial investor strengthens capital base

On the basis of the contract signed at the end of April 2001 with Investors advised by Schroder Ventures, which envisages the latter subscribing to a capital increase and acquiring a majority stake in Grammer, the Company will net proceeds totaling DM 85.5 million. In this way, the Group’s debt load can be reduced and the capital base strengthened. Group financing as at March 31, 2001 came to a loss of DM 227.6 million as compared with DM 211.0 the prior year; the equity-to-assets ratio is 12.6 percent.