Earnings before interest and tax improved to $64 million compared to year-ago results of $26 million.
Hella's investment grade status was upgraded to "stable" by Moody's Investors Service. Moody's change in rating status is due to results that were well above target and can be attributed to Hella's Lighting division.
Hella drew a positive interim balance due to Hella's "Lion" (Light on) program. Started 12 months ago in the Lighting division in order to bring it back into the black on a sustainable basis, the goal of the program is to improve the division with a cost-reduction target of $414 million over three years.
More than 500 employees are permanently involved in the project worldwide, and they have already implemented 3,800 improvement measures in the past fiscal year alone. In the first year, an above-target improvement of $138 million was achieved within the five sub-programs of the project.
In Germany, employment was reduced by 291 jobs during the fiscal year within the framework of an agreed program of job cuts. This took place without compulsory redundancies. The agreement, reached at the end of 2006 with IG Metall, will result in job cuts of up to 1,600 employees by 2011.
"Hella's rating change is an important milestone in securing the independence of our company," said Dr. Jurgen Behrend, chairman and president of Hella. "Having declared a tax loss of $29 million last year, a swift return to black figures was the prime target. In addition to the positive result, the clear reduction of our net debt is an important sign of Hella's ability to cope with future challenges."
Hella's largest division, Lighting, and it's two other business areas, Electronics and Aftermarket, command a top position in their markets. Each achieved sales of $1.3 billion. The company focuses specifically on new technological developments.
In addition to the existing technologies of xenon-light and bending- light systems, Hella is now placing emphasis on full-LED headlamps and energy management. In the field of camera-based driver assistance systems (e.g. glare-free high beam, pedestrian protection), Hella is playing a pioneering role because of its combined competence in the fields of lighting and electronics.
In the medium term, the company plans a growth in sales to $8 billion. This is to be achieved without acquisitions. All three business divisions are expected to contribute to this target achievement. In the coming years, management is striving for a sustained earnings improvement to $276 million.
Dr. Behrend concluded, "With our strategic positioning of the three divisions - Lighting, Electronics and Aftermarket - and the operational improvements already started, we have all the prerequisites for leading the way to success as an independent company. Of prime importance to us is not short-term shareholder value maximization, but turning Hella into a high- performance and globally-oriented top company within the automotive supply industry."
Hella, a global supplier, develops and manufactures components and systems for lighting and electronics for the automotive industry, including driver-assistance systems enhancing safety and comfort. In addition, its joint-venture companies produce complete vehicle modules, air-conditioning systems and vehicle-electric systems. Hella is also one of the world's largest companies selling automotive aftermarket parts and accessories, with its own sales companies and partners in more than 100 countries. Annual consolidated sales for the Hella Group total $4.4 billion.
More than 24,000 people are employed in 70 production facilities, production subsidiaries and joint-venture companies. Nearly 2,900 Hella engineers and technicians work in research and development. Customers include all of the world's leading automakers and system manufacturers, as well as the automotive aftermarket.
Additional information is available at www.hella.com
Source: Hella KGaA Hueck & Company