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        1. ElringKlinger AG

          Research & Development

          Research and development ratio at 5%
          Among other things, ElringKlinger’s corporate philosophy involves being close to the customer, spotting trends early, and helping to actively shape new solutions. To this end, the Group invests a substantial amount in research and development every year - around 5% of its revenue. Deployed in a targeted manner, this capital expenditure underpins the strong competitive position enjoyed by the ElringKlinger Group.

          In 2018, R&D spending (including capitalized development costs)?came to EUR 87.2 (previous year: 75.9) million. This corresponds to an R&D ratio of 5.1% (previous year: 4.6%), i.e., within the short to medium term target range of 5 to 6%. Alongside investments in the Group’s traditional fields of business centered around cylinder-head and specialty gaskets, and shielding technology, expenditure was directed in particular toward the Lightweighting/Elastomer Technology, E-Mobility, and New Business Areas. The Group is thus pursuing its strategy of prioritizing its highly promising areas of business when it comes to allotting significant resources.

          Key figures R&D 2018 2017 2016 2015 2014
          R&D costs (incl. capitalized development costs)
          (in EUR million)
          87.2 75.9 74.8 71.2 66.5
          R&D ratio (incl. capitalized development costs) 5.1 % 4.6 % 4.8 % 4.7 % 5.0 %
          Capitalization ratio1 12.7 % 5.9 % 9.9 % 13.8 % 13.8 %

          1 Capitalized development costs in relation to R&D costs, including capitalized development costs

          Number of R&D staff slightly decreased in FY 2018
          The Group has established a strong culture of innovation. As of December 31, 2018, the company employed 590 (previous year: 597) R&D staff. This figure is slightly down on the previous year as a result of the sale of the Hug subgroup and new enerday GmbH. Excluding these disposals, the total number of R&D staff would have increased. ElringKlinger has largely centralized its R&D operations to prevent a “brain drain.” The Group has concentrated its main development activities at the German sites operating within the Original Equipment and Engineered Plastics segments and at its US plant in Southfield, Michigan. Smaller modifications are also performed at other locations.

          New patent applications surpass previous year’s level
          ElringKlinger always seeks legal protection for new developments at both product and process level. In 2018, the centralized patents unit, which is tasked with protecting the company's technological expertise and intellectual property rights, applied for 80 (previous year: 69) new patents. This substantial increase of around 16% on what was already an impressive total underscores ElringKlinger's technological know-how and inventive spirit.