Mannesmann Raises Return on Gross Operating Assets
2 April 1998
Mannesmann: Increased Return on Gross Operating Assets, Capital Increase Approved
DUSSELDORF, Germany, April 2 -- In 1997, Mannesmann raised
its return on gross operating assets to 10.3%. In 1996 the rate of return was
8.0% and the 1995 figure amounted to 7.4%. Last year the Executive Board
announced its intention to achieve a step-by-step increase in the return on
gross operating assets to 15% by the year 2000.
Earnings per share increased to DM 26 in 1997 (compared to DM 22 in 1996).
The following additional figures from the annual results were today
presented to the Supervisory Board for approval. Cash flow according to
DVFA/SG was DM 2.9 billion (against DM 2.8 billion in 1996), while the cash
flow from operations amounted to DM 4.1 billion (against DM 4.9 billion for
1996). The particularly high level of investment by Mannesmann in 1997, which
focused on growth-oriented activities in the European telecoms sector,
resulted in expenditures to the tune of DM 6.4 billion (against DM 2.7 billion
in 1996). As a result the company recorded a negative net cash flow of
DM 2.2 billion (against a positive cash flow of DM 2.2 billion in 1996). The
net debt position at year end was DM 0.5 billion (compared to a net cash
position of DM 1.5 billion in 1996).
Profits for 1997 were in line with figures announced by Mannesmann in
mid-February 1998. Profit of ordinary activities amounted to DM 1.74 billion
(against DM 1.01 billion in 1996). Extraordinary expenses were
DM 380 million, tax charges DM 752 million, resulting in net profits of
DM 610 million (against DM 603 million in 1996).
The Supervisory Board approved the proposal of the Executive Board to
raise the dividend to DM 10 per share. German shareholders will in addition
receive a DM 4.29 tax credit.
The Supervisory Board also approved the Executive Board's proposals to
implement a 10-for-1 share split following the Annual General Meeting on
May 29, 1998 as well as to subsequently conduct a capital increase of around
DM 3 billion. Funds raised through these measures are intended to be used to
finance expected growth-oriented investments, with a particular focus on the
European telecoms sector.
The breakdown of 1997 profits by sector was also announced today. Profits
from Engineering grew to DM 207 million (against DM 18 million in 1996).
Despite this marked increase, profits from Engineering were not satisfactory.
Automotive improved its profitability by 43% to DM 264 million (against
DM 185 million in 1996). The Telecoms sector achieved 31% growth in profits
to DM 1.2 billion (against DM 947 million). Tubes and Trading reported a
striking turnaround, with profits rising to DM 120 million (against a
DM 92 million loss in 1996).
NOTE: "THE INTERNATIONAL OFFERING CONSISTS OF A PUBLIC OFFERING OF SHARES
IN GERMANY AND AN INTERNATIONAL PRIVATE PLACEMENT OF SHARES TO QUALIFIED
INSTITUTIONAL BUYERS ABROAD. THE PRIVATE PLACEMENT OF SHARES IN THE UNITED
STATES WILL BE MADE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT OF 1933."
"THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS DOCUMENT ARE STATEMENTS
WITH RESPECT TO FUTURE DEVELOPMENTS MADE ON THE BASIS OF THE CURRENT GENERAL
ECONOMIC ENVIRONMENT AND EXISTING COMPANY-SPECIFIC CONDITIONS. THE COMPANY
HAS NO DUTY TO UPDATE SUCH STATEMENTS. ACTUAL FUTURE PERFORMANCE, RESULTS AND
TRENDS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH STATEMENTS DUE TO
THE OCCURRENCE OF UNANTICIPATED EVENTS OR DIFFICULTIES RELATING TO GLOBAL
INTEGRATION OR OTHER PROJECTS, CHANGES IN CURRENCY EXCHANGE RATES, CHANGING
ECONOMIC AND COMPETITIVE CONDITIONS, TECHNOLOGICAL DEVELOPMENTS OR OTHER
BUSINESS-RELATED RISKS AND UNCERTAINTIES."
SOURCE Mannesmann AG