05/30/2007

First half of 2006/07: turnaround achieved

Göppingen - Schuler AG (WKN 721063/ISIN DE0007210635) has drawn a positive balance for the first half of the 2006/07 financial year (October 1, 2006, to March 31, 2007): the consolidated result increased from EUR -2.5 million to EUR +4.2 million, compared against the first half of the previous financial year. Incoming orders also rose by a healthy 15 percent. The merger with Müller Weingarten AG, in which Schuler AG now has a holding of over 96 percent, is proceeding according to plan. The market acknowledged this development with a rise in price of EUR 5.60 (October 1, 2006) to EUR 9,47 (May 25, 2007).

In the words of Jürgen Tonn, Chief Executive Officer of Schuler AG: "Our restructuring measures, in conjunction with our diversification strategy, returned the consolidated result to the black during the first half of the year. This means that Schuler AG has achieved turnaround. We now have a sound basis, thanks to the takeover of Müller Weingarten, from which to reposition ourselves on the global markets and consequently to participate in their dynamic growth."
It proved possible to increase earnings before interest and tax (EBIT) from EUR 5.1 million to EUR 7.7 million. This improvement is also the result of the Group's SPEED program, which was initiated a year ago. Gross cashflow virtually doubled from its level during the same period last year, from EUR 6.8 million to EUR 12.7 million.
New orders rose from EUR 234.4 million to EUR 270.0 million (+ 15 percent). The "Forming Systems" business segment accounted for EUR 209.0 million of this total (previous year: EUR 182.5 million) and the "Automation and Production Systems" for EUR 78.9 million (previous year: EUR 66.6 million). At EUR 360.5 million, the order backlog at March 31, 2007, was at virtually the same level as last year (EUR 362.0 million).

The volume of sales totalled EUR 239.5 million, and as expected, was slightly lower than last year's level of EUR 250.0 million (- 4.2 percent), due to falling sales in the USA. The cause of this has been the sustained investment reticence on the part of the automotive industry, in particular in North America. The "Forming Systems" segment realised sales of EUR 192.9 million, against EUR 214.4 million last year (- 10.0 percent), the "Automation and Production Systems" realised sales of EUR 62.9 million, against EUR 61.9 million (+ 1.6 percent) during the first half of 2005/06. Sales were broken down as follows: North and South America 35 percent, Germany 30 percent, Europe excluding Germany 23 percent, Asia and other regions 12 percent.

The size of the workforce of the Schuler Group fell by 121 over the past twelve months to 3,520. The capacity adjustment was part of the Group's SPEED program which was instigated in May 2006.
The takeover of Müller Weingarten AG, which was announced in March, is going to plan. Eleven working parties, in which specialists from Schuler and Müller Weingarten are devising the future models for the individual product segments, were set up at the beginning of May. After the close of the compulsory offer on May 15, 2007, Schuler AG now holds over 96.5 percent of shares in Müller Weingarten AG. On May 15, 2007, Schuler AG introduced a squeeze-out operation, under which the shares of the remaining minority shareholders of Müller Weingarten AG are to be transferred to Schuler AG in return for a cash payment of EUR 15.74 per share.

Jürgen Tonn: "Thanks to cost reductions and measures designed to expand growth areas, which were introduced at an early stage, Schuler AG is in a good position. Its merger with Müller Weingarten in particular has opened up opportunities to develop additional potential. We are therefore again expecting a positive operating result for the current financial year before integration-related non-recurrent expenses, even in the event of continuing investment reticence on the part of the automotive industry. In the medium term, the merger of Schuler and Müller Weingarten will bring cost savings of over EUR 40 million per annum. This is offset by a sizeable non-recurrent restructuring expense, which is likely to lead to a negative EBIT at Schuler during the current year. We are expecting continued positive business development for the year as a whole and improved results next year."