Financial Overview

(in million Euros)

	FY2010	FY2009	Rate of change (%)	Notes and Factors
Sales	5,260.6	3,864.0	36.1	-The highest sales figure in the Company's history. -Regionally, taking 2008 as the basis for comparison (it was still largely unaffected by the economic crisis), the proportion of the sales has changed. European sales decreased (54 to 48% of group sales), Asian and South American sales increased (from 29 to 35%) and North American sales remains unchanged (17%).
Net Income	176.6	(379.3)	-	-
Sales by business unit
Engine systems and components business unit	2,377.9	1,678.6	41.7	See note 1) below
Filtration and engine peripherals	1,522.0	1,131.2	34.5	See note 2) below

 

Notes and Factors
1) Engine systems and components business unit
-Sales increased from the precious year but did not reach the sales level of 2008.
Sales in Europe fell the furthest short of the 2008 values. This is primarily because the commercial vehicle activities performed significantly below the pre crisis level. In contrast, considerable sales increases in comparison with the previous year were achieved in South America and Asia. Worldwide sales in all product groups rose by a significant percentage. The largest sales increase were recorded in the passenger car and commercial vehicle pistons, cylinder liners, piston rings, bearings, connecting rods, camshafts, and valves product groups.

2) Filtration and engine peripherals
-All regions contributed to the development with double-digit growth rates. The largest sales growth in comparison with the previous year came from the Asia/Pacific region, where a particularly strong rise in sales took place in the intake manifold product division. The activities in Japan, Korea, and China were the primary growth drivers. With EUR 679.5 million and 41 percent of worldwide sales, the Asia Pacific region is now on a par with Europe. Growth was also satisfactory in North America and was driven by the increased sales generated with intake manifolds. Besides increased sales with Chrysler, sales with Japanese customers also played a decisive role. Overall, the sales in this region have not yet reached the level recorded before the onset of the financial and economic crisis. In Europe, the oil-water heat exchanger products for engine and transmission applications acquired from KTM were included for the first time from the beginning of the year. However, sales growth in the Europe region was less marked than that of the other regions. As in North America, the European sales have not yet reached the sales level recorded in the years preceding the crisis.

Acquisition

-Share agreement with Behr
Behr and the Company have agreed that Mahle will acquire shares in Behr in several stages. In the first stage in 2010, the Company acquired 19.9 percent of shares. and In January 2011, the Company increased its share from 19.9 to 36.85 percent. The company's share in the Behr Group will be increased to more than 50 percent on January 1, 2013.

Contracts

First joint systems activities with Behr
-The Company won the systems order for a complex intake module in a new passenger car engine used for both a French and a Germany OEMs in December 2010. One of its main integrated elements is Behr's indirect charge air cooler.

Business in Asian areas
-In May 2010, the Company received a high-volume order for a new generation of gasoline pistons from a Japanese OEM. Production will take place in the North America region and China.
-In July 2010, the Company received a high-volume order for various engine components and peripherals from a European commercial vehicle manufacturer. Production will take place exclusively in India.
-In September 2010, the Company received its first high volume order foa a fully variable controlled oil pump, to be produced in China.

First high-volume orders for Bosch Mahle Turbo Systems
-Bosch Mahle Turbo Systems received the first orders for exhaust gas turbochargers. The turbo technology will be applied in a gasoline downsizing engine and a common-rail diesel engine. Bosch Mahle Turbo Systems holds the development location in Stuttgart (Germany) as well as the production locations in Blaichach/Immenstadt (Germany) and St. Michael (Austria). Currently, turbocharger systems for engines in passenger cars and light commercial vehicles are being developed. The company plans to start production for the approximately one million turbochargers per year at the end of 2011. (From a press release on March 29, 2010)

-The Company has also entered into the commercial vehicle/off highway segment. In December 2010, Bosch Mahle Turbo Systems has received its first high volume order to supply turbochargers for a new 2.9 liter diesel engine for off-highway applications. Production will start in 2012-2013.

Awards

-Supplier award from Chaoyang Diesel: Mahle Tri-Ring Valve Train (Hubei) Co., Ltd. in Macheng/China received the "Core Supplier" award.
-Supplier award from Toyota: The Mahle Group received the "Global Contribution Award."
-Supplier award from Toyota: Mahle Engine Components USA, Inc. in Morristown/USA received the "Superior Quality Performance Award."
-Supplier award from Isuzu: Mahle Engine Components Japan Corporation in Truruoka/Japan received the "Excellent Supplier for Delivery Cooperation" award.
-Supplier award from John Deere:  Mahle Metal Leve S.A. in Mogi Guacu/Brazil received the award "Achieving Excellence-In Recognition of Outstanding Supplier Performance"
-Supplier award from General Motors:  Mahle Argentina S.A. in Rafaela/Argentina received the "Best Supplier Award"
-Supplier award from John Deere:  Mahle Components de Motor Espana, S.L. in Vilanova i la Geltru/Spain received the award "Achieving Excellence -in Recognition of Outstanding SupplierPerformance."
-Supplier award from FIAT:  Mahle Metal Leve Miba Sinterizados Ltda. in Indaiatuba/Brazil received the "Qualitas Award."
-Supplier award from Ford:  Mahle Metal Leve S.A. in Mogi Guacu/Brazil received the "Best Powertrain Supplier" award.

R&D Expense

(in million Euros)

	FY2010	FY2009	FY 2008
Overall	310.0	246.5	285.9

 

R&D Structure

The Company holds 8 R&D centers worldwide:
-Stuttgart, Germany
-Northampton, UK
-Farmington Hills/Detroit, USA
-Novi/Detroit, USA
-Jundiai/Sao Paulo, Brazil
-Kawagoe/Saitama, Japan
-Okegawa/Saitama, Japan
-Shanghai, China

Capital Expenditure

(in million Euros)

Business Units	FY2010	FY2009	FY2008
Group toral	199	172	415
Engine systems and components	89	87	266
Filtration and engine peripherals	79	55	85

 

Investments in Germany

In view of the weaker growth in the Western European markets, a relatively small proportion was invested in this region in 2010. One exception was the considerable investment required for the start-up of large-scale production of controlled liquid pumps in Germany.

Investments outside Germany

India:
-Expansion of camshaft production.
-The construction of a new location in Chennai as for filtration and engine peripherals products.

China
-Investment of the machining and surface treatment facilities for engine systems and components.