GRAMMER AG Business Report FY2011

Business Highlights

Financial Overview

(in million EUR)
  FY2011 FY2010 Rate of Change(%) Factors
Revenue 1,093.5 929.7 17.6 1)
EBIT 49.4 32.9 50.2 -
Automotive Division
Revenue 680.3 610.2 11.5 2)
EBIT 26.9 21.4 25.7 -
Seating Systems Division
Revenue 438.0 341.9 28.1 3)
EBIT 30.6 17.6 73.9 -

1) Overall
-Sales in 2011 increased by 17.6% to 1,093.5 million euro, which is a new record during its more than 50-years company history.

-Sales increased in all regions. Especially in Europe, revenue increased by 21.7%. Particularly the first two quarters in the Seating Systems Division were considerably stronger in Europe than they were in the comparable prior-year period. In addition, the Automotive Division also saw outstanding growth in Europe as a result of high demand for premium vehicles and German carmakers' export strength.

2) Automotive Division
-Every quarter saw double-digit gains in revenue, due to the stability of demand in the premium segments and the very high export rate of the German auto industry.

-Revenues in all regions increased at already high levels. In Europe, new production starts pushed revenues still higher year-over-year, and capacity utilization at its plants in some cases hit the limit, as sporadic demand lead to repeated order surges.

-The domestic Chinese market and the performance of its local customers proved to be very robust, and the Company was once again in a position to profit from these developments.

3) Seating Systems Division
-Given the Company's dominant position in the offroad and truck segments, positive order volumes resulted in strong revenue growth of 28.3%.

-In truck business, the Company increased its lead in the South American market, especially in Brazil. As the economy expanded, sales also improved considerably in Europe and the Middle East.


-The Company announced that it has acquired 100% of equity in Belgium-based EiA Electronics N.V., based in Belgium, from VADO (van doorne's) Financieringsmaatschappij N.V. and DACO N.V., the previous owners. Grammer paid 10.5 million euros for the acquisition of EiA Electronics. EiA Electronics specializes in development and distribution of electronic components for commercial vehicles. EiA Electronics generated revenue of approximately 20 million euros in 2010. The company's product range includes displays, consoles, controllers, communication modules and sensors. The Company plans to integrate EiA Electronics features into its seating product portfolio. (From a press release on July 26, 2011)

Plant Closure

-In August 2011, in line with the optimization of the worldwide production network, the Company closed the Immenstetten plant near Amberg, Germany.


-The Company announced that its MSG 115 suspended seat has been selected as standard equipment on the "Mercedes-Benz Actros", which has been in production since the end of September 2011. MSG 115 optimally absorbs horizontal vibrations and shocks through its fore/aft isolator while the nine-step adjustable shock absorber affords additional suspension comfort. The metal components for the MSG 115 suspended seats are manufactured at the company's plant in Haselmuehl, Germany. The seat covers and armrests are produced at Grammer Group's locations in southern Europe. Final assembly is then completed at the plant in Tachov, Czech Republic. (From a press release on December 7, 2011)

-In the forth quarter of 2011, the Company - alongside joint venture partner, Magna Seating - achieved a major success in the US truck market. Truck maker, Paccar, chose the GT700 seat series for its premium vehicles Kenworth "T700" and Peterblit "587".


R&D Expenditure

(in million EUR)
  FY2011 FY2010 FY2009
Total 37.7 32.4 32.2

R&D Facilities

-The Company holds R&D centers in China, Turkey, Brazil and the USA.

-In 2011, the Company intends to soon begin construction of a new R&D center. At the R&D center, its engineers will not only develop new and innovative products or research new materials such as hybrids. They will also work to advance innovative manufacturing processes, like laser welding or gas injection molding.

Investment Activities

Capital Expenditure

(in million EUR)
  FY2011 FY2010 FY2009
Overall 37.6 38.1 32.7
Automotive Division 14.8 22.0 22.4
Seating Systems Division 22.1 15.8 9.5

Investment Activities

<Automotive Division>
-The Company invested significantly less at 14.8 million euro (-32.7%), which went mainly to new production facilities for pending customer projects and expansion of the sites in Changchun, China; Mexico and Schmolln, Germany, which will contribute to optimizing its cost structure as low-cost locations featuring as well as offering integrated production with a high degree of automation.

-Investments in the integrated center console production is necessary due to the orders received, and forms basis for its future growth potential.

-The Company continues to carry out lean optimizations which are designed to increase productivity at its plants.

<Seating Systems Division>
-Capital expenditure in 2011 increased by 39.9% year-on-year. Set up of production for generation MSG 115 truck seats required substantial investment in the Czech Republic and Germany. Investments were also made in expansion of production in Brazil for the booming South American market.

<Outlook for 2012>
-The Company expects the capital expenditures in 2012 to be in line with the ones in 2011. In order to continue driving growth of the Company, further investments will be made in NAFTA and Asian markets. Another focus will be Europe, given increases in 2012 form the expansion of center console production and implementation of larger scale customer projects in the truck seat segment, as well as optimization of its R&D capacities.

Investment in Germany

-The major metal components for the seat are sourced from its Haselmuhl plant near Amberg, where the Company has made targeted investments in new process technologies and production systems. Investments totaling more than 5 million euro serve to expand and optimize its core competencies in metal production at the Haselmuhl location.

Investment Outside Germany

<Czech Republic>
-The Company has completed expansion of the Tachov plant in the Czech Republic to equip it for final assembly and distribution of its new generation MSG 115 truck seats.