RECORD EXPORTS SEES SALES GROWTH FOR FAUN

Annual trading announcement by FAUN Zoeller (UK) Ltd for the year ending 31 December 2010

Highlights:

• Turnover grows 20 per cent to £30.3m (2009: £25.3m) thanks to export sales of TRACKWAY mobility systems to the defence industry

• Operating profit more than doubles to £943,000 (2009: £466,000) driven by increased efficiencies and cost reduction

• Forecast for next year boosted by acquisitions of  refuse collection vehicle (RCV) equipment manufacturers  Zoeller and Otto business to provide full service offering to UK market

• Sales of RCVs decline due to local authority spending cuts

• Maintenance division expands as RCV owners look to prolong life of existing assets

FAUN-Zoeller ltd – the UK subsidiary of the German manufacturer of municipal vehicles – said that it had offset the continued weakness of the UK RCV market with record demand for its TRACKWAY range of ground mobility systems, according to its annual trading update for the year ending 31 December 2010.

The business, which is headquartered in Llangefni, Anglesey, also announced that it had purchased two RCV equipment manufacturers – Zoeller Waste Systems and Otto Lifts Ltd – for an undisclosed sum in the first quarter of this new financial year.

While sales of its RCVs had dropped as local authorities continued to cut back on capital expenditure projects, FAUN said its support services division was experiencing strong growth on the back of contracts secured with councils looking to prolong the life of their existing vehicles.

Last month it secured an order worth almost £2m for a seven year servicing and maintenance contract with Kier Street Services – part of the Kier Group - in North Norfolk.

In addition the business said its acquisition of Zoeller and Otto meant it can now provide its customers with support throughout the life cycle of its RCVs from initial purchase to ongoing repairs.

The firm’s directors are also confident of the potential for new RCV sales growth to private contractors as local authorities moved to outsourcing their waste collection services in a bid to reduce costs.

FAUN’s defence product range TRACKWAY reported a significant uplift in sales with the vast majority coming from nations outside the European Union. In April this year its wholly owned American subsidiary FAUN TRACKWAY USA Inc began trading from its permanent US office as the business targets major expansion in the North American market.

The TRACKWAY division designs and manufactures several types of temporary aluminium roadways and runways which are used by armed forces when operating on challenging terrain conditions.

FAUN-Zoeller’s chief operating officer Alun Jones said that firm is anticipating several significant opportunities for TRACKWAY originating from both its new US office and its global sales team based in the UK.

He said: “It’s been another challenging year in the RCV marketplace in the wake of the government’s spending cuts agenda but our recent acquisitions and expanding support services division means we’ve created a strong platform to capitalise on the growing maintenance and private sector markets.

“The past year has also seen sales for our TRACKWAY products continue to go from strength to strength as our growing worldwide reputation for quality, innovation and engineering excellence has continued to attract new customers.”

FAUN-Zoeller is part of the FAUN Group, which has manufacturing facilities across Germany, France and Switzerland. It is one of four companies within the Kirchhoff Group, alongside WITTE tools, mobility vehicle manufacturer REHA and automotive parts group Kirchhoff Automotive.