ElringKlinger says auto markets are unpredictable in 2009

ERJ staff report (DS)

Dettingen/Erms, Germany -- Consolidated sales generated by the ElringKlinger Group in fiscal 2008 rose by 8.2% to EUR 657.8 (607.8) million as a result of contributions from the acquisition of the Swiss SEVEX Group and the expansion of the interest held in ElringKlinger Marusan Corporation, Japan. In the fourth quarter, business performance was impacted by the severe slump in demand recorded in automobile markets in North America and Europe. The operating result fell by 38.3% in 2008.

ElringKlinger said the sudden slump in demand for automobiles in the fourth quarter of 2008 was reflected in the order intake for the Group as a whole. This was down 3.6% to EUR 621.3 (644.7) million. Order backlog within the ElringKlinger Group contracted by 14.9%, falling to EUR 208.6 (245.1) million as at December 31, 2008.

The relatively good basis for planning that existed until now has been eroded mainly by the significant fluctuation - both upward and downward - in the volumes requested by vehicle manufacturers as part of their forward production scheduling as well as adjustments to orders by customers. Owing to the historically exceptional market circumstances, the issuance of forecasts is very difficult. In view of the global recession and uncertainties as to the short-term performance of the vehicle sector as a whole, ElringKlinger is currently making preparations for several different scenarios.

The worst scenario envisages a decline in vehicle production within the Northern American and European markets by a further 20 to 25%, coinciding with a contraction of vehicle sales within the emerging markets. Should this latter scenario eventuate, ElringKlinger said Group sales would be in the region of EUR 580 to 600 million and an EBIT margin of 8 to 10% for fiscal 2009 as a whole.

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Press release from ElringKlinger