- Order intake up 10% like-for-like
- Order intake in China up 28%
- Sales up 10% like-for-like
- Earnings after tax above € 200 million for the first time
- Top ROCE of 40% by international standards
- Innovation spending at a new peak of € 117 million
Acquired in 2014, the HOMAG Group reported a 17.2% increase in new orders. At € 1,366.3 million, it made the largest contribution to the Group’s order intake. The global market leader in woodworking machinery benefited from dynamic demand for automated equipment for the efficient production of made-to-order furniture. With growth of 3.4%, the painting robot division Application Technology also posted record order intake. The Paint and Final Assembly Systems division even achieved double-digit growth of 10.6%. The Group’s strong order intake was also underpinned by growing demand for production technology for electric vehicles.
After muted conditions in the previous year, orders in China rose by 28% to just under € 800 million, while Europe and the rest of Asia (excluding China) also reported gains. In North America, order intake returned to normal after the very strong previous year, reaching a good level of around € 800 million. CFO Carlo Crosetto: “Order intake has a diverse international basis. This is one of Dürr’s strengths: with our international footprint, we are able to utilize market opportunities everywhere to make up for slumps in individual regions.”
The increase in earnings is due to high capacity utilization as well as sharp growth at HOMAG. At the same time, EBIT was buoyed by extraordinary effects of a total of € 7.8 million. Earnings in highly competitive paintshop business declined. Dürr has implemented the FOCUS 2.0 optimization program to address this situation. Among other things, it provides for the implementation of lean processes and lower product costs. FOCUS 2.0 is to push the EBIT margin in the Paint and Final Assembly Systems division back up to the target level of 6 to 7% in 2020.
Dürr increased spending on research and development by 10.2% to € 116.7 million. This was primarily driven by the digital@DÜRR digitization strategy. One aspect of this is the ADAMOS platform for the “Internet of Things”, which Dürr unveiled in September together with Software AG and mechanical engineering companies DMG Mori, Carl Zeiss and ASM. A further renowned mechanical engineering company, Engel Austria GmbH with annual sales of € 1.36 billion, has recently also entered the ADAMOS joint venture. Ralf W. Dieter: “With ADAMOS, the LOXEO and tapio market places and other smart products, Dürr is well positioned for the digital future. Several automotive OEMs are using Dürr’s intelligent smart solutions to optimize production and maintenance. Mid-size customers are also entrusting Dürr, Schenk and HOMAG with their business in coming to terms with the digital transformation.”
At 39.5%, the return on capital employed (ROCE) reached what by international standards is a very high level. The high net profit (up 7.3%) caused equity to rise by 8.8% to € 903.7 million, with the equity ratio widening from 24.8% to 26.5%. At € 191.5 million, the net financial status reached the second highest figure in the company’s history. Cash flow from operating activities came to € 119.8 million and was firmly in positive territory. The fact that it fell short of the previous year’s high level reflects the more restrictive prepayment behaviour on the part of customers in the automotive industry. Although this caused a delay in payment receipts, it does not have any impact on profitability.
Capital expenditure increased by 7.4 % to € 88.0 million. In Shanghai, Dürr’s new campus for around 1,100 employees went into operation. Following the disposal of Ecoclean, the Group headcount contracted by 1.7% to 14,974 employees.
Outlook
As things currently stand, Dürr expects sales of € 3.7 to 3.9 billion in 2018. This means that sales will probably be higher than in 2017 even though the Ecoclean Group, which was sold last year, contributed € 47.5 million in the first quarter of 2017. Order intake is expected to come to € 3.6 to 3.9 billion. Order volumes in the Paint and Final Assembly Systems division could drop somewhat due to the decision to focus on more profitable orders. Adjusted for extraordinary effects, the Group EBIT margin should come to 7.4 to 7.8% in 2018. The EBIT margin after extraordinary effects is expected to reach 7.0 to 7.5 %. It should be noted that EBIT included positive extraordinary effects of € 7.8 million in 2017. At this stage, Dürr projects extraordinary expense of € 15 to 20 million in 2018, of which FOCUS 2.0 should account for € 5 to 10 million.
The forecast for 2018 assumes that there are no serious changes in the economic and political environment. The figures in this release are provisional and unaudited. They have not yet been approved by the Supervisory Board. The annual report for 2017 setting out the final figures will be published on March 22, 2018.
