Amberg, Germany - Automotive seat and interiors supplier Grammer AG increased its revenue by one percent in the past fiscal year to Euro 1007 million (2007: Euro 998 million), but it is forecasting a tough year in 2009, with no rapid recovery expected in its markets.
Discussing the 2008 results, Grammer said, "Despite declining revenue in the fourth quarter in the wake of the global financial and economic crisis, the company turned over more than one billion euros for the first time in its history."
Earnings (EBIT) were Euro 32.0 million, similar to those of 2007 (Euro 32.1 million). Grammer earned net profit of Euro 14.1 million, "substantially lower than the previous year's Euro 17.6 million, as a result of valuation write-downs," said the company.
In the light of the ongoing very weak demand situation, however, Grammer said it expects a decline in revenue by 25 to 30 percent in the first half of 2009, along with negative EBIT.
Grammer cut its employees by 6.5 percent up to 31 Dec 2008, to 8908, but the company noted that ongoing declines in orders have made further measures necessary. Grammer introduced short-time work at all German locations in mid-January 2009, and has cut personnel by a further 1000 jobs, largely at sites outside Germany. In the Amberg region, it has agreed with the works council that a further 227 jobs will go.
Decreased demand saw revenue fall in Europe by Euro 22.4 million to Euro 729.7 million. But Grammer's expanded international presence saw revenue in Asia rise by as much as 20.6 percent to Euro 113.6 million). This underlined the strategic importance of the region for Grammer, the company emphasised.
In America, Grammer said its "excellent market position," especially in South America, enabled sales to rise 7.8 percent to Euro 163.7 million.
Seating systems' sales were Euro 390.0 million (2007: Euro 363.6 million), with EBIT up by 29 percent to Euro 31.0 million. "This outstanding result is primarily attributable to the very dynamic first half in the areas offroad and truck, as well as the pleasing performance in the agricultural segment. Our technically advanced and innovative products enabled us to further strengthen our leading position in the area of seats for commercial vehicles in 2008," said chairman Dr Rolf-Dieter Kempis.
The Automotive division struggled with the effects of the financial and economic crisis and both revenue and EBIT fell substantially. Double-digit growth rates in the first half were followed by a clear fall-off in demand in the second half. For the full year, this division saw a 3.1 percent decline in revenue to Euro 637.6 million with EBIT down from Euro 10.7 million in 2007 to Euro 3.1 million. This is attributable primarily to difficulties relating to production in the US, additional expenditures for restructuring and lower order volumes from automakers, Grammer said.
Investments by Grammer of Euro 39.9 million in 2008 focused on expanding in Shanghai and Schmölln for upcoming production launches of centre consoles and truck seats, as well as expanding low-cost sewing operations in Serbia.
Grammer's board said it expects demand to continue to be very weak in the first half of 2009, with a 25 to 30 percent decline in revenue, along with negative EBIT. "Given the still limited visibility" and uncertainty about orders, the company said it can currently make no forecast of full-year 2009 results. "Based on the present situation, however, a rapid and strong recovery of the markets is not expected."