Business model / Strategy
The Dürr Group is one of the world’s leading mechanical and plant engineering firms. Our technology boasts automation and a high degree of digitalization in order to help customers make their production more efficient while at the same time conserving natural resources.
Business Model
Our core competence is the engineering page 262 of efficient production technology. We offer our customers a full range of options from individual machines to turnkey manufacturing systems. In this context, our offering in digital networking and control of production systems is becoming increasingly important.
Our technologies and services are designed to help our customers achieve efficient and sustainable production by focusing on the following primary factors:
- digitalization and technological innovation
- development of material-efficient, energy-saving, and low-emission products
- planning, engineering, and order processing know-how
- a comprehensive range of services for the entire life cycle of our products
- global presence, proximity to customers in all market regions
We operate in niche markets, where we are either the market leader or among the largest suppliers, with market shares ranging from 15% to 55%. In 2022, 57% of Group sales came from mechanical engineering and 43% from plant engineering. In mechanical engineering, we aim for EBIT margins of 10% or more; in plant engineering, the target margin is over 6%. In terms of return on capital employed (ROCE), we target a figure of 25% or more. In principle, our business model allows us to achieve high operating and free cash flows. From 2025, free cash flow should permanently amount to at least 80% of earnings after taxes.
Strategy
Our corporate strategy is oriented to both profitability and growth. It aims to act on opportunities in established core business as well as in new or high-growth business areas. In established business, the focus is on expanding market leadership and profitability. We call the new business areas “growth business”. They are characterized by high growth potential and access to new markets and customers.
- Established Business
Established business mainly entails paint shops, final assembly technology, and painting robots for the automotive industry, environmental technology, balancing, tooling and filling systems as well as HOMAG machinery for furniture production. We hold leading global market positions in these areas and expect them to generate moderate to medium sales growth. The main priority in established business is to enhance profitability. - Growth Business
Growth business consists of three business areas (Construction Elements Solutions, Production Automation Systems, Battery Production) with potential for strong, above-average sales growth. Aggregated sales from growth business reached roughly €420 million in 2022. By expanding our activities, we are aiming to increase this to a total of €1.3 to €1.5 billion by 2030. To this end, we also intend to make further acquisitions. In this way, the three growth business areas are to make the greatest contribution to the growth in Group sales to more than €6 billion.
Target Key Figures
Our strategy includes several KPI targets that extend until 2030:
- 5 to 6% sales growth: By 2030, sales are expected to increase by an average of 5% to 6% and reach the new target of more than €6 billion.
- High profitability: The EBIT margin before extraordinary effects is expected to sustainably achieve at least 8%.
- Attractive return on capital: We are aiming for an ROCE of at least 25%, underpinned by high EBIT contributions from mechanical engineering and low capital employed in plant engineering.
- Increased share of service business: With its higher margins, service business is to consistently contribute at least 30% to Group sales.
Strategic Fields and Enablers
We have identified five strategic fields that are critical for achieving our goals and expanding our leadership in the global market: glocal (global/local), technology leadership, digitalization, efficiency, and life cycle services. We have also defined four enablers, i.e. supporting functions, which are particularly important for the successful implementation of the strategy. These are sustainability management, mergers & acquisitions, finance management, and people development.