DMG Mori is feeling the effects of the more difficult market and general conditions with which the 2020 financial year has started. The mechanical engineering industry is also struggling with losses and production downtime due to the coronavirus pandemic. The machine tool specialist is also feeling the effects: Incoming orders amounted to 440.2 million euros (Q1/2019: 708.3 million euros), while turnover in the first three months was 458.0 million euros, well below the 629.2 million euros recorded in the same quarter of the previous year. EBIT amounted to 25.3 million euros. Free cash flow amounted to -36.7 million euros. "2020 is an exceptional year: pandemic plus global economic weakness, geopolitical uncertainties, industrial structural change. In these difficult times, everyone at DMG Mori is working closely together. We were exactly right with the strategic orientation of our future fields in recent years. It is precisely now that digitalization is gaining momentum," says CEO Christian Thönes.

Incoming orders and sales in detail

Demand for machine tools declined significantly in the first quarter of 2020 due to the weak global economy and the rapid spread of the coronavirus. DMG Mori recorded an order intake of € 440.2 million, which, as expected, was significantly below the high level of the previous year (-38%; € 708.3 million). Domestic orders amounted to 143.3 million euros (previous year: 229.0 million euros). Orders from abroad amounted to 296.9 million euros (previous year: 479.3 million euros). The foreign share was 67% (previous year: 68%).

Sales amounted to 458.0 million euros (-27%; previous year: 629.2 million euros), influenced by the coronavirus crisis. The decline is partly due to the fact that machines could no longer be delivered due to international border and customer-related factory closures as well as transport and logistics bottlenecks. The export ratio amounted to 64% (previous year: 68%).

On March 31, 2020, the order backlog amounted to EUR 1,160.8 million (31.12.2019: EUR 1,197.4 million) - an average order backlog of five months. One proactive measure in the fight against the further spread of the virus is the temporary partial shutdown planned until the end of April at the European production plants and selected sales and service companies. Production and assembly are scheduled to resume on May 4, 2020.

The package of measures jointly developed by the Executive Board and employee representatives to protect health and safeguard jobs enables an orderly approach and flexible adjustment of production capacities. DMG Mori is thus making an important contribution to the fight against COVID-19 and wants to secure employment in a phase in which demand is collapsing, many companies are stopping production and risks in the supply chains are increasing.

Outlook for 2020

2020 is an exceptional year. The extent of the coronavirus crisis took everyone by surprise. The massive consequences for the global economy are reflected in the slump in demand, disruption to supply chains and production stoppages. According to the latest April forecast by the German Machine Tool Builders' Association (VDW) and the British economic research institute Oxford Economics, the global market for machine tools is set to collapse by -28.3% to 52.3 billion euros in 2020 (October forecast: -0.6%). The USA (-41.3%), China (-34.0%), Italy (-32.5%), Japan (-31.9%) and Germany (-30.1%) are expected to be the hardest hit. The effects of the coronavirus crisis have not yet been fully taken into account. The association's forecast will be adjusted in October.

The duration and negative consequences of the coronavirus pandemic are currently not foreseeable for the economy as a whole or for industry. Due to the completely changed global economic conditions, DMG Mori will also have to accept serious losses in order intake, sales and earnings compared to the record figures in 2019. The outlook published in the 2019 Annual Report can therefore not be maintained. At this point in time, we are unable to provide a reliable forecast for the 2020 financial year. As soon as a reliable assessment of the impact of COVID-19 on business performance is possible, the 2020 forecast will be updated. DMG Mori is working hard to overcome the crisis and, in particular, to further strengthen the strategic areas of the future.