GRAMMER AG — Earnings Release 2007

Mar 31, 2008

News Details

Corporate | 31 March 2008 11:53

Grammer AG: Revenues grew in both divisions

Grammer AG / Final Results

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Revenues grew in both divisions Grammer to decisively continue its
Group-wide optimization program Proposed dividend remains unchanged at €
1.00 per share

Amberg, March 31, 2008 – Grammer AG will focus on the consequent
implementation of its current growth and optimization program during its
2008 financial year. In addition, the Group plans to further strengthen its
position as a provider of innovative solutions in its areas of business,
the Board of Management explained at today’s annual results press
conference in Frankfurt am Main. The Board of Management announced that
shareholders may expect to receive a stable dividend of 1.00 euro per share
for the last financial year. Based on the XETRA closing price of the stock
on December 28, 2007, the dividend yield is 6.2 percent.

CEO Dr. Rolf-Dieter Kempis said: 'The stable dividend is a clear signal of
reliability to our shareholders, even in today’s challenging market
environment. We are progressing as planned with the optimization program we
launched in 2007, and we anticipate a slight increase in our operating
result in the current year. Our strong increase in revenues underlines our
company’s potential for further growth.'

As previously announced on February 25, 2008, Grammer AG recorded a 13.3
percent increase in Group revenues, which rose to 998.1 million euros
(previous year: 881.0) in the 2007 financial year. Both the Seating Systems
division and the Automotive division contributed to this significant
increase in revenues. As expected, earnings before interest and taxes
(EBIT) after non-recurring charges amounted to 32.1 million euros (previous
year: 38.9). Grammer thus achieved its earnings forecast made in October
2007.

After taxes, Grammer posted a Group net income for the year of 17.6 million
euros following 21.3 million euros in the previous year. Earnings per share
amounted to 1.72 euros (previous year: 2.09).

Growth and optimization plan progressing as planned

In the second half of 2007 Grammer AG initiated a Group-wide program to
increase profitability. The key elements of the program are a significant
reduction in personnel costs, measures to increase efficiency and optimize
production processes, as well as the realization of material cost savings.
By the end of the year the company had achieved its first targets as
planned. After the end of the reporting period, Grammer announced in
February 2008 that it was raising the targeted savings goal to at least 40
million euros and stated that it planned to achieve this by making
additional job cuts and optimization measures in material purchasing and
processes.

Strong sales growth seen in all regions

During the year under review Grammer recorded significantly higher revenues
in all regions. Revenues in the European region rose by 9.4 percent to
752.1 million euros (previous year: 687.2). The North and South America
region reported a 41.1 percent increase in revenues to 151.8 million euros
(previous year: 107.6) and thus contributed disproportionally to Group
revenue growth. Business also developed favorably in the Asian markets as
revenues posted by the Far East/Other region advanced by 9.3 percent to
94.2 million euros (previous year: 86.2).

Revenues and earnings rise at Seating Systems division

During the last financial year Grammer combined the previous Driver Seats
and Passenger Seats segments in the newly formed Seating Systems division.
Grammer further expanded its leading market position in this sector during
2007 as it increased its revenues by 16.6 percent to 363.3 million euros
(previous year: 311.5). Grammer especially benefited from the good order
situation in the off-road sector and in the truck segment. The Group also
noted rising revenues in its business for busses and trains.

The company’s focus on niche products was favorably reflected in the
division’s earnings as Seating Systems increased its EBIT figure by 43.1
percent to 24.1 million euros (previous year: 16.8).

Revenue increase in the Automotive division

The export markets and the premium segment mainly drove demand in the
Automotive division. The division posted revenues of 657.7 million euros
(previous year: 574.8), or a plus of 14.4 percent. In addition to the good
production figures posted by new customers, model changes in volume class
vehicles like the Mercedes-Benz C-Class also had a favorable impact on
revenues, as did the start of production of sensor-controlled, crash-active
head restraints for several BMW series. Grammer’s promising market position
as a developer and supplier of innovative systems was again confirmed when
the company received the order to develop the entire center console for the
VW Touareg.

The EBIT figure posted by the Automotive division decreased to 10.7 million
euros from the 22.7 million euros noted in the previous year. The decline
was due to higher prices for raw materials, the weak US dollar, as well as
higher wage and infrastructure costs at Eastern European locations.

Solid financial structure

At the end of the 2007 financial year Grammer continued to have a solid
financial structure leaving sufficient room to finance future growth. As of
December 31, 2007 the Grammer Group had total assets of 497.5 million euros
(previous year: 476.6). A slight increase in equity to 184.7 million euros
(previous year: 174.8) led to an equity ratio of 37.1 percent, which was
marginally higher than in the previous year (36.7 percent).

Cash flow from business operations increased notably from 29.7 million
euros in 2006 to 38.5 million euros in the 2007 financial year. The Group’s
cash and cash equivalents rose to 22.9 million euros from the 18.3 million
euros noted in the previous year.

Investments driving growth and efficiency

Grammer Group’s capital expenditures for plant and equipment as well as
intangible assets rose to 34.6 million euros in 2007 (previous year: 32.1).
Resources were allocated primarily to the expansion of the Group’s
production capacities for pending customer projects, in measures to
optimize local facilities, as well as in measures to boost the Haselmühl
site’s energy efficiency.

As part of the revision of Grammer’s production systems and with a view to
decisions on sites, any further investment decisions will in the future
follow strict profitability criteria.

Outlook

Grammer noted a robust development of its business activities during the
first months of 2008. Both of the company’s business divisions started the
new year with a good order book. The Management Board anticipates that
Group revenues will rise slightly to over 1 billion euros in the 2008
financial year, with growth coming mainly from regions outside of Europe.
The Management Board believes that EBIT will be slightly higher than the
figure posted for the 2007 financial year. During the current year the
Group will build the foundation for a sustainable increase in profitability
by decisively implementing its growth and optimization program.

Note to the editors:

The Grammer Annual Report 2007 is available on the Company’s website
www.grammer.com.

Key figures of Grammer

in EUR m 2007 2006
Revenue 998.1 881.0
EBITDA 55.6 62.6
EBITDA margin 5.6% 7.1%
EBIT 32.1 38.9
EBIT margin 3.2% 4.4%
Earnings before taxes 22.8 32.0
Net profit 17.6 21.3
Total assets 497.5 476.6
Equity 184.7 174.8
Equity Ratio 37.1% 37.0%
Net debt 69.9 57.9
Gearing 37.9% 33.1%
Capex 34.6 32.1
Depreciation 23.5 23.7
Employees (Dec 31, 2007) 9527 8,925

About Grammer AG

Grammer AG, based in Amberg, specializes in the development and production
of components and systems for automobile interiors and of driver and
passenger seats for offroad vehicles, trucks, buses, coaches and trains.
'Automotive', Grammer’s strongest division in terms of turnover, supplies
head restraints, armrests and central consoles as well as integrated
child’s safety seats to major car manufacturers and system suppliers to the
automotive industry. The second division, 'Seating Systems', comprises the
segments driver and passenger seats. In the area of driver seats, Grammer
is active both as an original equipment manufacturer and in the refitting
and upgrading business, supplying prestigious manufacturers of trucks and
offroad vehicles. In the passenger seat segment, Grammer offers its
products to original equipment manufacturers and railway operators. With
more than 9,500 employees in 21 consolidated companies, Grammer shares are
listed in the SDAX and traded on the Munich and Frankfurt Stock Exchanges
via the electronic platform Xetra as well as in OTC trading on the
Stuttgart, Berlin and Hamburg Stock Exchanges.
31.03.2008 Financial News transmitted by DGAP

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Language: English
Issuer: Grammer AG
Postfach 14 54
92204 Amberg
Deutschland
Phone: +49 (0)9621 66-0
Fax: +49 (0)9621 66-1000
E-mail: investor-relations@grammer.com
Internet: www.grammer.com
ISIN: DE0005895403, DE0005895403
WKN: 589540, 589540
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), München;
Freiverkehr in Berlin, Stuttgart, Hamburg, Düsseldorf

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