DGAP-News: Grammer AG: Automotive with dynamic growth, Seating Systems under pressure from market weakness


DGAP-News: Grammer AG / Key word(s): Half Year Results
Grammer AG: Automotive with dynamic growth, Seating Systems under
pressure from market weakness

05.08.2015 / 06:56

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Grammer AG: Automotive with dynamic growth, Seating Systems under pressure
from market weakness

  - 6% increase in Group revenue to EUR 710.2 million in the first
    half-year

  - Group EBIT of EUR 24.6 million in the first half-year

Amberg, August 5, 2015 - For Grammer, the first half of 2015 was
characterized by continued dynamic growth in the automotive business while
its commercial vehicle business came under pressure from weak conditions in
key markets. Consolidated revenue increased by 6.1 percent over the
previous year to EUR 710.2 million in the first half of the year (2014:
669.6). Accordingly, Grammer AG, a global supplier of automotive interiors
and a leading producer of seating systems for commercial vehicles, has
continued to maintain its growth momentum also in 2015.

Despite the continued growth, however, consolidated EBIT in the first half
of 2015 declined to EUR 24.6 million compared with the previous year (2014:
30.9) due to the unexpectedly sharp contraction in important markets of the
higher margin Seating Systems division. Accordingly, the EBIT margin came
to 3.5 percent (2014: 4.6). The negative trends simultaneously occurring in
several key markets lead to a strong downturn in Seating Systems revenue
and earnings. On the other hand, EBIT in the Automotive Division was only
slightly lower despite the ongoing implementation of the globalization
strategy. Reflecting EBIT, net profit came to EUR 13.6 million in the first
half of 2015 (2014: 18.3).

Automotive business still the growth driver
The continued high number of new product launches and generally strong
demand for premium cars provided the basis for further dynamic growth for
the Automotive Division in the first half of 2015. The Division contributed
EUR 494.9 million (2014: 427.9) to consolidated revenue, achieving a strong
increase of 15.7 percent over the previous year. Despite the still high
up-front costs for implementing global expansion strategy with plant
optimization and capacity additions, operating profit in this Division
remained largely stable, with EBIT coming to EUR 14.4 million in the first
half of the year (2014: 15.1), accompanied by an EBIT margin of 2.9 percent
(2014: 3.5).

Seating Systems suffered from sharp contraction in demand for trucks and
agricultural machinery
The downward trend in some important markets left noticeable traces on
Grammer's Seating Systems Division. Current market data indicates that
after the already weak previous year new truck registrations in Brazil
continued to slump by almost another 50 percent since the beginning of the
year. Truck registrations in China were also down 30 percent. At the same
time, the Chinese market for construction machinery contracted at an
unexpectedly sharp rate. Also a further significant downswing in the global
market for agricultural machinery occurred, which exerted considerable
pressure on OEMs and, hence, also Grammer as a leading global supplier of
suspended seating systems for commercial vehicles. These simultaneous
weaknesses in several different markets caused revenue in the Seating
Systems Division to drop by 7.9 percent to EUR 233.1 million (2014: 253.0).
As product segments with higher margins were disproportionately affected by
this trend, segment EBIT fell substantially to EUR 16.0 million (2014:
21.8). Despite this heavy burden, the EBIT margin still came to 6.9 percent
(2014: 8.6).

Capex focused on expansion measures in the Automotive Division
In the first half of 2015, Grammer primarily invested in new production
capacities in the Automotive Division. In response to weak market
conditions, capex in the Seating Systems Division were duly scaled back.
Total Group capex came to EUR 15.9 million, 27.1 percent down on the same
period of the previous year (2014: 21.8).

Slight increase in equity and net debt
As of the reporting date, consolidated equity was EUR 247.1 million, up on
the previous year (2014: 228.6). This resulted in a slightly higher equity
ratio of around 29 percent (2014: 28). Net debt as of June 30, 2015 was EUR
131.5 million (2014: 122.4), translating into a gearing of 53 percent
(2014: 54).

Outlook for 2015
Looking forward to 2015 as a whole, the performance of the Automotive
Division will continue to be influenced by new product launches and
projects for the implementation of the globalization strategy. In the
Seating Systems Division, the decline in revenue will continue throughout
the rest of the year given the persistent weakness of the Brazilian and
Chinese truck market as well as in the agricultural machinery sector. A
recovery in the second half is unlikely to materialize. Accordingly,
revenue in the Seating Systems Division will probably be noticeably lower
than in 2014 while Automotive revenues are expected clearly higher than
previous year. Overall, Grammer reaffirms its existing forecast for
consolidated revenue of more than EUR 1.4 billion in 2015. However, due to
the sustained decline in demand for commercial vehicles and the absence of
any recovery in the markets in the second half of the year, Grammer expects
full-year EBIT to decline by around EUR 15 million compared to the previous
year to around EUR 42 million in 2015.

Company Profile
GRAMMER AG, Amberg, Germany, specializes in the development and production
of components and systems for automotive interiors as well as driver and
passenger seats for offroad vehicles. In the Automotive Division, we supply
headrests, armrests and center console systems to premium automakers and
automotive system suppliers. The Seating Systems Division comprises the
truck and offroad seat segments as well as train and bus seats.
Grammer is represented in 20 countries worldwide with a workforce of over
10,700 employees across its 30 subsidiaries.
The GRAMMER share is listed in the SDAX and traded on the Frankfurt and
Munich stock exchanges via the electronic trading system, Xetra, as well as
in over-the-counter trading at 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                                       
 
 
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