DGAP-News: Grammer with substantial increase in revenue and net profit in 2014


DGAP-News: Grammer AG / Key word(s): Final Results
Grammer with substantial increase in revenue and net profit in 2014

30.03.2015 / 07:00

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Grammer with substantial increase in revenue and net profit in 2014

-8 percent increase in revenue to a new record of EUR 1.37 billion
-Net profit up 14 percent to EUR 33.6 million
-High up-front costs and investments for global expansion and optimization
-Dividend to be increased by 15 percent to EUR 0.75 per share

Amberg, March 30, 2015 - The Grammer Group, a leading supplier of interior
components for passenger vehicles and seating systems for commercial
vehicles, continued to perform successfully last year, recording a
substantial increase in revenue as well as net profit. The final annual
financial statements for 2014 show consolidated revenue of EUR 1.366
billion (2013: 1.266). This is an increase of 8 percent over the previous
year and also marks the fourth all-time high in a row. In view of high
up-front costs and investments for the global expansion program and
capacity optimization in all regions, the company achieved consolidated
EBIT of EUR 57.0 million (2013: 58.0). However, thanks to an improved
financial result, net profit rose substantially more quickly compared with
the previous year, coming to EUR 33.6 million (2013: 29.6), while earnings
per share also increased to EUR 3.09. Reflecting this favorable
performance, the company is proposing to increase its dividend by 15
percent to EUR 0.75 per share (2013: 0.65).

"With the extensive expansion and optimization measures which we took as
well as the fluctuation in markets of key importance for us, 2014 was a
very challenging year for us. However, the fact that despite these
underlying conditions we were able to achieve a new revenue record and post
higher profit reflects Grammer's good international position and improved
stability," says Hartmut Müller, Chief Executive Officer of Grammer AG.

Revenue in the Far East greater than in the Americas for the first time
The substantial increase in business was materially underpinned by strong
growth in the region Far East. In this region, revenue rose by a very
strong 26 percent to EUR 227.7 million (2013: 181.0) thanks to new products
and further gains in market shares. Consequently, the region Far East made
a greater contribution to group revenue than the Americas did for the first
time. In the Americas, revenue fell slightly by 3.1 percent to EUR 226.3
million (2013: 233.6) as a result of a further slump in the Brazilian
commercial vehicle market. On the other hand, business in North America
continued to expand but was unable to completely compensate the sharp
decline in Brazil.  The European markets also grew by an encouraging 7
percent to EUR 911.9 million (2013: 851.1).

Sharp growth in the Automotive Division
The Automotive Division, which develops and produces headrests, armrests
and center consoles for passenger vehicles, again stepped up its global
growth course in 2014, with revenue rising by 12 percent over the previous
year to EUR 911.6 million (2013: 813.3). Grammer benefited from a positive
global automotive sector as well as numerous serial ramp-ups and new
projects in all product segments. Reflecting the heavy up-front efforts for
plant and capacity expansion as well as structural optimization in all
regions, EBIT in the Automotive Division came to EUR 28.9 million, thus
falling short of the previous year (2013: 33.1) as expected. Accordingly,
the decline in the EBIT margin to 3.2 percent (2013: 4.1) reflects the
global expansion program and high growth as a result of new business.

Seating Systems impacted by sharp contraction in some core markets
The Seating Systems Division, in which Grammer as a global leading company
develops and produces seating systems for commercial vehicles, recorded
revenue of EUR 478.7 million, up a small 1 percent over the previous year
(2013: 472.8), despite very challenging conditions in some markets. At the
same time, the individual commercial vehicle sub-markets performed very
disparately. Whereas the agricultural machinery market saw a sharp decline
in global demand, the market for material handling vehicles as well as
aftermarket business expanded. The global truck market showed strong
regional variation, with Europe and South America reporting substantial
declines in sales and production figures. Thanks to its broad range, superb
international positioning and new products and customers, Grammer was able
to completely offset these adverse effects on its revenue. The
aforementioned market shifts and extensive expansion spending in the United
States and China caused EBIT in the Seating Systems Division to drop
slightly to EUR 36.2 million (2013: 37.6). However, at 7.6 percent, the
EBIT margin remained at a very high level (2013: 8.0).

Investments in global growth strategy 
Last year, Grammer increased its investments in property, plant and
equipment as well as intangible assets by 10 percent to EUR 51.5 million
(2013: 46.8). This spending reflects the implementation of the global
growth strategy and particularly entailed production expansion in all
regions as well as capacity optimization in Eastern Europe. Despite the
higher volume of investments, cash flow rose over the previous year.

Increased equity, further reduction in net financial liabilities
As of December 31, 2014, the Grammer Group had total assets of EUR 836.5
million, thus constituting an increase over the previous year (2013:
766.0). The reason for this was the ongoing set-up and expansion of
production locations together with increased business volumes. Equity also
rose, coming to EUR 231.8 million on the reporting date (2013: 224.7) and
resulting in an equity ratio of 28 percent (2013: 29). At the end of the
year, the Grammer Group's net financial liabilities were valued at EUR 86.7
million (2013: 93.2) and were thus 7 percent down on the end of the
previous year. This was accompanied by an improvement in gearing (net debt
to equity) to 37 percent (2013: 41).

Forecast for 2015: Revenue of more than EUR 1.4 billion; EBIT on previous
year's level
"We expect revenue to continue growing appreciably and to exceed EUR 1.4
billion in 2015. The generally good order situation and additional customer
projects in the Automotive Division will particularly allow us to continue
on our growth trajectory," says Hartmut Müller, Chief Executive Officer of
Grammer AG.

On the one hand, operating profit will be influenced by further costs as a
result of the expansion and optimization projects that are still ongoing as
part of the global growth strategy in 2015 and will leave traces on the
bottom line. Moreover, the sustained weakness of the market for
agricultural machinery and the uncertain outlook for the Brazilian truck
market are likely to exert pressure on operating profit. On the other hand,
the Automotive Division should make a positive contribution to earnings,
underpinned by a mildly positive outlook for the global passenger vehicle
markets. Against this backdrop, the Grammer Group expects to be able to
report a substantial positive EBIT on a par with the previous year in 2015.
However, given the expected revenue growth, the possibility of slight
contraction in the operating margin cannot be entirely ruled out.

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 (agricultural and
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 and center console systems to premium automakers and automotive
system suppliers.

Grammer is represented in 20 countries worldwide with a workforce of more
than 10,000 employees across its 30 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.




Contact:
GRAMMER AG
Ralf Hoppe
Phone: 0049 9621 66 2200
investor-relations@grammer.com



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Language:    English                                                  
Company:     Grammer AG                                               
             Postfach 14 54                                           
             92204 Amberg                                             
             Germany                                                  
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:      Regulated Market in Frankfurt (Prime Standard), Munich;  
             Regulated Unofficial Market in Berlin, Dusseldorf,       
             Hamburg, Stuttgart                                       
 
 
End of News    DGAP News-Service  
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