Tognum meets forecast for 2009

Tognum AG / Final Results

11.03.2010 08:00

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Tognum meets forecast for 2009

The 2009 annual report is available for download at www.tognum.com. 
The annual press conference takes place today at 10:30 a.m. CET; the
analysts' conference call is at 1:30 p.m. CET.

* Revenues in 2009 at EUR2.5 billion within forecast corridor 
* Adjusted EBIT margin at 7.9%
* Net financial debt down significantly to EUR192 million 
* Dividend proposal: EUR0.35 per share
* 2010: revenues between EUR2.3 and EUR2.5 billion expected


Key figures for the Tognum Group 


(EUR million as of 31 December                     2008     2009     Change
if not otherwise indicated)                       
Order intake                                       3,231    2,330     -28%
Revenues                                           3,133    2,529     -19%
EBIT (adjusted)                                      407      199     -51%
EBIT margin (adjusted)                             13.0%     7.9%   -5.1 pp
Net profit (adjusted)                                264      121     -54%
Earnings per share (adjusted)                    EUR2.01  EUR0.92     -54%
Dividend                                         EUR0.70  EUR0.35     -50%
Balance sheet total                                2,554    2,469      -3%
Equity                                               672      681      +1%
Equity ratio                                       26.3%    27.6%   +1.3 pp
Net financial debt                                   336      192     -43%
Free cash flow                                        65      224    +245%
Employees                                          8,929    8,726      -2%




Friedrichshafen/Stuttgart, 11 March 2010. The specialist for propulsion and
power solutions Tognum has met its forecast for the financial year 2009 in
full and stands by its dividend policy.

'Despite the global financial and economic crisis, Tognum has managed the
financial year 2009 well. We have met our forecasts as promised, achieved a
solid level of profitability, despite declining revenues, higher capital
expenditures and advance investments and we have been able to reduce our
net financial debt significantly,' said Volker Heuer, chairman of the
executive board of Tognum AG. 'Many of our markets continue to be difficult
and volatile, which will also present us with challenges in the current
financial year. We are going through a stage of transition, in which the
markets and our business should become increasingly stable. We will
continue to pursue our proven strategy based on five growth initiatives,
and will reap the benefits as soon as markets recover.'

In 2010, Tognum expects to generate revenues of between EUR2.3 and EUR2.5
billion. For adjusted return on sales, the company anticipates a level of
between 6 and 9%, despite increased advance investments for future
projects.

Revenues 2009 within forecast corridor

The order intake was down 28% in the financial year 2009 to EUR2,330
million (previous year: EUR3,231 million). The ordering behaviour of the
customers was characterized by lower volume orders being placed at shorter
notice. Revenues were down 19% to EUR2,529 million (previous year: EUR3,133
million). Excluding the Rotorion companies, the decline would have been
17.8%. The export ratio increased in the reporting period to just under 81%
(previous year: 79%). A growing share of revenues is generated in Asia.


Focused investments in R&D and sales, administration costs down

With its 'Robust Action Plan', Tognum implemented effective measures to
counteract the impact of the economic crisis at an early stage, which
enabled it to successfully secure its business performance last year. The
program targets the market, employment, cash and risk management, in
addition to cost reduction and investment planning. As a result, the
company achieved an earnings contribution of EUR100 million. At the same
time, the company made focused investments in the financial year 2009 to
further increase its technological edge and improve its competitive
position in order to emerge stronger from the continuing economic crisis.
The company increased expenditure on research and development by 29% to
EUR143 million. The company also intensified its sales activities
significantly, which contributed to a 20% increase in selling costs to
EUR203 million. On the other hand, Tognum reduced its administrative costs
by around 9% to EUR81 million, which had a positive effect on profit.


Profit target met: adjusted EBIT margin at 7.9%

Adjusted earnings before interest and taxes (EBIT) in 2009 amounted to
EUR199 million and were thus 51% below the previous year's level of EUR407
million. The decline is primarily due to lower revenues and a declining
gross profit. The adjusted EBIT margin amounts to 7.9% (previous year:
13.0%). This means that Tognum has met its projected profitability target
for 2009.

The adjusted Group net profit in the financial year 2009 amounted to EUR121
million (previous year: EUR264 million), resulting in adjusted earnings per
share of EUR0.92 (previous year: EUR2.01). Tognum will continue to pursue
the dividend policy it established during the IPO, on the basis of which 30
to 50% of the adjusted annual net profit is to be distributed to
shareholders. At the annual general meeting to be held on 18 May 2010, the
supervisory board and the executive board will propose a dividend of
EUR0.35 per share for the financial year just ended (previous year:
EUR0.70).


Sound financing structure: net financial debt significantly reduced, equity
base strengthened

Tognum has sufficient liquid funds available for investments. Free cash
flow, which comprises cash flow from operating activities and investing
activities, increased in the reporting period to EUR224 million (previous
year: EUR65 million). This was mainly due to reduced stock levels, which
decreased the net current assets.

Net financial debt was reduced significantly compared with the end of 2008,
decreasing by 43% to EUR192 million. The company's equity ratio rose from
26.3% as at 31 December 2008 to 27.6% at the end of 2009, thus reaching its
highest level since the IPO in the middle of 2007.


Segmental revenues and profit development

The Engines and Onsite Energy & Components segments as well as the
Distribution segment that was created in 2009 reported economy-related
declines in revenues. However, the after-sales business, with a positive
performance in all three segments, proved to be resistant to economic
fluctuations.

The Engines segment generated revenues of EUR1,681 million (previous year:
EUR2,053 million) and was thus 18% below the level of the previous year.
The sector of industrial engines, in which a project-related decline in
rail propulsion systems was reported, was most severely affected. The
decline in prices on the international commodity markets had a negative
impact on mining and on the oil and gas industry. The sales of agricultural
equipment and industrial machinery for the construction industry also
declined. In the market segment for marine applications, government and
project business, which is long-term oriented, performed very well, whereas
the business in yachts and commercial vessels declined. The segment's
adjusted EBIT margin was 8.1% (previous year: 16.1%).

In the Onsite Energy & Components segment, revenues were down 29% to EUR719
million (previous year: EUR1,015 million). Not including Rotorion's
propeller shafts business, which was sold effective 31 October 2009, this
would have been a decline of 27%. Onsite Energy Diesel Systems & Engines in
particular reported a strong decline, as customers had reduced their
call-offs significantly. In Onsite Energy Gas & Fuel Cell Systems
application area, revenues also declined. The segment's adjusted EBIT
margin amounted to 3.8% (previous year: 6.0%).

Revenues generated by the Distribution segment dropped to EUR524 million
(previous year: EUR602 million), with virtually all consolidated foreign
sales companies affected by the decline. The adjusted EBIT margin increased
to 9.5% (previous year: 7.9%). In this case, the good profit situation in
Asia had a stabilising effect.


Employees

As at the end of 2009, the Tognum Group had 8,726 employees. Of the 7,309
employees in Germany, 5,969 are employed at the company's headquarters in
Friedrichshafen. The decline of 2% compared with the situation at the end
of the previous year was due primarily to the fact that fixed-term
employment contracts in production in Germany and the USA were not
extended. '2009 demanded an enormous effort from our workforce. In view of
the difficult economic conditions, our employees demonstrated that they
were prepared to take on responsibility, so that, as a result of our
flexible working time model and additional action we took, we have so far
been able to avoid the introduction of short-time work in particular, and
our core workforce has remained on board,' said Heuer, praising the efforts
of the entire workforce. These measures to secure jobs are also an integral
part of the 'Robust Action Plan'.


Strategic focus targets sustainable growth

Tognum relies on five strategic growth initiatives - focused on the product
portfolio, propulsion systems, onsite energy systems, after sales and
regional expansion. Clear objective is to increase the company's innovative
power. To this end, the company intends to increase its expenditure for the
development of new technologies once again. 'Our policy has always been to
offer our customers the best possible solutions, which means we never make
compromises. It's the reason why we continue to invest in our technology
leadership, which also enables us to improve our competitive situation,'
Tognum's CEO Heuer stressed. In the internationalization of production
capacity, the company also intends to make targeted investments in the
current financial year. Tognum announced just a few days ago that
production in the USA is to be relocated from Detroit to South Carolina,
where the company can produce more cost-effectively and capacity can be
extended in the medium term if required.


- End -


Tognum's new annual report, including a letter by the chairman of the
executive board to shareholders, customers and business partners, as well
as the Group's and individual financial statements for the financial year
2009, are available for download from the company's website at
www.tognum.com in the 'Investors' section.


Disclaimer
Forward-looking statements 
This release contains forward-looking statements based on assumptions,
forecasts and estimates made by Tognum's executive board of management.
Although we assume that the assumptions, forecasts and estimates forming
the basis for these forward-looking statements are realistic, we cannot
guarantee that they will prove to be correct in the future. Assumptions,
forecasts and estimates may entail risks and uncertainties which may cause
actual results to differ considerably from those included in
forward-looking statements. Factors which may result in such discrepancies
include, among other things, changes in the economic and business
environment, fluctuations in exchange and interest rates, the introduction
of competing products, lack of acceptance for new products or services and
changes in corporate strategy. Tognum undertakes no obligation to update
and/or to correct and/or to confirm forward-looking statements or to
release publicly any updates or corrections to any forward-looking
statements in order to reflect events or circumstances which occur after
the date of this release.




Contact:
Investors & Analysts contact:

IR Team
ir@tognum.com
+49 (0)7541-90 3318

Media contact:

PR Team
pr@tognum.com
+49 (0)7541-90 3989




11.03.2010 Ad hoc announcement, Financial News and Media Release
distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:     English
Company:      Tognum AG
              Maybachplatz 1
              88045 Friedrichshafen
              Deutschland
Phone:        +49 (0)7541 90 3318
Fax:          +49 (0)7541 90 90 3318
E-mail:       ir@tognum.com
Internet:     http://www.tognum.de
ISIN:         DE000A0N4P43
WKN:          A0N4P4
Indices:      MDAX, CDAX, Classic All Share, Prime All Share
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hannover, München, Hamburg, Stuttgart
 
End of News                                     DGAP News-Service
 
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