Dürr AG — Interim / Quarterly Report 2006

Aug 10, 2006

Interim Report January 1 to June 30, 2006

Technologies · Systems · Solutions

Contents

• 3 Key figures
• 5 Management report
• 15 Consolidated income statement
• 16 Consolidated balance sheet
• 17 Consolidated statement of changes in equity
• Statement of recognized income and expense in 18 the consolidated financial statements
• 19 Consolidated cash flow statement
• 20 Notes to the consolidated financial statements
• 24 Financial calendar 2006 and 2007
• 24 Contact

Cover photo:

High-pressure crankshaft deburring and cleaning system from Dürr Ecoclean

Key figures for the Dürr Group (IFRS)

(Continuing operations)

		Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Incoming orders	in € m	845.3	728.4
Orders on hand (June 30)	in € m	929.9	955.2
Sales revenue	in € m	626.3	656.9
EBITDA	in € m	16.4	14.7
EBIT	in € m	6.0	3.0
Net loss for the period	in € m	-3.3	-12.5
Cash flow from operating activities	in € m	-51.8	-105.0
Cash flow from investing activities	in € m	16.2	75.0
Cash flow from financing activities	in € m	-8.1	26.3
Balance sheet total (June 30)	in € m	1,046.9	1,358.8
Equity (excluding minority interests) (June 30)	in € m	239.1	243.1
Net financial debt (June 30)	in € m	122.2	334.0
Net working capital (June 30)	in € m	182.6	214.8
Employees (June 30)		5,755	6,0991)
Dürr stock ISIN: DE0005565204
High2)	€	26.90	17.49
Low2)	€	17.14	13.50
Close2)	€	20.65	13.95
Number of shares (June 30)	k	15,728	14,298
Earnings per share (continuing operations)	€	-0.22	-0.87

Immaterial variances may occur in this report due to rounding in the computation of sums and percentages. The balance sheet for the first half of 2006 no longer includes values for the Measuring and Process Technologies business unit, which was sold, but the balance sheet for the first half of 2005 does. We are thus complying with a provision of IFRS 5. Accordingly, the values on the balance sheet are comparable only to a limited extent.

1) Continuing operations (excluding Measuring and Process Technologies) 2) XETRA

Highlights

• Incoming orders up considerably on previous year •
• Gross margin improved steadily over several quarters •
• After-tax earnings positive in the second quarter and noticeably better than the previous year despite expected sales decline •
• Group-wide FOCUS program on track implementation stage begins •

Management report

Economic environment

The global economy continued to grow in the first half of 2006. This is particularly true of the United States and China, but also of Japan, most of the emerging economies, and some Western European economies. Germany, too, has seen signs of an upturn. The increase in domestic economic forces expected there for 2006 is based more or less equally on the continued positive trend in spending on plant and equipment and the slight increase in consumer spending following a long period of weak demand. However, the outlook for 2007 is dimmed by rising interest rates and raw material prices worldwide and considerable increases in taxes and social security contributions in Germany.

Development of global demand for automobiles in the industrialized countries of the West held steady despite high oil prices. The United States, on the other hand, registered a marked decline in demand for light trucks, including SUVs, while demand for fuel-efficient vehicles increased. Asia and Eastern Europe recorded considerable growth.

Experts believe automobile production is likely to pick up speed over the yearearlier period, increasing by a solid 3% in 2006.

We have received a growing number of project inquiries since winter 2005/2006, which can also be attributed to customers picking up projects that had been postponed in previous quarters. The increase in project inquiries has already resulted in stronger incoming orders in the first half of 2006. Project inquiries continue to come in from the automotive industry at a steady pace.

FOCUS program

In mid-August 2005, we launched FOCUS as a Group-wide program aimed at improving our profitability and financial structure for the long term. Through it, we are concentrating on our core business as a manufacturer of machinery and industrial equipment for the automotive industry, which will account for some 90% of Group sales revenues in 2006.

FOCUS is not a restructuring program in the traditional sense. With FOCUS, we want to position ourselves well in our sales markets and tap the automotive market's existing growth potential. Nevertheless, it does involve a personnel reduction in order to adjust capacities to regional shifts in demand.

All told, some 800 of the company's 6000 and more jobs are to be cut, with most of those cuts being in the Americas and Europe. By contrast, we are creating new jobs in Eastern Europe and Asia, particularly India and China.

The number of employees at June 30, 2006, was down 305 from the end of 2005 as part of FOCUS; 332 jobs were cut in 2005. Thus, the lion's share of the planned reductions is complete.

Another structural change is automotive customers' growing needs in terms of modernizing existing plants and making them more flexible. Many of these plants are outdated and no longer sufficiently productive. Because more than 50% of all existing plants contain Dürr technology and because of our technological expertise, Dürr is predestined to benefit from this trend. But Dürr must also adapt its business processes and resources to these market conditions. New service product lines have been defined and launched and our service organization has been completely revamped. We now have a service manager responsible for each country in which we operate. And we are keeping our antennae tuned to the biggest automotive factories by stationing Dürr employees directly in those factories or nearby to better address those customers' needs and make suggestions for plant improvements. As a result, we expect service revenue to increase by around 15% each year. Dürr management will track this progress closely and make adjustments as needed.

Projects progressing according to plan

All FOCUS projects have already started up on schedule. As part of these projects, we have examined our internal processes for any problems that may arise, pinpointed barriers and identified potential for needed improvements. Now it is time to implement the concepts we have developed.

Of the FOCUS projects, eight were already completed as of March 31 of this year. Five more were wrapped up in the second quarter of 2006. Implementation of the FOCUS measures takes top priority at Dürr, which is why each business unit has designated an experienced team member to ensure that implementation is successful.

Business developments*

Incoming orders up considerably on previous year

Incoming orders for the Dürr Group in the first six months of 2006 were up 16.0% year-on-year to € 845.3 million (previous year: € 728.4 million). This improvement was driven largely by growth in Paint and Assembly Systems. The incoming order figure for the second quarter was 3% above the yearearlier period, which was by far the strongest quarter in 2005. Measuring and Process Systems was able to offset the first-quarter decline in incoming orders, posting a gain of 4.0% for the first six months. In the geographic breakdown of incoming orders, it is clear that Asia is becoming increasingly important. Orders intake from the region grew 76.5% on the previous year. Incoming orders from Germany remained well below the year-earlier figure. We received strategically important orders from Europe in the second quarter. Business in the Americas held steady at an unsatisfactory level.

Sales and orders on hand

Consolidated sales for the first six months of 2006 (€ 626.3 million) were down 4.7% from the previous year (€ 656.9 million), as expected. The main reason for this decline was the relatively weak orders intake in the second half of 2005, whose time-delayed effect on sales is reflected now. The bookto-bill ratio improved in the first six months to 1.3 (previous year: 1.1). At June 30, 2006, orders on hand amounted to € 929.9 million (previous year: € 955.2 million). Nevertheless, this amounts to an increase of € 206.4 million compared with orders on hand at the end of 2005.

Gross margin improved again

Although sales revenue was down 4.7% in the first half of 2006, the cost of sales was down even further, by 5.4%. This resulted in a corresponding improvement of 0.6 percentage points in our gross margin on average for the year to date, to 17.0%. The primary forces driving this improvement were increased efficiency and growth in our services business.

At € 49.4 million, selling costs in the first half were virtually unchanged from the year-earlier period. However, the figure for the second quarter was down € 1.4 million from the same period of 2005. In particular, we strengthened our sales organization in Asia.

In the first half of 2006, administrative expenses were down € 1.7 million from the year-earlier period, to € 42.7 million. Second-quarter developments are especially noteworthy, as administrative expenses declined € 3.1 million from the first quarter of 2006 to € 19.8 million due to successful implementation of FOCUS. Administrative expenses were also 12.8% lower in the second quarter of 2006 than they had been in the second quarter of 2005.

^*Unless indicated otherwise, all values and statements in this interim report refer to continuing operations of the Dürr Group, that is, the Paint and Assembly Systems and Measuring and Process Systems divisions and the Corporate Center (Dürr AG). Only the balance sheet for H1 2005 includes the figures from Measuring and Process Technologies, as required by IFRS 5. This interim report was prepared in accordance with the International Financial Reporting Standards (IFRS).

Direct research and development costs declined € 1.0 million to € 9.3 million. We plan to maintain an appropriate relation between these expenditures and sales revenue.

Other operating income and expenses show a balance of € +4.7 million (previous year: € +0.8 million). Income from provisions for projects and processes and liabilities that were no longer needed influenced the other operating income in the second quarter. The other operating income and expenses figure also includes an insurance benefit payment received for a fire in a building in Brazil.

The costs of implementing FOCUS, for which we were unable to create provisions last year due to accounting rules, are stated separately. These expenses include consulting costs. Overall, other operating income and the costs of implementing FOCUS are more or less balanced.

Earnings after taxes positive in the second quarter

EBITDA for the first six months of 2006 was € 16.4 million (previous year: € 14.7 million), and EBIT was € 6.0 million following € 3.0 million in the yearearlier period. The Group generated a net loss of € -3.3 million (previous year: € -12.5 million), due in large part to a € 6.7 million year-on-year improvement in our financial expense figure to € -10.8 million as the Group's financial position improved.

Despite a marked decline in sales revenue (€ 46.6 million to € 317.2 million), we achieved earnings after taxes of € 1.3 million in the second quarter of 2006, following a loss of € -5.9 million in the year-earlier period. The FOCUS measures are yielding results.

Financial position

Cash flow*

Cash flow from operating activities in the first six months of 2006 amounted to € -51.8 million, a marked improvement over the outflow of € -105.0 million in the year-earlier period.

Key factors causing the negative cash flow from operating activities in the first half of 2006 included outflows for taxes (taxable income from the sale of Measuring and Process Systems), personnel adjustments, and other structural measures undertaken as part of FOCUS as well as the use of provisions. Advances received, which are recognized under equity and liabilities, were down € 11.2 million to € 107.5 million, which roughly corresponds to the increase in net working capital. A sharp decline in advances received (and in the development of net working capital) was also responsible for the negative cash flow from operating activities last year.

*The values for changes to balance sheet items reported in the cash flow statement are adjusted for exchange rate effects. For this reason and due to acquisition accounting, they can only be seen in the balance sheet to a limited extent.

Cash flow from investing activities amounted to € 16.2 million (previous year: € 75 million) in the first six months of the year. The fact that this value is positive is largely due to a € 20 million inflow from the out-of-court settlement of arbitration proceedings relating to an acquisition made in an earlier fiscal year. This cash inflow hat no impact on the consolidated income statement. In 2005, this figure was influenced by proceeds from disposals of non-current assets. Cash flow from financing activities amounted to € -8.1 million (previous year: € 26.3 million), due primarily to interest payments of € -12.1 million.

Balance sheet ratios improved considerably

The balance sheets for the first half of 2006 and the first half of 2005 are only comparable to a limited extent. The balance sheet for the first half of 2006 no longer includes values for Measuring and Process Technologies, but the balance sheet for the first half of 2005 does. We are thus complying with a provision of IFRS 5.

Net financial debt at June 30, 2006, totaled € 122.2 million, following € 84.9 million at the end of fiscal 2005. In the first half of 2006 the still negative cash flow was the primary force driving this increase. Thus, cash and cash equivalents decreased € 38.7 million from December 31, 2005, to € 86.0 million. At June 30, 2005, net financial debt was still € 334.0 million.

Total assets in continuing operations were down to € 1,046.9 million at June 30, 2006, compared with € 1,185.3 million at December 31, 2005. The biggest change on the assets side was a decrease in current assets and trade receivables, to € 396.1 million (December 31, 2005: € 479.7 million).

On the liabilities side, trade payables dropped to € 263.4 million (December 31, 2005: € 347.8 million) and other liabilities decreased to € 112.0 million (December 31, 2005: € 138.9 million). The equity ratio rose to 23.0% at June 30, 2006 (June 30, 2005: 18.0%). At June 30, 2006, equity and non-current liabilities equaled 122% of non-current assets.

Current and non-current liabilities

	June 30, 2006	June 30, 2005	December 31, 2005
Amounts in € m
Financial liabilities	31.0	172.6	30.0
Corporate bond	189.0	187.1	187.9
Trade payables	263.4	349.2	347.8
of which prepayments received	107.5	123.3	118.7
Tax liabilities	22.0	7.1	27.8
Other liabilities	112.0	127.0	138.9
Total	617.4	843.0	732.4

R&D and capital expenditures

Direct expenses for research and development (R&D) shown in the income statement for the first half of 2006 are € 9.3 million (previous year: € 10.3 million). Including expenses for project-related development done under customer orders, the R&D ratio was considerably higher. The recently launched FOCUS project entitled "Innovation Management" is aimed at better coordinating R&D processes among the individual business units.

Capital expenditures for property, plant and equipment and intangible assets amounted to € 6.0 million (previous year: € 9.3 million). This decline is due in part to the fact that a large portion of our IT investments will come in the second half. Capital expenditures went primarily to painting technology, in particular robotics and conveyor systems. In addition, we continued to invest in coating processes and software development.

Capital expenditures*

	Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Amounts in € m
Paint and Assembly Systems	5.0	5.4
Measuring and Process Systems	1.0	3.7
Corporate Center	0.0	0.2
Total	6.0	9.3

* in property, plant, and equipment and intangible assets

Employees

Continued growth in Asia

At June 30, 2006, Dürr employed 5,755 persons worldwide. That is 344 employees, or 5.6%, fewer than a year ago. The primary reason for the decrease was a capacity reduction in Paint and Assembly Systems (-303 employees). It should also be noted that personnel at corporate headquarters was reduced by 30% year-on-year.

Although we added 45 employees in the growth regions of Asia and South Africa, we had to eliminate 273 jobs in the mature markets of North America and Europe in the first half. In 2005, we added 38 new jobs in Asia.

	June 30, 2006	June 30, 2005	December 31, 2005
Employees
Paint and Assembly Systems	3,840	4,143	3,979
Measuring and Process Systems	1,877	1,902	1,966
Corporate Center	38	54	47
Total	5,755	6,099*	5,992*

* continuing operations (excluding Measuring and Process Technologies)

Personnel changes

At its meeting on August 10, 2005, the Supervisory Board appointed Ralf Dieter Chief Executive Officer of Dürr AG effective January 1, 2006. Mr. Dieter has been a regular member of the Board of Management of Dürr AG since January 1, 2005, and is also Chief Executive Officer of Carl Schenck AG.

Treasury stock and subscription rights

Dürr AG owns no treasury stock. No subscription rights have been granted to members of its corporate bodies or to employees as part of the Dürr International Stock Option Plan (DISOP).

Overview of the divisions

Paint and Assembly Systems

	Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Amounts in € m
Incoming orders	680.2	569.7
Sales revenues	498.2	508.8
EBITDA	16.8	14.1
EBIT	10.9	7.6
Employees (June 30)	3,840	4,143

Incoming orders in Paint and Assembly Systems increased considerably, to € 680.2 million, in the first six months of 2006. Large systems orders for painting technology came from India, China, and Italy. By contrast, the North American automotive industry practiced spending restraint, although we did win a large-scale modernization order. The systems orders ensure good capacity utilization in painting technology, application technology, and environmental systems, particularly in Germany and Asia. Second-quarter EBIT was far improved over the year-earlier period despite lower sales revenue. Plant Engineering achieved a positive result despite lower sales.

Measuring and Process Systems

	Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Amounts in € m
Incoming orders	165.1	158.7
Sales revenues	128.1	148.2
EBITDA	-1.9	3.4
EBIT	-4.4	-0.4
Employees (June 30)	1,877	1,902*

* continuing operations (excluding Measuring and Process Technologies)

Incoming orders in Measuring and Process Systems for the first six months were up 4,0% on the previous year. The stronger orders intake, particularly in the second quarter, was due to a large-scale order in Cleaning and Filtration Systems. EBIT declined markedly compared with the year-earlier period, due to weak operational earnings within the Cleaning and Filtration Systems division, where the product range is being adjusted to match the changed market conditions. Business in Balancing and Diagnostic Systems is satisfactory, although the bulk of sales and earnings will come in the second half.

Corporate Center

Corporate Center (Dürr AG) EBIT for the first half of 2006 totaled € -0.5 million following € -2.5 million for the year-earlier period. Major adjustments have been made in the Corporate Center.

Outlook

Project demand from the automotive industry remains brisk. Due to the positive demand trend in our modernization and services business and orders for new plant and equipment from Asia and Eastern Europe, we expect incoming order volume to increase in 2006. Sales revenue is unlikely to change significantly due to the smaller order backlog at the end of 2005 both in the Group and in the two divisions. We expect second-half sales revenue to be noticeably higher than both the first half and the year-earlier period. For fiscal 2007, we anticipate a slight increase in incoming orders and sales in the Group and in the divisions.

Our most important task for 2006 will be to resolutely push forward implementation of FOCUS. We expect first success of FOCUS in 2006. Only a portion of the purely mathematical savings calculated for personnel expenses will actually materialize since Asia and Germany are up to full capacity utilization and we are compelled to outsource more and more work. On this basis, we expect a considerable improvement in our operating results for 2006. However, the implementation of FOCUS is weighing on results. Our net interest position will improve over 2005. Overall, we still expect earnings after taxes for 2006 to be slightly positive. The improvements in productivity that we are seeking to achieve with FOCUS hold great potential for improving our bottom line in the medium term. We also face stiff price competition. Our target margins are 4% with respect to earnings before taxes and 8% with respect to EBITDA. These margins may still fall short of our targets for 2007 as a whole because the effects of FOCUS will take the course of the year to develop fully.

Development of Dürr stock

Dürr stock developed more or less in line with overall market trends in Germany during the reporting period. In April and May, the stock made considerable gains after the company's targets were presented to investors in various interviews and road shows following the financial press conference on March 30, 2006. General uncertainty on the market in June brought the share price back down to the level at which it started the year.

Price trend of Dürr stock in XETRA trading from January – June 2006 Compared with development of the DAX, MDAX and SDAX (indexed values), in %

Events subsequent to the reporting date

There were no events subsequent to the reporting date to report.

Stuttgart, August 10, 2006

Dürr Aktiengesellschaft

The Board of Management

Consolidated income statement

of Dürr Aktiengesellschaft, Stuttgart, for the period from January 1 to June 30, 2006

	Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005	April 1 - June 30, 2006	April 1 - June 30, 2005
Amounts in € k
Continuing operations Sales revenues	626,342	656,937	317,057	363,588
Cost of sales	-519,879	-549,384	-261,851	-303,405
Gross profit on sales	106,463	107,553	55,206	60,183
Selling expenses	-49,405	-49,226	-24,826	-26,253
General and administrative expenses	-42,722	-44,417	-19,843	-22,757
Research and development costs	-9,337	-10,306	-4,275	-5,540
Other operating income and expenses	4,690	798	4,321	790
	9,689	4,402	10,583	6,423
Restructuring expense / onerous contracts	-3,676	-1,386	-3,075	-1,386
Impairment losses less insurance benefit received	-	-	-	-
Earnings before investment income, other interest and similar
income, interest and similar expenses and income taxes	6,013	3,016	7,508	5,037
Results of associates	-447	569	-353	398
Other interest and similar income	2,750	289	1,899	126
Interest and similar expenses	-13,080	-18,331	-6,665	-9,573
Earnings before taxes of continuing operations	-4,764	-14,457	2,389	-4,012
Income taxes	1,446	2,001	-1,107	-1,895
Earnings of continuing operations	-3,318	-12,456	1,282	-5,907
Earnings of discontinued operations	30	18,773	-132	15,127
Consolidated profit or loss for the period	-3,288	6,317	1,150	9,220
Profit/loss share of minority interests
Continuing operations	64	-45	75	-14
Discontinued operations	3	-148	-	-87
Dürr Group	67	-193	75	-101
Profit/loss share of shareholders of Dürr Aktiengesellschaft
Continuing operations	-3,382	-12,411	1,207	-6,029
Discontinued operations	27	18,921	-132	15,350
Dürr Group	-3,355	6,510	1,075	9,321
Earnings per share in € (basic and diluted)
Continuing operations	-0.22	-0.87	0.08	-0.42
Discontinued operations	0.00	1.32	-0.01	1.07
Dürr Group	-0.22	0.45	0.07	0.65

Consolidated balance sheet

of Dürr Aktiengesellschaft, Stuttgart, as of June 30, 2006

	June 30, 2006	June 30, 2005	Dec. 31, 2005
Amounts in € k
Assets
Goodwill	263,991	315,398	267,377
Other intangible assets	19,067	37,322	20,777
Property, plant and equipment	116,146	128,047	121,671
Investment property	12,147	18,470	13,068
Investment in associates	11,883	16,939	12,892
Other financial assets	5,478	5,846	4,950
Income tax receivables	-	151	-
Deferred taxes	46,818	48,245	43,170
Prepaid expenses	783	959	960
Non-current assets	476,313	571,377	484,865
Inventories and prepayments	52,619	69,412	43,716
Trade receivables	396,110	523,199	479,705
Income tax receivables	5,747	2,441	6,158
Other receivables and other assets	24,326	66,098	43,171
Cash and cash equivalents	85,970	52,311	124,658
Prepaid expenses	5,833	6,438	3,010
Current assets	570,605	719,899	700,418
For informational purposes: Total assets of continuing operations	1,046,918	1,291,276	1,185,283
Assets of a disposal group classified as held for sale (discontinued operations)	-	67,505	3,832
	570,605	787,404	704,250
Total assets Dürr Group	1,046,918	1,358,781	1,189,115
Equity and liabilities Subscribed capital	40,264	36,603	40,264
Capital reserve	160,459	159,000	160,459
Revenue reserves	62,612	51,447	65,967
Other comprehensive income	-24,245	-3,993	-20,140
Equity without minority interests	239,090	243,057	246,550
Minority interests	1,358	1,612	1,517
Equity with minority interests	240,448	244,669	248,067
Provisions for pension obligations	67,961	54,315	67,818
Other provisions	9,951	19,313	9,753
Bonds	188,953	187,146	187,901
Other financial liabilities	11,500	25,405	12,602
Income tax liabilities	12,701	15	443
Deferred taxes	46,522	54,094	44,408
Deferred income	1,631	1,763	1,632
Non-current liabilities	339,219	342,051	324,557
Other provisions	62,302	91,697	81,979
Trade payables	263,398	349,166	347,833
Financial liabilities	19,487	147,154	17,410
Income tax liabilities	9,270	7,104	27,332
Other liabilities	112,015	127,035	138,896
Deferred income	779	5,330	1,241
Current liabilities	467,251	727,486	614,691
For informational purposes: Total liabilities of continuing operations	1,046,918	1,314,206	1,187,315
Liabilities in direct connection with assets classified as held for sale (discontinued operations)	-	44,575	1,800
	467,251	772,061	616,491
Total equity and liabilities Dürr Group	1,046,918	1,358,781	1,189,115

Consolidated statement of changes in equity

of Dürr Aktiengesellschaft, Stuttgart, for the period from January 1 to June 30, 2006

	Subscribed capital	Capital reserve	Revenue reserves	Other com prehensive income	Equity without minority interests	Minority interests	Equity with minority interests
Amounts in € k
January 1, 2005	36,603	159,000	44,937	-19,670	220,870	1,875	222,745
Profit/loss from continuing operations	-	-	-12,411	-	-12,411	-45	-12,456
Profit/loss from discontinued operations	-	-	18,921	-	18,921	-148	18,773
Other comprehensive income	-	-	-	15,677	15,677	-70	15,607
June 30, 2005	36,603	159,000	51,447	-3,993	243,057	1,612	244,669
January 1, 2006	40,264	160,459	65,967	-20,140	246,550	1,517	248,067
Profit/loss from continuing operations	-	-	-3,382	-	-3,382	64	-3,318
Profit/loss from discontinued operations	-	-	27	-	27	3	30
Other comprehensive income	-	-	-	-4,105	-4,105	-2	-4,107
Other changes	-	-	-	-	-	-224	-224
June 30, 2006	40,264	160,459	62,612	-24,245	239,090	1,358	240,448

Statement of recognized income and expense in the consolidated financial statements

of Dürr Aktiengesellschaft, Stuttgart, as of June 30, 2006

	Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Amounts in € k
Change in the fair value recorded in equity of financial instru ments used for hedging purposes	1,635	-988
Adjustment item for currency translation of foreign subsidiaries	-5,575	16,223
Actuarial gains/losses from defined benefit obligations and similar obligations	477	-
Deferred taxes on revaluations recognized directly in equity	-644	372
Revaluations recognized directly in equity	-4,107	15,607
Profit after tax	-3,288	6,317
Total profit for the period and revaluations recognized directly in equity in the period	-7,395	21,924

Consolidated cash flow statement

of Dürr Aktiengesellschaft, Stuttgart, for the period from January 1 to June 30, 2006

	Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Amounts in € k
Earnings before interest and taxes (EBIT)	5,566	3,585
Income tax paid	-5,296	-900
Results of associates	447	-771
Dividends from associates	155	202
Amortization and depreciation of non-current assets	10,386	11,661
Net gain on the disposal of property, plant and equipment	-502	-3,023
Non-cash expenses and income	-635	4,213
Changes in operating assets and liabilities
Inventories	-10,275	-9,485
Trade receivables	71,857	63,188
Other receivables and assets	-1,498	682
Provisions	-17,514	-22,746
Trade payables	-78,407	-158,151
Other liabilities (other than bank)	-23,875	7,169
Other assets and liabilitities	-2,199	-643
Cash flow from operating activities of continuing operations	-51,790	-105,019
Cash flow from operating activities of discontinued operations	1,365	-5,322
Cash flow from operating activities	-50,425	-110,341
Purchase of intangible assets	-2,223	-3,085
Purchase of property, plant and equipment	-3,794	-6,259
Purchase of other financial assets	-608	-109
Proceeds from the disposal of non-current assets	937	7,102
Purchase price refund	20,000	-
Disposal of discontinued operations, net of cash disposed of	1,873	77,356
Cash flow from investing activities of continuing operations	16,185	75,005
Cash flow from investing activities of discontinued operations	-3	-2,286
Cash flow from investing activities	16,182	72,719
Change in current bank liabilities	1,726	53,284
Payment of finance lease liabilities	-467	-449
Change in financial liabilities to associates	-49	-1,083
Internal financing	1,212	-9,160
Interest received	1,631	167
Interest paid	-12,131	-16,421
Cash flow from financing activities of continuing operations	-8,078	26,338
Cash flow from financing activities of discontinued operations	-1,229	10,606
Cash flow from financing activities	-9,307	36,944
Effects of exchange rate changes	4,663	1,649
Change in cash and cash equivalents	-38,887	971
Cash and cash equivalents
At the beginning of the period	124,857	51,471
At the end of the period	85,970	52,442
From continuing operations	85,970	44,273
From discontinued operations	-	8,169
Dürr Group	85,970	52,442

Notes to the consolidated financial statements January 1 to June 30, 2006

1. Summary of significant accounting policies

The Company

Dürr Aktiengesellschaft ("Dürr AG" or the "Company") is headquartered at Otto-Dürr-Strasse 8 in 70435 Stuttgart. Dürr AG and its subsidiaries ("Dürr" or the "Group") are a worldwide leading supplier of plants, systems and services for automobile production. The offering covers all the main production and assembly stages of a vehicle. As a system supplier, Dürr designs and constructs paint shops and final assembly plants. Dürr also supplies cleaning systems, filtration systems and balancing machines for the manufacture of engines, transmission and vehicle components. Dürr´s main customers are the major companies in the automobile industry worldwide.

The consolidated financial statements are prepared in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB ("Handelsgesetzbuch": German Commercial Code). The consolidated financial statements are in line with all IFRSs that have to be adopted by the balance sheet date.

The accounting policies used generally correspond to the methods applied in the consolidated financial statements of December 31, 2005; we refer the reader to our 2005 annual report.

In 2005, Dürr decided to apply IAS 19 (revised) to measure pension commitments. According to this standard, actuarial gains and losses are recorded without effect on income directly in equity. Comparability with the prior-year figures is ensured by adjusting the balance sheet positions concerned. The effects in terms of amount can be seen from the statement of changes in Group equity as of January 1, 2004 and December 31, 2004 (adjusted); we refer the reader to the 2005 annual report.

Income that is recorded during the reporting period for seasonal reasons, due to cyclical developments, or only occasionally is not cut off in the consolidated interim financial statements. Expenses that are incurred irregularly during the reporting period have been cut off in those cases where they would also be cut off at year-end.

The income taxes were determined on the basis of an estimated average annual effective income tax rate.

The consolidated financial statements are prepared in thousands of euros (€ k), unless stated otherwise.

2. Consolidated group

Besides Dürr AG, the consolidated financial statements as of June 30, 2006, contain all domestic and foreign entities which Dürr AG can control, directly or indirectly (control relationship). The entities are included in the consolidated financial statements from the date when the possibility of control was obtained.

Besides Dürr AG as parent company, the consolidated group contains the following entities:

	June 30, 2006	June 30, 2005
Number of fully consolidated entities
Germany	17	22
Other countries	44	70
	61	92

	June 30, 2006	June 30, 2005
Number of entities accounted for at equity
Germany	1	1
Other countries	5	6
	6	7

The consolidated financial statements contain one entity (June 30, 2005: nine) in which minority shareholders hold interests.

In the reporting period, two companies were deconsolidated.

3. Discontinued operations

Effective March 10, 2006, SRH Systems Ltd., Worcester, Great Britain - which was part of the Development Test Systems (DTS) business unit - was sold to Horiba, Japan.

Furthermore, subsequent effects of the divestments made in 2005 of the DTS, Services, and Measuring and Process Technologies (MPT) business units are included.

4. Earnings per share

Earnings per share are determined pursuant to IAS 33 (Earnings per Share).

If there are dilutive effects present, two different ratios for earnings per share must be disclosed. The ratio "earnings per share" does not take account of dilutive effects; the earnings share of the shareholders of Dürr Aktiengesellschaft is divided by the weighted average number of shares outstanding. The ratio "earnings per share (diluted)" accounts not only for the shares outstanding, but also for shares potentially available on the basis of options.

The calculation is presented below (all amounts in thousands of euros or thousands of shares, except earnings per share). Basic and diluted earnings per share are the same in the periods to June 30, 2006 and in 2005, as no new option rights were issued and all existing option rights have expired.

		Jan. 1 - June 30, 2006	Jan. 1 - June 30, 2005
Profit/loss allocable to shareholders of Dürr Aktiengesellschaft	in € k	-3,355	6,510
of which continuing operations	in € k	-3,382	-12,411
of which discontinued operations	in € k	27	18,921
Number of shares outstanding (weighted average)		15,728.0	14,298.2
Earnings per share (basic and diluted)	in €	-0.22	0.45
of which continuing operations	in €	-0.22	-0.87
of which discontinued operations	in €	0.00	1.32

5. Liabilities from restructuring measures

Liabilities from restructuring measures have decreased in comparison with December 31, 2005 by € 6,712 thousand to € 28,945 thousand. The decrease is mainly due to utilization with effect on income of liabilities formed in prior periods.

Expenses from restructuring measures in the first half of 2006 amount to € 3,676 thousand (first half of 2005: € 1,386 thousand). These expenses totaled € 601 thousand in the first quarter of 2006.

6. Segment reporting

The primary reporting is based on the divisions of the Group. The Dürr Group is comprised of a management holding and two divisions differentiated by product and performance spectrum that each have global responsibility for their products and results.

The Corporate Center mainly consists of Dürr AG.

1st half 2006	Paint and Assembly Systems	Measu ring and Process Systems	Corporate Center	Consoli dation	Continuing operations	Discon tinued operations	Total divisions
Amounts in € k
Sales revenues with external customers	498,219	128,123	-	-	626,342	143	626,485
Sales revenues with other divisions	172	1,080	-	-1,252	-	-	-
Total sales revenues	498,391	129,203	-	-1,252	626,342	143	626,485
EBIT	10,867	-4,389	-495	30	6,013	-605	5,408
Employees (as of June 30, 2006)	3,840	1,877	38	-	5,755	-	5,755

1st half 2005	Paint and Assembly Systems	Measu ring and Process Systems	Corporate Center	Consoli dation	Continuing operations	Discon tinued operations	Total divisions
Amounts in € k
Sales revenues with external customers	508,758	148,179	-	-	656,937	221,768	878,705
Sales revenues with other divisions	861	3,805	-	-4,666	-	-	-
Total sales revenues	509,619	151,984	-	-4,666	656,937	221,768	878,705
EBIT	7,608	-372	-2,536	-1,684	3,016	24,836	27,852
Employees (as of June 30, 2005)	4,143	2,998	54	-	7,195	551	7,746

November 14, 2006 Interim report on first nine months of 2006

Financial calendar 2007

March 29, 2007 Financial press conference March 29, 2007 Analysts´ conference May 10, 2007 Interim report first quarter 2007 May 18, 2007 Annual shareholders´ meeting, Stuttgart August 09, 2007 Interim report first half 2007 November 15, 2007 Interim report on first nine months of 2007

Contact

Please contact us for Dürr AG further information: Günter Dielmann

Corporate Communications & Investor Relations Otto-Dürr-Straße 8 70435 Stuttgart Phone: +49-711-136-1785 Fax: +49-711-136-1034 corpcom@durr.com investor.relations@durr.com

www.durr.com

This interim report is the English translation of the German original.

This interim report includes forward-looking statements about future developments. As is the case for any business activity conducted in a global environment, such forward-looking statements are always subject to uncertainty. Our information is based on the conviction and assumptions of the Board of Management of Dürr AG, as developed from the information currently available. However, the following factors may affect the success of our strategic and operating measures: geopolitical risks, changes in general economic conditions (especially a prolonged recession in Europe or North America), exchange rate fluctuations and changes in interest rates, new products launched by competitors, and a lack of customer acceptance for new Dürr products or services, including growing competitive pressure. Should any of these factors or other imponderable circumstances arise, or should the assumptions underlying the forwardlooking statements prove incorrect, actual results may differ from those projected. Dürr AG undertakes no obligation to provide continuous updates of forward-looking statements and information. Such statements and information are based upon the circumstances as of the date of their publication.