Financial Overview

(in million Euros)

	FY2009-10	FY2008-09	Rate of change (%)	Factors
Overall
Sales	42,621	40,563	5.1	-
Earnings before taxes	1,135	(2,364)	-	-
Components Technology
Sales	5,724	4,603	24.4	1)

Factors
1)
Components Technology
-The automotive supply business performed well. Sales were significantly up from the crisis-hit prior year. Increased orders from the auto industry resulted in higher sales at Presta Camshafts, Presta Steering and the Bilstein group.

-The forging group increased its sales of forged car and truck crankshafts significantly. Demand was higher particularly on the Brazilian and US markets. The European market also started to recover, leading to rising sales.

R&D Expenditure

(in millions of JPY)

	FY2009-10	FY2008-09	FY2007-08
Basic research and development	249	284	316
Customer-related development	215	193	224
Technical quality assurance	213	258	301
Total	677	735	841

R&D Structure

-Around 3,500 engineers, technicians and scientists work in research and development.

R&D Activities

Hybrid chassis parts of steel and plastic
-To meet customer requirements for further cost and weight savings in chassis parts, the Company has developed components of hybrid construction. Consisting of steel and glass fiber reinforced plastic, the parts combine the high strength of the glass fibers and the toughness of steel. Under the development project various chassis parts are being designed, prototyped and tested for functionality and load-bearing ability. The first tested parts offer the same fatigue strength but are around 20% to 30% lighter than conventional chassis parts.

Capital Expenditures

(in million Euros)

	FY2009-10
Overall	3,408
Components Technology	272

Investment Outside Germany

-The Bilstein group is building a new plant in Chattanooga, USA to assemble complete front and rear axles for a major German car manufacturer. Investments were also made in stabilizer production at the Mexican site.