Autoneum increases sales in local currencies by more than 15% and achieves positive net result

Winterthur, Switzerland – Autoneum sales in local currencies for the first half-year 2011 rose markedly in all regions, and the company achieved an overall sales growth in local currencies of 15.4%, significantly above the average for the vehicle production figures. Gross sales consolidated in Swiss francs increased by 0.5% to 880.6 million CHF (prior year: 876.7 million CHF). Worldwide car production increased to 37.5 million vehicles in the first half of 2011, two percent higher than in the prior year period. The Japanese automobile producers were globally affected by consequences of the earthquake in March 2011, which impacted the development of sales and profitability of Autoneum. The operating result before interest, taxes, depreciation and amortization (EBITDA) rose by 17.9% to 58.5 million CHF (prior year: 49.6 million CHF), and EBIT at 21.6 million CHF was markedly higher than in the prior year (4.6 million CHF) mainly due to lower employee costs at 28.2% of net sales (prior year: 30.4%) and reduction of other operating expenses to 14.6% of net sales (prior year: 17.3%). Profitability was affected above all by raw material price increases, consequences of the Japan effect and the strong Swiss franc. Materials costs increased to 50.8% (prior year: 47.9%). The Autoneum net result improved by 32.3 million CHF to 1.5 million CHF.

At the Rieter Holding AG Annual General Meeting of April 13, 2011 shareholders approved the Board proposal to split the Rieter Group and to continue to operate the Automotive Systems and Textile Systems divisions as two independent publicly listed companies. Since May 13, 2011 the former Automotive Systems division is therefore listed as Autoneum (ticker symbol: AUTN) on the SIX Swiss Exchange.
Further rise in sales and profitability

Worldwide automobile production increased from 36.6 million in prior year period to 37.5 million vehicles in the first half of 2011. Overall, global light vehicle production is still below the half-year peak of 38.3 million vehicles in 2007 despite rapid recovery. Autoneum gross sales for the first half-year 2011 reached 880.6 million CHF (prior year: 876.7 million CHF), equivalent to an increase of 15.4% in local currencies. Net sales amounted to 860.5 million CHF. The growth of Autoneum is attributable to successful car models, particularly in North America, above-average growth in Asia thanks to expansion in recent years, and a positive sentiment in most automobile markets. The biggest growth in terms of local currencies was recorded by Business Group Asia at +44% and Business Group North America at +25% higher net sales.

All Autoneum Business Groups reached positive operating results at EBITDA and EBIT levels and significantly higher profitability compared with the first and second halves of 2010, mainly thanks to operating improvements in Europe. The operating result before interest, taxes, depreciation and amortization (EBITDA) rose to
58.5 million CHF, 6.8% of net sales. The operating result (EBIT) improved to 21.6 million CHF, an EBIT margin of 2.5%.

The rising commodity and material costs, the events in Japan and temporary resultant reduction of workload in North America and China, together with the strong Swiss franc, cancelled out any further profitability improvements.

Significantly lower gross debt in the first half-year 2011 than in the prior year period resulted in reduced interest charges, with a correspondingly positive effect on the financial result. At -11.2 million CHF it has been more than halved compared with prior year.

Per end of the period under review net profit had improved to 1.5 million CHF from
-30.8 million CHF for the first half-year 2010.

The equity ratio (including subordinated shareholder loans) per June 30, 2011 was more than 30%. After the split of the Rieter Group, the financing previously secured by Rieter was replaced by external financing in the form of long-term bank loans. Gross debt has reduced in the first six months of 2011 by 81.1 million CHF to 220.9 million CHF. Net debt of 165.4 million CHF per balance sheet date is slightly higher than per year-end 2010. Autoneum has a solid balance sheet.

Autoneum employed 9 124 people per end of the period under review as against
8 409 per 31.12.2010. This increase was due to business volume expansion in North America and Asia. In Europe restructuring resulted in a decrease of the workforce. Overall, employee distribution in high-cost countries declined further from 65 % to 63% and rose accordingly to 37% in low-cost nations.
Selective expansion namely in Asia

Autoneum continued to expand production capacities in Asia. In the first half-year 2011 another plant was opened in Shenyang, China, to supply local and foreign manufacturers with heat shields and acoustic insulation components. Autoneum is now present in the Chinese growth market with five production plants and a develop-ment center, and in India with two plants. In Bor, Czech Republic, Autoneum installed production capacities in the first half-year. Production will start in the fall of 2011. And in Sevelen, Switzerland, a production plant for lightweight underfloor systems employing the new RUS fiber technology is under construction for inauguration in September 2011.

In mid-year 2011 Autoneum’s acoustic and technological capabilities were presented during the first international Automotive Acoustics Conference at Zurich Federal Institute of Technology (ETH). Numerous presentations by Autoneum experts and other international specialists gave an overview of the latest developments in vehicle noise reduction and comfort enhancement as well as C02 minimization. The participation of more than 150 representatives of leading automobile manufacturers and suppliers bears witness to the growing importance of acoustics in motor vehicle development. Autoneum globally plays a leading role in this field.
Business Groups

In Europe Automobile production increased by 4% to 9.1 million vehicles in the period under review, mainly because of the strong rise in exports to Asia and the USA. Business Group Europe recorded net sales of 461.3 million CHF for the first half-year (prior year: 460.9 million CHF), an 11% rise in local currencies. The EBITDA of Business Group Europe improved from 4.1 million CHF in prior year to 20.4 million CHF (4.4% of net sales), mainly thanks to restructuring effects, operative improvements, and business volume expansion.

Automobile production in North America rose by 6% in the first half-year 2011 to
6.4 million vehicles. Business Group North America recorded a net sales rise of 3% to 286.6 million CHF in the period under review, a 25% increase in local currencies. Due to the consequences of the crisis in Japan, EBITDA declined from 33.9 million CHF to 27.9 million CHF, an EBITDA margin of 9.7%.

Automobile production in Asia (without Japan) increased in the period under review by 7% overall to 13.9 million vehicles and in China by some 5% to 8.6 million vehicles. Business Group Asia improved net sales for the first half-year 2011 by 25% to
42.9 million CHF (a 44% rise in local currencies). EBITDA declined from 3.7 million CHF in prior year to 3.3 million CHF. The EBITDA margin was 7.7% of net sales.

Automobile production in South America increased by 11% from 2.0 to 2.2 million vehicles. The Business Group South America, Middle East, Africa (SAMEA) increased net sales for the first half-year 2011 by 6% in local currencies compared to the prior year, but decreased in Swiss francs from 76.5 million CHF to 71.1 million CHF. EBITDA declined slightly to 5.1 million CHF, 7.2% of net sales.
Outlook

Notwithstanding various unfavorable influences in the market environment Autoneum expects sales growth in local currencies for the full year 2011 to exceed the mid-term target of 4–5%. Due to seasonal factors sales for the second half-year 2011 are expected to be a bit lower, although recovery can be expected among Japanese customers. Autoneum expects operating margin for the year to improve compared with 2010 despite the massive rise in raw material prices, and aspires to a positive net result for the business year 2011 as a whole – as announced in March. For the second half-year the company expects improved margins above all for the Business Groups outside Europe. Autoneum will focus on further improving operating performance. Material price increases will be compensated as far as possible by charging on to customers and by further operative measures.