Quarterly Report • Aug 13, 2018
Quarterly Report
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DMG MORI AKTIENGESELLSCHAFT has again achieved record figures – and thus the best first half-year results in the company's history. Order intake, sales revenues, earnings and free cash flow recorded double-digit rates of growth. Order intake rose by 14 % to € 1,577.1 million (previous year: € 1,384.2 million). Sales revenues increased by 10 % to € 1,215.1 million (previous year: € 1,108.0 million). EBIT amounted to € 93.0 million (+20 %; previous year: € 77.6 million). Free cash flow improved by € 90.9 million to € 67.2 million (previous year: € -23.7 million).
DMG MORI continues to develop positively – technologically, structurally and culturally. The current financial year is marked by Dynamics and Excellence.
The global economy and the worldwide market for machine tools are expected to continue to grow in 2018 – although with less dynamism due to the geo-political uncertainties. Therefore, we still plan to achieve order intake of about € 2.7 billion after having raised the forecast in the first quarter. Due to the good business development in the first half-year, DMG MORI raises its targets for sales revenues, EBIT and free cash flow for the whole year: For sales revenues we are now expecting about € 2.55 billion (previously: about € 2.45 billion). For EBIT we are awaiting about € 200 million instead of previously about € 180 million. For free cash flow, we are currently expecting about € 125 million (previously: about € 100 million).
The Interim Consolidated Financial Statements of DMG MORI AKTIENGESELLSCHAFT were prepared in accordance with the International Financial Reporting Standards (IFRS), as applicable within the European Union. The interim financial statements have not been audited; they refer exclusively to DMG MORI AKTIENGESELLSCHAFT and its subsidiaries (in the following DMG MORI).
| KEY FIGURES | Changes | |||
|---|---|---|---|---|
| in € million | 30 June 2018 | 30 June 2017 | 2018 against 2017 | |
| Order Intake | 1,577.1 | 1,384.2 | 192.9 | 14 % |
| Domestic | 453.2 | 416.8 | 36.4 | 9 % |
| International | 1,123.9 | 967.4 | 156.5 | 16 % |
| % International | 71 | 70 | ||
| Sales Revenues | 1,215.1 | 1,108.0 | 107.1 | 10 % |
| Domestic | 384.8 | 339.2 | 45.6 | 13 % |
| International | 830.3 | 768.8 | 61.5 | 8 % |
| % International | 68 | 69 | ||
| Order Backlog | 1,658.5 | 1,186.0 | 472.5 | 40 % |
| Domestic | 522.9 | 424.6 | 98.3 | 23 % |
| International | 1,135.6 | 761.4 | 374.2 | 49 % |
| % International | 68 | 64 | ||
| EBITDA | 120.5 | 107.3 | 13.2 | 12 % |
| EBIT | 93.0 | 77.6 | 15.4 | 20 % |
| EBT | 92.3 | 75.2 | 17.1 | 23 % |
| EAT | 64.7 | 52.0 | 12.7 | 24 % |
| Free cash flow | 67.2 | -23.7 | 90.9 | 384 % |
| 30 June 2018 | 31 Dec. 2017 | Changes 2018 against 2017 |
||
| Employees | 7,310 | 7,101 | 209 | 3 % |
| incl. trainees | 343 | 359 | -16 | -4 % |
As at 30 June 2018, the DMG MORI group is still comprised of 86 companies, including DMG MORI AKTIENGESELL-SCHAFT, and thus remains unchanged compared to 31 December 2017. More information on the group structure can be found in the Notes on page 18.
DMG MORI AKTIENGESELLSCHAFT, Bielefeld
| MACHINE TOOLS GILDEMEISTER Beteiligungen GmbH, Bielefeld; Development and Production |
||||||
|---|---|---|---|---|---|---|
| TURNING GILDEMEISTER Drehmaschinen GmbH (Bielefeld) GRAZIANO Tortona S.r.l. (Tortona /Italy) GILDEMEISTER Italiana S.p.A. (Bergamo /Italy) |
MILLING DECKEL MAHO Pfronten GmbH (Pfronten) DECKEL MAHO Seebach GmbH (Seebach) |
ADVANCED TECHNOLOGIES SAUER GmbH (Pfronten, Idar-Oberstein) REALIZER GmbH (Bielefeld, Borchen) |
DIGITAL SOLUTIONS DMG MORI Software Solutions GmbH (Pfronten) ISTOS GmbH (Düsseldorf) WERKBLiQ GmbH (Bielefeld) |
|||
| FAMOT Pleszew Sp. z o.o. (Pleszew /Poland) |
Ulyanovsk Machine Tools ooo (Ulyanovsk /Russia) |
| INDUSTRIAL SERVICES DMG MORI Management GmbH, Bielefeld; Sales and Services |
|||||||
|---|---|---|---|---|---|---|---|
| SALES AND SERVICES | ENERGY SOLUTIONS | ||||||
| DMG MORI Germany |
DMG MORI EMEA |
DMG MORI China |
DMG MORI DMG MORI India Services |
GILDEMEISTER energy solutions GmbH (Würzburg) |
|||
| Markets of DMG MORI COMPANY LIMITED | |||||||
| DMG MORI Japan* |
DMG MORI Asia* |
DMG MORI USA* |
DMG MORI Americas* |
* These markets are consolidated by DMG MORI COMPANY LIMITED.
The global economy slowed down in the second quarter of 2018. The Kiel Institute for the World Economy (IfW) reduced its growth forecast for the whole year to 3.8 %. Germany and the Eurozone lost momentum due to the trade dispute with the USA, the appreciation in value of the euro and the increase in oil prices. Japan and the USA continued to develop positively.
The worldwide market for machine tools is expected to carry on growing. In their April forecast, the German Association of Machine Tool Builders (VDW) and the British economic research institute, Oxford Economics, are expecting growth in global consumption of +5.9 % to € 75.2 billion, despite the looming slowdown in the global economy. At present, growth of 6.7 % is still forecast for the German machine tools market. In Europe, machine tools consumption is expected to grow strongest with an
increase of +8.0 %. In the Asian markets consumption shall increase by +5.2 %. For America, consumption growth of +6.0 % is expected.
The next forecast of VDW and Oxford Economics will be published as scheduled in October. In view of the macroeconomic environment, we are currently assuming that the current rate of growth of +5.9 % for 2018 will be more moderate than expected.
The international business of DMG MORI AKTIENGESELL-SCHAFT is affected by the euro's exchange rate. Of particular importance are the US dollar, the Chinese renminbi, the Russian ruble and the Japanese yen. Compared with the previous year's quarter, the euro gained in value against the US dollar, the yen and the ruble but lost in value against the renminbi.
Order intake rose in the second quarter to € 755.3 million (+9 %; previous year: € 690.3 million). Thus, for the third time, orders in a quarter were more than € 700 million. This was owed in part to the successful open house exhibition in Bielefeld.
In the first half year order intake rose by 14 % to € 1,577.1 million (previous year: € 1,384.2 million). Thus we had the best first half year in order intake so far in the company's history. In the "Machine Tools" segment, orders grew
■ International ■ Domestic
by 6 % to € 878.0 million (previous year: € 825.8 million). The "Industrial Services" segment recorded order intake of € 699.0 million (+25 %; previous year: € 558.3 million) of which € 631.7 million is attributable to Services (previous year: € 528.8 million). Domestic orders were € 453.2 million (previous year: € 416.8 million). International orders amounted to € 1,123.9 million (previous year: € 967.4 million). The share of international orders thus amounted to 71 % (previous year: 70 %).
Sales revenues rose in the second quarter to € 633.3 million (+10 %; previous year: € 574.1 million).
At the end of the half-year; sales revenues grew by 10 % to € 1,215.1 million and thus reached a new record high (previous year: € 1,108.0 million). In the "Machine Tools" segment sales revenues increased by € 42.2 million to € 654.5 million (previous year: € 612.3 million). In the "Industrial Services" segment, sales revenues rose to € 560.5 million (previous year: € 495.6 million).
International sales revenues increased by 8 % to € 830.3 million (previous year: € 768.8 million). Domestic sales revenues amounted to € 384.8 million (+13 %; previous year: € 339.2 million). The export share was 68 % (previous year: 69 %).
As at 30 June 2018 the order backlog for the group amounted to € 1,658.5 million (31 Dec. 2017: € 1,309.1 million). The high order backlog and the very high capacity utilization at the production plants are causing longer delivery times at present. We are specifically counteracting this development with stronger flexibility measures and our sound business relationships with our partners and suppliers. International orders account for 68 % of current orders (corresponding date of the previous year: 64 %).
Earnings continued to develop positively. In the second quarter EBITDA reached € 65.9 million (previous year: € 58.6 million), EBIT amounted to € 52.0 million (previous year: € 43.3 million) and EBT rose to € 52.0 million (previous year: € 42.2 million). EAT were € 36.4 million (previous year: € 29.2 million).
At the end of the first half year the DMG MORI group reached new record figures: EBITDA improved to € 120.5 million (+12 %; previous year: € 107.3 million). EBIT increased by 20 % to € 93.0 million (previous year: € 77.6 million). EBT rose by 23 % to € 92.3 million (previous year: € 75.2 million). As at 30 June 2018, the group reports EAT of € 64.7 million (previous year: € 52.0 million).
Sales revenues increased by € 107.1 million to € 1,215.1 million (previous year: € 1,108.0 million). Changes in stocks of finished goods and work in progress rose by € 59.5 million to € 72.3 million (previous year: € 12.8 million). Total operating revenue rose by € 164.7 million to € 1,290.6 million (previous year: € 1,125.9 million). The cost of materials amounted to € 720.0 million (previous year: € 590.8 million). The materials ratio rose, most notably due to the increase in stock levels, to 55.8 % (previous year: 52.5 %). Gross profit increased by € 35.5 million to € 570.6 million (previous year: € 535.1 million). Personnel expenses amounted to € 290.5 million (previous year: € 272.0 million). The personnel expenses ratio improved to 22.5 % (previous year: 24.2 %).
The balance of other income and expenses was € 159.6 million (previous year: € 155.8 million). Depreciation went down to € 27.5 million (previous year: € 29.7 million). The financial result improved by € 1.7 million to € -0.7 million (previous year: € -2.4 million). EAT amounted to € 64.7 million (previous year: € 52.0 million). This gave rise to a tax expense of € 27.6 million (previous year: € 23.2 million). The tax ratio improved to 29.9 % (previous year: 30.9 %).
| NET WORTH | |||
|---|---|---|---|
| in € million | 30 June 2018 | 31 Dec. 2017 | 30 June 2017 |
| Long-term assets | 733.9 | 737.0 | 815.4 |
| Short-term assets | 1,616.4 | 1,504.3 | 1,258.6 |
| Equity | 1,216.4 | 1,164.6 | 1,209.3 |
| Outside capital | 1,133.9 | 1,076.7 | 864.7 |
| Balance sheet total | 2,350.3 | 2,241.3 | 2,074.0 |
The balance sheet total increased by € 109.0 million to € 2,350.3 million (31 Dec. 2017: € 2,241.3 million)
Under assets, long-term assets decreased slightly by € 3.1 million to € 733.9 million. Intangible assets and plant, property and equipment amounted to € 617.9 million (31 Dec. 2017: € 630.7 million). Financial assets were € 50.4 million (31 Dec. 2017: € 47.3 million).
Short-term assets increased by € 112.1 million to € 1,616.4 million (31 Dec. 2017: € 1,504.3 million). Inventories rose by € 108.4 million to € 656.1 million. Raw materials and consumables grew by € 39.1 million to € 246.9 million. Unfinished goods increased by € 68.3 million to € 213.3 million. The increase was due in particular to preliminary work for the planned sales revenues in the second half year. Finished goods and goods for resale amounted to € 178.3 million (31 Dec. 2017: € 181.9 million). The turnover rate of inventories was 3.7 (previous year's period: 4.2).
Trade receivables declined by € 20.5 million to € 218.1 million despite an increase in sales volumes. Receivables from related companies rose by € 142.3 million to € 349.3 million (previous year: € 207.0 million). The rise was essentially due to an increase in a loan of € 150.0 million to DMG MORI GmbH. The turnover rate of trade receivables improved to 7.7 (previous year: 8.4). Liquid funds amounted to € 209.7 million (31 Dec. 2017: € 363.4 million).
Under equity and liabilities, equity rose by € 51.8 million to € 1,216.4 million. The equity ratio amounted to 51.8 % (31 Dec. 2017: 52.0%). Outside capital increased by € 57.2 million to € 1,133.9 million (31 Dec. 2017: € 1,076.7 million). Prepayments received rose by € 98.9 million to € 389.1 million and trade creditors rose by € 40.1 million to € 209.9 million. Liabilities to related companies decreased by € 111.8 million to € 95.3 million. The decrease essentially arose from the payment of the profit transfer amount for 2017 to DMG MORI GmbH.
| CASHFLOW in € million |
2018 1st half year |
2017 1st half year |
|---|---|---|
| Cash flow from operating activities | 92.1 | -11.0 |
| Cash flow from investment activity | -155.3 | 7.0 |
| Cash flow from financing activity | -89.4 | -189.7 |
| Changes in cash and cash equivalents |
-153.7 | -195.4 |
| Liquid funds at the start of the reporting period |
363.4 | 396.7 |
| Liquid funds at the end of the reporting period |
209.7 | 201.3 |
Apart from the good development of earnings, the financial position also developed positively: Cash flow from operating activities improved by € 103.1 million to € 92.1 million (previous year: € -11.0 million). Contributions to this cash flow came from EBT of € 92.3 million (previous year: € 75.2 million) and depreciation of € 27.5 million (previous year: € 29.7 million). Especially the rise in prepayments received of € 98.9 million (previous year: € 30.4 million) led to an increase in cash flow. The cash flow was reduced by a rise in inventories of € 113.3 million (previous year: € 30.1 million).
Cash flow from investment activity amounted to € -155.3 million (previous year: € +7.0 million). Payments for investments in property, plant and equipment, and in intangible assets were € -27.1 million (previous year: € -16.7 million). The cash flow from investment activity also shows the payment for the increase in the loan to DMG MORI GmbH of € -150.0 million. The sale of subsidiaries resulted in total receipts of € 21.4 million (previous year: €+19.7 million).
Cash flow from financing activity was € -89.4 million (previous year: € -189.7 million) and essentially results in an amount of € -89.9 million from the payment of the profit transfer for 2017 to DMG MORI GmbH.
Free cash flow improved by € 90.9 million to € 67.2 million (previous year: € -23.7 million). This improvement is essentially due to cash flow from operating activities, which improved by € 103.1 million from € -11.0 million to € 92.1 million.
Investments in property, plant and equipment and in intangible assets amounted as planned for the first half year to € 25.6 million (previous year: € 16.7 million). The focus of our investments was on expanding our production capacity in Pleszew (Poland) and Pfronten, as well as strengthening our future topic of digitization.
At FAMOT in Pleszew, we are expanding the assembly, production and logistics areas by a total of 22,000m2 by mid-2019. Already on 8 October we will open a new 7,000m2 large and up-to-date assembly hall. In addition, we have started construction of a state-of-the-art 6,000m2 large production hall for the production of XXL components.
At our production site at DECKEL MAHO Pfronten, we will also build a state-of-the-art Technology and Solution Center, and additionally will expand the assembly and logistics areas. The Grand Opening shall take place in January 2021 on the occasion of the traditional Open House exhibition and the company's 100 year anniversary.
Our business activities include the "Machine Tools" and "Industrial Services" segments. "Corporate Services" essentially 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 "Machines Tools". The trade in and the services for those machines are entered in the accounts under "Industrial Services".
| SEGMENT KEY FIGURES in € million |
30 June 2018 | 30 June 2017 | Changes 2018 against 2017 |
|
|---|---|---|---|---|
| Order Intake | 1,577.1 | 1,384.2 | 192.9 | 14 % |
| Machine Tools | 878.0 | 825.8 | 52.2 | 6 % |
| Industrial Services | 699.0 | 558.3 | 140.7 | 25 % |
| Corporate Services | 0.1 | 0.1 | 0 | 0 % |
| Sales Revenues | 1,215.1 | 1,108.0 | 107.1 | 10 % |
| Machine Tools | 654.5 | 612.3 | 42.2 | 7 % |
| Industrial Services | 560.5 | 495.6 | 64.9 | 13 % |
| Corporate Services | 0.1 | 0.1 | 0 | 0 % |
| EBIT | 93.0 | 77.6 | 15.4 | 20 % |
| Machine Tools | 55.4 | 49.4 | 6.0 | 12 % |
| Industrial Services | 51.7 | 44.4 | 7.3 | 16 % |
| Corporate Services | -13.9 | -15.9 | 2.0 | 13 % |
The "Machine Tools" segment includes the group's new machines business with the Turning and Milling, Advanced Technologies (ULTRASONIC / LASERTEC / ADDITIVE MANUFACTURING) and the Digital Solutions divisions.
Order intake in the "Machine Tools" segment in the second quarter was € 411.4 million (previous year: € 403.8 million). In the first six months, orders rose by € 52.2 million or 6 % to € 878.0 million (previous year: € 825.8 million). Whereas domestic order intake rose by 10 % to € 253.2 million (previous year: € 231.1 million), international order intake rose by 5 % to € 624.8 million (previous year: € 594.7 million). Thus "Machine Tools" accounted for 56% of all orders (previous year: 60 %). The order backlog as at 30 June 2018 amounted to € 996.6 million (same date in previous year: € 700.0 million).
Sales revenues in the second quarter rose by € 20.1 million to € 343.1 million (previous year's quarter: € 323.0 million). At the end of the first half year sales revenues increased by € 42.2 million or 7 % to € 654.5 million (previous year: € 612.3 million). The "Machine Tools" segment contributed 54 % of sales revenues (previous year: 55 %). EBIT reached € 55.4 million (previous year: € 49.4 million).
As at 30 June 2018, the number of employees of 4,008 had risen compared with year-end 2017 (3,875). An adjustment in the employee number is due in particular to new hires for our FAMOT production plant as well as for our strategic future topics.
| KEY FIGURES SEGMENT "MACHINE TOOLS" |
Changes | |||
|---|---|---|---|---|
| in € million | 30 June 2018 | 30 June 2017 | 2018 against 2017 | |
| Order Intake | 878.0 | 825.8 | 52.2 | 6 % |
| Domestic | 253.2 | 231.1 | 22.1 | 10 % |
| International | 624.8 | 594.7 | 30.1 | 5 % |
| % International | 71 | 72 | ||
| Sales Revenues | 654.5 | 612.3 | 42.2 | 7 % |
| Domestic | 199.1 | 182.4 | 16.7 | 9 % |
| International | 455.4 | 429.9 | 25.5 | 6 % |
| % International | 70 | 70 | ||
| Order Backlog | 996.6 | 700.0 | 296.6 | 42 % |
| Domestic | 247.5 | 161.7 | 85.8 | 53 % |
| International | 749.1 | 538.3 | 210.8 | 39 % |
| % International | 75 | 77 | ||
| EBIT | 55.4 | 49.4 | 6.0 | 12 % |
| 30 June 2018 | 31 December 2017 | Changes 2018 against 2017 |
||
| Employees | 4,008 | 3,875 | 133 | 3 % |
| incl. trainees | 245 | 276 | -31 | -11 % |
| KEY FIGURES SEGMENT "INDUSTRIAL SERVICES" |
||||
|---|---|---|---|---|
| in € million | 30 June 2018 | 30 June 2017 | Changes 2018 against 2017 |
|
| Order Intake | 699.0 | 558.3 | 140.7 | 25 % |
| Domestic | 199.9 | 185.6 | 14.3 | 8 % |
| International | 499.1 | 372.7 | 126.4 | 34 % |
| % International | 71 | 67 | ||
| Sales Revenues | 560.5 | 495.6 | 64.9 | 13 % |
| Domestic | 185.6 | 156.7 | 28.9 | 18 % |
| International | 374.9 | 338.9 | 36.0 | 11 % |
| % International | 67 | 68 | ||
| Order Backlog | 661.9 | 486.0 | 175.9 | 36 % |
| Domestic | 275.4 | 262.9 | 12.5 | 5 % |
| International | 386.5 | 223.1 | 163.4 | 73 % |
| % International | 58 | 46 | ||
| EBIT | 51.7 | 44.4 | 7.3 | 16 % |
| 30 June 2018 | 31 December 2017 | Changes 2018 against 2017 |
||
| Employees | 3,220 | 3,142 | 78 | 2 % |
| incl. trainees | 98 | 83 | 15 | 18 % |
The "Industrial Services" segment includes the business activities of the Services and the Energy Solutions divisions. In the Services division we combine the marketing activities and the LifeCycle Services for both our machines and those of DMG MORI COMPANY LIMITED. With the aid of the DMG MORI Life Cycle Services, our customers maximize the productivity of their machine tools over their entire life cycle – from their commissioning to part exchange as a used machine. The wide range of service contracts, repair and training services offered to our customers ensures the maximum cost efficiency of their machine tools.
Order intake in the "Industrial Services" segment grew in the second quarter by € 57.4 million or 20 % to € 343.9 million (previous year: € 286.5 million). Services contributed € 321.0 million (previous year: € 272.9 million). In the first half year order intake rose by € 140.7 million or 25 % to € 699.0 million (previous year: € 558.3 million). Order intake in the Services division amounted to € 631.7 million (previous year: € 528.8 million). "Industrial Services" accounted for 44 % of orders in the group (previous year: 40 %). The order backlog at the end of the first half year amounted to € 661.9 million (same date in previous year: € 486.0 million).
Sales revenues in the second quarter rose by € 39.1 million or 16 % to € 290.2 million (previous year: € 251.1 million). Services contributed € 287.8 million (previous year: € 235.3 million). In the first half year sales revenues in the segment rose by € 64.9 million or 13 % to € 560.5 million (previous year: € 495.6 million). Sales revenues in the Services division amounted to € 554.6 million (previous year: € 460.6 million). "Industrial Services" contributed 46 % of group sales revenues (previous year: 45%). EBIT in the first six months was € 51.7 million (previous year: € 44.4 million).
In the "Industrial Services" segment, the number of employees at the end of the first half year 2018 was 3,220 (31 Dec. 2017: 3,142). The rise in the number of employees was primarily due to hiring new service personnel both in Germany and abroad.
The "Corporate Services" segment essentially comprises DMG MORI AKTIENGESELLSCHAFT with its group-wide holding functions. EBIT amounted to € -13.9 million (previous year: € -15.9 million).
| KEY FIGURES | ||||
|---|---|---|---|---|
| SEGMENT "CORPORATE SERVICES" | Changes | |||
| in € million | 30 June 2018 | 30 June 2017 | 2018 against 2017 | |
| Order Intake | 0.1 | 0.1 | 0 | 0 % |
| Sales Revenues | 0.1 | 0.1 | 0 | 0 % |
| EBIT | -13.9 | -15.9 | 2.0 | 13 % |
| Changes | ||||
| 30 June 2018 | 31 December 2017 | 2018 against 2017 | ||
| Employees | 82 | 84 | -2 | -2 % |
On 30 June 2018 the group had 7,310 employees, of whom 343 were trainees (31 Dec. 2017: 7,101). The rise in employee numbers occurred in particular in service employees both nationally and internationally. In addition, we have increased the staff to strengthen our production capacity at FAMOT in Pleszew as well as in our future strategic areas – above all in the fields of automation, digitization and ADDITIVE MANUFACTURING. At the end of the first half year, 4,309 employees (59 %) worked for our domestic companies and 3,001 employees (41 %) for our international companies. The personnel expenses ratio improved to 22.5% (previous year: 24.2%). The personnel costs amounted to € 290.5 million (previous year: € 272.0 million).
The DMG MORI AKTIENGESELLSCHAFT share was quoted at the start of the second quarter at € 47.40 (3 Apr. 2018) and closed on 29 June 2018 at € 46.70.
Expenditure on research and development in the first half year amounted to € 28.2 million (previous year: € 25.3 million). There are 572 employees working on the development of our new products, which corresponds to some 15 % of the workforce at the plants.
In financial year 2018 we will present a total of 11 world premieres together with DMG MORI COMPANY LIMITED. At international trade fairs and at our traditional Open House exhibitions in Pfronten and Bielefeld we have so far shown seven world premieres and many other innovations from our five strategic future areas: automation, digitization, ADDITIVE MANUFACTURING, Technology Excellence and DMG MORI Qualified Products (DMQP). We are pushing ahead in these future areas.
For easy entry into the digital factory, the IoTconnector networks both new machines as well as DMG MORI machines with CELOS that are already installed at the customer's premises. With the two new technology cycles "TCC – Tool Control Center" and "VCS Complete" we now offer 30 digital assistants for workshop-oriented programming. The DMG MORI technology cycles increase quality, productivity, transparency and process reliability in production and ensure time-savings of up to 60 % – a true added value for the user in their daily use.
In the field of automation, the Robo2Go 2nd generation impresses with its high level of flexibility and simple programming. New workpieces can be taught quickly and efficiently in less than 15 minutes. Moreover, the first automation solutions from DMG MORI HEITEC have been successfully put into operation at customers' premises.
In the turning technology area, the Turn & Mill machining center NTX 3000|1500 offers the highest processing stability and a generous working area while taking up a floor area of only 16.5m2 . In milling, the experience we have gained from more than 10,000 vertical machining centers has been incorporated into the new DMC 1850 V. The machine is impressive for its top dynamics and is equipped with speedMASTER spindles with a rotational speed of up to 20,000U/min.
In ADDITIVE MANUFACTURING, the LASERTEC 30 SLM of the 2nd generation enables high-precision generative production. Its flexible and enhanced powder module rePLUG enables the powder to be changed without any contamination in less than two hours. The quality of the finished structural parts has been further increased by an optimized gas flow, among other things. The open system allows all the machine's parameters to be customized. At the same time, CELOS ensures simple and consistent operation: from the CAM programming to the machine controls.
We are pushing service excellence with the new NETservice. Together with the SERVICEcamera, it ensures even more customer proximity and efficiency, and sets new benchmarks for remote services. In addition, with WERKBLiQ we offer a manufacturer-independent platform, where all those involved in the maintenance process can be linked to one another simply, efficiently and transparently. This substantially speeds up the service process.
With the "First Quality" campaign DMG MORI is setting new benchmarks. Since the start of the year, all motor spindles of the MASTER series enjoy a 36-month warranty period – with unlimited hours.
SERVICEcamera Robo2Go
Our opportunities and risk management report is presented in detail in the Annual Report 2017 on pages 64 et seq. The statements in the report are essentially unchanged. Additional risks may arise from the current geo-political uncertainties. Several indicators suggest that the global economy might noticeably slow down due to the trade dispute with the USA, the appreciation in value of the euro and the rise in oil prices. A dampening of the macroeconomic growth dynamics may have an effect on worldwide growth in machine tool consumption. DMG MORI might be affected by this trend.
Opportunities may arise through innovations from the strategic future areas of automation, digitization, ADDITIVE MANUFACTURING, Technology Excellence and the DMG MORI Qualified Products (DMQP), as well as from the targeted expansion of our production capacity.
Despite the lack of change in political uncertainties, the global economy is expected to continue to grow in 2018. The Kiel Institute for the World Economy (IfW) has lowered its growth forecast for the whole year to 3.8 %. Germany and Europe will continue their growth trend at a subdued rate. Economic researchers anticipate that the gross domestic product of the euro countries will only rise by 2.1 % and by 2.0 % in Germany. Asia will be the strongest growth region again in the current year with a likely steady growth of 6.5 %. In the USA the positive economic development is expected to continue. According to IfW estimates, the gross domestic product in the USA will grow by 2.8 %.
The worldwide market for machine tools is expected to carry on growing. In their April forecast, the German Association of Machine Tool Builders (VDW) and the British economic research institute, Oxford Economics, are expecting growth in global consumption of 5.9 % to € 75.2 billion, despite the looming slowdown in the global economy. The next forecast of the VDW and Oxford Economics will be published as scheduled in October. In view of the macroeconomic environment, we are assuming that the current rate of growth of 5.9 % for 2018 will be more moderate than expected.
The global economy and the worldwide market for machine tools are expected to continue to grow in 2018 – although with less dynamism due to the geo-political uncertainties. Therefore, we still plan to achieve order intake of about € 2.7 billion after having raised the forecast in the first quarter. Due to the good business development in the first half-year, DMG MORI raises its targets for sales revenues, EBIT and free cash flow for the whole year: For sales revenues we are now expecting about € 2.55 billion (previously: about € 2.45 billion). For EBIT we are awaiting about € 200 million instead of previously about € 180 million. For free cash flow, we are currently expecting about € 125 million (previously: about € 100 million).
DMG MORI continues to develop positively – technologically, structurally and culturally. Dynamics and Excellence characterize the current financial year. We are dynamically pushing forward our future topics. We are optimizing our existing and proven achievements sustainably for excellence. At the AMB in Stuttgart (18-22 Sep. 2018) customers and other interested parties will have an opportunity to convince themselves of our power of innovation and our integrated digitization solutions.
| FIRST HALF YEAR 2018 (01 JAN – 30 JUNE) in € million |
2018 | 2017 | Changes 2018 against 2017 |
|||
|---|---|---|---|---|---|---|
| Sales Revenues | 1,215.1 | 94.2 % | 1,108.0 | 98.4 % | 107.1 | 9.7 % |
| Changes in finished goods and work in progress | 72.3 | 5.6 % | 12.8 | 1.1 % | 59.5 | 464.8 % |
| Own work capitalized | 3.2 | 0.2 % | 5.1 | 0.5 % | -1.9 | 37.3 % |
| Total Work Done | 1,290.6 | 100.0 % | 1,125.9 | 100.0 % | 164.7 | 14.6 % |
| Cost of material | -720.0 | -55.8 % | -590.8 | -52.5 % | -129.2 | 21.9 % |
| Gross Profit | 570.6 | 44.2 % | 535.1 | 47.5 % | 35.5 | 6.6 % |
| Personnel costs | -290.5 | -22.5 % | -272.0 | -24.2 % | -18.5 | 6.8 % |
| Other income and expenses | -159.6 | -12.4 % | -155.8 | -13.8 % | -3.8 | 2.4 % |
| Depreciation | -27.5 | -2.1 % | -29.7 | -2.6 % | 2.2 | 7.4 % |
| EBIT | 93.0 | 7.2 % | 77.6 | 6.9 % | 15.4 | 19.8 % |
| Financial Result | -0.7 | -0.1 % | -2.4 | -0.2 % | 1.7 | 70.8 % |
| EBT | 92.3 | 7.1 % | 75.2 | 6.7 % | 17.1 | |
| Income taxes | -27.6 | -2.1 % | -23.2 | -2.1 % | -4.4 | |
| EAT | 64.7 | 5.0 % | 52.0 | 4.6 % | 12.7 | |
| Of which attributed to the shareholders of DMG MORI AKTIENGESELLSCHAFT |
65.1 | 5.0 % | 51.1 | 4.5 % | 14.0 | |
| Of which attributed to non-controlling interests | -0.4 | 0.0 % | 0.9 | 0.1 % | -1.3 |
| FIRST HALF YEAR 2018 (01 JAN – 30 JUNE) | ||
|---|---|---|
| in € million | 2018 | 2017 |
| EAT | 64.7 | 52.0 |
| Other comprehensive income | ||
| Actuarial gains / losses | 0.0 | 0.0 |
| Income taxes | 0.0 | 0.0 |
| Sum of items not reclassified to the income statement | 0.0 | 0.0 |
| Differences from currency translation | -12.3 | -10.1 |
| Change in market value of hedging instruments | -0.7 | 1.0 |
| Market value of hedging instruments – reclassification to profit or loss | 0.2 | 1.0 |
| Net investments | -0.7 | 1.3 |
| Income taxes | 0.2 | -0.6 |
| Sum of items reclassified to the income statement | -13.3 | -7.4 |
| Other comprehensive income for the period after taxes | -13.3 | -7.4 |
| Total comprehensive income for the period | 51.4 | 44.6 |
| Of which attributed to the shareholders of DMG MORI AKTIENGESELLSCHAFT | 51.9 | 44.4 |
| Of which attributed to non-controlling interests | -0.5 | 0.2 |
| ASSETS | |||
|---|---|---|---|
| in € million | 30 June 2018 | 31 Dec. 2017 | 30 June 2017 |
| Goodwill | 139.4 | 139.4 | 137.9 |
| Other intangible assets | 48.7 | 51.3 | 58.3 |
| Tangible assets | 429.8 | 440.0 | 465.1 |
| Equity accounted investments | 48.3 | 45.2 | 46.4 |
| Other equity investments | 2.1 | 2.1 | 21.8 |
| Trade debtors | 0.3 | 0.8 | 0.8 |
| Other long-term financial assets | 11.4 | 5.9 | 9.4 |
| Other long-term assets | 3.4 | 2.4 | 17.6 |
| Deferred taxes | 50.5 | 49.9 | 58.1 |
| Long-term assets | 733.9 | 737.0 | 815.4 |
| Inventories | 656.1 | 547.7 | 528.4 |
| Trade debtors | 217.8 | 237.8 | 204.8 |
| Receivables from at equity accounted companies | 18.1 | 16.0 | 9.7 |
| Receivables from other related companies | 349.3 | 207.0 | 172.7 |
| Receivables from associated companies | 0.1 | 0.0 | 0.5 |
| Receivables from down payment invoices | 16.3 | 0.0 | 0.0 |
| Other short-term financial assets | 61.7 | 72.8 | 70.7 |
| Other short-term assets | 85.7 | 58.1 | 61.2 |
| Income tax receivables | 1.6 | 1.5 | 7.1 |
| Cash and cash equivalents | 209.7 | 363.4 | 201.3 |
| Long-term assets held for sale | 0.0 | 0.0 | 2.2 |
| Short-term assets | 1,616.4 | 1,504.3 | 1,258.6 |
| Balance sheet total | 2,350.3 | 2,241.3 | 2,074.0 |
| EQUITY AND LIABILITIES in € million Equity |
30 June 2018 | 31 Dec. 2017 | 30 June 2017 |
| Subscribed capital | 204.9 | 204.9 | 204.9 |
| Capital reserves | 498.5 | 498.5 | 498.5 |
| Retained earnings and other reserves | 510.6 | 458.1 | 502.8 |
| Total equity of shareholders of DMG MORI AKTIENGESELLSCHAFT | 1,214.0 | 1,161.5 | 1,206.2 |
| Non-controlling equity interests | 2.4 | 3.1 | 3.1 |
| Total Equity | 1,216.4 | 1,164.6 | 1,209.3 |
| Long-term financial debts | 35.0 | 35.0 | 38.7 |
| Provisions for pension | 43.4 | 44.6 | 45.9 |
| Other long-term provisions | 45.5 | 43.2 | 39.5 |
| Trade creditors | 1.3 | 0.0 | 0.0 |
| Contract liability | 0.7 | 0.0 | 0.0 |
| Other long-term financial liabilities | 9.3 | 9.5 | 9.6 |
| Other long-term liabilities | 3.1 | 3.9 | 3.6 |
| Deferred taxes | 2.7 | 1.8 | 3.4 |
| Long-term debts | 141.0 | 138.0 | 140.7 |
| Short-term financial debts | 5.5 | 11.5 | 8.1 |
| Tax provisions | 15.7 | 15.2 | 27.8 |
| Other short-term provisions | 179.8 | 183.2 | 168.6 |
| Payments received on account | 389.1 | 290.2 | 188.5 |
| Trade creditors | 208.6 | 169.8 | 204.2 |
| Liabilities to at equity accounted companies | 3.7 | 2.3 | 1.3 |
| Liabilities to other related companies | 95.3 | 207.1 | 68.9 |
| Contract liability | 16.8 | 0.0 | 0.0 |
| Contract liability from down payment invoices | 16.3 | 0.0 | 0.0 |
| Other short-term financial liabilities | 19.1 | 10.7 | 10.1 |
| Other short-term liabilities | 43.0 | 48.7 | 46.5 |
| Short-term debts Balance sheet total |
992.9 2,350.3 |
938.7 2,241.3 |
724.0 2,074.0 |
| FIRST HALF YEAR 2018 (01 JAN – 30 JUNE) | ||
|---|---|---|
| in € million | 2018 | 2017 |
| Cash flow from operating activities | ||
| Earnings before taxes (EBT) | 92.3 | 75.2 |
| Income taxes | -27.6 | -23.2 |
| Depreciation | 27.5 | 29.7 |
| Change in deferred taxes | 0.7 | 0.1 |
| Change in provisions | 5.0 | -20.6 |
| Other income and expenses not affecting payments | -1.5 | 2.3 |
| Changes in inventories, trade debtors and other assets | -119.2 | -56.9 |
| Changes in trade creditors and other liabilities | 114.9 | -17.6 |
| 92.1 | -11.0 | |
| Cash flow from investment activity | ||
| Cash inflows on disposal of tangible assets and intangible assets | 2.2 | 4.0 |
| Amounts paid out for investments in intangible and tangible assets | -27.1 | -16.7 |
| Cash flow from the takeover of control over subsidiaries | -1.5 | -23.7 |
| Cash flow from the loss of control over subsidiaries | 0.0 | 43.4 |
| Amounts paid out for investments in financial assets | -0.3 | 0.0 |
| Amounts received from the disposal in financial assets | 21.4 | 0.0 |
| Amounts paid out for loans to other related companies | -150.0 | 0.0 |
| -155.3 | 7.0 | |
| Cash flow from financing activity | ||
| Cash inflows / cash outflows for borrowings / repayment | 0.5 | -5.1 |
| Payments from changes in interests in subsidiaries | 0.0 | -143.5 |
| Profit transfer to DMG MORI GmbH | -89.9 | -41.1 |
| -89.4 | -189.7 | |
| Changes affecting payments | -152.6 | -193.7 |
| Effects of exchange rate changes on financial securities | -1.1 | -1.7 |
| Cash and cash equivalents as of 1 January | 363.4 | 396.7 |
| Cash and cash equivalents as of 30 June | 209.7 | 201.3 |
| in € million | Subscribed capital |
Capital reserve |
Retained earnings and other reserves* |
Total equity of shareholders of DMG MORI AKTIENGE SELLSCHAFT |
Non controlling equity interests |
Total equity |
|---|---|---|---|---|---|---|
| As at 01 January 2018 | 204.9 | 498.5 | 458.1 | 1,161.5 | 3.1 | 1,164.6 |
| Effects from changes in the accounting methods | 0.0 | 0.0 | -1.2 | -1.2 | -0.2 | -1.4 |
| As at 01 January 2018 adjusted | 204.9 | 498.5 | 456.9 | 1,160.3 | 2.9 | 1,163.2 |
| Total comprehensive income | 0.0 | 0.0 | 51.9 | 51.9 | -0.5 | 51.4 |
| Consolidation measures / Other changes | 0.0 | 0.0 | 1.8 | 1.8 | 0.0 | 1.8 |
| As at 30 June 2018 | 204.9 | 498.5 | 510.6 | 1,214.0 | 2.4 | 1,216.4 |
| As at 30 June 2017 | 204.9 | 498.5 | 502.8 | 1,206.2 | 3.1 | 1,209.3 |
|---|---|---|---|---|---|---|
| Consolidation measures / Other changes | 0.0 | 0.0 | 14.0 | 14.0 | -37.0 | -23.0 |
| Total comprehensive income | 0.0 | 0.0 | 44.4 | 44.4 | 0.2 | 44.6 |
| As at 01 January 2017 | 204.9 | 498.5 | 444.4 | 1,147.8 | 39.9 | 1,187.7 |
* adjusted due to initial application of IFRS 9 and IFRS 15
part of the Selected Explanatory Notes
| FIRST HALF YEAR 2018 in € million |
Machine Tools |
Industrial Services |
Corporate Services |
Transition | Group |
|---|---|---|---|---|---|
| Sales Revenues | 654.5 | 560.5 | 0.1 | 0.0 | 1,215.1 |
| EBIT | 55.4 | 51.7 | -13.9 | -0.2 | 93.0 |
| Investments | 22.8 | 2.2 | 0.9 | 0.0 | 25.9 |
| Employees | 4,008 | 3,220 | 82 | 0 | 7,310 |
| FIRST HALF YEAR 2017 in € million |
Machine Tools |
Industrial Services |
Corporate Services |
Transition | Group |
|---|---|---|---|---|---|
| Sales Revenues | 612.3 | 495.6 | 0.1 | 0.0 | 1,108.0 |
| EBIT | 49.4 | 44.4 | -15.9 | -0.3 | 77.6 |
| Investments | 14.0 | 2.0 | 0.7 | 0.0 | 16.7 |
| Employees | 3,686 | 3,102 | 82 | 0 | 6,870 |
The consolidated financial statements of DMG MORI SEIKI AKTIENGESELLSCHAFT as at 31 December 2017 were prepared in accordance with the International Financial Reporting Standards (IFRSs) and their interpretations as applicable at the reporting date and as adopted by the European Union. The consolidated interim financial statements as at 30 June 2018 were prepared on the basis of IAS 34 Interim Financial Reporting. The consolidated interim financial statements as at 30 June 2018 and the interim management report for the period 1 January to 30 June 2018 have not been audited nor subject to a review under section 37 of the German Securities Trading Act (WpHG). All interim financial statements of those companies that were included in the interim consolidated financial statements were prepared in accordance with the uniform accounting and valuation principles that also formed the basis for the consolidated financial statements for the year ending 31 December 2017. Bearing in mind the sense and purpose of the interim reporting as an instrument of information based on the consolidated financial statements, and in accordance with IAS 1.112, we refer to the Notes to the Consolidated Annual Financial Statements. These set out in detail the accounting, valuation and consolidation methods applied and the right of choice contained in the IFRS that has been exercised. The accounting and valuation principles as well as the consolidation methods applied have been retained for comparison with financial year 2017 (see further explanations in the Notes to the Consolidated Financial Statements as at 31 December 2017 on page 98 et seq.), with the exception of the application of new financial accounting regulations. All IFRS amendments and new standards that are required to be applied as of 1 January 2018 have been adopted.
In particular, the amendments to IFRS 9 "Financial Instruments" and to IFRS 15 "Revenue from Contracts with Customers" have an effect on the DMG MORI AKTIEN-GESELLSCHAFT financial reporting and further details are given in the following. None of the other obligatory applications of IFRS amendments or new standards effective as of 1 January 2018 have any material effect on the reporting of DMG MORI AKTIENGESELLSCHAFT.
IFRS 9 sets out a new classification and measurement model for financial assets, which takes account of the business model under which the assets are to be held and the cash flow characteristics.
The standard removes the former categories of IAS 39: held to maturity, loans and receivables, and available for sale. The three new classification categories in IFRS 9 are: amortized cost, FVTPL (fair value through profit or loss) and FVOCI (fair value through other comprehensive income).
IFRS 9 replaces the IAS 39 "incurred loss" model with a future-oriented model of "expected credit losses". Measurement in accordance with the expected credit losses approach must be applied over the entire life of the asset if the credit risk of a financial asset has risen significantly from initial recognition at the end of the reporting period; otherwise measurement is to be applied in accordance with the 12-month credit loss approach.
Measurement following the concept of expected credit losses over the entire term is nevertheless always applied to trade receivables and contractual assets without any significant financing component. There is a choice of applying this method for trade receivables and contractual assets with a significant financing component. DMG MORI has decided to apply the concept of expected credit losses over the entire term including for trade receivables and contractual assets.
In applying IFRS 9 DMG MORI has made use of the exception of not restating comparative information for previous periods with respect to a change in classification and measurement (including any impairment). Differences between the carrying amounts of financial assets and financial debt due to the application of IFRS 9 are generally recognized in revenue reserves and other reserves as at 1 January 2018.
The application of IFRS 9 has led to the following adjustments to the balance sheet as at 1 January 2018:
| in € K | Additional impairment as at 1 January 2018 |
|---|---|
| Trade receivables and other receivables (after tax) | -344 |
| Cash and cash equivalents | -2 |
| Total | -346 |
| in € K | Adjustment of equity as at 1 January 2018 |
|---|---|
| Revenue reserves and other reserves (after tax) | -345 |
| Non-controlling equity interests | -1 |
| Reduction in equity | -346 |
The credit losses taken into account for trade receivables are calculated on the basis of actual experience of credit losses over the past three years. Credit risks within each group are segmented on the basis of common default risk characteristics. For the companies these are, for example, the credit risk assessment, such as on the basis of past due and the geographical location. The underlying default rate for DMG MORI, depending on the due date (not due and past due) and the regional assignment of trade receivables, is between 0.01% and 1.24%.
A value adjustment to other receivables following the general approach was calculated for a period of six months on the basis of ratings and default probabilities and reflects short terms.
Cash and cash equivalents are deposited with banks or financial institutions that were rated as A-1 to A-2 by the rating agency S&P. A value adjustment to cash and cash equivalents was calculated on the basis of expected losses within 12 months and reflects the short terms.
DMG MORI also applies IFRS 9 to the accounting of hedging transactions as of 1 January 2018. Essentially the hedge relationships could continue in hedge accounting. DMG MORI applies the spot-to-spot method. The effects of forward components are recognized as an expense. Overall, applying the amendments under IFRS 9 only has a slight effect on the accounting of hedging transactions at DMG MORI.
Further explanatory notes to the first-time application of IFRS 9 are presented in the Notes to the Consolidated Financial Statements as at 31 December 2017 in the Annual Report on page 97 et seq.
The table below presents the reconciliation of the carrying amounts of financial assets pursuant to IAS 39 to the carrying amounts of financial assets pursuant to IFRS 9 as at 1 January 2018.
Applying IFRS 9 only had a slight effect in the first half year.
The group adopts IFRS 15 "Revenue from Contracts with Customers" as of 1 January 2018. For the transition to IFRS 15, DMG MORI applies the modified retrospective method by which the cumulative adjustments are recognized as at 1 January 2018.
IFRS 15 establishes a comprehensive framework for determining whether, in what amount and at which date sales revenues are recognized. It replaces the former guidelines on recognizing sales revenues, including IAS 18 "Revenue", IAS 11 "Construction Contracts" and IFRIC 13 "Customer Loyalty Programmes".
Sales revenue from the sale of machine tools at the DMG MORI group includes as a rule ancillary services.
| RECONCILIATION OF FINANCIAL ASSETS FROM IAS 39 TO IFRS 9 in € million |
Book value 31 Dec. 2017 (IAS 39) |
Reclassi fication* |
Remeasure ment |
Book value 1 Jan. 2018 (IFRS 9) |
|---|---|---|---|---|
| IAS 39 – Loans and receivables | ||||
| Cash and cash equivalents | 363.4 | 0.0 | 0.0 | 363.4 |
| Trade receivables | 319.8 | -235.5 | -0.1 | 84.2 |
| Other receivables | 141.8 | 0.0 | 0.0 | 141.8 |
| Other financial assets | 74.7 | 0.0 | 0.0 | 74.7 |
| Amortized Cost | 899.7 | -235.5 | -0.1 | 664.1 |
| IAS 39 – Available for sale | ||||
| Financial assets | 5.3 | 0.0 | 0.0 | 5.3 |
| Reclassified from IAS 39 – Loans and receivables | ||||
| Trade receivables | 0.0 | 235.5 | -0.3 | 235.2 |
| Fair value through other comprehensive income (FVOCI) | 5.3 | 235.5 | -0.3 | 240.5 |
| Derivatives (freestanding) | 0.6 | 0.0 | 0.0 | 0.6 |
| Fair value through profit or loss (FVTPL) | 0.6 | 0.0 | 0.0 | 0.6 |
| Derivatives (hedge accounting) | 0.1 | 0.0 | 0.0 | 0.1 |
| Derivatives in hedge accounting | 0.1 | 0.0 | 0.0 | 0.1 |
| Total | 905.7 | 0.0 | -0.4 | 905.3 |
* Existing book value under IAS 39, reclassified from a IAS 39 category in a new IFRS 9 category
Under IFRS 15 revenues are recognized as soon as a customer has control of the goods. In addition, the company must determine its performance obligations pursuant to IFRS 15. The following applies: A contract or a sum of combined contracts may have multiple performance obligations, which are subject to individual rules with respect to the date of realization.
DMG MORI group estimates that several performance obligations arise out of the contracts for the sale of machine tools (sale of machine tools, transport and commissioning of the machine, plus training), which are all subject to individual rules with respect to the realization principle. This means that the revenue from the sale of machine tools is allocated to the individual performance obligations. The sales revenues for these performance obligations and the associated costs are recognized following contractual performance.
From the performance of services, for instance service contracts, maintenance, repair and training services, which are not incurred within the scope of machine sales, no material differences arose with respect to the date of recognition of revenues.
The application of IFRS 15 has led to the following material adjustments to the balance sheet as at 1 January 2018:
| in € million | Effects of the application of IFRS 15 as at 1 January 2018 |
|---|---|
| Contract liability | +25.5 |
| of which prepayments | +13.3 |
| Receivables from customers from prepayments | +13.3 |
| Group equity | -1.0 |
| Other provisions | -4.5 |
| Other financial liabilities | -6.5 |
The application of IFRS 15 gave rise in the first half year 2018 to the following material effects as opposed to the application of IAS 18:
| in € million | Effects of the application of IFRS 15 as at 30 June 2018 |
|---|---|
| Sales revenues | -4.0 |
| Cost of materials | +3.2 |
| Earnings after taxes | -0.6 |
| Group equity | -1.6 |
| Other provisions | -7.6 |
| Contract liability | +33.8 |
| Receivables from customers from prepayments | +16.3 |
| Contract liability from prepayments | +16.3 |
| Other financial obligation | -7.8 |
Further discussion of first-time application of IFRS 15 on sales revenues from the sale of goods and the performance of services are presented in the Notes to the Consolidated Financial Statements as at 31 December 2017 in the Annual Report on page 100 et seq.
IFRS 16 was published in January 2016. The standard has the effect for lessees that practically all leases are recognized in the balance sheet as the difference between operating and finance leases has been nullified for lessees. As per the new standard, an asset (the right to the use of the leased object) and a financial liability for lease payments are recognized. The only exceptions relate to short-term leases and leases for low value leased assets. Accounting by lessors will not change materially. The standard will primarily affect the accounting for operating leases at DMG MORI. As at the balance sheet date of 31 December 2017, the group had obligations under non-terminable operating leases (on a non-discounted basis) of € 54.5 million. The group has not yet determined, however, the extent to which these obligations will lead to the recognition of an asset and a liability for future payments, and the effect this will have on the group's results and the classification of cash flow. Some of these obligations may possibly fall under the exception for short-term and low-value leased assets, others may involve agreements, which do not qualify as leases in accordance with IFRS 16. The standard first becomes mandatory and applicable to reporting periods beginning on or after 1 January 2019. DMG MORI waives early application of the standard.
In December 2017, DMG MORI started a project for the introduction of IFRS 16 and continued the analysis of the effects of this application on the financial reporting. The project team assigned to this task examined in the first stage of the project in particular the contracts that so far have significantly been classified as operate lease contracts in which DMG MORI is the lessor. In particular the issues relating to initial application and discretionary scope for representative material individual cases were addressed. At the time it was not decided which of the transition methods should be applied. Further detailed explanations are given in the Notes to the Consolidated Financial Statements as at 31 December 2017 in the Annual Report on page 101 et seq.
As a globally operating company the DMG MORI group is subject to various cyclical developments. In the section "Business environment" the cyclical influences during the reporting period have been given in detail. Industryrelated seasonal fluctuations over the course of the year are normal and may lead to different sales revenues and as a result different earnings.
As in the previous year, as at 30 June 2018 there were no diluted earnings.
| Group result excluding profit share of | ||
|---|---|---|
| other shareholders | €K | 65,094 |
| Average weighted number of shares | 78,817,994 | |
| Earnings per share acc. to IAS 33 | € | 0.83 |
As at 30 June 2018, the DMG MORI group, including DMG MORI AKTIENGESELLSCHAFT, comprised 86 companies, of which 81 companies were included in the interim financial statements as part of the full consolidation process. Compared with 31 December 2017, the number of consolidated subsidiary companies has not increased. The change in the group structure is as follows: GILDEMEISTER ENERGY Services UK Ltd., Manchester (Great Britain), which has been founded as a 100% subsidiary of GILDEMEISTER energy solutions GmbH, Würzburg, has been newly-consolidated.
DMG MORI Hamburg GmbH, Hamburg, has merged with retroactive effect as at 1 January 2018 with DMG MORI Berlin Hamburg GmbH, Berlin.
In addition to the consolidated subsidiary companies, Magnescale Co., Ltd., Kanagawa (Japan), its subsidiary companies Magnescale Europe GmbH, Wernau, and Magnescale Americas, Inc., Davis (USA), DMG MORI Finance GmbH, Wernau, and DMG MORI HEITEC GmbH, Erlangen have been classified as associated companies and equity-accounted in the group consolidated interim financial statements.
In accordance with IAS 33, earnings per share are determined by dividing the consolidated earnings by the average weighted number of shares. At the same time the earnings after taxes of € 64.7 million are increased by the earnings attributed to non-controlling interests of € 0.4 million.
The income tax expense in the interim reporting period is determined for the whole year pursuant to IAS 34.30(c) on the basis of the currently expected effective tax rate and according to economic considerations.
Pursuant to IAS 34.16A all types of financial assets and liabilities are to be measured at fair value. In the notes to the consolidated financial statements as at 31 December 2017 the valuations of financial instruments are explained in detail. The accounting as at 30 June 2018 remains unchanged. There are only differences between the book values and fair value of long-term and short-term financial debts. The book value as at 30 June 2018 is € 40.5 million, whereas the fair value is € 41.0 million.
Comprehensive income as at 30 June 2018 of € 51.4 million comprises earnings after tax (€ 64.7 million) and "other comprehensive income after taxes" (€ -13.3 million). The earnings after taxes of € 64.7 million increased comprehensive income, whereas the differences from foreign currency translation and, the changes in market value of derivative financial instruments reduced it. Seasonally-related income and expenses, respectively those distributed unevenly over the year, did not have any material effect.
Equity rose overall by € 51.8 million to € 1,216.4 million. The share of equity attributable to non-controlling interests fell by € 0.7 million to € 2.4 million.
Consolidated income of € 64.7 million increased equity. The currency changes recognized in other income and the change in valuation of derivative financial instruments reduced equity.
Within the scope of segmental reporting, pursuant to IFRS 8 regulations the business activities of the DMG MORI group have been divided into the "Machine Tools", "Industrial Services" and "Corporate Services" business segments. The segmentation follows the internal management and reporting on the basis of the different products and services. The machines of the DMG MORI COMPANY LIMITED produced under license are included in "Machine Tools". The business with DMG MORI COMPANY LIMITED products is accounted for in "Industrial Services". The demarcation of the segments and the determination of the segment results remain unchanged from 31 December 2017. The business activities of the segments are disclosed in detail in the notes to the consolidated financial statements as at 31 December 2017 on page 156 et seq.
As presented in the notes to the financial statements as at 31 December 2017, numerous business relations continue to exist with related parties, which are conducted on the basis of standard market terms and conditions. Related companies pursuant to IAS 24.9 (b) are all companies that belong to the DMG MORI COMPANY LIMITED group of companies or companies in which DMG MORI COMPANY LIMITED has an investment. In line with the consolidated financial statements as at 31 December 2017, relationships with related companies are shown separately in the balance sheet.
DMG MORI Finance GmbH and Magnescale Co., Ltd. together with its subsidiaries are classified as associated companies. Other related companies to the DMG MORI group are any other companies that belong to the consolidated group of DMG MORI COMPANY LIMITED.
DMG MORI AKTIENGESELLSCHAFT granted DMG MORI GmbH a loan of € 120.0 million in financial year 2016, which was increased in March 2018 by € 150.0 million. The agreement was concluded at standard market terms and conditions. The disclosure is made in the balance sheet under receivables from other related parties.
A domination and profit transfer agreement pursuant to section 291 et seq. of the German Stock Corporation Act (AktG) is in place between DMG MORI GmbH (controlling company) and DMG MORI AKTIENGESELLSCHAFT (controlled company).
Significant events occurring after the balance sheet date are presented in the "Forecast". No other significant events have occurred after the end of the reporting period of the interim financial statements.
To the best of our knowledge, and in accordance with the applicable accounting and reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim management report of the group includes a fair review of the development and performance of the business and the position of the group, together with a description of the material opportunities and risks associated with the expected development of the group for the remaining months of the financial year.
Bielefeld, 26 July 2018 DMG MORI AKTIENGESELLSCHAFT The Executive Board
Chairman
Dipl.-Kfm. Christian Thönes Dipl.-Kfm. Björn Biermann Dipl.-Kfm. Dr. Maurice Eschweiler Michael Horn, M.B.A.
Supervisory Board: Dr.-Eng. Masahiko Mori, Chairman
| 25 October 2018 | Release for the 3rd Quarter 2018 (1 January to 30 September) |
|---|---|
| 11 February 2019 | Preliminary Figures for the Financial Year 2018 |
| 12 March 2019 | Press conference on Financial Statements Publication Annual Report 2018 Analyst Conference |
| 30 April 2019 | Release for the 1st Quarter 2019 (1 January to 31 March) |
| 10 May 2019 | 117th Annual General Meeting |
Subject to alteration
DMG MORI AKTIENGESELLSCHAFT Gildemeisterstraße 60 D-33689 Bielefeld www.ag.dmgmori.com
ISIN: DE0005878003
Phone: + 49 (0) 52 05 / 74 - 3001 Fax: + 49 (0) 52 05 / 74 - 45 3001 E-Mail: [email protected]
This report is available in German and English.
We will gladly send you further copies and additional information on DMG MORI AKTIENGESELLSCHAFT free of charge upon request.
This report contains forward-looking statements, which are based on current estimates of the management of future developments. Such statements are based on the management's current expectations and specific assumptions. They are subject to risks, uncertainties and other factors, which could lead to the actual future circumstances including the assets, liabilities, financial position and profit or loss of DMG MORI AKTIENGESELLSCHAFT differing materially from or being more negative than that those expressly or implicitly assumed or described in these statements. The business activities of DMG MORI AKTIENGESELLSCHAFT are subject to a series of risks and uncertainties, which may result in forward-looking statements estimates or forecasts becoming inaccurate.
DMG MORI AKTIENGESELLSCHAFT is strongly affected, in particular, by changes in general economic and business conditions (including margin developments in the most important business areas as well as the consequences of a recession) as these have a direct effect on processes, suppliers and customers. Due to their differences, not all business areas are affected to the same extent by changes in the economic environment; significant differences exist with respect to the timing and extent of the effects of any such changes. This effect is further intensified by the fact that, as a global entity, DMG MORI AKTIENGESELLSCHAFT operates in various markets with very different economic rates of growth. Uncertainties arise inter alia from the risk that customers may delay or cancel orders or they may become insolvent or that prices become further depressed by a persistently, unfavourable market environment than that which we are expecting at the current time; developments on the financial markets, including fluctuations in interest rates and exchange rates, in the price of raw materials, in borrowing and equity margins
as well as in financial assets in general; growing volatility in the capital markets and a deterioration in the conditions for the credit business as well as a deterioration in the future economic success of the core business areas in which we operate; challenges in integrating major acquisitions and in implementing joint ventures and achieving the expected synergy effects and other essential portfolio measures; the introduction of competing products or technology by other companies or the entry onto the market of new competitors; a change in the dynamics of competition (primarily on developing markets); a lack of acceptance of new products and services in customer target groups of DMG MORI; changes in corporate strategy; interruptions in the supply chain, including the inability of a third party, for example due to natural catastrophes, to supply pre-fabricated parts, components or services on schedule; the outcome of public investigations and associated legal disputes as well as other measures of public bodies; the potential effects of these investigations and proceedings on the business of DMG MORI AKTIENGESELLSCHAFT and various other factors.
Should one of these factors of uncertainty or other unforeseeable events occur, or should the assumptions on which these statements are based prove incorrect, the actual results may diff er materially from the results stated, expected, anticipated, intended, planned, aimed at, estimated or projected in these statements. DMG MORI AKTIENGESELLSCHAFT neither intends to nor does DMG MORI AKTIENGESELLSCHAFT assume any separate obligation to update any forward-looking statements to reflect any change in events or developments occurring after the reporting period. Forward-looking statements must not be understood as a guarantee or assurance of the future developments or events contained therein.
There are two companies using the name "DMG MORI": DMG MORI AKTIENGESELLSCHAFT with registered office in Bielefeld, Germany, and DMG MORI COMPANY LIMITED with registered office in Nara, Japan. DMG MORI AKTIENGESELLSCHAFT is (indirectly) controlled by DMG MORI COMPANY LIMITED. This report refers exclusively to DMG MORI AKTIENGESELLSCHAFT. If reference is made in this report to "DMG MORI", this refers exclusively to DMG MORI AKTIENGESELLSCHAFT and its controlled companies within the meaning of Section 17 of the German Stock Corporation Act (Aktiengesetz – AktG). If reference is made to "Global One Company", this refers to the joint activities of DMG MORI COMPANY LIMITED and DMG MORI AKTIENGESELLSCHAFT including all subsidiary companies.
Gildemeisterstraße 60 D-33689 Bielefeld
Local Court HRB 7144
Phone: + 49 (0) 52 05 / 74 - 0 Fax: + 49 (0) 52 05 / 74 - 3273 E-Mail: [email protected]
www.dmgmori.com
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