E_mg_GB_03_vorne-29_3_04

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48 Pre-tax earnings for the mg Group after discontinued operations in s million 290.5 01/02 – 181.0 03 Net Assets, Financial Position and Results of Operations Earnings depressed by lower sales, strong euro and one-off charges The mg Group’s pre-tax earnings for its continued operations amounted to a loss of a181.0 million in 2003 after a290.5 million in 2001/2002. Because they were due to be sold, solvadis, the Boiler Plant strategic business unit, and the non-core activities of GEA and Dynamit Nobel that had either already been sold or were due to be sold are reported under ‘Profit/loss on discontinued operations’ in the consolidated statements of income. Including the pre-tax loss of a59.7 million attributable to these companies, the pre-tax earnings for the mg Group under its old structure would have amounted to a loss of a240.7 million. In 2001/2002, by contrast, pre-tax earnings of a320.3 million were reported. If one compares the pre-tax loss of a240.7 million with the corresponding figure for 2001/2002, the change amounts to a decrease of a561.0 million. The reasons for this sharp decline in earnings were the fall in sales caused by the economic downturn, operating losses, and adverse currency trends as a result of the euro’s strength (especially against the U.S. dollar). The deterioration in earnings was also caused to a large extent by substantial one-off charges. These cover the cost of restructuring and reorganization; risk provisioning charges for pre-existing problem contracts, principally in the industrial plant engineering business; the settlement of long-running lawsuits; and the disposal or discontinuation of loss-making businesses. The restructuring costs of a –121.5 million (2001/2002: a26.1 million) reported separately in the consolidated statements of income essentially relate to the expenses incurred by the optimization of mg's holding-company structures and by capacity adjustments. The discontinued operations also incur restructuring costs of a8.4 million (2001/2002: a1.5 million), which are reported under ‘Profit/loss on discontinued operations’. Consolidated Statements of Income in Short adjusted 1/1/2003 - 10/1/2001 12/31/2003 9/30/2002 u million t million Gross margin 1,374.7 1,681.9 Earnings before income taxes and minority interests – 181.0 290.5 Net loss/income – 198.6 189.6 Profit/loss on continued operations thereof: consolidated net loss/income from continued operations – 128.1 180.0 Basic earnings per share (in s) – 1.02 0.99 Diluted earnings per share (in s) – 1.02 0.97 Weighted average number of shares outstanding (in thousands) 193.8 192.3
MANAGEMENT SHARE STRATEGY SPECIAL SECTION MANAGEMENT REPORT FINANCIAL STATEMENTS FURTHER INFORMATION Economic Environment • Situation of the Company • Organization and Structure • Risk Report • Employees • Performance of the Subgroups • Outlook In 2003, a loss of a63.0 million was also incurred on the sale and winding-up of the remaining activities of the Stahlbau Plauen strategic business unit, which was being closed down. mg engineering’s pre-tax earnings during the period under review (before consolidation) amounted to a1.3 million, a decrease of a251.7 million on 2001/2002. In 2003, GEA reported earnings of a196.7 million, a38.0 million less than in the corresponding period last year. Lurgi reported a loss of a75.7 million, a decrease of a84.0 million on 2001/2002. Lurgi Lentjes’ earnings fell by a117.8 million to a loss of a124.1 million in 2003. Zimmer’s earnings were a11.9 million down on the a16.3 million it reported in 2001/2002. Dynamit Nobel reported pre-tax earnings of a187.7 million during the period under review, a decrease of a61.1 million on the corresponding period last year. The disposal of its ammunition business needs to be taken into account in this context. solvadis’ earnings contracted year on year by a35.0 million to a loss of a7.4 million. This figure includes the anticipated loss on the disposal of Safic-Alcan in January 2004. Net loss incurred due to substantial one-off charges The mg Group reports a net loss of a198.6 million for 2003, a decline of a388.2 million on 2001/2002. a69.6 million of this loss is attributable to discontinued operations operations (before minority interests). A profit of a12.2 million was reported for discontinued operations in 2001/2002. Earnings per share reports a loss Earnings per share – calculated as the net income for the year divided by the weighted-average number of mg shares in issue (193.8 million) – came to a loss of a1.02 per share due to the net loss reported in 2003. Earnings per share was reduced by a0.36 as a result of the businesses reported as discontinued operations, which comprised solvadis, the Boiler Plant strategic business unit, and various non-core activities of GEA and Dynamit Nobel. No dividend for 2003 mg technologies ag will not be paying a dividend for fiscal 2003 owing to the accumulated loss it has reported for this year. Decline in return on sales and return on capital employed mg’s key performance indicators deteriorated sharply due to the pre-tax losses it reported. The return on sales (ROS) came to minus 2.8 percent in 2003 compared to a positive return of 4.3 percent in 2001/2002. The return on capital employed (ROCE) fell from 8.6 percent in 2001/2002 to minus 1.9 percent in 2003. The cash flow return on investment (CFROI) amounted to 2.1 percent during the period under review after 9.4 percent in the corresponding prior-year period. 49
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Key Figures for the mg Group RESULT
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