- Order intake of € 3.7 billion at the top end of the target corridor
- EBIT (€ 271.4 million) up on the previous year despite 5% sales decline
- 12.8% increase in earnings after tax
- 2017: Stable performance expected
Europe made the greatest contribution to order intake in 2016, with new orders rising by 16.1% to € 1,710.3 million. New orders in North and Central America exceeded the one-billion threshold for the first time, rising by 44.7% to € 1,045.3 million.
The reason for the decline in consolidated sales is that in the previous year sales from the paint shop business had been up around € 200 million on the normal level. On like-for-like exchange rates, sales would have dropped by only 3%. Sales from strategically important service business climbed by 11.0% to € 981.9 million, thus almost reaching the one-billion threshold for the first time. The proportion of service business in total sales widened from 23.5% to 27.5%.
Together with the substantial reduction in the cost of materials (down 13.0%), the growth in service business provided the underpinnings for the increase in EBIT in 2016. EBIT was burdened by extraordinary effects of € -15.0 million. Adjusted for this, the operating EBIT margin came to 8.0%, up from 7.8% in the previous year. Most of the extraordinary expense arose from purchase price allocation and write-offs at the HOMAG Group. Despite this, HOMAG’s EBIT rose by 22.4% to € 44.9 million, with operating EBIT coming to € 71.2 million (up 12.6%).
The increase in earnings after tax was influenced by substantially lower net finance expense and tax expense. Both items reflect the absence of non-recurring charges that had arisen in 2015 as a consequence of the domination and profit transfer agreement with HOMAG Group AG.
Dürr increased spending on research and development by 9.0% to € 105.9 million. The focus was on innovations for the digital transformation of production processes. Recent examples include the new Dürr painting robot with smart control and the Industry 4.0 software platform iTAC.IoT.Suite. At € 81.9 million, capital spending returned to normal, after reaching € 102.3 million in the previous year due to the construction of new campus sites in the United States and China.
Driven by the high cash flow from operating activities (€ 227.4 million), cash and cash equivalents rose to € 724.2 million at the end of 2016. Net financial status improved from € 129.4 million to € 176.5 million. Thanks to the high earnings, the equity ratio widened from 23.9% to 24.8% despite a 12.1% increase in total assets. CFO Ralph Heuwing: “We generated copious cash and cash equivalents from our operating business and improved all main items of our balance sheet. This has put Dürr in an excellent position for the future.”
The head count rose moderately to 15,235 at the end of 2016 (up 2.6%). In Germany the workforce numbered 8,205 (December 31, 2015: 8,026).
In view of the record earnings, the Board of Management will be recommending a further dividend increase to the Supervisory Board. Dürr distributed a dividend of € 1.85 per share for 2015.
Outlook
The forecast for 2017 assumes that the global economy will continue to develop positively and that the political uncertainties will remain limited. The sale of the Dürr Ecoclean Group (industrial cleaning technology) announced in 2016 to the Chinese SBS Group is expected to be completed effective March 31, 2017, meaning that Dürr will no longer be reporting any sales or earnings contributions from this business from the second quarter. Even so, Dürr currently expects sales of € 3.4 - 3.6 billion and order intake of € 3.3 - 3.7 billion in 2017. A target corridor of 7.5 - 8.25% has been defined for the EBIT margin. In 2017, the EBIT margin will include extraordinary income of presumably around € 25 million from the sale of the Dürr Ecoclean Group. With around 850 employees, Ecoclean generated sales of just under € 200 million in 2016.
The figures in this press release are provisional and unaudited. They have not yet been approved by the Supervisory Board. The annual report for 2016 setting out the final figures will be published on March 17, 2017.
