DMG MORI : Interim Report first half year 2024 (dmgmori224e data)

About this update from Dmg Mori Aktiengesellschaft

M A C H I N I N G T R A N S F O R M A T I O N Interim Report 2024 | First half year 2 DEAR SHAREHOLDERS, DMG MORI AG performed well in the first half of 2024 in a persistently difficult market environment,­ characterized in particular by ongoing geopolitical uncertainties. The second half of the year will also remain challenging for us. A recovery in the subdued demand for capital goods and the machine tool market is not in sight for the time being. DMG MORI AG is meeting these challenges with a consistent strategic focus on MX - Machining­ Transformation, based on Process Integration, Automation, Digital Transformation (DX) and Green Transformation­ (GX). We are also making targeted investments in our young talent and in the ­modernization and expansion of our production capacities. 01 // KEY FIGURES in € million 30 June 2024 30 June 2023 ** Changes 2024 against 2023 Order Intake 1,228.6 1,461.7 -233.1 -16 % Domestic 385.8 455.9 -70.1 -15 % International 842.8 1,005.8 -163.0 -16 % % International 69 69 Sales Revenues 1,104.2 1,188.6 -84.4 -7 % Domestic 461.0 426.6 34.4 8 % International 643.2 762.0 -118.8 -16 % % International 58 64 Order Backlog * 1,588.8 1,780.0 -191.2 -11 % Domestic 450.1 597.0 -146.9 -25 % International 1,138.7 1,183.0 -44.3 -4 % % International 72 66 EBITDA 142.3 107.5 34.8 32 % EBIT 105.6 74.0 31.6 43 % EBT 112.8 78.0 34.8 45 % EAT from continuing operations 80.0 55.2 24.8 45 % EAT from discontinued operations -91.9 0.6 -92.5 >-100 % EAT -11.9 55.8 -67.7 >-100 % Free cash flow -47.4 34.9 -82.3 >-100 % Employees 30 June 2024 31 Dec. 2023 Changes 2024 against 2023 Employees * 7,427 7,515 -88 -1 % incl. trainees 218 294 -76 -26 % reporting date 30 June Adjusted previous year's figures The Interim Consolidated Financial Statements of DMG MORI AKTIENGESELLSCHAFT were prepared in accordance with the International Financial Reporting­ Standards (IFRS), as applicable in the European Union. The interim financial statements have not been audited; they refer exclusively to DMG MORI AKTIENGESELLSCHAFT and its subsidiaries (hereinafter referred to as the Group or DMG MORI AG). DMG MORI AG is part of the DMG MORI Group (hereinafter­ referred to as DMG MORI or Global One Company), whose group parent company is DMG MORI COMPANY LIMITED (hereinafter referred to as DMG MORI CO. LTD.). Further explanations on the EAT can be found in the notes to the interim consolidated statements on page 26 et seqq. Interim Report First half year 2024 DMG MORI AG 3 Group Interim Business Report Interim Consolidated Financial Statements Additional Information TABLE OF CONTENTS G R O U P I N T E R I M B U S I N E S S R E P O R T 05 Overall Conditions Business Development Order Intake Sales Revenues Order Backlog 06 Results of Operations, Financial Position and Net Worth 09 Investments 09 Segment Report 10 Machine Tools 11 Industrial Services 12 Corporate Services 12 Employees 13 Research & Development 15 Opportunities and Risk Report 16 Forecast 17 Group Structure A N N U A L R E P O R T 2 0 2 3 Click here to get to the PDF of the Annual Report 2023 dmgmori.com/gb-en-2023 I N T E R I M C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S A S AT 3 0 J U N E 2 0 2 4 Consolidated Income Statement Consolidated Statement of other Comprehensive Income Consolidated Balance Sheet Consolidated Cash Flow Statement Development of Group Equity Group Segment Report Selected Explanatory Notes to the Interim Consolidated Financial Statements 32 Responsibility Statement C A D D I T I O N A L I N F O R M AT I O N List of Graphs and Tables Forward-Looking Statements Financial Calendar Contact Interim Report First half year 2024 DMG MORI AG 4 Group Interim Business Report Interim Consolidated Financial Statements Additional Information G R O U P I N T E R I M B U S I N E S S R E P O R T 05 Overall Conditions Business Development Order Intake Sales Revenues Order Backlog 06 Results of Operations, Financial Position and Net Worth 09 Investments 09 Segment Report 10 Machine Tools 11 Industrial Services 12 Corporate Services 12 Employees 13 Research & Development 15 Opportunities and Risk Report 16 Forecast 17 Group Structure G R O U P I N T E R I M B U S I N E S S R E P O R T Interim Report First half year 2024 DMG MORI AG 5 Group Interim Business Report Interim Consolidated Financial Statements Additional Information Overall Conditions Business Development GROUP INTERIM BUSINESS REPORT OVERALL CONDITIONS Overall economic development remained subdued in the second quarter of 2024. Geopolitical uncer- tainties, in particular the ongoing war in Ukraine, restrictive monetary policy and the global increase in industrial and trade policy interventions weighed on the economy - especially in Europe. However, the US economy also lost momentum and there was little stimulus from China due to structural problems. Demand for capital goods declined again in the first half of 2024 following a moderate trend in the previous year. Looking at the worldwide market for machine tools, this trend is expected to ­continue for the rest of the year. In the current April forecast by the German Machine Tool Builders'­ Association­ (VDW) and the British economic research institute Oxford Economics, Machine tool ­consumption is expected to fall by -1.1 % to € 80.8 billion (previous year: +1.6 %; € 81.7 billion). A decline of -6.0 % is currently forecast for the German machine tool market. In Europe, machine tool consumption is expected to fall by -2.2 % and in the USA by as much as -7.5 %. A noticeable decline of -10.6 % is forecast for Japan. Machine tool consumption in Germany and Japan thus remains well below the pre-corona level. Growth forecasts for China are rather moderate at +2.1 %. In view of the difficult geopolitical situation, continued high commodity prices, increased inflation rates and high interest rates, it cannot be ruled out that these forecasts will be adjusted in the ­association's regular forecast in October. BUSINESS DEVELOPMENT O R D E R I N TA K E The worldwide market for machine tools continued to be significantly characterized by the ongoing geopolitical uncertainties. The ongoing war in Ukraine, restrictive monetary policy and the global increase in industrial and trade policy interventions weighed on the economy - particularly in Europe - and led to a decline in demand for capital goods. In this still challenging market environment, DMG MORI AG achieved an order intake of € 570.4 million­ in the second quarter (-15 %; previous year: € 674.3 million). In the first half of the year, orders amounted to € 1,228.6 million (-16 %; previous year: € 1,461.7 million). Orders in the "Machine Tools" segment totaled € 654.7 million (-22 %; previous year: € 836.3 million)­ . The "Industrial Services" segment recorded order intake of € 573,8 million (-8 %; previous year: € 625.3 million). This includes order intake from our original service business totalling of € 397.6 million­ (-2 %; previous year: € 404.7 million) and orders for machines from DMG MORI COMPANY LIMITED amounting to € 176.2 million (-20 %; previous year: € 220.6 million). Interim Report First half year 2024 DMG MORI AG 6 Group Interim Business Report Interim Consolidated Financial Statements Additional Information Business Development Domestic orders totaled € 385.8 million (-15 %; previous year: € 455.9 million). International orders amounted to € 842.8 million (-16 %; previous year: € 1,005.8 million). As in the previous year, the share of international orders was 69 %. S A L E S R E V E N U E S Sales revenues in the second quarter totaled € 552.7 million (-8 %; previous year: € 602.4 million). In the first half of the year, sales revenues amounted to € 1,104.2 million (-7 %; previous year: € 1,188.6 million). Sales revenues in the "Machine Tools" segment were € 600.9 million (previous year: € 633.2 million). Sales revenues in the "Industrial Services" segment totaled € 503.2 million­ ­(previous year: € 555.3 million). Of this, € 370.2 million was attributable to our original service business (+5 %; previous­ year: € 352.9 million) and € 133.0 million to trade sales with machines from DMG MORI COMPANY LIMITED (previous year: € 202.2 million). Domestic sales revenues increased by +8 % to € 461.0 million (previous year: € 426.6 million). International­ sales revenues fell by -16 % to € 643.2 million (previous year: € 762.0 million). The export ratio was 58 % (previous year: 64 %). O R D E R B A C K L O G The order backlog amounted to € 1,588.8 million as at 30 June 2024 (31 December 2023: € 1,535.5 million) - a calculated range of six months on average. The individual production companies have different capacity utilization rates. We continue to work on the ongoing optimization of supply chains as well as production and assembly processes, also in order to reduce delivery times for our cus- tomers. International orders accounted for 72 % of the current order backlog (previous year: 66 %). R E S U LT S O F O P E R AT I O N S , F I N A N C I A L P O S I T I O N A N D N E T W O R T H EBITDA amounted to € 142.3 million in the first half of 2024 (previous year: € 107.5 million). EBIT increased to € 105.6 million (previous year: € 74.0 million). The EBIT margin improved to 9.6 % ­(previous year: 6.2 %). EBT increased to € 112.8 million (previous year: € 78.0 million). Income taxes amounted to € 32.8 million (previous year: € 22.8 million). This resulted in earnings after taxes from continuing operations of € 80.0 million (previous year: € 55.2 million). By a decree published on 19 February 2024, the Russian Federation has brought our shareholding in Ulyanovsk Machine Tools ooo, Ulyanovsk (Russia), under state control. The DMG MORI AG Group has thus lost the ability to control and influence the company in Ulyanovsk. The loss of control over ­Ulyanovsk Machine Tools ooo led to the derecognition of this company from the consolidated financial statements of DMG MORI AG. The disposal of our production company in Russia and the Executive Board's subsequent decision to discontinue our "ECOLINE" product line resulted in earnings after taxes from discontinued operations of € -91.9 million (previous year: € 0.6 million). The DMG MORI AG group's earnings after taxes amounted to € -11.9 million (previous year: € 55.8 mil- lion). Further explanations can be found in the notes to the Consolidated Financial Statements on page 26 ↗ page 26 . Interim Report First half year 2024 DMG MORI AG 7 Group Interim Business Report Interim Consolidated Financial Statements Additional Information Business Development DMG MORI AG group's results of operations developed very positively in the second quarter: EBITDA reached € 76.3 million in the second quarter (previous year: € 45.5 million). EBIT amounted to € 58.0 million (previous year: € 29.8 million). The EBIT margin was 10.5 % (previous year: 4.9 %). EBT totaled € 63.0 million (previous year: € 32.8 million). Sales revenues totaled € 552.7 million in the second quarter ­(previous year: € 602.4 million). Sales revenues amounted to € 1,104.2 million in the first half of the year ­(previous year: € 1,188.6 million). The change in inventories of finished goods and work in progress amounted to € 1.0 million (pre- vious year: € 75.9 million). Total work done amounted to € 1,107.6 million (previous year: € 1,270.2 million). The cost of materials fell to € 525.4 million (previous year: € 691.4 million) with a reduction­ in total work done. The materials ratio improved to 47.5 % (previous­ year: 54.5 %), in particular­ due to developments in changes in inventories and improved gross profit margins. ­Personnel expenses amounted to € 314.8 million (previous year: € 320.4 million). The ­personnel ratio increased to 28.4 % (previous year: 25.2 %) despite lower total work done. The balance of other operating expenses and income decreased to € -125.1 million (previous year: € -150.9 million) due to the lower total work done. The decline was mainly due to lower sales com- missions, freight and packaging expenses as well as advertising and trade fair expenses. Depreciation and ­amortization increased slightly to € 36.7 million (previous year: € 33.5 million). The financial result improved significantly­ to € 7.2 million (previous year: € 4.0 million). EBT increased to € 112.8 million (previous year: € 78.0 million). A.01 // NET WORTH in € million 30 June 2024 31 Dec. 2023 30 June 2023 Long-term assets 902.1 926.7 936.5 Short-term assets 1,600.9 1,841.0 1,823.3 Equity 1,414.1 1,382.2 1,444.3 Outside capital 1,088.9 1,385.5 1,315.5 Balance sheet total 2,503.0 2,767.7 2,759.8 The balance sheet total decreased by € 264.7 million to € 2,503.0 million (31 December 2023: € 2,767.7 million). The equity ratio improved to 56.5 % (31 December 2023: 49.9 %). Under assets, long-term assets decreased by € 24.6 million to € 902.1 million. Tangible and intangible­ assets amounted to € 722.8 million (31 December 2023: € 757.1 million); the decline relates in particular to property, plant and equipment (€ 20.7 million) in connection­ with the disposal of our production company in Russia and the Executive Board's subsequent decision to discontinue our "ECOLINE" product line. Financial assets amounted to € 132.8 million­ ­(31 ­December 2023: € 124.8 million). Short-term assets decreased by € 240.1 million to € 1,600.9 million (31 December 2023: € 1,841.0 million). Inventories decreased slightly by € 2.0 million to € 780.0 million. Raw materials and supplies increased by € 4.1 million to € 338.6 million and work in progress by € 13.9 million to € 177.5 million. Finished goods and products decreased by € 20.0 million to € 263.9 million. Trade account Interim Report First half year 2024 DMG MORI AG 8 Group Interim Business Report Interim Consolidated Financial Statements Additional Information Business Development receivables increased slightly by € 7.5 million to € 127.9 million. Receivables from other related ­parties decreased by € 179.8 million to € 444.7 million (31 December 2023: € 624.5 million). This decline mainly resulted from a repayment (€ 150.0 million) by DMG MORI Europe Holding GmbH for its loan. Cash and cash equivalents amounted to € 95.9 million (31 December 2023: € 158.7 million). Under equity and liabilities, equity increased by € 31.9 million to € 1,414.1 million. The equity ratio improved to 56.5 % (31 December 2023: 49.9 %). Liabilities decreased by € 296.6 million to € 1,088.9 million (31 December 2023: € 1,385.5 million). Advance payments received decreased by € 49.9 million to € 305.5 million due to weaker order intake. Trade accounts payable amounted to € 187.1 million (previous year: € 185.7 million). Liabilities­ to other related parties decreased by € 222.3 million to € 45.8 million. The decline is mainly due to the payment of the profit transfer for 2023 in the amount of € 147.5 million to DMG MORI Europe Holding GmbH. A.02 // CASH FLOW in € million 2024 2023 1 st half year 1 st half year Cash flow from operating activities -34.0 81.1 Cash flow from investment activity 133.9 49.3 Cash flow from financing activity -164.9 -135.4 Changes in cash and cash equivalents -62.8 -13.2 Liquid funds at the start of the reporting period 158.7 177.4 Liquid funds at the end of the reporting period 95.9 164.2 Overall, the financial position developed in line with our expectations: the cash flow from operating activities amounted to € -34.0 million (previous year: € 81.1 million). Based on earnings after taxes of € -11.9 million (previous year: € 55.8 million), depreciation and amortization in the amount of € 36.7 million contributed to the cash flow (previous year: € 34.5 million). In addition, the decline in inventories by € 0.9 million ­(previous year increase: € 104.4 million) led to an increase in cash flow. The decline in provisions by € 50.3 million, trade accounts payable­ by € 20.6 million (previous year increase: € 28.6 million) and the decline in advance ­payments received by € 47.9 million (previous year increase: € 6.2 million) as well as the decrease in trade accounts receivables by € 6.1 million (previous year increase: € 8.7 ­million) led to a reduction in cash flow. The cash flow from investing activities was positive at € 133.9 million (previous year: € 49.3 million). Cash outflows for investments in property, plant and equipment and intangible assets amounted to € -16.1 million (previous year: € -46.3 million); cash inflows from disposals amounted to € 2.7 million­ (previous year: € 0.1 million). The repayment of DMG MORI Europe Holding GmbH for its loan resulted in cash inflows of € 150.0 million (previous year: € 100.0 million). The cash flow from financing activities amounted to € -164.9 million (previous year: € -135.4 million)­ . The cash flow mainly results from the payment of the profit transfer 2023 to DMG MORI Europe Holding­ GmbH in the amount of € 147.5 million (previous year: € 146.5 million) and payments for lease liabilities in the amount of € 7.8 million (previous year: € 7.9 million). Interim Report First half year 2024 DMG MORI AG 9 Group Interim Business Report Interim Consolidated Financial Statements Additional Information Business Development Free cash flow amounted to € -52.4 million in the second quarter (previous year: € 1.7 million). Free cash flow amounted to € -47.4 million in the first half of the year (previous year: € 34.9 million). The discontinued operations in Russia has no material impact on the financial position. I N V E S T M E N T S Investments in property, plant and equipment and intangible assets totaled € 22.1 million in the first half of the year as planned (previous year: € 54.7 million). The additions from rights of use in ­accordance with IFRS 16 "Leases" included in this figure were € 5.9 million (previous year: € 8.5 million)­ . Investments in financial assets amounted to € 0.2 million (previous year: € 3.2 million). Investments therefore totaled € 22.3 million (previous year: € 57.9 million). We have started construction of the new training centre at our production site in Pfronten. By 2026, 150 state-of-the-art training places will be created here. The new premises will enable us to place an even greater focus on future technologies, automation and digitization in our training. We have begun targeted modernization and expansion measures in Bielefeld and Stipshausen. These include infrastructural modernization and capacity expansions in the areas of logistics and assembly. Completion of the measures at both locations is planned for 2025. Construction of the new assembly hall at our site in Tortona (Italy) has been completed. In the third quarter of 2024, we plan to finish the interior work, including the implementation of a state-of-the- art assembly concept based on driverless AGV (automated guided vehicle) transport systems for efficient and flexible assembly. We are also continuing to invest in a self-sufficient, sustainable power supply for our production­ plants with additional photovoltaic systems. The expansion at our production site in Pleszew (Poland) will begin in the current financial year. We are also continuing to invest in our ERP project "GLOBE - Global One Business Excellence" to standardize and optimize systems and processes. S E G M E N T R E P O R T Our business activities comprise the segments "Machine Tools" and "Industrial Services". "Corporate Services" mainly comprises DMG MORI AKTIENGESELLSCHAFT with its group-wide holding functions. The selected machines of DMG MORI COMPANY LIMITED which we produce under license are included in "Machine Tools". The trade and services for these machines are recognized under "Industrial Services". Interim Report First half year 2024 DMG MORI AG 10 Group Interim Business Report Interim Consolidated Financial Statements Additional Information Business Development A.03 // SEGMENT KEY FIGURES 30 June 2023 * Changes 2024 in € million 30 June 2024 against 2023 Order intake 1,228.6 1,461.7 -233.1 -16 % Machine Tools 654.7 836.3 -181.6 -22 % Industrial Services 573.8 625.3 -51.5 -8 % Corporate Services 0.1 0.1 0.0 0 % Sales revenues 1,104.2 1,188.6 -84.4 -7 % Machine Tools 600.9 633.2 -32.3 -5 % Industrial Services 503.2 555.3 -52.1 -9 % Corporate Services 0.1 0.1 0.0 0 % EBIT 105.6 74.0 31.6 43 % Machine Tools 5.7 22.6 -16.9 -75 % Industrial Services 118.1 83.0 35.1 42 % Corporate Services -18.1 -31.7 13.6 43 % * Adjusted previous year's figures MACHINE TOOLS The "Machine Tools" segment includes the group's new machine business with the divisions Turning and Milling, Advanced Technologies (Ultrasonic / Lasertec) and Additive Manufacturing as well as Digital Solutions. The worldwide market for machine tools continued to be significantly impacted by continued geopolitical uncertainties. The ongoing war in Ukraine, the restrictive monetary policy and the global increase in industrial and trade policy interventions weighed on the economy - particularly in Europe - and led to declining demand for capital goods. In this still challenging market environment, DMG MORI AG achieved order intake of € 299.1 million in the "Machine Tools" segment in the second quarter (-22 %; previous year: € 381.6 million). In the first six months, orders amounted to € 654.7 million (-22 %; previous year: € 836.3 million). Domestic order intake was € 182.2 million (previous year: € 254.8 million). International orders totaled € 472.5 million (previous year: € 581.5 million). 53 % of all orders received were for "Machine tools" (previous year: 57 %). On 30 June 2024, the order backlog amounted to € 823.1 million (31 December 2023: € 832.6 million). Sales revenues in the second quarter reached € 309.6 million (-3 %; € 319.5 million). In the first half of the year, sales revenues amounted to € 600.9 million (-5 %; previous year: € 633.2 million)­ . The "Machine Tools" segment accounted for 54 % of sales revenues (previous year: 53%). EBIT amounted to € 5.7 million (previous year: € 22.6 million). The EBIT from discontinued operations of € -91.9 ­million (previous year: € 0.6 million) is attributable to the "Machine Tools" segment. As at 30 June 2024, the number of employees in the "Machine Tools" segment was 4,475 (31 December 2023: 4,616). Interim Report First half year 2024 DMG MORI AG

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