BERU Increases Revenues by 23%

LUDWIGSBURG, Germany--Aug. 1, 20049, 2004--

BERU increases revenues by 23%

In the first quarter of the 2004/05 financial year, BERU Aktiengesellschaft, Ludwigsburg, increased its total revenues by 23.2% to EUR85.5 million (Q1 2003/04: EUR69.4 million), mainly due to strong growth in the youngest division of Electronics and Sensor Technology and the generally positive business in the main division of Diesel Cold-Start Technology. EUR7.4 million of this growth was accounted for by the French subgroup, BERU Eyquem, which is currently making only a negligible contribution to Group earnings. The Group's Electronics and Sensor Technology division achieved the strongest organic growth with a plus of 30.4%, generating revenues of EUR21.0 million (EUR16.1 million). Earnings per share amounted to EUR0.77 compared with EUR0.64 for the same period of last year. For seasonal reasons, margins are always lower in the first quarter of the financial year; in the first quarter of 2004/05, BERU achieved an EBIT margin of 13.8% (14.0%), despite higher advance expenditure for new product startups and at Eyquem. EBIT grew by nearly 22% to EUR11.8 million compared with EUR9.7 million in the prior-year period. Financial income remained at the level of the prior-year period at EUR1.0 million (EUR0.9 million). Before taxes, BERU earned 20.8% more, with EBT of EUR12.8 million compared with EUR10.6 million in the prior-year quarter. The total effective tax rate of 39.1% was a little higher (38.7%), due to the "taxe professionelle" at Eyquem, a tax on assets which is independent of earnings. The effective income-tax rate decreased by 2.0 percentage points to 36.1% (38.1%). Net income increased by 20.3% to EUR7.7 million (EUR6.4 million). First-quarter capital expenditure on tangible and intangible assets was higher than the annual average: at EUR9.3 million, it was also 55% higher than in the prior-year quarter. The Group demonstrated its financial strength with a 13.2% increase in cash flow to EUR13.7 million (EUR12.1 million). Executive Board Chairman Marco von Maltzan explained that the company still intends to continue expanding its revenues from its own resources by at least 10%, with an additional contribution of about 3 percentage points from the inclusion of BERU Eyquem in the consolidated group for the full financial year. Operating profit is to be increased in line with sales growth. Cost structures are to be further improved with the aid of the Productivity Action Plan (PAP). With the increasing spread of the ISS instant-start system and the development of the smart glow plug (PSG), BERU sees itself as very well positioned in the industrial segment of diesel technology, which has good potential for long-term structural and regional growth. Orders received increased by 19.6% to EUR89.7 million (EUR75.0 million).