Tognum to accelerate in 2008

• Projected revenues in 2008: approximately 12% growth to exceed €3 billion for the first time
• Proposed dividend for 2007: probably 60 euro cents per share
• Stability through diversified product range and sales markets

Friedrichshafen, 12 December 2007. Tognum AG will probably close fiscal 2007 with revenue growth of more than 10% to €2.8 billion (2006 pro forma: €2.5 billion) and with a return on sales of nearly 14% (pro forma 2006: 12.2%). “In the year 2008, we should exceed the €3 billion mark,” stated Heuer. “We anticipate revenue growth of approximately 12% next year, and will thus continue to grow significantly faster than the market in the future,” said Tognum CEO Volker Heuer at a publicly broadcast analysts’ conference in Friedrichshafen today. An adjusted return on sales of between 13% and 15% is expected in 2008. The Executive Board will probably propose to the Supervisory Board that a dividend of 60 euro cents per share be distributed for the 2007 financial year.

Product variety and new markets

Volker Heuer: “Our situation is very stable, with a diversified range of products which we supply for 22 different applications in many profitable markets around the world. With this well-balanced business model, we are significantly less dependent on individual market cycles than most of our competitors.” According to Tognum’s projections, all of the individual applications – ships, power generation, oil and gas exploration, locomotives, vehicles for open-cast mining, construction and agricultural vehicles – promise to continue expanding in 2008. In addition, Tognum is gradually penetrating the major emerging markets with great potential for the future. “China is a good example of how we are doing so within the framework of our Asia strategy,” said Heuer. The Asia headquarters are being moved from Singapore to Shanghai, and a technology center is to be opened in Suzhou. Following the establishment of an assembly plant in Suzhou, a joint venture has now been founded with the major Chinese company Norinco for the assembly and installation of mtu engines. “China needs our modern high-performance diesel engines, today mainly for power generation, soon also for construction and mining vehicles, and after that increasingly for oil and gas exploration and commercial ships, in the long term also for yachts,” explained Heuer. Developments will be similar in India in the foreseeable future.

After-sales business is a growth driver

In addition to the business with new engines, the area of after sales is also expanding substantially. The Tognum segment mtu Engines already generates a quarter of its revenues with maintenance, spare parts and overhauls. The Group aims to grow by at least 10% per annum in this field. Service orders such as long-term maintenance contracts with a British rail operator demonstrate the future potential that is available. And the recently announced acquisition of SKL Motor GmbH in Magdeburg, which will be developed into a remanufacturing center starting at the beginning of 2008, is another key milestone in Tognum’s after-sales strategy.

Product offensive in the core business

For the challenges of the future – high energy prices, rising energy needs, stricter emission regulations and economic growth particularly in the emerging markets – Tognum has the right solutions with its range of advanced products. Tognum’s core company, mtu, is the world’s only independent engine manufacturer that concentrates on high-speed diesel engines with 20 to 9,100 kW power output. “We are further developing the diesel engine not only in terms of optimizing power output and fuel consumption. Now we are also concentrating on the development of pioneering, technologically leading systems that comply with future emission limits. We will surprise the market with a large number of further developed and all-new engines,” stated Gerd-Michael Wolters, Executive Vice President Engines. “This includes above all the future Series 1600 in the lower power segment for the mass market, which will be launched in 2009.”

Expansion of Onsite Energy Systems

Tognum is expanding its segment Onsite Energy Systems, which supplies highly efficient onsite power-generation systems based on diesel and gas engines. The segment includes the German company MDE and, since this year, the US manufacturer Katolight. Furthermore, the Tognum company CFC Solutions is to commence series production of its stationary fuel cells in the year 2009. With this business expansion into different areas, the Group is securing its position in the growing market for energy-efficient and low-emission power and heat generation.

“Our investors can rely on us. We have kept all of our promises for 2007,” emphasized Tognum CEO Volker Heuer.


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A webcast of the analysts’ conference at 11 a.m. on 12 December 2007 and other presentations can be downloaded on the Internet at

http://tognum1212071-live.cyber-presentation.de

Tognum

Tognum is one of the world’s leading suppliers of high speed diesel engines and complete propulsion systems for ships, heavy land and rail vehicles and of industrial drive systems as well as decentralized power plants, set-up in the two divisions mtu Engines and Tognum Onsite Energy Systems and Components.

Its product portfolio includes diesel engines in the power range from 20 to 9,100 kW, gas engine systems, gas turbines and fuel cells and is one of the most modern and comprehensive in its sector. In addition, the group develops and manufactures custom-made electronic control and monitoring systems for its engines and propulsion systems.

Sales of the Tognum Group amounted to EUR 2.5 billion in 2006. Today, the Group employs more than 8,000 personnel worldwide. It maintains a global sales and distribution network including 16 subsidiaries, more than 130 distribution partners and 1,100 authorized dealers.