DMG Mori : Summary of Consolidated Financial Statements for the second quarter of Fiscal Year 2019 ended June 30, 2019 (IFRS basis)

Date: August 6, 2019

Summary of Consolidated Financial Statements for the second quarter of Fiscal Year 2019 ended June 30, 2019 (IFRS basis)

(All financial information has been prepared based on the original Japanese-language document, Summary of Consolidated Financial

Statements for the second quarter announced on August 6, 2019)

Listed company name:	DMG MORI CO., LTD.
Stock exchange listing:	First Section of Tokyo Stock Exchange
Code Number:	6141	URL http://www.dmgmori.co.jp
Company Representative:	Masahiko Mori, President
Contact Person	Hirotake Kobayashi, Vice President, Accounting / Finance HQ, Executive Officer
Phone:	[phone]

Filing date of quarterly financial statements: August 8, 2019

Estimated starting date of dividend paying: September 13, 2019

Preparation of supplementary explanatory materials: Yes

Holding of quarterly earnigs release conference: Yes

1． Consolidated business results of the second quarter ended June 30, 2019 (January 1, 2019 to June 30, 2019)
										(Note: All amounts less than one million are disregarded)
(1) Consolidated business results										(% of change from same period in the previous year)
												Income attributable to	Total comprehensive
	Sales revenues		Operating result	Earnings before Taxes	Quarterly profit
												owners of the parent	income
	million yen	%		million yen	%	million yen	%	million yen	%	million yen	%	million yen	%
Second quarter
	238,646	1.4		20,022	27.0	17,030	25.2	11,095	21.6	10,673	20.1	10,694	165.2
ended June 30, 2019
Second quarter															△7.9
	235,283	18.8		15,763	74.8	13,603	95.2	9,126	144.0	8,886	148.9	4,033
ended June 30, 2018
	Basic earnings per share		Diluted earnings per share
			Yen			Yen
Second quarter
		83.30			83.01
ended June 30, 2019
Second quarter
		69.09			68.49
ended June 30, 2018
(Note)
・Basic earnings per share is based on the earning amount which excludes earnings attributed to owners of hybrid capital.

1. Consolidated financial position

Ratio of equity

Equity attributable to

Equity per share attributable to

Total assets

Total Equity

attributable to owners of

owners of the parent

owners of the parent

the parent

million yen

million yen

million yen

%

yen

June 30, 2019

531,843

121,491

118,070

22.2

964.29

December 31, 2018

528,423

114,166

111,113

21.0

910.25

(Note) Ratio of equity attributable to owners of the parent and equity per share attributable to owners of the parent are based on the equity amount which includes

amounts of hybrid capital.

2．Dividends

Dividends per share

Record Date

1Q

2Q

3Q

Year-end

Annual

yen

yen

yen

yen

yen

December 31, 2018

-

25.00

-

25.00

50.00

December 31, 2019

-

30.00

December 31, 2019 (Forecast)

-

30.00

60.00

(Note) Revision of dividend forecast in the current quarter: No

3．Consolidated earnings forecast for Fiscal Year 2019 (January 1, 2019 to December 31, 2019)

(% of change from same period in the previous year)

Income attributable to

Sales revenues

Operating result

Basic earnings per share

owners of the parent

million yen

%

million yen

%

million yen

%

yen

Full Year 2019

500,000

△0.2

36,000

△0.7

19,000

2.6

147.19

(Note)

Revision of consolidated earnings forecast in the current quarter: No

・Exchange rate used for consolidated earnings forecast for fiscal year 2019: JPY 110.0 /USD for the 2nd half, 110.0 /USD for the full year JPY 120.0 /EUR for the 2nd half, 122.2 /EUR for the full year

4. Others

1. Changes in significant subsidiaries during the second quarter ended June 30, 2019: No
2. Changes in accounting policies applied and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: Yes
   2. Changes in accounting policies other than the above: No
   3. Changes in accounting estimates: No
4. Number of shares outstanding (Common shares)
5. 1. Number of shares outstanding at the end of the period (including treasury shares)

June 30, 2019:	125,953,683	December 31, 2018:	125,953,683
2. Number of treasury shares at the end of the period
June 30, 2019:	3,979,980	December 31, 2018:	4,456,599

3. Average number of outstanding shares during the period (cumulative from the beginning of the period)

January - June 2019: 121,762,573

January - June 2018: 120,905,906

(Note) The Company implemented trust-type employee stock ownership incentive plan in April 2018. Therefore, the shares of the company held by DMG MORI Employee Shareholders Association Exclusive Trust are included in the number of treasury shares at the end of period (2,044,900 shares as of June 30, 2019) and the number of treasury shares deducted in calculating the average number of outstanding shares during the period (2,162,286 shares as of June 30, 2019).

• Information regarding implementation of quarterly review procedures

These quarterly financial results are not subject to quarterly review procedures.

• Proper use of the earnings forecasts and other notes

The above forecast is based on information available as of the release of this report and assumptions of several uncertain factors which may affect the company's results. Actual results might be different from the above estimates due to subsequent changes in the circumstances. Regarding Fiscal Year 2019(Forecast), please see "1. Qualitative Information Regarding Quarterly Settlement of Accounts (3) Explanation of forecasts and other projections" on page 4.

We will upload additional explanation on August 6, 2019.

(Attached Documents) Index
1. Qualitative Information Regarding Quarterly Settlement of Accounts
(1)	Explanation of operating results ..............................................................................................................................	2
(2)	Explanation of financial position ..............................................................................................................................	4
(3)	Explanation of forecasts and other projections........................................................................................................	4
2. Quarterly Consolidated Financial Statements
(1)	Quarterly consolidated statements of financial position ..........................................................................................	5
(2)	Quarterly consolidated statements of income .........................................................................................................	7
(3)	Quarterly consolidated statements of comprehensive income................................................................................	8
(4)	Quarterly consolidated statements of changes in equity .........................................................................................	9
(5)	Quarterly consolidated statements of cash flows ..................................................................................................	11
(6)	Notes on going concern assumption .....................................................................................................................	13
(7)	Notes on quarterly consolidated financial statements ...........................................................................................	13

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1. Qualitative Information Regarding Quarterly Settlement of Accounts

1. Explanation of operating results

During the first half of the fiscal year 2019 (from January 1 to June 30), the sales revenues were 238,646 million yen (1,919,923 thousand EUR), the operating result was 20,022 million yen (161,081 thousand EUR), and earnings before taxes were 17,030 million yen (137,011 thousand EUR). The income attributable to owners of the parent was 10,673 million yen (85,870 thousand EUR). (Euro amount is converted from yen at 124.3 yen, the average exchange rate between January 1 and June 30).

DMG MORI promotes 5-axis control and multi-axis machines and automation systems to facilitate process integration for customers and strengthens digital services to realize their efficient production management as its business strategies. In the enhancement of automation systems, we developed the AGV robot capable of running for 24 hours straight, which is equipped with a laser sensor for preventing contact with operators and a non-contact power supply system. We also developed the technology for automatically adjusting coolant discharge angles according to the chip location and amount inferred by AI based on camera images. The AI-enabled automatic chip cleaning solution helps reduce the operators' load and frequency of cleaning, ensuring no-man operation for long hours. In May, we began providing the operation manuals, maintenance manuals, parts lists through the website of our group company TECHNIUM CO., LTD. Digital manuals enable central management of the materials on PCs and tablets with no risk of degradation of or missing paper documents. With the search function, customers can quickly access necessary information and simultaneously share the same manuals between maintenance staff and machine operators at the customer site, which contributes to streamlined shop operations.

For the technological aspect, we developed a turning center NLX 6000 | 1000, a vertical machining center DMP 70, and an additive manufacturing machine LASERTEC 12 SLIM; and put them on show as Japan premiere models at the Iga Innovation Days 2019. The NLX 6000 | 1000 is a new product that can satisfy customers in the construction machinery and energy plant industries. The model boasting stable machining of large components features a beltless-driven motor integrated, large-diameter spindle and a rotary tool spindle that perfectly synchronizes the spindle. The DMP 70 achieves a high positioning accuracy of 5 µm thanks to the scale feedback mounted on all axes, the cooling function and the highly rigid structure. The LASERTEC 12 SLM uses an open system in which all the machine settings and process parameters can be adjusted, which allows the model to install the INTECH software OPTOMET. With the software, optimal parameters are automatically calculated only by operators' entering components of alloy powder materials and the particle size distribution. What's more, we produced a machine tool that has a drastically improved rigidity and a light-weight structure compared with the existing model while maintaining the same high cutting capability. This was done using the topology optimization technology which is recently drawing attention along with advancement of additive manufacturing. We continue to proactively adopt cutting-edge technologies and contribute to boosting customers' productivity.

As for sales, we participated in the China International Machine Tool Show (CIMT) 2019 in April, and held the Chicago Innovation Days 2019 in the U.S. and the open houses at the Bergamo Plant, Italy and at the Bielefeld Plant, Germany, respectively. At the Iga Innovation Days held in July, we showcased 36 advanced machines including a large 5-axis control machining center DMU 340 Gantry and the Japan premiere models DMP 70 for 5-axis control machining, the NLX 6000 | 1000 and the LASERTEC 12 SLM. At the event, DMG MORI set a booth of the 5-axis Technology Study & Research Group, which had been launched to commemorate the 70th anniversary of our foundation, to show examples of use of the 5-axis control machine DMU 50 3rd Generations it had lent to 70 customer companies across the nation. The cutting-edge technologies applied to our production equipment were also demonstrated. At the Precise Processing Plant, the 5-axis control machine DMC 125 FD duoBLOCK with the grinding function started its operation in full swing in June, so the processes which used to require a special grinding machine and a horizontal machining center can be performed on a single DMC 125 FD duoBLOCK now. This, as a result, led to approximately 40% shorter lead time and higher machining accuracy. We also showed our plants and facilities to customers as the proving grounds of shop digitization: the Ball Screw Plant and Assembly Plant have been revamped with various digital systems for machine operation monitoring and efficient production management. The new Iga Global Parts Center has employed the latest warehouse management system.

DMG MORI adopted the policy stipulating a working hours limit of 12 hours and an over 12-hour interval between daily shifts, and drastically raised a starting salary of new graduates (218,400 JPY in the previous year to 250,000 JPY for those with a bachelor's degree). The approach began showing effective results in terms of work efficiency and productivity improvements in the company. Under the motto of "Play Hard + Be Dynamic," "Study Continuously + Be Open," and "Work Together + Be Innovative," we make continued efforts to secure excellent human resources from every field and create a working environment for employees to be able to work with a sense of security for long years.

The DMG MORI SAILING TEAM, which was launched to welcome a marine adventurer Kojiro Shiraishi, aims to participate in the Vendée Globe

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