LONDON European suppliers who are creating the most value for investors are doing so with advanced technology in fast-growing component areas like diesel, safety technology and aluminum parts.
Montupet SA, the Clichy, France-based maker of aluminum castings, returned 277.2 percent to shareholders in the last three years. It benefited from booming demand for its cylinder heads and wheels.
Beru, the Ludwigsburg, Germany, maker of spark plugs and other electrical components, managed the best one-year performance an increase of 101.3 percent.
The world market leader in diesel cold start technology, Beru has grown with the escalating diesel demand in Europe.
Montupet and Beru led a roster of 34 publicly-traded suppliers surveyed by Automotive News Europe and PricewaterhouseCoopers.
The supplier index calculated by PricewaterhouseCoopers showed a return of 34.1 percent over the three years that ended March 31. The index was a negative 5.6 percent for the one-year period ending March 31.
The indices measure Europe-based suppliers with at least A100 million in annual revenue, half or more of which is automotive.
'There is more value added if you can make complex components that your customers need,' said Steve Utting, European Automotive Leader in Corporate Finance and Investment Banking Services at PricewaterhouseCoopers.
Montupet attributes the strong performance of its shares to improved technology and to rising demand for cast-aluminum cylinder heads and wheels in the past four years.
Its biggest customers are Renault, Ford-Volvo, General Motors and PSA/Peugeot-Citroen. The company's 1999 revenue was A334 million.
Montupet's share price performance was less impressive in the last year. Total shareholder return was down 19.97 percent in the year through March 31.
Problems ramping up cylinder head production for Renault's new K-engine series in the Megane combined with heavy investments in its French plants cut profits in 1999. The share price has fallen 22 percent since January 1.
Beru, which had revenues of more than DM485 million last year, delivered 101.3 percent in the 12 months through March 31, compared to a negative shareholder return of 6.1 percent for all suppliers.
Other factors have boosted Beru's share price. It started a buy-back operation in February for up to 10 percent of the company's shares and has also been the subject of takeover speculation.
First Technology, the UK-based maker of sensors and crash test dummies, was the second-best performer in the one-year table (+91.1 percent) and third best in the three-year results (+218.3 percent). First Technology's sensors are used to trigger alarms, cut off fuel in a crash and automatically switch on headlamps at dusk and before entering tunnels.
Veritas Gummiwerke, the German maker of hoses and other rubber parts, was second in the supplier three-year index, returning 245.4 percent.
Mayflower, the UK supplier that makes chassis and bodyshells for Ford, DaimlerChrysler and General Motors among others, was second in the one-year category. Its total shareholder return for the year was 69.9 percent. Richard Johnson
Supplier shareholder return results, Page 9