PWO with solid performance after first nine months

Progress-Werk Oberkirch AG has concluded the first nine months of the current 2006 financial year with satisfactory results. Group revenue edged up by 3.7 per cent to EUR 167.5 million (prev. year: EUR 161.5m). The third quarter produced revenue growth of 4.8 per cent, taking the overall figure for this period to EUR 54.3 million (prev. year: EUR 51.8m). Total output, i.e. net sales plus inventory changes, within the PWO Group rose by 4.9 per cent to EUR 172.5 million (prev. year: EUR 164.4m) in the first nine months of 2006; in the third quarter, total output grew by 1.8 per cent to EUR 56.5 million (prev. year: EUR 55.5m).

EBIT increased by 9.4 per cent to EUR 3.5 million (prev. year: EUR 3.2m) in the third quarter. Thus, the margin calculated in relation to total output rose to 6.2 per cent, compared with 5.8 per cent for the same period a year ago. In the first nine months, EBIT reached EUR 12.0 million, as opposed to EUR 11.5 million a year ago. Thus, tool-related outlays which had impacted on first-half earnings were almost fully compensated for in the third quarter, allowing PWO to match the previous year's margin of 7.0 per cent.

In the third quarter, net profit increased from EUR 1.5 million to EUR 1.8 million. Correspondingly, the net margin rose from 2.7 to 3.2 per cent. At EUR 0.71, earnings per share returned to the previ-ous year's level (adjusted) for the first time since the increase in share capital executed in October 2005. In the first nine months, net profit rose to EUR 6.2 million, after EUR 5.8 million a year ago. Owing to the capital increase, earnings per share contracted from EUR 2.77 (adjusted) in the first nine months of 2005 to EUR 2.49 in the 2006 reporting period.

As announced, capital expenditure was stepped up in the third quarter, increasing to EUR 4.5 mil-lion (prev. year: EUR 3.3m), compared with EUR 3.1 million in the second quarter. In the first nine months, capital expenditure rose to EUR 9.6 million, compared with EUR 8.0 million in the same period a year ago. The planned budget of EUR 17 million is expected to be fully utilised in the 2006 financial year as a whole. In the first nine months, cash inflow attributable to EBIT and deprecia-tion/amortisation amounted to EUR 23.6 million, compared with EUR 21.1 million a year ago. After deduction of taxes, interest as well as the increased dividend pay-out, the company had a total of EUR 15.5 million at its disposal. These funds covered the operations-related expansion of working capital as well as maintenance investments. Correspondingly, the equity ratio increased from 40.7 per cent at the year-end of 2005 to 41.5 per cent at September 30, 2006.

PWO Canada was able to stand its ground in the third quarter, despite operating against the back-drop of production downsizing implemented by the three leading producers General Motors, Ford and Chrysler ("Big Three") in North America. Revenue generated by the subsidiary rose slightly to EUR 7.7 million (prev. year: EUR 7.5m), while total output reached EUR 7.1 million (prev. year: EUR 7.4m). In the first nine months, the subsidiary generated revenue in the amount of EUR 24.9 million (prev. year: EUR 22.7m); total output was EUR 24.7 million (prev. year: EUR 22.3m). As a result of tooling-related charges, EBIT fell to EUR 0.1 million in the quarter under review, compared with EUR 0.3 million a year ago. The Czech subsidiary PWO UNITOOLS continued to perform well. In the third quarter, total output reached EUR 2.3 million, a figure comparable to that posted in the first two quarters of 2006. At EUR 3.1 million, revenue was higher than in the preceding quarters. In the first nine months, total output amounted to EUR 6.8 million, while revenue stood at EUR 7.6 million. The subsidiary operated profitably both in the third quarter and the first nine months as a whole. Year-on-year comparability is not possible, as PWO UNITOOLS was not included in the consolidated group until April 1.

Based on the company's performance in the first nine months and given the favourable outlook presented by the automobile industry for the remaining months of the year, PWO has reconfirmed its forecast of revenue and earnings growth for the 2006 financial year as a whole.

Oberkirch, November 8, 2006
The Executive Board


Progress-Werk Oberkirch AG
Industriestraße 8
77697 Oberkirch
Germany

back