Preh Inc, Releases Q1 Results and Enters Electric Growth Market

May 05, 2011

Preh GmbH, Bad Neustadt a. d. Saale, Germany, reports a 30 percent sales growth for Q1/2011, compared to the same period last year. In the first three months of 2011, sales surged to EUR103.4 million, up from EUR78.4 million in Q1/2010.

The company is thus continuing its growth trend of fiscal year 2010, during which automotive sales climbed to a record of around EUR343 million, up from EUR240 million in 2009. In addition, Preh recovered its pre-crisis profitability last year, with EBIT climbing to EUR17.8 million. At year's end 2010, the company's workforce had increased by 340 to 2,420 employees worldwide.

For fiscal 2011, Preh's management board is confident of strong double-digit growth in sales and with earnings in excess of last year's. The worldwide workforce is planned to increase to 2,655, with a considerable addition to product development processes in Bad Neustadt.

Besides the traditional market segments of climate control systems, sensors and ECUs, Preh in 2011 will benefit increasingly from the growth market in electric transportation. In the area of battery management systems, Preh has achieved a major breakthrough by winning a contract for an electric vehicle to be built by a leading German car manufacturer.

Dr. Michael Roesnick, president and CEO of Preh GmbH, said, "Since 2003, we have more than doubled our automotive sales, from EUR169 million to EUR343 million in 2010. Even the severe industry crisis of 2008/2009 failed to divert us from the path of sustainable growth. In the past seven years Preh has shown an average annual growth of 10.6 percent. Together with our new majority shareholder Joyson, we will not only continue, but even accelerate our growth."

A second plant in Mexico
A key success ingredient at Preh has been the consistent internationalization strategy adopted in recent years. Back in 2005, Preh had established its first production location in Monterrey, Mexico. In response to strong growth in the NAFTA region, a second plant in Monterrey is scheduled to begin operations in the summer of 2011. In the initial stage, the new Mexican facility will occupy an area of over 89,000 sq. ft.

Preh achieved over 60 percent growth in the NAFTA region in the first quarter of 2011. As a specialist in automotive electronics, the company has succeeded in becoming the second-largest supplier of climate control systems in the U.S.A. in only five years.

At the beginning of April, Chinese automotive supplier Joyson announced its position as majority shareholder of Preh. Joyson, a privately-owned supplier of automotive electronics, will hold a 74.9 percent stake, while the previous majority shareholder, Deutsche Beteiligungs AG, Frankfurt a. M., the funds managed by it (the "DBAG Group"), and company management retain their stake of 25.1 percent.

The result is a dynamically growing technology company with annual sales of over EUR500 million. As an automotive specialist, the company will have the best possible access to the markets of Europe, the U.S.A. and China. From its Bad Neustadt base, Preh management will direct and expand the global operations of Joyson and Preh in the automotive electronics market, ensuring continuity for customers and employees alike. The purchase agreement is still subject to approval by the relevant authorities.

About Preh
Founded in 1919, Preh is a globally operating group of enterprises with more than 2,500 employees in Germany, Portugal, Mexico, the U.S.A., China and Romania. Preh is headquartered in Bad Neustadt a.d. Saale. The company achieved revenues of EUR 351 million in 2010. Preh's development and production competencies focus on vehicle interior control systems, sensor systems, electronic control units and assembly systems for the world's leading vehicle manufacturers. For more information, please visit: http://www.preh.com.