Dürr Aktiengesellschaft

Good afternoon and welcome to the DER conference call for the first quarter of 2025. I will now hand over to Andreas Schaller, Head of Investor Relations of DER-AG.

Thank you very much, ladies and gentlemen. Good afternoon and good morning to those of you in the U.S. Welcome, everybody, to our Q1 earnings conference call. With me on the call today are our CEO, Jochen Weihrauch, and our CFO, Dietmar Heinrich. They will present the Q1 results as well as the outlook and will be happy to answer your questions afterwards. As always, our earnings presentation is available on our investor relations web pages, and we assume that you have it in front of you. Please be aware of our disclaimer regarding forward-looking statements on slide two. And now it's my pleasure to hand over to our CEO. Jochen, please go ahead.

Thank you, Andreas, for the short introduction and a warm welcome also from my side to all participants on this call. On the following slides, we will mainly focus on the earnings of the continued operations in accordance with our last annual report. The environmental technology business is held for sale and the respective sales process is ongoing. We will comment on the main KPIs also for the DIRC group as a whole on one slide and refer you to the appendix for further details. As always, I will first go through the highlights and divisions, and then my colleague Dietmar will talk about the financials. At the end, I will reflect on the current situation and outlook. Let's take a look at the highlights of Q1 on slide five. Overall, we had a solid start into 2025. Our intake was robust and in line with our expectations at 1.1 billion euros. The prior year Q1 was boosted by a large partnership order in Germany for automotive. Without this special project, automotive order intake would have grown year on year. Industrial automation and woodworking orders improved as well. Order backlog remained at a high level of 4.2 billion euros. Sales revenues were stable at prior year's Q1 level of 1 billion. The book-to-bill ratio stands at 1.07. At 3.9%, the EBIT margin before extraordinary effects was on par with the level of Q1 2024. It includes about 4 million euros of costs that belong to the environmental business, but are allocated to continued operations due to IFRS regulations. Net income improved by 40% to 17 million euros due to lower extraordinary effects and a better interest result. Free cash flow was slightly positive in Q1. This is a great achievement of our team in continuously managing working capital as some customer payments expected for Q1 2025 were brought forward to Q4 2024. Based on the results of Q1, we are confirming our outlook for 2025 from today's perspective. On slide six, we see the key financial indicators for Q1. The 21% decline in order intake was solely due to a strong base effect stemming from the already mentioned partnership project with a size of almost half a billion euros into one last year. Adjusted for this single event, order intake showed a positive development. Sales revenues were stable but included negative effect from the deconsolidation of Agramco in the order of 15 million euros. The increase in automotive sales compensated the deconsolidation effect, as well as the lower operational sales revenues in industrial automation and woodworking. The EBIT margin before extraordinary effects was close to prior year's level. Net income improved from 12 to 17 million euros. The slightly positive free cash flow is a good start and in line with our full year guidance. On slide seven, we can see the main KPIs for the group as a whole. The dynamics are the same as for the continued operations, and therefore, I will go ahead and look at the order intake on the next slide. The order intake of the continued operations improved quarter on quarter, and the book-to-bill ratio stood at 1.07. We saw a solid rebound of orders for production automation systems, and woodworking had a good start into the year. Automotive order intake was solid and the project pipeline is stable. On slide nine, you see the geographical distribution of order intake. The effect of the large automotive order in Germany on last year's Q1 is clearly visible. The order intake in all other regions improved year on year. In the Americas, we won a large automotive order and secured an attractive project for production automation. We received several double-digit million euro orders in China and another big automotive order in Saudi Arabia. Once again, our global diversification and being close to the customer is a big asset. Let's have a look at our M&A activities. The sales process for the environmental technology business is proceeding, and we will keep you informed about important developments. On slide 10, we would like to remind you of the increase of our shareholding in HOMAG to almost 84% as a result of the end of the cash settlement offer in early March. We had a cash outflow of 97 million euros for the acquisition of the shares that were tendered to us. This was already considered in our guidance for net financial debt in 2025, and therefore, there is no change to what we presented before. As a result of the increased shareholding, we saved financing expenses for dividends and interest payments of about 2.6 million euros per year. On top, sundry financial liabilities declined by about 109 million euros. Now let's have a look at the divisional development. We start with automotive on slide 12. With more than 500 million euros, order intake was robust and above sales revenues in Q1. As already mentioned, the prior year Q1 included the very large order in Germany. The project pipeline remains solid, but customers currently take more time to make decisions due to the uncertainties around tariffs. Since revenues grew by more than 8%, driven by higher equipment sales. Debit margin before extraordinary effects was at the same high level as in the prior years Q1. This is in line with our expectations and guidance and a great achievement since the last year's Q1 included a very strong service business. The service share was lower this year, but the margin remained at a high level. In addition, we saw good margins on our equipment sales. Networking capital management continued to be very disciplined, and we achieved a high return on capital employed of more than 40%. All in all, we're very pleased with the solid start of our automotive division in 2025. Let's turn to industrial automation on slide 13. Water intake improved by almost 10% and was mainly driven by rebound of orders for production automation systems. We won several double-digit million orders, double-digit million orders in China and Europe. On the other side, orders for battery production equipment were weak in Q1 due to investment delays and competition. The balancing business performed well, driven by demand, especially from the aerospace sector. More than half of the decline in sales revenues came from the deconsolidation of Arcomco, which we sold in July last year. The rest was a consequence of the weaker order intake last year in connection with the slowdown of the EV transformation at Tier 1 customers. The decline in EBIT margin was mainly due to the higher R&D expenses for the lithium-ion battery business. The solid orders for production automation in Q1 are a good sign, and we continue to focus on winning projects and bringing up the margin at the same time. Next is our woodworking division on slide 14. Order intake improved year on year to a level above the run rate that we assume for our guidance. Q1 typically sees some more order activity as we are regularly increasing prices in February. The single machine business improved slightly. We're still cautious and believe it is too early to call it a market recovery. We expect a clearer picture after the Ligna trade fair in May. Sales revenues declined somewhat due to the low order intake level in 2024. Service sales increased, however. The EBIT margin before Extraordinaries improved by almost 100 base points, driven by the cost savings and the higher service share. On slide 15, we see the development of our environmental technology business, which is held for sale. And I would like to keep the commentary short. Order intake continued to be solid in North America, but we have seen some declines in Europe due to the timing effect of projects. The order pipeline remains well-filled. Sales revenues growth is in line with expectations, and so is the margin development. The margin level remains high even when adjusting for the cost allocations to the continued operations. This is a result of the right project selection and a very strong project execution. Now let's move on to the service business on slide 16. In Q1, service sales reached a level close to the very strong level of the prior year. Due to the growth of the equipment business, the service share declined slightly. Margins remained stable year on year. Growth of the service business of the woodworking division was very solid, and we are on the right track to realize the related margin potentials. Now, Dietmar, hand over to you for the financials.