Behr Business Report FY2006
|in million Euros||FY2006||FY2005||Change of ratio
|Sales||3,188||3,052||+4.5%||The Company posted increased sales figures of 3,188 million euros. This corresponds to a growth of 4.5% compared with the previous year. At 71.3%, the share of total sales generated abroad was slightly up on 2005.|
|Earning before taxes||95||92||+3.3%||The increase of revenue by 4.5% was offset by the operating expenses. Operating expenses increased to 3,209 from 3,074, due primarily to material and personnel expenses.|
|Sales by Divisions|
|Automotive air-conditioning||1,304||1,318||(1.0%)||The Air Conditioning Product Division posted sales of 1,304 million euros, slightly undercutting the previous year's level. Market saturation for HVAC systems is the principal reason for this.|
|Engine cooling systems||1,463||1,296||+12.9%||The Engine Cooling Division was able to significantly boost its sales by 12.9% to 1,463 million euros. This can primarily be attributed to the flourishing truck business and the continuing positive trend for front-end modules.|
Results by regions
-At 915 million euros, sales in Germany remained approximately at the same level as in the previous year. In the rest of Europe, sales were boosted by 7% to 1,142 million euros. Accordingly, in fiscal 2006, the Company generated 64.5% of its total sales in Europe - similar to the previous year. The growth drivers were Eastern Europe and Italy.
-In 2006, in spite of the difficult market trends, the Company succeeded in increasing sales in North America by 1.6% to 774 million euros.
-The continuing upward trend in Asia also had a positive impact on the Company, with its sales rising in this region by 15% to 161 million euros. This was chiefly due to thriving business in India and China.
-The Company is likewise present in the key growth regions of Brazil and South Africa. In these so-called "other regions", it recorded sales growth of 7.1% to 196 million euros.
Outside Europe and North America, Behr has grown almost 10% in the year under review.
-Donfeng Behr Thermal Systems (SBTS)
In the course of the 2006 fiscal year, DBTS was able to further consolidate its position through the opening of a new plant in Wuhan, introduction of a new management system and more efficient processes, the acquisition of new projects, and several series launches. In addition, in close collaboration with Behr Asia-Pacific Management (Shanghai), it succeeded in winning new customers and establishing useful contacts with potential customers in the commercial vehicle and bus sectors.
-Hella-Behr Plastic Omnium (HBPO)
In the 2006 fiscal year, roughly 1.9 million front ends were produced in the ten production locations in Germany and abroad (+ 27.5%). HBPO also managed to acquire new, high volume, global orders, for example in Korea, and implement several production startups. In 2007, HBPO will be constructing four new plants and implementing eight series production launches.
-Present status of joint venture companies in Asia
(1) Behr India: This J/V with Anand Automotive Systems continued its stable growth in 2006. At the start of 2007, inauguration of a new production plant opened a new chapter in the program of Behr India.
(2) SBAS and BTEC: Since 2001, Behr has had a presence on the Japanese market with the joint ventures Sanden-Behr Air-Conditioning Systems (SBAS) and Behr-Toyo Engine Cooling Systems (BTEC). In the last few years, both companies succeeded in acquiring their first high-volume production orders.
|(in million euros)||2006||2005||2004||2003||2002|
% of sales
-The Company has 17 development locations. Thereinto, the Company has two fully equipped Technical Centers in Stuttgart (Germany) and Troy (Michigan). With 233 patent applications in 2005, the Company was number 16 among the top 50 companies applying for patents in Germany.
-In 2006, the Company invested 229 million euros, or 7.2% of sales, in research and development. That is 6.5% more than in the previous year.
New Product Developments
(1) Automotive air-conditioning
No-idle air conditioning system
Behr America is working with a major U.S. truck manufacturer to launch its No-Idle Air-Conditioning (NIA/C) System in North America in 2007. Behr's NIA/C System provides air conditioning to heavy-duty truck cabins while the engine is turned off. This system has become desirable in the U.S. as stringent emissions regulations and soaring prices of diesel fuel discourage leaving truck engines running. Behr's technology brings comfort to long-haul truckers who sleep in their cabins. It also saves fuel and reduces emissions. The U.S. system is integrated into the vehicle's architecture to deliver high performance and exceptional comfort (From a press release on Apr. 17)
(2) Engine cooling systems
Improved exhaust gas recirculation
Behr America has developed an improved exhaust gas recirculation (EGR) cooler that adheres to the latest United States emissions standards for heavy trucks. An EGR cooler is a device used on diesel engines that works in conjunction with the EGR system. The EGR cooler works by cooling the exhaust gases that go back into the engine through the intake manifold. The EGR system is used to reduce nitrous oxide (NOx) emissions. The EGR system lowers the amount of oxygen in the cylinder and the combustion temperature, thus reducing NOx (From a press release on May 7)
|(in million euro)||FY2006||FY2005||FY2004||FY2003||FY2002|
- In fiscal 2006, the Company invested 150 million euros in fixed assets (-15.7%). This
is a reflection of the significant improvement in plant productivity and of the increased sourcing of production equipment
from cost-competitive countries. Investments were mainly focused on the new plants in the growth markets and in Germany,
the USA and France.
-In April 2006, Behr South Africa started construction work on a new production line for exhaust gas
heat exchangers at its Pretoria plant.
-In June 2006, HBPO opened an engineering office in Tokyo, Japan, and started production in its just-in-sequence assembly plant in Busan, Korea.
-In September 2006, Behr Korea was founded - initially as a development and sales office.
-In October 2006, construction work started on Behr's second production plant in the Czech Republic. From the middle 2007, the Ostrava facility will manufacture products for car engine cooling systems.
-In December 2006, Behr America opened its new production site at Ramos Arizpe, Mexico. Engine cooling components will be manufactured there starting in mid-2007.
-In January 2007, Behr India, a joint-venture company between Behr GmbH & Co. KG of Germany and Anand Automotive Systems of India, opened a new state-of-the-art manufacturing plant, in the Pune District in the state of Maharashtra, India. The partners invested a total of $12 million in the project in 2006 and plan to invest another $5 million by the end of 2007. Behr India's Pune plant is spread over ten acres. With state-of-the-art production equipment, it will produce a variety of automotive components including heating, ventilation and air-conditioning (HVAC) modules, engine-cooling modules, as well as heat exchangers including radiators, charge air coolers, condensers and Visco (R) fan drive systems. (From a press release by the company on Jan. 31, )