Machine manufacturer making headway DMG Mori increases order intake by 34 percent
Germany — DMG Mori Aktiengesellschaft has nothing to complain about in the first quarter of 2021. In monetary terms, orders were up by around 149.6 million euros compared to 2020.
The global machine tool market showed signs of recovery in the 1st quarter of 2021. At DMG Mori, there was a pleasing increase in orders in almost all industries. With 589.8 million (+34 percent), DMG Mori can now look forward to significantly more orders than in the same quarter of the previous year. Turnover, the board informs, reached 421.6 million euros in the first three months. EBIT amounted to 11.8 million euros under persistently difficult conditions. The EBIT margin was 2.8 percent. Free cash flow increased by a whopping 208 per cent, which translates into 39.6 million euros, the statement continues. Domestic orders increased to 174.6 million euros (143.3 million in the previous year), according to the company. Foreign orders reached a volume of 415.2 million euros (previous year: 296.9 million). DMG Mori states the foreign share of orders at 70 percent.
Confidence, despite some uncertainties
Compared to last year, however, sales were down by about 8 percent. This minus is explained by the lower order backlog at the beginning of the year as well as by the continuing travel restrictions, which continue to make the service business difficult. In addition, the upturn in incoming orders will only be reflected in turnover with a time lag.
The current business year is not an easy one, the Executive Board members emphasised. Rising raw material prices, longer delivery times and a more difficult supply of materials are burdening the business.
DMG Mori is nevertheless confident and expects demand to continue to pick up — provided there are no significant effects from the corona mutations. Due to the good business development in the 1st quarter, we are raising the 2021 forecast significantly: Order intake is now expected to reach around two billion euros. EBIT is currently expected to reach around 60 million euros — twice as much as initially forecast. Free cash flow could reach around 70 million euros (previously 20 million).
New business models and expansion in China
In the course of the year, the company is gearing up for the future with further innovations. One example is the new subscription business model: what has long been indispensable for films and music, they are also pushing in mechanical engineering. With Payzr — Pay with Zero Risk — and the new 3-axis universal milling machine M1, the manufacturer wants to accelerate innovation cycles for users and at the same time avoid investment costs by subscribing to the M1 instead of buying it.
Due to the increasing importance of the Chinese market, the company plans to build a highly automated and fully digitalised 35,000 m2 production plant for 5-axis machines in Pinghu near Shanghai, which will open at the end of 2022.