26.01.2005

Fiscal year 2003/04: Schuler raises sales and earnings

Sales growth of 16 percent – Major orders from Asia and USA

Göppingen - In its fiscal year 2003/04 (ending September 30), the Schuler Group posted a significant increase in sales as well as improved earnings. The global market leader in metalforming profited above all from increased investment by the automotive industry in Asia and Eastern Europe. At the company’s annual report press conference in Stuttgart, Schuler CEO Horst Dienstbach stated: "Thanks to our strong international presence, we were able to win major orders from these growing markets, as well as from US manufacturers."

Sales up 16 percent

Consolidated sales of the Schuler Group grew strongly in fiscal 2003/04 to € 558.1 million. They were thus 16.0 percent above the prior-year figure of € 481.1 million. In Asia, revenues almost tripled to a total of € 99.6 million. On the company’s domestic market, there was an increase of 14.7 percent to € 262.9 million. In the rest of Europe, however, sales slipped by 2.5 percent to € 101.5 million and fell in North and Latin America by 18.5 percent to € 91.8 million

Slight rise in new orders

The past fiscal year saw a slight increase in the value of new orders received: € 562.9 million compared with € 560.5 million in the previous year. There was strong demand from Asia, the USA and Eastern Europe. The volume of new orders received from Asian customers almost doubled (from € 70.4 million to € 134.8 million). In North and Latin America, new orders grew from € 147.1 million to € 181.5 million, while orders from German companies fell from € 222.8 million to € 163.0 million. There was also a decline in orders from the rest of Europe (from € 118.0 million to € 83.3 million). The proportion of new orders received from outside Germany grew from 60.3 percent to 71.0 percent.
As of the balance sheet date (September 30, 2004), the Group's order backlog was up slightly at € 571.2 million (prior year: € 566.4 million).

All key earnings figures positive

After achieving a turnaround in its operating income in the previous fiscal year, Schuler continued to improve earnings in the reporting period 2003/04. The Group achieved a net income of € 3.5 million, compared with a net loss of € 2.6 million in the previous year. Earnings before interest and taxes (EBIT) grew to € 10.4 million (prior year: € 8.4 million).

Proposed dividend of € 0.20

At the Annual General Meeting on April 7, 2005, the Board of Management and Supervisory Board will propose an increased dividend of € 0.10 per common share and € 0.20 per preferred share for the fiscal year 2003/04. The owner of the company’s common stock, Schuler-Beteiligungen GmbH, has announced that it will waive its dividend rights.

Improved cash flow

Gross cash flow improved from € 16.8 million in the previous year to € 22.0 million in 2003/04. Bank liabilities were reduced from € 153.7 million last year to € 131.6 million. During the same period, the balance sheet total fell from € 429.3 million to € 416.2 million. The equity ratio was slightly above the prior-year level at 18.2 % (17.6 %).

Increase in capital expenditure

Capital expenditure was raised from € 7.6 million last year to € 12.1 million in the period under review. Major investments included the expansion of stamping plant and tryout capacities in Göppingen and Canton, USA, as well as the fields of engineering and information technology. Depreciation of fixed and intangible assets fell from € 19.7 million to € 17.5 million.

Decrease in personnel

At the end of the past fiscal year, the Schuler Group employed a total of 3,793 people around the world – down 115 on the previous year. The number of staff employed by the Group's German subsidiaries fell by 190 to 2,899. Headcount at the Group's foreign subsidiaries rose by 75 to 894 as of September 30, 2004. At 6.9 percent, the ratio of apprentices to full-time staff at the Group's German subsidiaries is still above the average of 6.3 percent for the machine tool sector as a whole.

Outlook

The Board of Management expects investments by international car manufacturers and their suppliers – responsible for around three quarters of Schuler’s revenues – to remain virtually unchanged during the current 2004/05 fiscal year. Whereas demand in Western Europe is likely to remain sluggish, major project activity will continue to focus on Asia, the USA and Eastern Europe. Thanks to its strong international presence, Schuler will continue to benefit from this development. We are already supplying these growth markets to a large extent from our facilities in Brazil and, increasingly, China. We are therefore also well equipped to cushion the effects of growing exchange rate problems caused by the continuing weakness of the dollar. On the basis of its successfully implemented program to optimize Group structures and lower costs, with expected medium-term savings of € 25 million, the Board of Management expects further improvements in earnings of the Schuler Group in its fiscal year 2004/05.