DMG Mori : Summary of Consolidated Financial Statements for the third quarter of Fiscal Year 2018〔IFRS basis〕

Date: November 7, 2018

Summary of Consolidated Financial Statements for the third quarter of Fiscal Year 2018 ended September 30, 2018 (IFRS basis)

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

Statements for the third quarter announced on November 7, 2018)

Listed company name:

Stock exchange listing:

Code Number:

Company Representative:DMG MORI CO., LTD.

First Section of Tokyo Stock Exchange 6141

Masahiko Mori, President

Contact Person

Phone:

Hirotake Kobayashi, Vice President, Accounting / Finance HQ, Executive Officer [phone]

Filing date of quarterly financial statements: November 12 ,2018

Estimated starting date of dividend paying: -

Preparation of supplementary explanatory materials: Yes

URLhttp://www.dmgmori.co.jp

Holding of quarterly earnigs release conference: Yes (for investment analysts and institional investors)

1．

Consolidated business results of the third quarter ended September 30, 2018 (January 1, 2018 to September 30, 2018)

(1) Consolidated business results

(Note: All amounts less than one million are disregarded)

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

Sales revenues		Operating result		Earnings before Taxes		Quarterly profit		Income attributable to owners of the parent		Total comprehensive income
million yen	%	million yen	%	million yen	%	million yen	%	million yen	%	million yen	%
Third quarter ended September 30, 2018 Third quarter ended September 30, 2017	353,238 303,254	16.5 13.3	23,507 14,883	57.9 473.3	20,055 11,700	71.4 -	13,685 7,119	92.2 -	13,350 6,848	94.9 -	10,190 9,817	3.8 -

Basic earnings per share	Diluted earnings per share
Yen	Yen
Third quarter ended September 30, 2018 Third quarter ended September 30, 2017	103.75 49.56	102.91 49.26

(Note) Basic earnings per share is based on the earning amount which excludes earnings attributable to owners of hybrid capital

(2) Consolidated financial position

Total assets	Total Equity	Equity attributable to owners of the parent	Ratio of equity attributable to owners of the parent	Equity per share attributable to owners of the parent
million yen	million yen	million yen	%	yen
September30, 2018 December 31, 2017	543,201 567,411	113,019 110,019	110,489 107,617	20.3 19.0	907.86 886.73

(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

Record Date	Dividends per share
	1Q	2Q	3Q	Year-end	Annual
	yen	yen	yen	yen	yen
December 31, 2017 December 31, 2018	- -	15.00 25.00	- -	25.00	40.00
December 31, 2018 (Forecast)	25.00	50.00

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

3．Consolidated earnings forecast for Fiscal Year 2018 (January 1, 2018 to December 31, 2018)

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

Sales revenues		Operating result		Income attributable to owners of the parent		Basic earnings per share
million yen	%	million yen	%	million yen	%	yen
Full Year 2018	480,000	11.7	38,000	29.3	22,000	44.1	173.09

(Note)

Revision of consolidated earnings forecast in the current quarter: Yes

・Supported by the strong demand in market, we made an upward revision of the consolidated earnings forecast for fiscal year 2018 released on August 8, 2018 for the sales revenues. On the other hand, as manufacturing and logistics costs are expected to increase, operating result and income attributable to owners of the parent are retained. For details, please refer to the "1. Qualitative Information Regarding Quarterly Settlement of Accounts (3) Explanation of forecasts and other projections" on page 4.

・Exchange rate used for consolidated earnings forecast for fiscal year 2018: JPY 110.0 /USD, JPY 130.0 /EUR

4. Others

• (1) Changes in significant subsidiaries during the third quarter ended September 30, 2018: No

• (2) Changes in accounting policies applied and changes in accounting estimates

  • 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

• (3) Number of shares outstanding (Common stock)

  1. Number of shares outstanding at the end of the period (including treasury shares)

September 30, 2018: 125,953,683

December 31, 2017: 125,953,683

• 2. Number of treasury shares at the end of the period

  September 30, 2018: 4,936,149

  December 31, 2017: 5,054,853

• 3. Average number of outstanding shares during the period (cumulative from the beginning of the period)January - September 2018: 120,928,409

January - September 2017: 122,063,013

(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 (2,383,100 shares as of September 30, 2018) and the number of treasury shares deducted in calculating the average number of outstanding shares during the period (2,451,500 shares as of September 30, 2018).

- 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 2018(Forecast),

please see "1. Qualitative Information Regarding Quarterly Settlement of Accounts (3) Explanation of forecasts and other projections".

We will upload additional explanation on November7, 2018.

(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

1. Qualitative Information Regarding Quarterly Settlement of Accounts (1) Explanation of operating results

For the first three quarters of the fiscal year (from January 1 to September 30), the sales revenues were 353,238 million yen (2,696,474 thousand

EUR), the operating result was 23,507 million yen (179,449 thousand EUR), and earnings before taxes were 20,055 million yen (153,098 thousand

EUR). The income attributable to owners of the parent was 13,350 million yen (101,914 thousand EUR). (Euro amount is converted from yen at 131.0

yen, the average exchange rate between January and September 30).

We are working on the improvement of production efficiency with a focus on digitization, in addition to automation and process integration at the shop floor, and promotional activities of 5-axis control machines as our business strategy. In pursuit of those targets, we invested some eight billion yen on the FAMOT plant in Poland. The new plant opened in October with a total area of 50,000㎡ is a model plant for Industry 4.0 as well as one of our largest production bases. By using the advanced digital solutions of our group companies such as ISTOS GmbH, DMG MORI Software Solutions

GmbH and WERKBLiQ GmbH, we connected each of our IT systems to seamlessly network all the information about incoming orders, supply chains, customer relationship, tool management and personnel resource planning, and achieved automated production planning and monitoring. The FAMOT plant contributes to promoting the advantages of digitization to customers while boosting our production capacity with its expanded scale and shop digitization.

We have been providing customers with support for installation of 5-axis control machines through the 5-axis Technology Study & Research Group, which was launched as the DMG MORI's 70th anniversary memorial project. In addition to the said activity, we began lending our cutting-edge machines to technical high schools and research institutes in Nara and Mie prefectures. The training of operators and support for research at educational organizations aim to facilitate a wider use of 5-axis machining in Japan.

We served as a Platinum Sponsor at the General Assembly of the CIRP (the International Academy for Production Engineering), an international academic organization that promotes research and development of production engineering. We continue to contribute to technological innovations from both industrial and academic aspects in an effort to further streamline production activities.

As for the technological aspect, we newly released the ALX series turning centers as the standard machines for automation for every shop floor.

The new models equipped with a high-performance spindle turnMASTER achieve high productivity in a compact footprint. The series features high versatility with 36 variations of specifications. The extensive lineup with varieties of chuck sizes, distances between centers and machine specifications can meet a wide range of customer needs from any industry. We will develop high-performance, reliable and investment-worthy products to respond to our customer needs.

As for sales, we participated in IMTS 2018 held in Chicago, the U.S. and AMB 2018 in Stuttgart, Germany in September. In the trade shows, we set "automation," "additive manufacturing" and "technology excellence in the die & mold and medical fields" as the main themes, and with the highest focus on "digitization", we showcased full shop digitization covering production planning, production, setups, monitoring and services. The DMU 200

Gantry, which is suited for machining of large, difficult-to-cut materials and one of the largest machines in the venue, was highly appreciated by the customers in the aircraft and die & mold industries. In JIMTOF 2018 held from November 1 to 6 at Tokyo Big Sight, we showcased 22 cutting-edge machine tools in the largest exhibition area among the participating companies, such as DMU 340 Gantry, a large 5-axis control machine first-premiered in Japan, and advanced solutions for automation and digitization that use the MATRIS and Digital Twin technologies. The displayed products and technologies were highly evaluated and received favorable reviews at the event. During the same period, we also held Open House at

Tokyo Global Headquarters. New models including the ALX 2000 and NTX 2500 2nd Generation were put on display, and the 5-axis machining workshop provided the customers with on-site experience of machine operation and cutting.

We have been working on the establishment of a working environment that is easy and comfortable for employees to continue working in. We also set up facilities for elementary schoolchildren where they can be cared during long school holidays. Moreover, in August the company adopted the working hours interval system that requires employees to take a rest for a certain period of time between daily shifts. From January 2019 on, the interval time will be extended to 12 hours from the current 11 hours. As of the end of September, the progress rate of the employees taking annual paid leave of 20 days is 79%, which exceeds the January-September target. We will go ahead with the work style reform to maximize our employees'

strength under the motto of "play healthy + active," "work together + innovative," and "study smart + deeper."

The new orders for the first three quarters (from January 1 to September 30) totaled 384.4 billion yen, which is a 14% increase from the result for the previous year (336.0 billion yen). The demand for advanced machine tools such as multi-axis machines and ultrasonic machines, DMQPs (DMG

MORI Qualified Peripherals) and automation systems including Technology Cycles (application software) is strong, and a rise in order unit price