BERU Reduces Sales Growth Target to 10 per cent

Automotive supplier, Beru AG, has reduced its sales growth target, following lower than expected demand. The company now says that sales revenues should rise by at least 10 per cent in the current financial year with EBIT reaching at least 56 million euros. According to the company, an unusually warm winter, lower than expect demand for TPMS and lower sales in the field of diesel technology mean that its original 13 per cent sales goal will be unreachable.

This means that the company is likely to make an EBIT of 51 million euros this year, including 5 million euros of extraordinary expenses. In light of BorgWarner acquisition of 63 per cent of Beru, Deutsche Bank analysts note that some investors will argue that the company published the warning to induce people to tender their shares. On the other hand investors may have complained that they did not receive all relevant information in a timely fashion. It will probably take until early next until BorgWarner states the actual number of shares tendered, the analysts add.

In the future, BERU anticipates rising sales of TPMS and reports that orders from the 80-100 million euro 3-year deal it recently struck with an unnamed manufacturer will begin in the next financial year. This, the company says, should add 15-20 million euros to sales revenues that year. Disappointed with the profits of its recently acquired French subsidiary, Eyquem, the company is restructuring the business and installing modern manufacturing equipment. Beru is due to report its third quarter figures next week on 17 February.