Tognum makes large investments

• 2012-2014: Investment of more than one billion euros in plant expansion and R&D
• Publication of Annual Report 2012

Friedrichshafen, March 5, 2013. The specialist for propulsion and power solutions Tognum intends to invest more than one billion euros by the end of 2014. This amount exceeds the volume that Tognum specified in a cornerstone paper together with Daimler AG and Rolls-Royce plc two years ago. Approximately €600 million of the total investment will flow into each of research and development and long-term capital expenditure. “We intend to further pursue our growth strategy in the future and are convinced that our strategic investments will pay off,” stated Joachim Coers, CEO of Tognum AG, at today’s annual press talk in Friedrichshafen.

Tognum will invest approximately €140 million in the expansion of its plants in Europe, America and Asia between 2012 and 2014. One focus of the investment will be on the plants in Friedrichshafen. “We are clearly committed to our site in Friedrichshafen for research and development, production and assembly,” explained Coers. At Plant 1 in Friedrichshafen, a new factory is currently being built for the processing of piston rods. For the coming years, a new building is planned there with an air-conditioned and energy-efficient measuring room, new development test facilities and an energy line to supply the test facilities with electricity, water and hot water. In total, these planned investments in Friedrichshafen will amount to approximately €60 million between 2012 and 2014. The company plans to invest approximately €90 million in the new plant in Stargard, Poland, until the project is completed.
€42 million is to be invested in the plant by 2014; construction is scheduled to start in autumn this year.

For the plant in Aiken, USA, Tognum will establish new development test facilities in several phases until 2015 for a total of €40 million. From 2012 until 2014, investments of €21 million are planned. In Aiken, Tognum assembles mtu Series 2000 and 4000 engines. In addition, Tognum started production of major components for those series as well as cylinder heads for the Series 4000 in 2011. In the same year, a new administrative building was erected in Novi, and a training center and spare-parts logistics center were built in Greater Detroit.

In Singapore, Tognum is currently constructing a new logistics center similar to the existing logistics centers in Überlingen and Brownstown. Furthermore, the company plans to move into a new building in Singapore for sales, administration, development, training and workshop. These investments will total approximately €17 million between 2012 and 2014.

“Our goal is to develop all the relevant sales markets in the core regions of Europe, Asia and America,” stated Tognum’s Executive Board Member for Technology & Operations, Dr. Ulrich Dohle, on the occasion of the press talk. “In the medium term, the plant expansion enables us to prepare for the planned volume growth.”

The year 2013 is still subject to considerable uncertainty due to global economic risks. “But we assume that the economic situation will stabilize in the second half of 2013,” explained CEO Joachim Coers. “On this basis, we anticipate a stable development of revenue compared with last year. In view of the currently foreseeable less favorable business mix and volatility during the year, significant efforts will be required to maintain the level of earnings achieved in 2012,” stated Joachim Coers. “But in the medium term, we continue to see ourselves on a growth path.”

“The market for engines in the lower power range offers great growth opportunities,” reported Executive Board Member for Sales, Dr. Michael Haidinger, at the press talk. “We are already faced with strong demand for our pre-series engines. When the new emission legislation comes into force, we will utilize the resulting market dynamism to further enhance our strong market position.”

The Annual Report 2012 can be downloaded from www.tognum.com in the “Investors” area. The presentation for the annual press conference can be found under “Press.”