Tognum AG / Interim Report/Forecast 12.08.2008 Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Key figures of the Tognum Group ------------------------------- In EUR million H1 H1 Cha- Q2 Q2 Cha- 2007 2008 nge 2007 2008 nge Order intake 1,600 1,648 +3% 785 773 -2% Revenues 1,336 1,517 +14% 669 790 +18% EBIT (adjusted) 207 200 -3% 107 100 -7% Return on sales (adjusted) 15.5% 13.2% 15.9% 12.7% Net profit (adjusted) 104 133 +28% 57 75 +32% Earnings per share 0.87 1.01 +16% 0.47 0.57 +21% (adjusted) in EUR Free cash flow* -24 +53 --- -2 -2 Equity ratio 7.3% 22.6% 7.3% 22.6% * Free cash flow comprises cash flow from operating activities and cash flow from investing activities [The full interim report for the first half and second quarter of 2008 is available for download at http://investors.tognum.com] Tognum Group in H1 2008 ----------------------- Order intake increased to EUR 1,648 million Revenues up to EUR 1,517 million Adjusted EBIT at EUR 200 million Adjusted Group profits increased to EUR 133 million Target corridor for the year confirmed: Adjusted annual earnings per share to rise by over 25% to more than EUR 2.00 Friedrichshafen/Germany, 12 August 2008. Tognum Group continued on its successful growth path in the first half of 2008: order intake, influenced by project business, rose by 3% to EUR 1,648 million compared to the prior year period (H1 2007: EUR 1,600 million). Revenues increased by 14% to EUR 1,517 million (H1 2007: EUR 1,336 million). Without negative exchange rate effects resulting from the weakness of the US Dollar, order intake in the first half-year would have increased by 7% and revenues by 18%. 'Our broad application portfolio and our regionally balanced sales distribution again lead to fully utilised capacities in 2008', commented Volker Heuer, Chairman of the Executive Board of Tognum AG. 'This shows that our business model also works in a difficult economic environment.' Clear increase in net profit Tognum achieved adjusted net profit of EUR 133 million in the first six months of 2008. This corresponds to an increase of 28% compared to the prior year (H1 2007: EUR 104 million). Reduced net financial debt together with a lower interest expense contributed to this result. Free cash flow* for the 6-month period improved from EUR -24 million to EUR +53 million. EBIT influenced by Dollar weakness and additional costs Adjusted earnings before interest and taxes (EBIT) amounted to EUR 200 million (H1 2007: EUR 207 million) in the first six months of 2008. The primary influence on the current profit situation is the continuing weakness of the US Dollar which led to an average exchange rate of 1.53 USD/EUR in the first six months (first half 2007: 1.33 USD/EUR). Preparatory efforts for the future expansion of the company and the legal spin-off of Rotorion (propeller shafts division) in Friedrichshafen also had an impact. Increased revenues in both segments Both reporting segments saw an increase in revenues compared to the prior year. The Engines segment increased its half-year revenues by around 12% to EUR 1,286 million (H1 2007: EUR 1,146 million). Business in Europe, Africa and South America as well as in the Asia/Pacific region contributed with above-average increases in individual application areas especially in the areas of Defense, Power Generation and Marine. Adjusted EBIT in the Engines segment grew by 6% to EUR 199 million (H1 2007: EUR 188 million). The Onsite Energy Systems & Components (OES&C) segment achieved revenues of EUR 300 million. This is approx. 28% more than in the prior year period (H1 2007: EUR 235 million). This marked increase resulted in particular from the full half-year revenues in 2008 of the US subsidiary Katolight Corp. which was consolidated only as of April 2007 due to the date of purchase. The areas of fuel injection systems and propeller shafts, in particular, contributed to the segments organic growth of 12%. Adjusted EBIT at EUR 16 million was at the level of the prior year period (H1 2007: EUR 17 million). Employee numbers continued to increase The Tognum Group employed 8,592 persons worldwide on 30 June 2008, 413 employees or 5% more than at the end of 2007. This increase is primarily a result of new hires in Germany at the Friedrichshafen location and of the takeover of SKL Motor GmbH in Magdeburg. Outlook 2008 In accordance with current market expectations, Tognum estimates that the US Dollar exchange rate will be markedly weaker than originally expected, at a level of around 1.55 US Dollar/Euro. Despite this negative effect, the company remains confident that revenue growth over the prior year will remain in the 11-13% corridor as guided, albeit at the lower end of the range. Even with the increased headwinds high average annual US Dollar exchange rates, higher prices for energy and primary products and preparatory work for further growth as well as the legal spin-off of Rotorion, the executive board continues to expect the adjusted EBIT for 2008 to be above the prior-year level. Despite these developments and the forthcoming round of collective bargaining, Tognum expects to achieve an adjusted EBIT margin at the bottom end of the target corridor (13-15%). Assuming a further improved effective tax rate of around 30%, the management continues to expect an increase in the adjusted earnings per share of over 25% compared to the prior year to more than EUR 2.00. Production reorganization and price increases in 2009 'We have paved the way for further growth in the coming years: for instance, we are planning to start manufacturing parts in the US for the first time at the end of 2009', said Volker Heuer. This expansion in US activities is part of a global reorganization of production. With the associated expansion of manufacturing capacities abroad, in addition to the existing assembly plants, Tognum will be less dependent on exchange rate effects. In addition, local production is the basis in order to qualify for governmental orders for Defence or Navy applications in many countries such as the US. Furthermore, from January 2009, Tognum will raise its list prices in the engines market by 4% on average in the Euro region and by 7% on average in the US Dollar region. Focus on key technology of exhaust gas after treatment In order to advance the innovation and technology leadership and to safeguard know-how in the long run, Tognum concluded a joint venture with Swiss company Hug Engineering AG, a market leader in this field. From autumn 2008, specialists from both companies will work in this joint venture on the development of innovative exhaust gas after treatment systems for MTUs large engines to comply with future emissions guidelines. Disclaimer regarding forward-looking statements et al. ------------------------------------------------------ This report also contains forward-looking statements based on assumptions and estimates of Tognums Executive Board of Management. Although we assume that our assumptions and estimates on which we have based these forward-looking statements are realistic, we cannot guarantee that they will in the future prove to be correct. The assumptions and estimates, by their nature, may harbour risks and uncertainties that may cause the actual figures to differ considerably from the forward-looking statements. Factors that may cause such discrepancies include, among other things, changes in the economic and business environment, variations in exchange and interest rates, the introduction of competing products, lack of acceptance for new products or services and changes in corporate strategy. Tognum does not undertake any obligation to update, to review or to confirm the forward-looking statements or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this announcement. Investors & Analysts contact ---------------------------- IR Team / Achim Schneider and Michael Frank ir@tognum.com +49 (0)7541-90 3318 Media contact: -------------- PR Team / Julia Hoechel pr@tognum.com +49 (0)7541-90 3989 DGAP 12.08.2008 --------------------------------------------------------------------------- Language: English Issuer: Tognum AG Maybachplatz 1 88045 Friedrichshafen Deutschland Phone: +49 (0)7541 90 3318 Fax: +49 (0)7541 90 90 3318 E-mail: ir@tognum.com Internet: http://www.tognum.de ISIN: DE000A0N4P43 WKN: A0N4P4 Indices: MDAX, CDAX, Classic All Share, Prime All Share Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: Tognum Group in H1 and Q2 2008 / Adj. EPS target for FY08 confirmed at >2 Euro / Price increases for 2009 announced
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