- 5% increase in like-for-like order intake
- Like-for-like sales up 4%
- Full-year guidance confirmed
- Increasing sales and earnings momentum expected in the course of the year
- Project pipeline well filled
The HOMAG Group posted the largest order intake within the Group, achieving a new quarterly record with new orders worth € 415 million. In March, HOMAG was awarded the largest order in its history valued at over € 60 million. It will be installing a smart factory with several production lines and more than 80 individual machines for furniture producer Forte in Poland. Ralf W. Dieter: “This groundbreaking project shows how furniture will be produced on an industrial scale in the future: digitally networked, highly automated and in line with batch-size 1 requirements. HOMAG has the perfect solutions for this.”
Painting robot business was also upbeat in the first quarter, with the relevant Application Technology division recording further gains in order intake, sales and earnings. The Dürr Group registered continued growth in demand in China. After rising by 27.7% in 2017, order intake in China climbed by 19.2% in the first quarter. Demand in Europe remained consistently high, while declines in North America were offset by growth in order intake in emerging markets such as Vietnam.
At € 51.1 million, EBIT after extraordinary effects fell short of the previous year (€ 86.2 million) as expected. However, it should be borne in mind that high extraordinary income of € 20.5 million had arisen in the first quarter of 2017 due, among other things, to the book profit from the sale of Dürr Ecoclean. By contrast, earnings in the first quarter of 2018 were burdened by extraordinary expenses of € 4.5 million. Earnings after tax dropped to € 34.5 million (Q1 2017: € 61.4 million) primarily as a consequence of the Ecoclean effect.
The FOCUS 2.0 optimization program for painting systems business was launched as planned. Leaner processes, lower product costs, growth in service business and more efficient organizational structures are to help the Paint and Final Assembly Systems division reach the EBIT margin target of 6 to 7% again by 2020.
Dürr increased spending on research and development by 8.5% to € 30.9 million in the first quarter of 2018. The focus of innovation activities was on digitization. Among other things, Dürr launched the new LOXEO online market place from which customers can download apps for optimizing production.
At € -76.3 million, the cash flow from operating activities fell short of the previous year (€ -4.1 million). One reason for this was the higher inventories that had been accumulated to avoid the risk of short-term delivery shortfalls caused by suppliers operating at high capacity utilization levels. However, CFO Carlo Crosetto has issued favorable guidance for the full year: “Looking ahead over the next few quarters, we project high incoming payments from projects with the automotive industry. Consequently, we expect cash flow to be substantially up on the previous year in 2018.” At the end of March 2018, the net financial status was a positive € 94.1 million. Equity grew by 4.8% to € 926.8 million compared with March 31, 2017, with the equity ratio widening from 25.0% to 26.7%.
The headcount rose by 5.3% compared with March 31, 2017 to 15,153. An increase of 9.6% was registered in the emerging markets (4,824 employees). Dürr has 7,925 employees in Germany, equivalent to 52.3% of the Group workforce.
Outlook
The volume of investment projects in the pipeline on the verge of being awarded by the automotive industry has risen over the previous year. Demand in the furniture industry is also strong. From today´s perspective, 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 Dürr Ecoclean Group, which was sold last year, contributed € 45.8 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, thus remaining on a par with the previous year. 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. As things currently stand, Dürr projects extraordinary expense of € 15 to 20 million in 2018, of which FOCUS 2.0 should account for € 5 to 10 million.
Please note: The figures shown for Q1 2017 in this press release have been adjusted compared to last year´s publication due to the first-time application of IFRS 15.
