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Hella holds up well in the crisis - positive result despite drop in sales in
2008-2009
- Sales down 17 percent to EUR 3.3 billion due to the crisis on the automotive
market
- Positive operating result before interest and tax (EBIT) of EUR 49 million
- Continued high investment in research and development
- Entry into the non-automotive segment
- Financing secured long term
Article of 15.09.2009
Lippstadt, September 15, 2009. Hella KGaA Hueck & Co.,
a leading supplier of OEM lighting and electronics products to the automobile
industry and one of the top players in the automotive parts and accessories
aftermarket, today released its preliminary results for the past 2008-2009 fiscal
year (June 1, 2008 to May 31, 2009). Owing to the severe global crisis on the
automotive market, Hella's group sales were down 17 percent to EUR 3.3
billion in the 2008-2009 fiscal year (2007-2008: EUR 3.9 billion). Despite the
difficult market environment and the significant decrease in sales, a positive
operating result before interest and tax (EBIT) of EUR 49 million was achieved.
That is a decline of EUR 102 million versus the comparable figure for the previous
year. "Against the background of the dramatic and sustained market slump
in the automobile industry since October 2008, we can be satisfied that we have
achieved a positive result," Dr. Jürgen Behrend, President of the
company, commented on the figures.
Key success factors for Hella's stabilization in the market downswing
were the cost-cutting measures that were launched immediately in November 2008.
This mainly included a reduction of leased external labor, the rapid implementation
of short-time working, and further cost savings in all operating and administrative
areas. Hella's balanced business model, combining original equipment business
with automobile manufacturers, on the one hand, and aftermarket business with
distributors of automotive parts and garages, on the other, proved to be a particular
asset in the crisis. "We intend to further reinforce this strategic balance
by also building up a non-automotive segment," Dr. Behrend commented.
"The strategy is to transfer Hella's technological competence in
the automotive sector to non-automotive applications." Two developments
pursued for instance in the past fiscal year were an energy-efficient LED street
lighting system and a high-precision camera-based people counting system ("people
counter"). Both of these products are due to be launched in the market
in the current fiscal year.
At EUR 306 million, Hella's overall spending on research and development
was maintained at the previous year's level in 2008-2009. This is a reflection
of the long-term orientation of its development and investment strategy and
the company's underlying strength. In its choice of innovation themes,
Hella is largely pursuing the core mega trends in the automobile industry: environment,
safety and comfort. Development focuses in the past fiscal year were energy
management (e.g. components for CO2 reduction), comfort and safety-enhancing
driver assistance systems (e.g. "glare-free" headlights, lane change
assistant) and LED technology (e.g. full-LED front lighting). This focusing
will further strengthen Hella's market position in the future.
Hella's underlying strength is also reflected in the fact that the company's
long-term financing was secured in the past fiscal year despite the global crisis
on the financial markets and the tighter lending conditions. An important milestone
in this context was the successful refinancing of the syndicated loan that was
due to expire in August 2010 with a new EUR 550 million credit line ("Forward
Start Facility") running until August 2012 provided by a broad international
syndicate of 22 banks.
Although the first signs of a recovery of the world economy are visible on the
horizon, Hella's management does not yet see an end of the crisis. Rather,
all the indicators suggest that demand in the automobile market will be much
lower than before the crisis in the next few years, too. "The situation
remains strained. Thanks to Hella's good strategic positioning and the
solid financial situation, however, we are well placed to weather the crisis
successfully", Dr. Behrend commented.
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