BERU AG / Final Results
27.03.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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BERU achieves slight revenue growth in 2007
moderate growth expected in 2008
(Ludwigsburg, March 27, 2008) BERU Aktiengesellschaft, Ludwigsburg,
generated total sales revenue of EUR 450.6 million in 2007 (2006: EUR 439.0
million), achieving just slight revenue growth of 2.6% compared with the
prior year. Operating profit before special items amounted to EUR 43.1
million. Burdened by restructuring costs of approximately EUR 4 million,
profit on ordinary activities (EBIT) amounted to EUR 39.1 million (EUR 53.5
million). This represents an EBIT margin of 8.7% (12.2%). Net profit
amounted to EUR 30.9 million. Net profit in 2006 amounted to EUR 43.7
million, but was boosted by a one-time special tax gain of EUR 7.0 million.
Earnings per share for 2007 amounted to EUR 2.98 (EUR 4.30).
'The past financial year did not run according to plan for BERU and
represents the low point in the negative development of margins in recent
years,' stated Dr. Thomas Waldhier, Chairman of the Executive Board of BERU
AG since October 2007, 'but we assume that we will achieve the turnaround
in 2008.'
High growth rates for tire-pressure monitoring systems
Of the BERU Groups divisions, Electronics and Sensors once again achieved
the strongest revenue growth of 13.2%. This divisions main source of
growth was the tire-pressure monitoring system TSS (Tire Safety System),
which was responsible for EUR 72.6 million of the Groups total revenue, or
50% more than in the prior year.
Core division defends its market position
In its core division of Diesel Cold Start Technology, BERU defended its
leading market position despite a decrease in sales revenue. This BERU
division generated revenue of EUR 166.9 million compared with EUR 181.2
million in 2006. The reasons for the decrease include pressure on prices
and intense competition. However, due to the ongoing worldwide trend
towards diesel engines and the introduction of innovative products such as
the Pressure Sensor Glowplug, we anticipate rising revenue in this division
in the future.
Positive development of Ignition Technology
BERUs Ignition Technology division generated sales revenue of EUR 130.0
million (EUR 122.0 million), representing an increase of 6.6%. This growth
was primarily due to higher unit sales of ignition coils, causing revenue
from that product to rise from EUR 35.7 million to EUR 42.6 million.
The positive developments in the Electronics and Sensors and the Ignition
Technology divisions compensated for the decrease in revenue generated by
Diesel Cold Start Technology.
A weak year in the aftermarket business
In the high-margin aftermarket business, BERU was unable to offset the low
sales revenue at the beginning of the year caused by the mild winter
weather. Revenue fell by 4.2% compared with the prior year to EUR 117.6
million. Although the Original Equipment segment succeeded in increasing
its sales revenue by 5.9% to EUR 305.8 million, the high pressure on prices
combined with rising raw-material and energy prices as well as high wage
increases in Germany led to lower earnings for the year. The General
Industry segments sales revenue of EUR 27.2 million was very close to the
prior-year level (EUR 27.5 million).
Strong position in the domestic market
BERU once again extended its market position in Germany, its domestic
market, where sales revenue increased by 17.6% from EUR 137.1 million to
EUR 161.2 million. In the rest of Europe, revenue fell by 10%. This was
primarily a result of a change in distribution channels. Since 2007, BERUs
products have been exported directly to customers in Asia; previously these
markets were supplied via a European wholesaler. The unusually strong
growth in Asia of 25.6% to EUR 48.6 million reflects this change.
Earnings burdened by special items and pressure on prices
In the year 2007, BERU posted operating profit before special items of EUR
43.1 million. Profit on ordinary activities (EBIT) amounted to EUR 39.1
million, equivalent to an EBIT margin of 8.7% in relation to sales revenue.
The special items reducing profit by approximately EUR 4 million resulted
from the efficiency-improving program decided upon in December 2007 and
from the restructuring of the Executive Board.
Ongoing investment
BERU continued to make substantial investments in innovative production
technologies and new product startups in 2007. Total investment amounted to
EUR 40.2 million (EUR 43.2 million). Adjusted for capitalized development
expenses of EUR 10.1 million, investment amounted to EUR 30.1 million. More
than 85% of that amount was invested at our German sites. BERUs research
and development spending totaled EUR 34.3 million (EUR 33.5 million). As in
the prior year, this represents 7.6% of total sales revenue.
Renewed increase in the equity ratio
The balance sheet total increased to EUR 493.2 million at the end of 2007
(EUR 474.0 million). Equity rose to EUR 360.0 million (EUR 342.4 million);
the equity ratio, excluding minority interests, is thus 73.0% (72.2%).
The Groups cash flow (net profit for the year plus depreciation,
amortization and impairments and changes in non-current provisions)
amounted to EUR 61.6 million in 2007 (EUR 77.4 million). All payments for
investments as well as the dividend were thus financed out of the cash
flow.
First positive results from efficiency-improving program moderate growth
expected for 2008
In December 2007, due to the dissatisfactory business development, a
program designed to improve efficiency was decided. The first step was a
reduction in the size of the Executive Board from four to three members. As
a result of internal rationalization, the worldwide headcount is to be
reduced by 160 before the end of 2008; so far the workforce has been
reduced by 82 persons. The first positive results of the
efficiency-improving program are already apparent. In the medium term,
annual savings of approximately EUR 5 million are to be achieved.
The Executive Board expects only slight organic growth in 2008. As in 2007,
revenue growth will be of a low single-digit percentage. BERU anticipates
profit from ordinary activities (EBIT) of EUR 40-45 million in 2008. The
full effects of the efficiency-improving program will be felt as of 2009.
New orders and the market launch of innovative products should lead to
stronger growth once again from 2009 onwards.
'We are working on further advances in our innovation capabilities so that
we can achieve sustained improvements in our competitiveness,' stated
Waldhier. 'In addition, we have to expand our activities outside Europe in
order to fully participate in the development of growth markets.'
Dividend proposal
In continuation of the past dividend policy, at the Annual Shareholders
Meeting of BERU AG to be held on May 21, 2008, the Executive Board and the
Supervisory Board intend to propose the distribution of a dividend of EUR
1.10 per share. This represents a total dividend payout of EUR 11.0
million.
Annual report
BERU AG published its Annual Report 2007 on March 27, 2008 and made it
available on the companys Internet website at www.beru.com.
BERU business development in 2007
Consolidated income statement <pre>
EUR million 2007 2006
Revenue 450.6 439.0
Changes in inventories and own work capitalized 2.8 -0.8
Other operating income 5.0 11.1
Material expenses -186.8 -175.5
Personnel expenses -124.3 -117.4
Depreciation, amortization and impairments -31.5 -34.4
Other operating expenses -75.0 -66.6
Other taxes -1.7 -1.9
Profit on ordinary activities 39.1 53.5
Financial income 5.2 3.0
Profit before income taxes 44.3 56.5
Income tax expense -13.4 -12.8
Profit for the year 30.9 43.7</pre>
Consolidated balance sheet <pre>
EUR million Dec. 31, 2007 Dec. 31, 2006
Assets
Non-current assets 210.6 202.9
Current assets 282.6 271.1
Equity and liabilities
Equity* 363.4 345.1
Non-current assets 39.6 44.6
Current assets 90.2 84.3</pre>
Other key figures <pre>
EUR million 2007 2006
Dividend payout 11.0** 11.0
Dividend per share (EUR) 1.10** 1.10
Investment*** 40.2 43.2
R&D expenses 34.3 33.5
Number of employees (on the balance sheet date) 2,560 2,555</pre>
*Including minority interests
**Proposal to be made by the management on the appropriation of earnings at
the Annual Shareholders Meeting on May 21, 2008
***Includes capitalized development expenses of EUR 10.1 million (EUR 10.0
million)
DGAP 27.03.2008 ---------------------------------------------------------------------------
Language: English
Issuer: BERU AG
Mörikestr. 155
71636 Ludwigsburg
Deutschland
Phone: +49 (0)7141 132-931
Fax: +49 (0)7141 132-586
E-mail: investor-relations@beru.de
Internet: www.beru.de
ISIN: DE0005072102
WKN: 507210
Listed: Regulierter Markt in Frankfurt (General Standard), Stuttgart;
Freiverkehr in Berlin, München, Hamburg, Düsseldorf
End of News DGAP News-Service
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DGAP-News: BERU AG: BERU achieves slight revenue growth in 2007 moderate growth expected in 2008
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