Beru Increases Revenues by 23%

Beru Aktiengesellschaft (Ludwigsburg, Germany) increased its total revenues in the first quarter of the 2004/05 financial year (1 April – 30 June, 2004) by 23.2% to €85.5 million (1 April – 30 June, 2003: €69.4 million). A high level of growth in the company’s youngest division, Electronics and Sensor Technology, made a decisive contribution (12.5% organic growth) to earnings achieved by the group, but not the tyre pressure monitoring system. Net income rose by 20.3% to €7.7 million after €6.4 million in the same period of last year. As a result, earnings per share reached €0.77 after €0.64 in the prior-year quarter.

The Electronics and Sensor Technology division achieved the Group’s highest organic growth of 30.4% and sales revenues of €21.0 million (€16.1 million). This growth was driven by, among other things, PTC auxiliary heating systems and sensor business (excluding tire-pressure monitoring systems).

The sales revenues of electronic tyre-pressure monitoring systems stagnated at the prior-year level. However, one of the main reasons for this is the current lack of clarity regarding the amendment to the Tyre Safety Rule recently passed into law in the United States. This will stipulate that every car newly registered in the US must be equipped with a tyre-pressure monitoring system. Some manufacturers have not yet increased the percentage of cars for export to the US fitted with such equipment, while one German premium manufacturer has decided to postpone the fitting of these systems for another nine months.

The final decision on the newly formulated system specifications and the resulting announcement of the launch scenario in the United States should trigger a substantial expansion of the market for our tyre-pressure monitoring systems. At the same time, European vehicle customers are increasingly demanding this safety feature.

The acquisition of new projects is developing positively. For example, Beru received an order, due to start in the 2005/06 financial year, to equip an additional Audi model with the tyre-pressure monitoring system TSS (Tire Safety System). Beru is already supplying the system as an option for the A8 and the new A6, and will also supply it for the new facelift of the A4. VW has awarded Beru a follow-up order extending to the year 2010. Starting in the next financial year, an additional Bentley model will be equipped with TSS as standard equipment. Beru is currently holding discussions with other European manufacturers on the use of the system in several model series. The aftermarket business with tyre-pressure monitoring systems also contributes a small volume of sales revenues.

Beru AG recorded an increase in orders received during the period under review of 19.6% to €89.7 million (€75.0 million). The order backlog also rose, reaching €170.4 million after €151.7 million a year earlier.

The size of the workforce at June 30, 2004 was nearly constant compared with 31 March, 2004 at 2,672 employees (2,694). However, compared with 30 June, 2003, the workforce expanded by 20% due to the acquisition of Eyquem. The ratio of personnel expenses to sales revenues rose slightly, from 31.3% for the prior-year period to 32.3% in the first quarter of 2004/05.