Grammer AG was the top performing European supplier in the third quarter, as it reaped the benefits of last year's development of new products and companywide cost-cutting efforts.
Shareholders earned a 34.6 percent return on their investment in Grammer -- which has
private equity house Permira as its majority stockholder.
Based in Amberg, Germany, Grammer boosted first-half sales 6 percent to E424.5 million. Its operating profit before interest and taxes jumped 71 percent to E27.7 million.
The company, which makes headrests and armrests for luxury cars such as BMW, has been reducing administration costs, improving purchasing efficiency and optimizing logistic processes generated since the second half of 2003 under a plan called Grammer Offensive 2004.
A supplier of seats for trucks and buses, Grammer has benefited from strong demand for trucks and agricultural vehicles.
Grammer's automotive division said it expects to double its annual sales in the US to $200 million (about E160 million) within three to five years by winning contracts with the Big 3. Grammer will focus on expanding its child seats sales in North America.
Shareholders' investments in Kolbenschmidt-Pierburg grew 12.3 percent in Q3 on takeover speculation and a jump in profitability.
Its majority shareholder is Rheinmetall AG, which is also a takeover target. Rheinmetall is controlled by the Röchling family who, according to a recent article in Der Spiegel magazine, is negotiating the sale of its stake with equity funds such as Blackstone, KKR, the Carlyle Group and Permira -- Grammer's majority shareholder.
The family has declined to comment.
"There is speculation that Rheinmetall's controlling stake in Kolbenschmidt may be sold separately and this probably is pushing the [Kolbenschmidt] share price even higher," says Philip Wylie, automotive team leader at PricewaterhouseCoopers Corporate Finance.
Kolbenschmidt's sales increased E20 million to E1 billion in the first half led by its aluminum technology and motor service divisions.
The German company is one of the world's leading producers of aluminum engine blocks.
Kolbenschmidt's operating profit rose 51.5 percent to E75 million in the first half, representing 7.5 percent of sales compared with 4.7 percent in the first six months of last year.