Grammer AG Business report FY2009

Business Highlights

Financial Overview

(in million EUR)
  FY2009 FY2008 Rate of Change(%) Factors
Revenue 727.4 1,006.9 (27.8) -
EBIT (23.9) 32.0 - -
Revenue 495.5 637.6 (22.3) -
EBIT (3.9) 3.1 - -
Seating Systems
Revenue 247.1 390.0 (36.6) -
EBIT (9.9) 31.0 - -

Business Overview

-The Company experienced fluctuating order volumes in the Automotive division during 2009. The impact of the financial crisis was felt very strongly, above all in the first and second quarters. Government stabilization measures were able to reduce the effects, so that orders stabilized at a low level. From the middle of the third quarter on, development, orders and new production starts as well as increased registrations of German premium automakers also had a positive effect on the Company. The slump was mitigated thanks to the strategic expansion of its product base. In the fourth quarter, revenues were higher year-over-year, which in view of the considerably lower level is at least a positive signal.

-Another positive aspect in 2009 of crisis was the Company's involvement in Asia, as its Chinese production sites in Tianjin and Changchun developed better than planned. After the opening of the site in Shanghai and the development of a center console for the General Motors Epsilon II Platform, further milestones were successfully launched series production. And so in addition to positive economic developments, the expansion of its product range also strengthened movement toward recovery.

-As the Company pass through this crisis, the Company is putting additional measures into place to improve profitability and cost efficiency, so that the Company can continue to strengthen the earnings situation in the Automotive division over the long term. In addition to initiatives aimed at enhancing processes and structures, these also involve optimizing the worldwide production network. The closure of a production site in the Czech Republic and USA and the establishment of its plant in Serbia are an expression of its clear operations strategy. The increase in worker productivity likewise progressed on schedule, allowing the consolidations and closures that had already begun to be concluded as planned in the fourth quarter.

Seating Systems
-The dynamic business development of previous years was curbed by a subdued first quarter and a sudden breakdown in the order situation in the second quarter. Despite a strong market position in the offroad and truck segments, a drop of 36.6% could not be avoided owing to the economic situation.

-The Company solidified its lead in the South American truck market, which made gains in 2009 despite the crisis. A combination of favorable economic conditions and its strong market position had a positive effect on revenue and earnings in Brazil. By contrast, due to weak markets sales fell considerably in Europe and the Middle East compared to 2008.


R&D Expenditure

(in million EUR)
  FY2009 FY2008 FY2007
Total 30.0 39.2 50.2

R&D Activities

-Grammer Automotive Polska Sp. z o.o. has implemented project in scope of activity 4.2 POIG: PREPARATION AND IMPLEMENTATION OF LIGHT FOAMS FORMULA PU IN AUTOMOTIVE INDUSTRY and as a result is a potential producer of light, low-emitted foams, used in automotive headrests. The project is subsidized by European Union from Regional Development European Fund. (From a press release on Dec. 8, 2009)

Investment Activities

Capital Expenditure

(in million EUR)
  FY2009 FY2008 FY2007
Overall 32.7 39.9 34.6
Automotive 22.4 24.9 14.9
Seating Systems 9.5 13.7 18.1

-The Company invested mainly on new production facilities for pending customer projects and expansion of the sites in Shanghai, Serbia and Schmoelln, which will contribute to optimizing its cost structure as low-cost locations for sewing operations featuring integrated production with a high degree of automation. Moreover, construction was begun on the production facilities for integrated center console production.