Amberg, Germany -- Automotive seating systems maker Grammer AG said its business developed well in the first quarter of 2010. Economic recovery and new production starts resulted in an 18 percent revenue rise compared to Q1 last year, to Euro 203.0 million, the seat and interiors supplier said in a results statement issued 11 May.
In Q1 2009 Grammer had negative earnings (EBIT) of Euro -8.6 million, but the company said "the stable revenue base and positive effects from the restructuring programme helped Grammer to a positive group EBIT of Euro 3.5 million" in Q1 2010. This equates to an increase of Euro 12.1 million in operating profit, the company noted.
According to Grammer, accelerating automotive demand and new production starts led to a 30-percent increase in revenue for its automotive division to Euro 136.3 million, so that the positive trend which started in Q3 2009 continues. EBIT in automotive grew by Euro 9.7 million in Q1 2009 to Euro 3.7 million.
Grammer noted that, "This substantial rise is attributable largely to the promptly implemented measures to address the crisis and the positive revenue development boosted by product start-ups."
In its seating division -- hit later than interiors by the economic crisis - Grammer said it saw some improvement in Q1 2010, with a positive order situation in trucks, especially in Brazil. Stable off-road demand led to a recovery in the segment, the company commented. Revenue for Q1 in seating systems was up to Euro 71.8 million in 2010 from Euro 69.5 million last year.
In regional terms, all regions had higher revenue: in Europe, revenue rose to Euro 133.8 million from Euro 129.8 million, which Grammer said was "primarily attributable to new production starts in the automotive division." In overseas regions, revenue was up by Euro 12.8 million.
Grammer said business was "extremely good in the region Far East/Rest of World," with increases of more than 100 percent. This improvement to Euro 28.5 million is mainly based on the favorable revenue development seen by both divisions in China.
Grammer had 7617 employees on 31 March 2010, 156 less than on the same date of last year. These break down as Automotive 4804, Seating Systems 2623 and Central Services 190. Temporary workers have been hired in Mexico, Serbia and China as a result of increased activities and new production starts in these countries, said the company.
Investment in Q1 2010 was Euro 8.4 million, with Euro 4.6 million going on building automotive production capacities in Schmölln, Germany, and Mexico, while Grammer also spent Euro 3.8 million in Q1 to set up production of a new generation of truck seats.
Looking forward, Grammer is expecting moderate revenue growth, "in the single digits" for the current fiscal year, after a difficult 2009. Based on the present state of business and somewhat improved market indicators, and to its efforts to adjust capacity and cut fixed costs, the company said it anticipates positive growth and a return to profitability in 2010.