HELLA continues strong sales growth

Lippstadt, April 13, 2016. HELLA KGaA Hueck & Co. – a global automotive supplier for lighting and electronics – has increased group-wide revenue for the first nine months of the current 2015/2016 fiscal year by 10.3 percent over the same period in the previous year to 4.654 billion euros (previous year: 4.218 billion euros). About 2.4 percentage points result from positive foreign exchange effects. The most important driver of group-wide growth continued to be the strong market position in the Automotive segment. Here, HELLA benefits specifically from a leading portfolio of innovative LED technology and electronic components which serve global trends such as energy efficiency (CO₂ reduction) and safety.

"Innovative products are the key to a successful differentiation," says Dr. Rolf Breidenbach, Chairman of the Management Board. "As a leader in innovation, we are favorably positioned with our product categories. Our strong technology portfolio is helping us to successfully acquire new orders and grow faster than the market as a whole."

During the nine-month period, EBIT adjusted for one-time effects grew to 345 million euros (previous year: 318 million euros). This resulted in an increase of around 9 percent and an adjusted EBIT margin of 7.4 percent, which was slightly below the previous year (7.5 percent).
Taking into account one-time effects – particularly the additional expenses resulting from the supplier failure in the first quarter – operating earnings (EBIT) fell in the first nine months compared to the previous year by about 20 million euros to 290 million euros (previous year: 309 million euros). The EBIT margin was thus 6.2 percent (previous year: 7.3 percent).

Automotive segment grows faster than the market as a whole

The growth trend in the Automotive segment was supported by a solid demand in Europe and America as well as a growing demand in China in the third quarter. External revenue for the segment increased by about 3.5 billion euros or around 11 percent over the nine-month period. When compared to global growth in new car registrations and the sales of light vehicles, HELLA was able to exceed overall market growth for the first nine months.

On the earnings side, HELLA’s Automotive segment had an EBIT of 232 million euros with a margin of 6.6 percent for the initial nine months of the current fiscal year. This represents a decrease of 23 million euros compared to the previous year, which primarily resulted from the extraordinary expenses due to the supplier failure. Without these costs, the EBIT margin would have been 7.9 percent and thus at the same level as the previous year (8.0 percent).

Aftermarket segment remains on track for continued growth

In the first nine months the Aftermarket segment was able to continue offsetting the weak demand of the same period in the previous year. This is primarily owing to recovery on the European aftermarket as well as growth in the wholesale business in Northern Europe. External segment revenue expanded by 7.1 percent to 875 million euros. Operating income thus increased by 6 million euros to 56 million euros. Relative to revenue, the margin improved to 6.4 percent compared to 6.1 percent in the previous year.

Special Application segment stabilizes

The Special Applications segment – which bundles business operations of manufacturers of special vehicles and industrial lighting – has continued to stabilize over the reporting period. External revenue in the segment grew by 2 percent to 228 million euros in the nine-month period. EBIT was 12 million euros and thus 5 percent below the previous year, with a margin of 5.2 percent, following 5.6 percent in the previous year. As part of the focused product-market strategy, HELLA continues to examine the long-term market potential of various special business segments.

Strong financial basis for future growth

The equity ratio at the end of the third quarter for the fiscal year 2015/2016 was 39.1 percent compared to 37.9 percent in the previous year. The operative cash flow from operating activities rose by 54 million to 35 million euros in the nine-month period compared to the previous year.

Report for nine-month period confirms revenue and earnings forecasts for the fiscal year as a whole

HELLA continues to expect that Group revenue for the entire fiscal year will see growth in the middle to high single-digit range. Taking into account the extraordinary expenses arising from the supplier failure in China in the first half of the fiscal year, HELLA still expects the EBIT for the entire fiscal year to be lower than the level for the previous year and is thus keeping with the forecast. The negative impact on income from the supplier failure is about 47 million and has been fully posted in earnings for the nine month period. Without these extraordinary costs, the EBIT would currently show an increase in the mid to high single digit range relative to the previous year.

Note: The EBIT margins for the business segments listed in the press release are based on external segment income. Further details about the company strategy and activities in the individual business segments can be found in the current nine-month report for fiscal year 2015/2016. The report is available immediately on the HELLA KGaA & Hueck Co. website as a download.

Selected key figures derived from the nine month financial report for fiscal year 2015/2016 (June 1, 2015 to February 29, 2016)
(In million euros)

	Nine Months FY 2015/2016	Nine Months FY 2014/2015	Change
Sales revenue	4,654	4,218	+10%
Adjusted group earnings (adj. EBIT)	345	318	+9%
Earnings Before Interest and Taxes (EBIT)	290	309	-6%
Adjusted EBIT margin	7.4 %	7.5 %	-0.1%
EBIT margin	6.2 %	7.3 %	-1.1pp
Equity ratio	39.1 %	37.9 %	+1.2pp