GRAMMER AG — Earnings Release 2009

Aug 11, 2009

News Details

Corporate | 11 August 2009 06:55

Grammer AG: First Half Year January to June 2009

Grammer AG / Half Year Results

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Decline in demand impacts revenue and earnings in the first half year

Stabilization of the Automotive division at a low-level
EBIT of EUR -19.4 million weighed down by one-off expenses totaling EUR 9.8
million
Cost-cutting measures are taking hold and will intensified further

Amberg, August 11, 2009 - After a weak first half, GRAMMER AG achieved
consolidated revenue totaling EUR 341.7 million, a 37.6 % decline as
compared to the previous year. As expected, consolidated earnings before
interest and tax (EBIT) ended up negative in the first six months of the
year, at EUR -19.4 million, considerably lower than the prior-year level of
EUR 21.9 million. One-off expenses for restructuring in the amount of EUR
9.8 played a significant role in the earnings decline. Although the
measures implemented for capacity adjustment are having a positive effect,
costs could not reduced yet in adequate proportion to the decrease in
revenue.

Among the regions, Europe was particularly hard hit, with revenues down
38.2 % to EUR 249.7 million. North and South America also saw revenues fall
to EUR 44.4 million (previous year: 82.6). Only in Asia were the declines
in both divisions less significant. 'We expect the situation in the
relevant markets to remain difficult. Although the bottom seems to have
been reached in Automotive business, we are anticipating further production
cuts by customers in the Seating Systems division,' says Dr. Kempis, CEO of
GRAMMER AG.

Solid basis ensures financial flexibility
With total assets of EUR 475.7 million (December 31, 2008: 481.0), GRAMMER
AG had equity totaling EUR 155.2 million at the end of the second quarter
(December 31, 2008: 173.0). The equity ratio remained almost unchanged at
33 % (December 31, 2008: 36). Net debt was up as compared to the previous
year, to EUR 95.4 million. The gearing ratio remained solid at 61 %,
despite the negative trend. Group investments totaled EUR 14.5 million in
the first half of the year (previous year: 13.1). In the Seating Systems
division, the majority of investment was in replacements and
rationalization measures. In the Automotive division, investments were up
to EUR 9.1 million (previous year: 8.5), which primarily went toward the
establishment of capacities for new production starts in Mexico and
Schmölln.

Automotive: Stabilization at a low-level
The Automotive division also saw a substantial decline in revenue as a
result of the sustained period of weak demand for premium vehicles. In the
first half, revenue sank by 36.9 % to EUR 221.5 million (previous year:
351.2). Second quarter revenue fell short of the prior-year level by EUR
60.4 million, ending at EUR 116.8 million. This represents a decline of
34.1 % year-over-year. EBIT was also lower in the second quarter, at EUR
-3.1 million. Revenue and earnings show a first trend of stabilization as
compared to the first quarter. This indicates that the rationalization
measures implemented early on are beginning to have an effect.

EBIT down significantly in Seating Systems
Revenue in the Seating Systems division fell by at least 40 % to EUR 125.9
million (previous year: 210.4) in the first six months, as a result of
substantial order declines in offroad and truck products. Looking at the
second quarter of 2009, the percentage drop was even greater, with a EUR
56.4 million or 48 % decrease. Consequently, EBIT declined to EUR -5.4
million. The cost and capacity rationalization offensive already launched
was not enough yet to offset the drop-off.

Number of employees further adjusted in line with order situation
The number of employees has been further adjusted to account for the low
volume of orders. At the end of the second quarter of 2009, there were
7,320 people employed within the Group. Compared to the previous year, this
represents a decrease of 2,434 employees, or 25 %.

Outlook
GRAMMER AG expects full-year 2009 consolidated revenue to be roughly 30 %
lower than in the previous year, with a further decline in employee
numbers. According to Dr. Kempis, the continuation of rationalization and
fixed-cost reduction will remain the central focus of the company over the
coming months. This is important, in particular, to counteract the drastic
fall-off in offroad business. Given the projected costs of these measures
and the marked decline in revenues, the Company does not see the earnings
forecast for the current fiscal year in total as positive. The operating
result is expected to improve following implementation of the measures, but
overall earnings will be negative as a result of the restructuring costs.
'But, with the measures in place,' emphasizes Dr. Kempis, 'GRAMMER Group is
well-positioned for a return to profitable growth in the time after the
crisis.'

The GRAMMER interim/half-year report January to June 2009 is available for
download from the Internet on the company website: www.grammer.com.

Company Profile
GRAMMER AG, Amberg, Germany, is specialized in the development and
production of components and systems for automotive interiors as well as
driver and passenger seats for offroad vehicles (tractors, construction
machinery, forklifts), trucks, buses and trains.
Our Seating Systems division comprises the truck and offroad seat segments
as well as train and bus seating. In the Automotive division, we supply
headrests, armrests, center console systems and integrated child safety
seats to premium automakers and automotive system suppliers. GRAMMER is
represented in 17 countries worldwide with a workforce of approx. 7,300
employees across its 23 fully consolidated subsidiaries. GRAMMER shares are
listed in the SDAX segment of the German Stock Exchange, and are traded on
the Munich and Frankfurt stock exchanges, via the Xetra electronic trading
platform and on the OTC markets of the Stuttgart, Berlin and Hamburg stock
exchanges.

GRAMMER Investor Relations
Ralf Hoppe
Tel. +49 (0) 9621 66 22 00
Email: investor-relations@grammer.com

11.08.2009 Financial News transmitted by DGAP

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, Düsseldorf, Stuttgart, Hamburg

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