Dürr gets off to a successful start to the year
Incoming orders again in excess of € 500 million
Dürr got off to a good start in 2011 and booked incoming orders worth € 557 million in the first quarter. The Group therefore outstripped the strong final quarter of 2010 when it had received new orders worth € 542 million. Order intake was up 54% on the first quarter of 2010, while sales revenues were up 56% to € 359 million. On this basis, Dürr increased its earnings before interest and taxes to € 9.1 million (Q1 2010: € -6.1 million). A positive result of € 1.8 million was also achieved after tax (Q1 2010: € -10.4 million). For 2011, Dürr expects sales growth of at least 15% and an EBIT margin of 3.5% to 4%. Ralf Dieter, Dürr AG’s CEO, commented: “We are well on track to comfortably achieve our targets for the year and continue growing profitably.”
The positive business development in the first quarter was also driven by the strong upturn in the machinery business. The Measuring and Process Systems division, which supplies balancing and cleaning equipment, increased its order intake by 64%.
Dürr witnessed a balanced international distribution of its incoming orders after 2010 had been characterized by the strong demand in China. In the first quarter of 2011 Asia and the Americas each accounted for one-fourth of the new orders, while Germany contributed 15% and the rest of Europe about one-third. Ralf Dieter: “The revival of investment activity in the automobile industry is becoming increasingly broader based. Dürr is benefiting from this trend as we have a strong presence in all the industry’s production markets.” In the first quarter Dürr received large orders for the construction of paint shops in Brazil, China, India, and Hungary. Order intake exceeded sales revenues by 55%, with orders on hand rising to € 1,529 million as of March 31, 2011.
Another factor contributing to the earnings improvement, besides the growth in sales revenues, was the moderate development of selling and general administrative expenses. They rose by 8% to € 45.9 million and thus much less strongly than sales revenues. The financial result came to € -5.5 million after € -4.9 million in the first quarter of 2010. It included one-off expenses of € 1.0 million incurred in connection with the closing of a new syndicated loan at the end of March. The new loan agreement, which runs until mid-2014, provides better conditions than before and consists of a cash credit line of € 50 million and a guarantee facility of € 180 million. Dürr’s CFO Ralph Heuwing commented: “In negotiating the loan we benefited from our successful € 225 million bond issue in 2010. This enabled us to reduce the size of the loan and lower the costs.”
As the growing volume of business tied up more funds, operating cash flow was negative to the tune of € -16.0 million in the first quarter of 2011 as expected (Q1 2010: € 16.4 million). Dürr’s net financial status was more or less balanced out at € -0.4 million (December 31, 2010: € +23.6 million). The equity ratio was constant at 26.2% (December 31, 2010: 26.3%).
Judged from today’s vantage point, the disaster in Japan has few repercussions for Dürr as only a small proportion of sales are attributable to customers in Japan. Operations at the balancing technology joint venture Nagahama Seisakusho in Osaka were not affected. Neither have there been any bottlenecks so far in the supply of components sourced from Japan.
Outlook
Dürr expects sales revenues to be up by at least 15% to around € 1,450 million in 2011. Incoming orders, which were already back to the pre-crisis level last year at € 1,642 million, should rise by 5%. The EBIT margin is to be improved to 3.5 to 4%; last year it was 2.7%. Dürr also targets a further marked improvement in earnings after tax. It is expected that the number of employees within the Group, which stood at 6,080 on March 31, 2011, will rise to well over 6,100 by the end of the year.
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