Factor
(1) During fiscal year 2006 the Company's sales volume has increased by 23.5% to 2,023.3 million Euros compared to the previous year. The result of the usual business activities has almost doubled at 29.7 million Euros in comparison to the previous year. In this regard the tendency of its German corporate subsidiaries to stabilize the results has continued, while the Company had to suffer another enormous loss with its exhaust subsidiary Eberspaecher North America Inc. The total corporate result greatly influenced by these losses is therefore still at an unsatisfactory level.

(2)
In the Exhaust Technology Division, the Company achieved a sales figure of 1,695.5 million Euros, which was higher than in the previous year by 27%. At the regional level, South Africa and the U.S., in addition to Germany, made the strongest contributions to the sales expansion.
The strong growth is due both to an increase in the production and sales figures, and essentially, also to the increase in items in transit. The exhaust business is still characterized by a high number of items in transit, i.e. coated monoliths and competitor's components, which are assembled by the Company. The prices of these parts are negotiated directly between its customers and the suppliers, so that the Company has no influence on this part of sales at all. These add up to a sales portion of 52% in the Exhaust Technology business area.
Purged of items in transit, the net sales volume is 9% over the previous year窶冱 value. The more large increase of gross sales volume as compared to net sales volume is due to the increasing preparation of the diesel particulate filters. Their monoliths 窶 measured by the price of the total system 窶 are relatively expensive, and also represent items in transit to the Company. With the utility vehicles, the Company also experienced a sales growth, which can be attributed to the good economic situation (quantity effect), the increase of the production of systems for the EURO-4 exhaust retreatment as well as the pre-sales. The utility vehicle business has a share of almost 5% of the sales volume of the Exhaust Technology area.

(3)
The sales volume in the Vehicle Heating Division was 327.8 million Euros in fiscal year 2006, and therefore 15% higher than in the previous year. This new significant increase ( year 2005: 12%) was carried by all business segments. Especially pleasing was the development in the trade business, nationally and internationally, as well as in the utility vehicle business.
In the utility vehicle market, the Company profited from the still very stable economy, even in 2006, in Europe as well as in North America. In the automobile area, The Company were able to expand its good position with the most important customers in the Asian community.

Outlook
In view of its balanced order portfolio, the Company expects a moderate increase in sales development in 2007, which will result, in particular, from its international activities. This increase will be supported, among others, by a further increasing demand of diesel particulate filters in the Exhaust Technology Division.

The main focus of its efforts in 2007 will be on optimizing logistical processors, as well as the goal oriented and process-oriented design of liaison departments between the subsidiaries of the Company.
A special focus in 2007 will be on increasing the profitability of its exhaust subsidiary, Eberspaecher North America Inc.

R&D Expenditure

R&D structure
R&D centers: Esslingen and Detroit
R&D Office: France, Italy, UK, and Brazil

Emission reduction for commercial vehicles in Europe and America
To reduce nitrogen oxides in commercial vehicles designed to comply with the Euro 4 and Euro 5 emission limits, SCR catalytic converter systems built into a compact silencer housing has been developed. The key feature of these systems is that the exhaust gas, after admixture of a urea solution (e.g. "AdBlue") flows through a sequence of several catalyst modules, depending on the engine power and vehicle size.
The future EURO 6 limits require exhaust aftertreatment to reduce both NOx and particulate matter simultaneously. The Company has now developed a "Onebox system", which integrates the SCR catalytic converters and the particulate filter together with the silencer in a single package.

New Hydronic M auxiliary heater for commercial vehicles
The newly developed Hydronic M family of commercial vehicle auxiliary heaters provides maximum power variants of 10 kW or 12 kW and, for the first time, an 8 kW version for PME (Palm Methyl Ester) /biodiesel operation. The new combustion chamber technology has other major improvements in addition to the PME capability: the life span has been doubled to 6000 operating hours. It is particularly designed for medium-sized and larger trucks, construction vehicles and special vehicles, machine operating cabs and midi-buses.

Followings are ready for production:
-The ActiveSilence" system is based on sound absorption: not only does it reduce undesired noises, but also enables the sound design for the muffler system.

-The fuel processor: independent of the engine- enables an active exhaust finishing treatment: targeted local heat input results in the catalytic converter light-off and to filter regeneration.