W.E.T. Automotive Systems AG: W.E.T. Comes out of the Crisis Strengthened and Reports Record Sales in 2010

The W.E.T. Group came out of the crisis strengthened in the financial year 2010 and was able to increase revenues by approximately 44% to EUR 227 million. This encouraging development picked up particularly in the second half of the year. Above all, Asia (revenue EUR 53 millions, + 62% on prior year) and North America (revenue EUR 68 millions, + 89% on prior year) registered very high growth rates. In North America revenue growth was supported by catch-up effects and high growth rates for seat climate systems.

Operating results, adjusted for special effects, rose to EUR 23.5 million (10.4% of revenue). Operating results were affected here additionally by a reversal of impairment losses on customer relations in North America under IFRS in the amount of EUR 20.1 million, an unscheduled change in the fair value of the building in Hungary in the amount of EUR 3 million, as well as expenses in the amount of EUR 2.0 million in connection with the patent dispute with Amerigon, Inc., Michigan, US. The encouraging operating result shows that W.E.T used the automotive crisis in 2008 and 2009 to optimize material processes. Programs to reduce costs and increase efficiency were successfully implemented with annual sustainable earnings in the amount of EUR 5 - 8 million.

In the financial year 2010 a significantly increased group net income of EUR 22.2 million was achieved, whereby a negative financial result in the amount of EUR 12.2 million was accounted for. On the one hand, market valuations of financial instruments had to be adjusted to be recognized as expenses due to unfavorable foreign exchange parities. On the other hand, the refinancing concluded in April 2010 involving lines of credit of the KfW led to higher interest expenses compared to the prior year.

Particularly encouraging was how the operating cash flow developed, which could be increased from the prior year from EUR 4.3 million to EUR 23.4 million. The working capital rose around only 33.4% in the financial year despite the 44% revenue increase and could be financed completely from the operating cash flow. In addition, liabilities to banks in the amount of EUR 5.1 million were repaid prematurely and liquidity was increased by EUR 5.1 million to EUR 10.1 million at the end of the financial year. The equity ratio could be further improved from 43% at the end of the financial year 2009 to 45% in 2010.

W.E.T. and Amerigon, Inc. have entered into, as of 28 February 2011, an agreement for the preparation of a public takeover of W.E.T. by Amerigon, Inc. Amerigon, Inc. intends to issue, via its directly controlled subsidiary Amerigon Europe GmbH, a voluntary public tender offer for the acquisition of all shares of W.E.T. at the price of EUR 40.00 per share. In addition, Amerigon Europe GmbH and certain major shareholders of W.E.T. have entered into, equally as of 28 February 2011, an agreement according to which Amerigon Europe GmbH will acquire from the major shareholders 71.80% of the nominal share capital of W.E.T.. Taking into account that 4.99% of the nominal share capital of W.E.T. are held by W.E.T. in treasury stock, this corresponds to a percentage of voting rights of 75.58%. The consummation of the transaction is, inter alia, subject to cartel clearance by the competent cartel authorities. W.E.T. und Amerigon, Inc. have agreed to terminate, upon consummation of the transaction, the patent litigation pending between them in the US. It is furthermore intended that W.E.T. and Amerigon Europe GmbH, upon consummation of the transaction, enter into a domination and profit and loss transfer agreement according to Secs. 291 et seq. of the German Stock Corporation Act.

W.E.T. expects a moderate revenue increase and EBIT margins in the high one-digit percent range in 2011. 'The market environment is positive. Thanks to our global presence and our prominent position in the competition, we are well prepared for the future,' said Caspar Baumhauer, CEO.