Bietigheim-Bissingen, May 14, 2024 — The Dürr Group entered 2024 on a strong note, posting higher order intake, sales and margin. Order intake reached a new record of €1,488.8 million (up 1.6%) in the first quarter. The main reasons were the high volume of orders from the automotive industry and the inclusion of automation specialist BBS Automation, which had been acquired effective August 31, 2023. Sales climbed by 8.3% to €1,098.4 million, resulting in a growth rate that was slightly above the range of 2% to 8% projected for the year as a whole. The EBIT margin before extraordinary effects widened significantly and, at 4.9% (Q1 2023: 4.1%), has already reached the full-year target corridor of 4.5% to 6.0% in the first quarter. The mechanical and plant engineering company’s free cash flow of €25.0 million also marked a robust start to the year. Said Dr. Jochen Weyrauch, CEO of Dürr AG: “We’re off to a good start and fully on track to meeting our full-year targets. There are also signs of strong order intake in the second quarter, especially in automotive business. The margin quality on new orders and the large proportion of service business of more than 29% of sales are also encouraging.”
In particular, a large-scale order in Europe for the construction of a sustainable paint shop contributed to the high order intake in the first quarter. As a result, order intake in the Application Technology division rose to a new quarterly record of €262.2 million. At €570.2 million, the Paint and Final Assembly Systems division also posted very strong order intake. Although the orders received by Group subsidiary HOMAG increased by 7.0% year-on-year to €377.3 million, general investment restraint in the woodworking sector persisted.
Four of the five divisions contributed to the 8.3% increase in sales. The greatest gain (77.1%) was registered by the Industrial Automation Systems division due to the consolidation of BBS Automation. Clean Technology Systems and Paint and Final Assembly Systems also posted double-digit growth rates of around 13% in both cases. Reflecting the muted order intake in 2023, HOMAG’s sales declined by 14.1%, in line with expectations. In its high-margin service business, the Dürr Group achieved disproportionately strong sales growth of 13.5%. The share of service business in Group sales widened to 29.1% (Q1 2023: 27.8%).
Margin growth in four of the five divisions
The improvement in the EBIT margin before extraordinary effects to 4.9% was driven by a 27.3% increase in earnings, which in turn was underpinned by higher Group sales, strong service business and successful cost management. This more than made up for the decline in earnings resulting from the lower sales at HOMAG. “With the exception of HOMAG, which was hit by pronounced market weakness, all divisions were able to continue on their course of margin expansion. At HOMAG, we are boosting flexibility to better cope with fluctuations in demand and thus enhancing earnings resilience,” said Group CEO Dr. Jochen Weyrauch. In the first quarter, the best EBIT margins before extraordinary effects were achieved by the Application Technology (10.6%) and Clean Technology Systems (7.7%) divisions. At €20.3 million, earnings after tax came very close to the previous year’s figure (€21.0 million), despite the fact that financial result weakened and purchase price allocation effects in connection with BBS Automation led to significantly higher extraordinary expenses of €-13.8 million (Q1 2023: €-4.3 million).
The positive free cash flow caused net debt to contract from €516.6 million at the end of 2023 to €492.5 million. The increase compared with March 31, 2023 (€-4.4 million) reflects the acquisition of BBS Automation. “With the acquisition of BBS Automation, we have gained a strategically important company that will significantly improve our position in automation technology, a market that holds much promise for the future. Even after the transaction, net debt remains within a safe range, although we are working on scaling it back step by step,” explained CFO Dietmar Heinrich.
Employees
The Dürr Group had 20,490 employees as of March 31, 2024, translating into an increase of 9.3% over the same date in the previous year, due in particular to the acquisition of BBS Automation. The headcount dropped by 107 over the end of 2023 and by 174 compared with September 30, 2023. The decline is largely an effect of the roughly 600 job cuts initiated at HOMAG.
Outlook
Order intake should reach €4,600 to €5,000 million in 2024, equivalent to growth of up to 8%. The target for sales is €4,700 to €5,000 million, translating into growth of 2% to 8%. The full-year inclusion of BBS Automation will have a positive effect on both order intake and sales. The EBIT margin before extraordinary effects is expected to contract from 6.1% in the previous year to 4.5% to 6.0%. The reason for this is that HOMAG expects a decline of up to 15% in sales and an EBIT margin before extraordinary effects of 2.0% to 4.0% due to the previous year’s low order intake. Earnings after taxes should reach €90 to €150 million. Despite rising capital expenditure and spending on capacity adjustments at HOMAG, free cash flow should be in positive territory, amounting to up to €50 million.
