MANN+HUMMEL GmbH Business Report FY ended Dec. 2017

Financial Overview

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 Rate of change (%) Factors
Net Sales 3,892.1 3,479.8 11.8 1)
EBIT 185.1 115.7 60.0 2)


Factors
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2017 increased by 11.8% over the previous year to EUR 3,892.1 million. The increase was primarily due to a full 12 months of sales from the the Company’s Wix-Filtron segment. Growth in the Company’s aftermarket business also contributed to the increase in sales, while currency exchange effects had a negative impact.

2) EBIT
-In the fiscal year ended December 31, 2017, the Company’s EBIT increased by 60.0% to EUR 185.1 million. While the Company’s earnings increased, the figure was lower than the Company expected due to one-off effects of extraordinary impairment losses on assets, accounting for a decrease of EUR 14.2 million.

Recent Developments

-The Company announced that in the beginning of June, it opened an office in Tehran and therefore now for the first time has its own representation in Iran. The Company will primarily use the newly established office in the capital city of Iran to support customers in the automotive and industrial sector. In addition to the locations in the UAE and Turkey, Iran is the third office the Company has established in the Near East. (From a press release on August 18, 2017)

Contracts

-The Company announced that the new MANN-FILTER C 24 005 air filter offers a new filter medium made from recycled synthetic fibers. The new MANN-FILTER C 24 005 air filter will be available in original equipment quality on the European market from November 2017 for various Toyota models. The air filter achieves excellent filtration thanks to the multi-layer MICROGRADE A-S medium and removes at least 99.5% of dirt particles that are 0.001 - 0.352 millimeters in size. (From a press release on October 26, 2017)

Awards

-The Company announced that it was named a Supplier of the Year by General Motors, the 22nd time in which the Company has received this award. This award specifically recognized the Company’s air induction systems. The Company was recognized with an additional Silver Anniversary Award for the milestone achievement. (From a press release on April 10, 2017)

R&D Expenditure

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Total 133 126 121

R&D Structure

-As of December 31, 2017, the Company has more than 1,000 employees working in research and development.

Product Development

Dust particulate filter for EV
-The Company announced that it has developed a particulate filter which will be presented with the world's first emission neutral vehicle. Electric vehicles also release particulates into the atmosphere due to tire, brake, and road abrasion and are therefore not free of emissions. The Company addresses this issue with its fine dust particulate filter. The filter modules will initially be fitted to five StreetScooter test vehicles.The successful conclusion of the test could lead to the series implementation of the particulate filter. This would mean that the StreetScooter is the first series car which is almost free of emissions. (From a press release on December 19, 2017)

ProVent2 crankcase ventilation systems for diesel engine
-The Company announced its latest generation of ProVent2 crankcase ventilation systems for diesel engines. ProVent2 is a crankcase ventilation system with integrated oil separation which reduces vehicle emissions. The series is designed for the latest generation of turbocharged engines. The ProVent2 series uses a coalescence separator to separate the oil mist contained in the blow-by gas and reduces the residual oil content to a minimum. The ProVent2 200 will be available from the end of 2017 and the series will be successively extended up to completion in 2019. Test bench measurements verify ProVent2 200 achieves a separation performance which has reached efficiencies of over 99%. (From a press release on November 12, 2017)

MANN-FILTER C 24 005 new air filter
-The Company announced that the new MANN-FILTER C 24 005 air filter offers a new filter medium made from recycled synthetic fibers. The new MANN-FILTER C 24 005 air filter will be available in original equipment quality on the European market from November 2017 for various Toyota models. The air filter achieves excellent filtration thanks to the multi-layer MICROGRADE A-S medium and removes at least 99.5% of dirt particles that are 0.001 - 0.352 millimeters in size. (From a press release on October 26, 2017)

Brake dust particulate filter
-The Company announced that it has designed a brake dust particulate filter which substantially reduces the particulates which are created during braking. The filter can be adapted to existing installation space in the area of the brake disc. The filter medium, which efficiently filters the particles, is made from a material which is resistant to temperature and corrosion. The retention of the fine dust directly at the place of creation prevents the soiling of alloy rims and eliminates to a large extent the tedious removal of the entrenched brake dust. The brake dust particulate filter is suitable for use across all vehicle drive types ranging from electric vehicles to hybrid vehicles and conventional petrol and diesel vehicles. In addition to use in motor cars, the brake dust particulate filter can also be used in commercial vehicles and railway applications. (From a press release on September 11, 2017)

Intake manifold with fully integrated intercooler
-The Company announced that it will celebrate the world premiere of the first intake manifold with a fully integrated intercooler at the Frankfurt motor show. The system evenly distributes the temperature and is able to withstand the high loads. The new system exploits all the advantages of indirect charge air cooling and requires a lower number of components in comparison to standalone concepts which work with separate components for the intercooler and intake manifold. With full integration, the cooler is completely enclosed by the intake manifold shells. This gives the whole system a higher stability in comparison to mounted solutions as there is no sealing surface to the outside. (From a press release on September 8, 2017)

Patents

-In the fiscal year ended December 31, 2017, the Company submitted more than 3,000 patent applications.

Capital Expenditure

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Total (Investments in tangible assets) 164 151 140


-In the fiscal year ended December 31, 2017, the Company’s capital expenditure amounted to approximately 4.2% of its sales.

-During the fiscal year ended December 31, 2017, the Company invested 41.8% of its capital expenditures in the Automotive Original Equipment Business Unit and 29.6% of capital expenditures in the Automotive Aftermarket Business Unit.

-The Company made investments in production facilities, infrastructure for customer projects and the implementation of new production technologies. The Company’s largest projects were at its facilities in Santa Barbara, California, U.S.; Portage, Michigan, U.S.; Queretaro, Mexico; and Germany.

Investments in Germany

-The Company made a significant investment at its production facility in Marklkofen, Germany to expand production capacity of flat air filters with complex geometries.