Bietigheim-Bissingen, May 9, 2023 — The Dürr Group has started 2023 with a new record order intake. In the first quarter, it received orders worth €1,464.7 million, up 4.6% on the previous record achieved in the first quarter of 2022. The high level of orders was mainly driven by the automotive industry’s strong demand for production technology for electric vehicles. The MDAX-listed mechanical and plant engineering firm also posted significant sales growth of 12.0%, reaching €1,014.7 million. At €403.8 million, the HOMAG Group, which specializes in woodworking machinery, made the biggest contribution to sales. The EBIT margin before extraordinary effects temporarily decreased to 4.1%. The primary reason for this was the relatively small share of service business in total sales (27.8%), as is often the case at the beginning of the year. Added to that were extraordinary expenses relating to the inflation compensation premium for tariff employees in Germany as well as higher R&D expenses. Over the year as a whole, the EBIT margin before extraordinary effects is expected to rise to between 6% and 7%, as announced. Dr. Jochen Weyrauch, CEO of Dürr AG, stated: “In the first quarter, earnings were impacted by seasonal effects. In the further course of the year, we expect a significant margin expansion through economies of scale, a higher share of service business, and the increased execution of high-margin projects. In addition, the supply chain situation should ease further.” Financially, the Group is on solid ground with €43.9 million of free cash flow in the first quarter and an almost balanced net financial status.
The strong demand in the automotive industry led to record orders in paint and assembly systems (Paint and Final Assembly Systems division) and in the high-tech painting robot business (Application Technology division). Larger orders — from both established automakers and new e-mobility manufacturers — came from Europe, the United States, and China. The share of e-mobility production technology in order intake rose to around 50% in the first quarter of 2023. The Dürr Group also further expanded its business in production technology for lithium-ion batteries for electric vehicles. For the first time, a substantial order in this business field came from the United States. “With our production technology, we are an important pioneer for electromobility,” said CEO Weyrauch. “At the same time, we support our customers in building cars sustainably and in decarbonizing their plants.”
Dürr also continued its growth trajectory in environmental technology, achieving a 41.2% increase in orders. At HOMAG, order intake decreased, as expected, following two exceptionally strong years and the record level of the previous year’s quarter. At €352.6 million, orders in the first quarter were, however, significantly higher than in the final quarter of 2022 (€288.2 million).
Order backlog at record level
The Dürr Group’s order backlog increased to a new all-time high of €4,439.2 million as of March 31, 2023. This was due to the fact that order intake significantly exceeded sales in the first quarter.
Earnings were impacted not only by the small proportion of service business, the inflation compensation premium and higher R&D expenses, but also by the fact that Dürr began executing several new large projects. Earnings contributions are usually lower at the beginning of projects than they are in later stages. Therefore, earnings are expected to rise over the course of the year as projects reach more advanced stages of completion. In addition, the next few quarters will see an increasing number of projects with higher order intake margins being executed. In the first quarter, earnings after tax reached €21.0 million, compared to €27.1 million in the same period of the previous year. That said, the previous year’s figure included extraordinary income of around €5 million in connection with a legal dispute.
Capital expenditure, at €29.3 million, almost matched the previous year’s level (€31.6 million). A large proportion of this was accounted for by the extension and modernization of several HOMAG sites. The positive free cash flow (€43.9 million) benefited from extensive prepayments that the Dürr Group received due to its high order intake. CFO Dietmar Heinrich stated: “As the year progresses, we will focus mainly on managing our inventories. Our aim is to slim down inventories again since the availability of materials has recently seen a noticeable improvement, despite some exceptions.” Thanks to the positive free cash flow, it was possible to eliminate net financial debt almost completely as of March 31, 2023, reducing it to just €4.4 million. The equity ratio increased to 24.8% (March 31, 2022: 24.1%).
Moderate expansion of workforce
As of March 31, 2023, the Dürr Group had 18,746 employees. The workforce increased by 4.6% year-on-year and thus less strongly than sales. In Germany, the Group employed 8,946 staff, which is equivalent to 48%.
Outlook
The outlook for 2023 assumes that the economy does not fall short of expectations, that supply chains continue to stabilize, and that geopolitical uncertainties do not increase. Based on the high order backlog, the Dürr Group anticipates an increase in sales to between €4,500 and €4,800 million in the current year. Following the record level of 2022, order intake is expected to drop slightly and reach a range of €4,400 to €4,800 million. It should be borne in mind that, following the exceptionally strong year of 2022, HOMAG’s order volume is likely to decrease due to the more muted demand in the furniture sector. Demand is expected to remain strong in business with the automotive industry. Here, the Group will focus on high-margin orders as part of its “value before volume” strategy.
The EBIT margin before extraordinary effects should increase considerably in 2023 and come within a range of 6.0% to 7.0% (2022: 5.4%). This will be underpinned by ongoing efficiency improvements, the margin quality of the order backlog, the improved supply chain situation, and the planned expansion of service business. For earnings after tax, the Board of Management anticipates an increase to between €160 and €210 million. Free cash flow should reach €50 to €100 million.
