INCREASED SALES AND REVENUE MAKE LENZE A FORCE TO BE RECKONED WITH
13 September 2005 - Lenze Limited

The Lenze AG Board of Management, consisting of Dr Erhard Tellbüscher (Chairman), Michael Mölleken and Pekka Paasivaara, presented the latest figures today at their annual accounts press conference in Hanover.

The main sales markets for Lenze Group are in Europe. Of these, the German market accounts for 39% of total sales, with the remaining European countries making up a combined share of 48%. In particular, the sales pattern achieved over the last year in respect of the German market has been most pleasing, whereas that associated with the USA and Asia has failed to live up to expectations. In part, this can be attributed to unfavourable exchange rates.ates.

Although the gross profit margin dropped slightly to 59% (previous year: 60%), overall it was possible to limit operational expenditure. The rate at which personnel costs and other operational expenditure rose was lower than the rate at which sales rose. Depreciations increased by approximately 0.5 million Euro, which can be attributed to in-creased investment in fixed assets (including the expansion of electronics production in the USA). Moreover, the lower financial results and declining tax load ratio led to a significant increase in after-tax earnings of 47%, equating to a rise of 5.6 million to 17.6 million Euro (from 12 million Euro the previous year).

The remaining operational expenditure was successfully maintained at the previous year's level. Other operating revenue increased by 1.8 million Euro compared to the previous year. This increase in revenue can mainly be attributed to the sale of the brake and clutch business, which was through a management buyout during the year under review.

The average number of employees within the Lenze Group dropped slightly by 1% to 2986 (previous year: 3014). In Germany, the number of employees is now 1808 (previous year: 1909). At the same time, the number of employees based outside Germany has risen by 73 to 1178. This figure now represents a 40% share of the total number of employees (previous year: 37%). There was a further increase in total equity, which as at 30 April 2005 had risen to 158.7 million Euro, a rise of 12.4 million Euro. The equity ratio increased to a very healthy 55% (previous year: 51%). Net debts were successfully reduced and as at 30 April 2005 these stood at just 8.4% (previous year: 12.5%) of the balance sheet total, when adjusted to take account of cash resources.

The current financial year has got off to a good start and Lenze is optimistic that it will be able to enjoy continued growth. According to the forecasts for 2005, global industrial machine market growth is expected to be 5%, down significantly on the previous year. However, the German mechanical engineering market is anticipating growth of just 3%. On the basis of these forecasts, Lenze expects to see a more moderate level of growth during the second half of the financial year in terms of sales and incoming orders than was achieved in the first half.

Europe is Lenze Group's number one market and ac-counts for 87% of sales during the 2004/2005 financial year. This situation is unlikely to change much during the current financial year. However, the company can see large potential for future growth in Asia and America. The Lenze Group is therefore working hard to further increase its presence in America and Asia so that it can make the most of the growth opportunities afforded by these markets. Thanks to new servo technology products specifically designed with international marketing in mind (including these regions), Lenze has done all it can to guarantee future success.

http://www.lenze.co.uk

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