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Dürr raises forecast for incoming orders: Results (IFRS) for the first nine months of 2007

Published on 2007-11-21. Author : SpecialChem

Stuttgart -- The Dürr Group increased its order intake in the first nine months of 2007 by 12.6% to € 1,307.1 million, with growth of 25.1% year on year alone in the third quarter. Sales revenues for the first three quarters of 2007 came to € 1,015.0 million, an increase of 3.2% over the same period last year. Operating earnings (EBIT before one-time expenses) improved to € 27.4 million (9M 2006: € 19.3 million), with the third quarter contributing € 16.1 million (+67.2%). For 2007, Dürr expects sales growth of between 5% and 10%, and a strong improvement in earnings. In view of the positive trend in demand the industrial equipment and machinery supplier raised its forecast for incoming orders: "We have got off to a good start in the fourth quarter, too. So we now expect growth of at least 10% in new orders compared with last year", said Ralf Dieter, CEO of Dürr AG. Previously, the company had reckoned with new orders at the same level as last year of € 1,460 million.

The earnings situation was burdened for the last time in the third quarter by delays on projects in India. This caused the gross margin in the first nine months to dip to 16.0% as compared with 16.5% in the same period last year. Cost reductions were achieved through the improvements in internal processes which Dürr has implemented under the Group-wide FOCUS program, with administrative and selling expenses declining overall by 1.5% to € 132.2 million. Earnings after tax also improved to € 5.7 million in the first nine months of 2007; this compares with an only small net profit of € 0.1 million in the same period last year.

Operating cash flow (€ -32.7 million) improved appreciably by € 47.1 million in the first nine months of 2007. An even stronger improvement was prevented by a temporary build-up in net working capital. This was due to growth in trade receivables and inventories as a result of the increased volume of business. Owing to the good order situation the number of employees has risen by 3.9% versus December 31, 2006 to 5,869. The increase was primarily in the growth region of Asia, where the number of employees rose by 20.0% to 721 (December 31, 2006: 601).

At 22.4%, the equity ratio as of September 30, 2007 was little changed versus the end of 2006 (23.6%). Net financial debt amounted to € 170.5 million at the end of the third quarter of 2007, as compared with € 164.4 million as of September 30, 2006. Dürr Strategy 2010: Focus on faster growing and more profitable business areas

With the Group-wide FOCUS program launched in 2005 now completed, Dürr is currently finalizing the strategy for the six business units and the Group for the years to 2010. A first result of the "Dürr 2010" strategy process is the repositioning of the Factory Assembly Systems business unit. Ralf Dieter commented: "In future the unit will be tightening its focus on fast growing and lucrative business areas. In particular, we will continue to expand our business in assembly systems for the aviation industry." Dürr is currently engaged on a project with partner EDAG for the design and construction of a complete assembly line for Airbus in Tianjin, China.

The turnkey business as a systems supplier of complete final assembly systems for the automobile industry will be pursued more selectively and with a stronger focus on profitability. In this connection the conveyor systems activities in Stuttgart are being realigned. Unchanged positive outlook for 2007

Dürr expects a strong improvement in earnings in fiscal 2007. At the operating level (EBIT before one-time expenses) the margin should rise to 3.5% from 2.9% last year, while sales growth of between 5% and 10% is forecast. Among the factors contributing to the earnings improvement will be the marked turnaround at the Cleaning and Filtration Systems business unit and in the USA. Operating cash flow should be clearly positive in 2007. Dürr is still aiming to pay a dividend.

Dürr expects a further earnings improvement in 2008. The target margin for 2008 is 5% based on earnings at the operating level.

About Dürr

The Dürr Group is one of the world's leading suppliers of products, systems, and services for automobile manufacturing. Its range embraces important stages in the vehicle production process. As a systems supplier, Dürr designs and builds paint shops and final assembly plants. Dürr also supplies cleaning and filtration equipment used in the production of engine and transmission components as well as diagnostic and balancing systems for vehicle components. Business with automobile manufacturers and their suppliers accounts for about 90% of consolidated sales. Other important customer groups are the mechanical engineering sector and the chemical, pharmaceutical, coating, and aviation industries.

Source: Dürr


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