Financial Overview

(in million euros)

	FY2011	FY2010	Rate of change (%)	Factors
Overall
Sales	2,590.5	1,933.8	34.0	1)
EBITDA	182.4	114.1	59.9	-
Exhaust Technology Division
Sales	2,141.6	1,599.2	33.9	2)
Climate Control Systems Division
Sales	448.8	334.7	34.1	3)

Factor
1) Overall
-In 2011, the Company's revenue was up 34% on the prior year at 2,590.5 million euros. This means that revenue rose above the pre-crisis year 2008 for the first time. Sales increase was mainly due to the expansion of its commercial vehicle and passenger vehicle business.

2) Exhaust Technology Division
-In the largest division, the Exhaust Technology Division, revenue in 2011 rose by 33.9% to 2,141.6 million euros. The general economic upswing and, most of all the good market position and the large share of exports on the part of automotive manufacturers contributed to this development.

3) Climate Control Systems Division
-Climate Control Systems Division generated revenue of 448.8 million euros in 2011, 34.1% more than in the prior year. Never before has the Company sold so many heaters in one year, with all product group making a contribution. Major products contributed to sales increase were fuel-powered/electrical vehicle heaters and bus air-conditioning systems.

Contracts

-Prototechnik GmbH & Co. KG, a subsidiary of the Company, is supplying the titanium exhaust system for the current Porsche "911 GT3 RS 4.0" – compared with the stainless steel "911 GT3" version, a weight saving of more than 40 percent was achieved. Prototechnik has also contributed to the new Eberspaecher ActiveSound/ActiveSilence component. In this, acoustic emissions are reduced by the integration of an actuator into the exhaust system. The actuators for the Audi "A6 Avant" – the first standard-production vehicle on the market with ActiveSound technology – are made by Prototechnik. At the IAA 2011, the company is presenting actuators made of titanium and aluminium which, in comparison with the standard version made of steel, weigh up to 26 and 37 percent less respectively. (From a press release on August 30, 2011)

-The Company is supplying its electronic control unit (ECU) for electro chromatic auto-glazing roof of "Mercedes-Benz SLK". Thanks to its control unit, the electro chromatic auto-glazing with a technology named Magic Sky Control by Mercedes can be switched to transparent or dark at the touch of a button. (From a press release on August 11, 2011)

-The Company will supply ActiveSound sound actuator for Audi "A6 Avant" 3.0-liter TDI engine. The actuator is a standard feature of the Audi drive select options package for the "A6". Drivers will be able to choose between different exhaust sound characteristics. The "A6 Avant" is the first series-produced vehicle to feature Eberspaecher's ActiveSound technology. (From a press release on August 10, 2011)

-The Company announced that it is supplying parking heaters as an option on the 2011 Ford "Focus C-Max" and Focus "Grand C-Max". The parking heaters are compatible with E85 fuel, a blend of 85 percent ethanol and 15 percent gasoline. The company has been working closely together with Ford since the first "Focus" generation. (From a press release on February 9, 2011)

Recent Development Outside Germany

-The Company announced that its Russian subsidiary Eberspaecher Exhaust System Rus will start manufacturing exhaust systems from June 2011. Plans are in place for Eberspaecher Exhaust System Rus to produce 42,000 exhaust systems each year for Russian made Nissan "X-Trail" and "Teana2 models. (From a press release on April 11, 2011)

Acquisitions

-J. Eberspaecher GmbH & Co. KG signed an agreement with Hexadex Limited, under which Hexadex will transfer a majority interest in Swenox AB to the Eberspaecher group. Swenox, part of the British Hexadex Group, employs around 570 people in the development and production of exhaust systems for heavy-duty and medium-sized commercial vehicles. During 2010 the company with headquarters in Nykoping and technical center in Gothenburg, Sweden generated revenues of approximately 40 million euros. Eberspaecher now owns 76 percent of the issued share capital of Swenox. Hexadex retains a 24 percent interest in Swenox. (From a press release on November 10, 2011)

New Company

-The Company announced that it has established a subsidiary company Eberspaecher Exhaust Technology (Shanghai) Co. Ltd. in Pudong, Shanghai, China. The company has been represented in the Chinese market via a joint venture in Dalian, Liaoning province and Changchun, Jilin province. In addition to development and sales, Eberspaecher will produce muffler assemblies and catalytic converters for cars as well as complete exhaust systems for commercial vehicles on the site. (From a press release on September 21, 2011)

Joint Ventures

-The Company and South Korea-based Wooshin Industrial Co,. Ltd. announced the formation of a joint venture under the name of Wooshin Eberspaecher AG in Hwaseong City, South Korea. The new joint venture will supply particulate filters and catalytic converters to manufacturer Hyundai Kia in Korea. Wooshin Industrial supplies Hyundai Kia with muffler assemblies and exhaust manifolds. The Korean car group is also set to be supplied with engine products in future via further joint ventures of the two partner companies in international markets, for example the USA, India, Russia, Czech Republic, Slovakia and Brazil. (From a press release on March 31, 2011)

Awards

-The Company has been honored by Porsche the Supplier Award 2011 in the category "Production Material". The Company supplies exhaust systems for Porsche models, the "Carrera" and "Boxster". (From a press release on August 9, 2011)

-The Company has received "Best Innovation" award from Volvo Powertrain. In cooperation with Volvo, the company has developed an exhaust after-treatment system to comply with the Euro 6. The Company is already supplying Volvo with commercial vehicle exhaust after-treatment systems in U.S. to meet the EPA 10 standard. (From a press release on June 28, 2011)

R&D Expenditure

(in million euros)

	FY2011	FY2010	FY2009
Total	120.1	97.7	79.2

-Research and development expense in 2011 rose by 22.9% to 120.1 million euros. In addition to internal expenditure, this figure includes all third-party services for design, CAE (computer-aided engineering), testing and samples.

R&D Facilities

-The Company holds 7 research and development facilities;

• Esslingen, Germany
• Unna, Germany
• Schwabisch Gmund, Germany
• Paris, France
• Novi, USA
• Pune, India
• Gothenburg, Sweden

Product Development

Fuel heater for electric vehicles
-The Company announced that it has developed a new fuel heater that makes it possible to heat electric vehicles with bioethanol. The Eberspaecher Hydronic E4S water heater, reduces exhaust gas emissions, at approximately 90 percent below statutory standards. In addition, the heater is extremely fuel-efficient: On average the Hydronic E4S requires between 0.4 and 0.5 liters of bioethanol per hour. Another innovation is an Airtronic air heater that can also be run using 100 percent bioethanol. In addition to pure bioethanol, the new Airtronic and Hydronic models from the Company can also be run on E85 fuel, which is an 85 percent ethanol content. (From a press release on July 14, 2011)

PTC heater together with an air vent
-Eberspaecher catem GmbH & Co. KG, which is its Germany subsidiary, has developed a PTC heater together with an air vent for the Rinspeed's electric concept car Bamboo. The Bamboo will be displayed at 2011 Geneva Motor Show in March. (From a press release on February 16, 2011)

Capital Expenditure

(in million euros)

	FY2011	FY2010	FY2009
Total	109.5	33.9	38.1

Investment in Germany

-The Company established a new plant in Wilsdruff near Dresden, where production is scheduled to begin in 2012.