With a sales increase of EUR 364 million, the 2005 business year was once again characterized by growth for the MAHLE Group. This includes sales of EUR 159.4 million (4.2%) achieved by companies included in the consolidated financial statements for the first time. Significant additions were MAHLE Powertrain Ltd. (formerly Cosworth Technology), which allows the MAHLE Group to provide engineering services extending right up to the assembly of complete engines for the first time, MAHLE Engine Components (Thailand) Co., Ltd., which primarily supplies diesel pistons to the Japanese engine manufacturers operating in Thailand, MAHLE Filter Systems India Ltd. and MAHLE Donghyun Filter Systems (Tianjin) Co., Ltd. in China.

Shares of Group sales

Changes in exchange rates between the euro and the US dollar, Japanese yen, Brazilian real and Polish zloty had a positive effect on reported sales in 2005. Reported sales were EUR 36.7 million (1%) higher as a result of conversion. Allowing for these effects, organic growth amounted to EUR 167.9 million (4.5%). This increase in sales was supported by both the general market development and the expansion of our business activities, which led to a considerable strengthening of our market position, particularly in the growth markets outside Europe.

Once again, we were able to broaden our already good customer base both regionally and by opening up new areas of activity, e.g. engineering services. The expansion and improvement of our relationships with our customers formed a sustained focus of our activities. Our orientation toward quality and customers resulted in an organic sales growth rate above the development of the market, which has led to an improvement in our market shares.

Our operating profit did not develop sufficiently in line with sales. As a result of increased material prices in particular, which we were unable to share with our customers to a sufficient degree, and a heavy upward revaluation of the Brazilian real and the Polish zloty, considerable strain was placed on our operating profit from exports from Brazil and Poland. Through countermeasures to increase productivity, we were able to slightly increase the operating profit overall.