Interim Report 3rd Quarter 2004 GILDEMEISTER will cross the Euro 1 billion mark
Bielefeld, 8 November 2004. The positive trends in worldwide demand for machine tools have strengthened during the third quarter of 2004. This development is reflected in the business at GILDEMEISTER. The recovery that had become apparent over the financial year, particularly with respect to order intake, continued. In the first nine months of 2004, sales revenues were Euro 735.1 million, an increase of 5% over sales revenues in the first nine months of 2003. Order intake increased by 16% to Euro 811.8 million. In the third quarter, the special expenditures had a negative impact on our results of operation. This was due to the cost of restructuring the group's long-term borrowings and to the cost of the reorganisation measures within the group. EBITDA reached Euro 42.7 million (previous year: Euro 45.7 million). EBIT increased by Euro 1.0 million to Euro 20.4 million (previous year: Euro 19.4 million). Due to the special expenditures, EBT of Euro -1.4 million was slightly negative as of September 2004 (previous year: Euro 1.1 million). The group reported a net profit after tax for the year of Euro -4.9 million (previous year: Euro -7.5 million).
We are planning a significant increase in sales revenues for the fourth quarter of 2004. Over the year, it is our goal to once again cross the Euro 1 billion mark in sales revenues and order intake. This means a 6-7% increase in sales revenues, the rise in order intake will be around 9%. For the financial year 2004, we continue to aim for a considerable improvement in our result (EBT) compared to the previous year and, due to reduced tax rates, for a net profit after tax for the year.
In the third quarter of 2004, sales revenues were Euro 244.6 million, exceeding the value for the previous year (Euro 230.7 million) by 6%. Market demand continues to show an increase in complex technology machines. In the third quarter of 2004, the longer lead times of these machines influenced our sales revenues development. In the first nine months of 2004, sales revenues reached Euro 735.1 million; a 5% increase compared to the first nine months of 2003 (Euro 701.5 million). Domestic sales revenues increased by 3% to Euro 355.7 million. International sales revenues rose by 7% to Euro 379.4 million. The export share was 52% (previous year: 51%).
In the third quarter of 2004, the order intake of Euro 269.4 million (+18%) exceeded the order intake for the corresponding quarter of the previous year (Euro 229.1 million). Order intake totalled Euro 811.8 million in the first nine months of 2004, increasing by 16% or Euro 111.0 million compared to the previous year. Order intake for domestic orders amounted to Euro 381.3 million (+17%). International orders amounted to Euro 430.5 million (+14%). The export share was 53% (previous year: 54%).
As of 30 September 2004, the order backlog amounted to Euro 336.1 million.
In the third quarter, special expenditures had a negative impact on our results. Our earnings developed as follows: EBITDA was Euro 10.8 million (previous year: Euro 17.7 million) and EBIT amounted to Euro 3.4 million (previous year: Euro 8.4 million). Primarily due to special expenditures, EBT of Euro -6.4 million (previous year: Euro 2.6 million) was negative in the third quarter.
As of 30 September, EBITDA therefore reached Euro 42.7 million (previous year: Euro 45.7 million). EBIT increased by Euro 1.0 million to Euro 20.4 million (previous year: Euro 19.4 million). Due to the special expenditures, EBT of Euro -1.4 million was slightly negative in the first nine months (previous year: Euro 1.1 million). Earnings before taxes were affected by various factors. As part of our cost cutting and earnings growth programme, the group's allocation of product lines was reorganised. This means that in future, four product plants - two in each of the milling and the turning areas - will be responsible for the development, production, logistics and technical application support of the product lines worldwide. As a result, responsibility for the vertical and horizontal machining centre product lines was transferred to the sister companies, DECKEL MAHO Pfronten and DECKEL MAHO Seebach. The resulting cut in personnel of approximately 120 employees and the reallocation of plant areas and fixtures and fittings incurred a one-time expenditure of approximately Euro 4 million. In addition, a one-time expenditure arising from the refinancing measure in relation to the issue of the corporate bond also had a negative impact on our results. Part of this one-time expenditure was compensated for by the application of IFRS 3. The group reported a net profit after tax for the year of Euro -4.9 million (previous year: Euro -7.5 million).
In the third quarter of 2004, the GILDEMEISTER share followed general trends in the capital market. The share fluctuated around a stable price level of Euro 6. By the end of the quarter (30 September 2004) the price of the share was at Euro 6.05 and is currently quoted at Euro 5.91 (5 November 2004).
As of 30 September 2004, GILDEMEISTER had 5,169 employees, 193 of whom were trainees (30 September 2003: 5,042). This increase compared to the previous year is due primarily to the consolidation of staff levels in our Service area with the aim of better meeting customer requirements throughout the world. Personnel costs of Euro 207.7 million exceeded the personnel costs for the corresponding period of the previous year (Euro 199.8 million).
Forecast 2004: In the fourth quarter of 2004 and in the financial year 2005, business at GILDEMEISTER will continue to pick up thanks to its market-orientated strategy and product offensive. With our innovations and the optimisation of our sales and services organisations, we are well prepared for the expected market recovery. We will achieve our publicised business targets for the year 2004. Our primary goal for the financial year 2005 is an increase in the profitability of our divisions by utilising additional earnings potentials.
As regards the order intake, we expect the recovery of demand to continue throughout 2004. Following the successful third quarter, we expect a moderate increase in orders for the fourth quarter of 2004. We currently expect to achieve an increase in order intake during the year of around 9%, and thereby to once again cross the Euro 1 billion mark.
As regards the sales revenues we expect that the figures for the fourth quarter will be above the corresponding quarter of 2003 (Euro 276.3 million). In October, sales revenues reached Euro 95.2 million, as planned. We are now planning for a 6-7% increase in sales revenues for the entire year.
GILDEMEISTER intends a sustainable increase in the group's earning power. Based on the planned increase in sales revenues for the fourth quarter, we continue to expect a significant improvement in the result (EBT) compared to the previous year and, due to reduced tax rates, an annual net profit of approximately Euro 5 million for the entire year. At this point in time, we consider a statement on the distribution on dividends to be premature.
GILDEMEISTER Aktiengesellschaft
The Executive Board
The Consolidated Interim Financial Statements of GILDEMEISTER Aktiengesellschaft were prepared in accordance with International Financial Reporting Standards (IFRS). This Interim Report has not been audited.
Disclaimer, Forward-looking statement
Statements relating to the future:This press release contains statements relating to the future, which are based on current estimates by the management regarding 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. Should one of these factors of uncertainty or other unforeseeable event occur, or should the assumptions on which these statements are based prove incorrect, the actual results may differ materially from the results stated, expected, anticipated, intended, planned, aimed at, estimated or projected in these statements. Forward-looking statements must not be understood as a guarantee or assurance of 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 Nagoya, Japan. This release refers exclusively to DMG MORI AKTIENGESELLSCHAFT. If reference is made in this release to the “DMG MORI group”, this refers exclusively to the DMG MORI AKTIENGESELLSCHAFT and its group companies.