Press Release

Solid start to the year for Dürr

Bietigheim-Bissingen, May 6, 2014 - The Dürr Group entered 2014 on a solid note. With sales holding steady (€ 538.2 million), operating earnings (EBIT) rose by 23% to € 44.2 million in the first quarter of 2014. The EBIT margin widened from 6.6% in the year-ago period to 8.2%. As a result, Dürr has already reached its full-year target range of 8.0 - 8.5% for 2014 in the first quarter. As expected, the order intake of € 564.4 million was 17% down on the previous year’s high level, which had been influenced by an above-average order volume in China. The ample orders on hand of € 2,160.8 million will ensure good capacity utilization until well into 2015. Ralf W. Dieter, CEO of Dürr AG: “Our project pipeline is well filled, with the automotive industry planning numerous investments in China in particular. In view of the timing of contract awards, we expect order intake to accumulate in the second half of the year. Sales should also rise steadily in the course of the year.”

One key factor for the profit growth was the earnings turnaround at Cleaning and Surface Processing. Due to a realignment this business unit had recorded a loss in 2013; however, the reorganization resulted in a clearly positive EBIT in the first quarter of 2014.

Growing service business also made a larger contribution to earnings. Service sales rose by 10.6% to € 130.0 million and accounted for 24% of the Group’s top line. Ralf W. Dieter: “With our CustomerExcellence@Dürr optimization program, we are enhancing our offerings and efficiency in service business. The growth achieved in the first quarter shows that we are headed in the right direction with our customer-centric approach.”

As part of its innovation course, Dürr stepped up R&D spending by 18.4% to € 11.6 million. There was also a slight 5.1% increase in capital expenditure to € 8.3 million. Driven by increased interest income and reduced interest expense, net finance expense dropped by 19.1% to € 3.8 million. Dürr expects a slight deterioration in net finance expense in 2014 as a whole due to temporarily heightened expense in connection with the new funding arrangements completed at the end of March. These comprise a bond of € 300 million with a coupon of 2.875% and a syndicated loan also valued at € 300 million. CFO Ralph Heuwing: “We have broadened our financial flexibility with this long-term funding. The favorable terms which we were able to secure will have clearly positive effects from 2015.”

Dürr achieved a positive cash flow of € 42.7 million in the first quarter (Q1 2013: € -29.7 million). At € 482.2 million, cash and cash equivalents were at a high level (December 31, 2013: € 458.5 million). Equity grew by 5.1% to € 537.5 million thanks to the strong earnings performance, with the equity ratio widening from 25.7% at the end of 2013 to 26.8%. The net financial status reached a high of € 312.0 million at the end of March 2014.

The Group’s headcount has risen by 475 since March 31, 2013 to 8,259, equivalent to an increase of 6.1%. There were 117 new recruits in the first quarter of 2014. The headcount in Germany rose by 9.2% compared with March 31, 2013 to 3,816. This disproportionately strong increase was due to the acquisition of exhaust-air purification technology specialist LTB GmbH in mid-2013.

OUTLOOK
Dürr is confident of achieving its full-year targets in the absence of any material deterioration in macroeconomic conditions. It projects order intake of € 2.3 - 2.5 billion and sales of € 2.4 - 2.5 billion for 2014. The full-year EBIT margin should also come to between 8.0 and 8.5%.

KEY FIGURES1
Dürr Group (IFRS)
in € m Q1 2014 Q1 2013 Change (%)
Order intake 564.4 680.4 -17.0
Orders on hand (March 31) 2,160.8 2,476.9 -12.8
Sales revenues 538.2 542.5 -0.8
Gross profit 115.7 102.1 13.3
Research and development costs 11.6 9.8 18.4
EBIT (earnings before financial result and taxes) 44.2 36.0 22.8
Earnings after tax 29.2 22.7 28.6
Cash flow from operating activities 42.7 -29.7 -
Free cash flow 33.8 -38.1 -
Capital spending (net of acquisitions) 8.3 7.9 5.1
Total assets (March 31) 2,007.3 1,870.7 7.3
Equity (incl. non-controlling interests) (March 31) 537.5 455.7 18.0
Equity ratio (March 31) (%) 26.8 24.4 2.4 ppts
Net financial status (March 31) 312.0 58.9 429.7
Net working capital (March 31) -33.8 176.4 -
ROCE (return on capital employed) (%) 61.1 30.6 30.5 ppts
Employees (March 31) 8,259 7,784 6.1
Earnings per share (€)2 0.83 0.66 25.8
Paint and Assembly Systems
in € m Q1 2014 Q1 2013 Change (%)
Order intake 254.0 324.1 -21.6
Sales revenues 251.6 268.5 -6.3
EBIT (earnings before financial result and taxes) 21.0 19.0 10.5
Employees (March 31) 3,112 2,906 7.1
Application Technology
in € m Q1 2014 Q1 2013 Change (%)
Order intake 135.3 182.4 -25.8
Sales revenues 127.4 120.7 5.6
EBIT (earnings before financial result and taxes) 12.8 12.9 -0.8
Employees (March 31) 1,572 1,428 10.1
Measuring and Process Systems
in € m Q1 2014 Q1 2013 Change (%)
Order intake 138.6 146.0 -5.1
Sales revenues 128.3 134.4 -4.5
EBIT (earnings before financial result and taxes) 11.7 5.8 101.7
Employees (March 31) 3,007 3,043 -1.2
Clean Technology Systems3
in € m Q1 2014 Q1 2013 Change (%)
Order intake 36.5 27.9 30.8
Sales revenues 30.9 18.8 64.4
EBIT (earnings before financial result and taxes) 0.9 0.5 80.0
Employees (March 31) 440 286 53.9
1Minor variances may occur in the computation of sums and percentages in this report due to rounding effects.
2Number of shares doubled due to the issue of bonus shares on May 27, 2013; earnings per share for the first quarter of 2013 have been adjusted accordingly.
3Luft- und Thermotechnik Bayreuth GmbH (LTB) was not yet part of the Dürr Group in the first quarter of 2013. This influences the quarterly comparison for the Clean Technology Systems division to a limited degree.

Dürr is a mechanical and plant engineering group that holds leading positions in the world market in its areas of operation. It generates a good 80% of its sales in business with the automotive industry. It also supplies the aircraft, machinery, chemical, and pharmaceutical industries with innovative production and environmental technology. The Dürr Group operates in the market with four divisions: Paint and Assembly Systems plans and builds paintshops and final assembly systems for the automobile and aircraft industries. Application Technology provides automated paint application, sealing, and glueing with its robot technologies. Machinery and systems from the Measuring and Process Systems division are used for balancing and cleaning in engine and transmission manufacturing as well as in final vehicle assembly, among other areas. The fourth division, Clean Technology Systems, specializes in processes to improve energy efficiency and exhaust air purification. Dürr has 50 business locations in 24 countries worldwide and approximately 8,250 employees. The Group achieved sales of € 2.4 billion in 2013.