Press Release

Strong growth in new orders in China and North America

Bietigheim-Bissingen, August 6, 2015 - Dürr’s mid-year order intake and sales revenues are ahead of budget. Order intake rose by 41% to € 1,795.5 million in the first half of the year, underpinned by the consolidation of the HOMAG Group (since October 2014) and strong demand in China and North America. Sales revenues rose by 67% to € 1,773.5 million. In addition to the inclusion of HOMAG, this was also due to a 34% increase in paint systems business. Over the year as a whole, Dürr expects to report order intake of € 3.2 to 3.5 billion and sales revenues of € 3.4 to 3.5 billion. “From today´s perspective, we are confident of being able to reach the top end of the target corridor for both figures,” says Ralf W. Dieter, CEO of Dürr AG. Operating EBIT (earnings before interest and taxes and extraordinary effects from the acquisition of HOMAG) increased by 41% to € 126.2 million in the first half of the year, resulting in an EBIT margin of 7.1% in the first half and 7.3% in the second quarter, in which earnings were stronger. Earnings after tax came to € 53.5 million in the first half of 2015 due to the extraordinary effects of the HOMAG transaction. On an operating level, however, i.e. adjusted for these extraordinary effects, they were up 39%.

BUSINESS FIGURES FOR THE FIRST HALF AND THE SECOND QUARTER OF 2015

  • Operating earnings up 41% in the first half
  • Sales revenues and order intake ahead of budget

New orders rose by 52% to € 419.1 million in China, doubling to € 456.3 million in America. Says Ralf W. Dieter: “Looking further down the road, China will remain the largest market for the automotive industry and for Dürr. Given the market volume achieved, the slower growth rates in vehicles sales do not come as any surprise especially in view of the large absolute figures. Our pipeline is still amply filled with new capex projects in the automotive industry.”

The HOMAG acquisition generated extraordinary effects of € 18.2 million at the EBIT level and € 24.3 million after tax. They largely arose in the first quarter and are mostly related to purchase price allocation and the domination and profit transfer agreement, which came into effect with HOMAG Group AG in March.

At € 2,828.0 million, Dürr had a large mid-year order backlog. Service revenues grew by 65% in the first half of 2015, accounting for 24% of total sales revenues. R&D expense and capital spending came to € 46.2 million and € 36.2 million, respectively, and were up roughly double on the first half of 2014. Net finance expense widened from € 9.1 million to € 17.2 million. It included extraordinary expense in connection with the domination and profit transfer agreement and the integration of HOMAG in Dürr’s less expensive funding structure in the first quarter in particular. At € 5.6 million, net finance expense was substantially lower in the second quarter than in the first three months (€ 11.5 million).

Despite a higher net working capital, cash flow was a positive € 10.9 million in the first half of the year. The net financial status was solid at € 88.7 million. The equity ratio temporarily fell to 20.5% as a result of the domination and profit transfer agreement but should rise again in the second half of the year.

The Group headcount rose by 2.1% over the end of 2014 to 14,448 employees, with new recruiting primarily concentrated in China and the United States. In Germany, Dürr has 7,841 employees, including 3,910 at HOMAG.

The HOMAG Group increased its order receipts by 10.6% to € 557.4 million in the first half of the year, with sales revenues climbing by 17% to € 504.1 million. EBIT rose from € 14.4 million to € 21.0 million – also as a result of weaker extraordinary effects. “The HOMAG Group is growing profitably. Sales revenues and earnings are to continue to rise over the next few years due to the successful commencement of the FOCUS optimization program. The target for 2020 is an EBIT margin of between 8 and 10% on sales revenues of € 1.25 billion,” says Ralph Heuwing, CFO of Dürr AG and Co-CEO of HOMAG Group AG.

Outlook

Dürr confirms its outlook for 2015, expecting order intake of € 3.2 to 3.5 billion and sales revenues of € 3.4 to 3.5 billion. The HOMAG Group projects sales revenues of just under € 1 billion. Dürr anticipates an increase in EBIT in the double-digit millions, accompanied by an EBIT margin after extraordinary effects of 7.0 to 7.5%. This reflects the fact that the HOMAG Group’s operating margin currently falls short of the Group average. The extraordinary effects caused by the acquisition of HOMAG will continue to recede in the second half of the year. In the long term, Dürr’s EBIT margin should return to 8 to 10%, driven by operational optimization efforts within the HOMAG Group as well as the rest of the Dürr Group.

Key figures1
Dürr Group (IFRS)
€ m H1
2015
H1
2014
Q2
2015
Q2
2014
Order intake 1,795.5 1,271.5 900.0 707.1
Orders on hand (June 30) 2,828.0 2,351.6 2,828.0 2,351.6
Sales revenues 1,773.5 1,060.4 924.4 522.2
Gross profit 380.0 233.6 198.5 117.9
Research and development costs 46.2 22.1 25.0 10.5
EBITDA (earnings before financial result, taxes, depreciation and amortization) 146.7 102.5 75.9 51.7
EBIT (earnings before financial result and taxes) 108.0 89.2 60.5 45.0
EBIT before extraordinary effects HOMAG Group2 126.2 89.2 67.2 45.0
Earnings after tax 53.5 57.9 36.5 28.7
Earnings per share (€) 1.49 1.64 1.01 0.81
Cash flow from operating activities 10.9 24.2 -28.6 -18.4
Free cash flow -36.2 5.3 -58.5 -28.4
Capital spending (net of acquisitions) 36.2 17.8 18.8 9.5
Total assets (June 30) 2,952.4 2,232.6 2,952.4 2,232.6
Equity (incl. non-controlling interests) (June 30) 604.2 513.7 604.2 513.7
Equity ratio (June 30) (%) 20.5 23.0 20.5 23.0
Net working capital (June 30) 176.1 -4.6 176.1 -4.6
Net financial status (June 30) 88.7 227.2 88.7 227.2
EBIT margin (%) 6.1 8.4 6.5 8.6
EBIT margin before extraordinary effects HOMAG Group2 (%) 7.1 8.4 7.3 8.6
ROCE (return on capital employed) (%) 40.9 58.0 45.8 58.6
Employees (June 30) 14,448 8,324 14,448 8,324
Paint and Final Assembly Systems
€ m H1
2015
H1
2014
Q2
2015
Q2
2014
Order intake 588.1 608.9 309.2 354.9
Sales revenues 637.9 477.1 340.0 225.5
EBIT 48.0 39.4 24.9 18.4
Employees (June 30) 3,212 3,113 3,212 3,113
Application Technology
€ m H1
2015
H1
2014
Q2
2015
Q2
2014
Order intake 268.7 305.6 135.2 170.3
Sales revenues 279.0 249.2 148.9 121.8
EBIT 28.9 26.1 15.9 13.3
Employees (June 30) 1,843 1,603 1,843 1,603
Measuring and Process Systems
€ m H1
2015
H1
2014
Q2
2015
Q2
2014
Order intake 308.5 285.5 146.6 146.9
Sales revenues 283.9 272.4 147.3 144.1
EBIT 26.6 25.6 14.1 13.9
Employees (June 30) 2,925 3,018 2,925 3,018
Clean Technology Systems
€ m H1
2015
H1
2014
Q2
2015
Q2
2014
Order intake 72.2 71.6 38.6 35.1
Sales revenues 68.0 61.7 38.1 30.8
EBIT 0.2 2.3 -0.3 1.4
Employees (June 30) 480 456 480 456
Woodworking Machinery and Systems
€ m H1
2015
H1
2014
Q2
2015
Q2
2014
Order intake 557.4 - 270.3 -
Sales revenues 504.1 - 249.8 -
EBIT 9.1 - 8.1 -
EBIT before extraordinary effects HOMAG Group2 27.3 - 14.8 -
Employees (June 30) 5,780 - 5,780 -
1Minor variances may occur in the computation of sums and percentages in this report due to rounding effects. HOMAG Group AG (Woodworking Machinery and Systems division) had not yet been consolidated in the first half of 2014.
2Extraordinary effects (H1: € 18.2 million, H1: € 6.7 million) mainly resulting from purchase price allocation for the HOMAG Group.

The Dürr Group is one of the world's leading mechanical and plant engineering firms. Products, systems and services offered by Dürr enable highly efficient manufacturing processes in different industries. Business with automobile manufacturers and their suppliers accounts for approximately 60% of Dürr's sales. Other market segments include, for example, the mechanical engineering, chemical and pharmaceutical industries and – since the takeover of HOMAG Group AG in October 2014 – the woodworking industry. Dürr has 92 business locations in 28 countries. With about 14,500 employees, the Group plans to generate sales revenues of € 3.4 - 3.5 billion in 2015. The Dürr Group operates in the market with five divisions:

  • Paint and Final Assembly Systems: paint shops and final assembly systems for the automotive industry
  • Application Technology: robot technologies for the automatic application of paint as well as sealants and adhesives
  • Measuring and Process Systems: balancing and cleaning systems as well as testing and filling technology
  • Clean Technology Systems: exhaust-air purification systems and energy-efficiency technology
  • Woodworking Machinery and Systems: machinery and systems for the woodworking industry