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Tognum CEO Expects Further Medium-Term Growth for the Company

Posted on June 9, 2009

Tognum reports that it sees itself on a course of growth again in the medium term. “Our medium-term goal is to continue to grow on average faster than the market and average a double-digit return on sales,” explained Volker Heuer, Chairman and CEO of Tognum AG, in the report he presented to the company’s annual general meeting in Friedrichshafen recently.

As a result of the difficult economic situation worldwide, Tognum is currently monitoring declining markets, reported Heuer. Corporate growth will also slow down mid-term as a result compared with the previously successful years. “Our advantage – and this is not only true in the current exceptional economic circumstances – is that we operate in more than 20 different application fields for large off-highway diesel engines as well as onsite energy systems, and we do that all over the world in regions that are relevant to the business in which we are involved. With our diversified business portfolio, therefore, our view is that we have the opportunity to emerge from this crisis stronger then ever,” added Heuer.

In response to the global recession, at the end of last year Tognum developed its Robust Action Plan action package to stabilize the business. The plan includes targeted staff and budget cuts, but not standard reductions on the “one size fits all” principle. “Under no circumstances do we want to delay key projects. Quite the opposite in fact: we have once again significantly increased the budget planned for new developments in 2009 compared with the previous year,” Heuer stressed. “With the Robust Action Plan, we have prepared the ground and are now ready to continue to pursue our corporate strategy at full power.”

Tognum is focusing on five strategic initiatives: expansion of after sales, decentralized energy systems and propulsion, plus regional expansion and the extension of the product portfolio, as Heuer explained. In after sales, for example, last year Tognum was able to expand its spare parts and remanufacturing business. The company has also extended its product portfolio with the addition of many new products and technologies – including the new Series 1600 in the lower power range. In its Onsite Energy business, Tognum will be supplementing its portfolio in the second half of 2009 with the addition of diesel-based complete systems for energy generation. The company also intends to drive expansion regionally in countries such as India, Japan, Eastern Europe and both Central and South America. In Propulsion, the new, fifth initiative, which was only introduced at the end of March, Tognum is focusing primarily on innovative solutions such as hybrid technology.

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