01/24/2006

Schuler improves earnings

Sales and new orders at prior-year level – Restructuring and cost savings taking effect – Stable dividend for preferred stock shareholders

Sales at prior-year level

Consolidated sales of the Schuler Group rose slightly in the past fiscal year from € 558.1 million to € 564.3 million. In North and Latin America, revenues more than doubled to € 185.3 million. There was also growth in Schuler’s European export markets (outside Germany), where sales climbed 13.6 % to € 115.2 million. In Germany itself, however, sales were down 36.1 % to € 168.0 million. Sales in Asia remained at a high level of € 90.8 million, but were down 8.8 % from their peak of the previous year. The proportion of Group revenues generated outside Germany grew strongly from 52.9 % to 70.2 %.

Slight dip in new orders

At € 550.4 million, new orders were slightly below the prior-year level of € 562.9 million. New orders from non-German customers in Europe more than doubled from € 83.3 million to € 171.2 million – against the general trend and despite an overall weak market. Schuler was particularly successful in securing major orders from French car manufacturers, thus fulfilling its objective of strengthening its market share in France. In Asia, new orders were down 46.9 % from their prior-year peak at € 71.6 million. Orders from the Americas fell by 14.9 % to € 154.4 million. In Germany, the Group had to record a further decline in new orders of 6.4 % to € 152.4 million. As a consequence, the proportion of new orders received from outside Germany grew from 71.0 % to 72.3 %.

As of the balance sheet date (September 30, 2005), the Group's order backlog amounted to € 557.3 million and was thus down 2.4 % on the previous year.

All key earnings figures improved

Despite only a marginal increase in sales revenues, Schuler was able to improve all key earnings indicators as planned. This was due mainly to extensive cost reduction measures introduced in the previous fiscal years, which began to take effect in the past fiscal year. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) grew from € 27.9 million to € 30.9 million, while earnings before interest and taxes (EBIT) were raised from € 10.4 million to € 16.0 million. Net income was up from € 3.5 million to € 4.2 million.

Stable dividend for preferred stock shareholders

At the Annual General Meeting on March 30, 2006, the Board of Management and Supervisory Board will propose the payment of an unchanged dividend of € 0.20 per preferred share and € 0.10 per common share for the fiscal year 2004/05.

Equity ratio up slightly

In the past fiscal year, gross cash flow fell from € 22.0 million to € 20.1 million. In the same period, net borrowing fell from € 129.1 million to € 124.1 million, while the balance sheet total rose from € 416.2 million to € 429.2 million. This resulted in a slight increase in the equity ratio from 18.2 % in the previous year to 18.4 %.

Investments focused on engineering and IT

Investments in fixed and intangible assets were reduced, as planned, from € 12.1 million in the previous year to € 9.4 million. Capital expenditures once again focused on engineering and information technology. In addition, the company modernized its machines and equipment at numerous production facilities. Depreciation of fixed and intangible assets fell from € 17.5 million to € 14.8 million.

Reduction in headcount

As of September 30, 2005, the Schuler Group employed a total of 3,697 people around the world (including apprentices). Total headcount was thus down 96 on the previous year. The number of staff employed by the Group's German subsidiaries fell by 120, from 2,899 to 2,779. The number of staff employed by the Group's foreign subsidiaries rose by 24 to 918, as of the balance sheet date. The Group's personnel expenses were reduced from € 207.5 million to € 200.3 million.

On September 30, 2005, the Schuler Group employed a total of 177 apprentices. The ratio of apprentices to full-time staff at the Group's German subsidiaries amounted to 6.3 %.

Outlook

The Schuler Group does not expect any significant improvement in investments of car manufacturers and their suppliers in fiscal year 2005/06. The main focus of activity with regard to the expansion of press shop capacities will remain in the world’s growth markets of Asia and Eastern Europe. Schuler’s international manufacturing network with facilities in Europe, the Americas and Asia provides us with a vital competitive advantage to serve these regions flexibly. In the Group’s traditional markets of Western Europe and America, the capital expenditures of customers will focus on raising the economic efficiency of their production processes and implementing new technologies. With its innovative, market-oriented products and service concepts for equipping and modernizing press shops, Schuler will also benefit from this trend.

Overall, the Board of Management expects business in fiscal year 2005/06 to develop at a similar level to that of the previous year. The cost-cutting measures already successfully introduced will also be continued in future.