FY2019 Results and Outlook(PDF: 2,299 kB)

DMG MORI CO., LTD.

FY 2019 (Jan-Dec) Results

St

IR Announcement

February 14, 2020

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Agenda

1. FY2019 Financial Summary
2. Business Environment
3. Key topics
4. • Open House Pfronten (Feb 11th-15th)
   • R&D：Automation & Digitization
   • Production：Efficient in-house production & TULIP
   • SSEP：5-axis machine promotion & digital service
   • SDGs (Carbon footprint neutral & Trainings)

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Highlights

FY2019 (Jan-Dec) Results

• Consolidated order intake JPY 409.4 bn. (-22.9%year-on-year)
• Sales JPY 485.8 bn. (-3.1%y-o-y), operating profit JPY 37.3 bn (+3.0% y-o-y)
• Diverse customer base: the aerospace industry's share expanded to 16% (equivalent to the automobile industry's)
• Average unit price increased by 6% y-o-y, with the recent trend for 5-axis machines, process integration, and system solutions, and boosting sales to the aerospace customers
• Continuously growing repair/service order intake with larger installation base (+3% y-o-y)
• Free cash flows JPY 20.1 bn., net debt JPY 75.5 bn. (JPY 82.8 bn. at the end of 2018)

FY2020 (Jan-Dec) Plan

• Consolidated order intake JPY 420.0 bn. (+3% y-o-y)
• Sales JPY 400.0 bn. (-13%y-o-y, excluding energy business), operating profit JPY 20.0 bn. (-46%y-o-y)
  (Sales of energy business: JPY 26.6 bn. in 2019 to 0 in 2020)
• Efficient production and financial structure with build-to-order manufacturing system

 Free cash flows	： JPY 13.0 bn.
Annual dividend per share： JPY 60 (JPY 60 in 2019)
Net-debt at the year-end	： JPY 70.0 bn. or less

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Income Statement Summary

（JPY bn）				FY2018	FY2019	Changes	FY2019		FY2020	Changes
			（ ）	Original		Plan	（	%)
							%
Company-wide order intake	531.2	409.4	-22.9	ー		420.0		+2.6
Sales revenue	501.2	485.8	-3.1	485.0		400.0		-17.7
					ー
Sales revenue (excluding energy business)*	487.3	459.2	-5.8		400.0		-12.9
Operating profit		36.3	37.3	+3.0	37.0		20.0		-46.4
% to sales revenue				％	7.7%		7.6%		5.0%
		7.2
Net financial costs		-5.2	-5.9		-6.0		-6.0
(thereof, economic compensation associated with	(-2.5)	(-3.5)		(-3.5)		(-3.5)
DA)
Profit before taxes	31.3	31.5	+0.6	31.0		14.0		-55.5
Net profit	19.4	18.9	-2.6	20.5		8.8		-53.3
Net profit attributable to owners	18.5	18.0	-2.8	19.5		8.5		-52.8
Depreciation & amortization with lease				ー	23.1		23.3		23.0
	D&A without lease				18.5	18.4		18.5		18.5
	Capital expenditure				19.3	21.2		19.0		19.0
	USD/JPY				110.4	109.1		109.0		110
	EUR/JPY				130.4	122.1		122.0		120
*Energy business is sold in end Jun 2019

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Quarterly financial results

(JPY bn)			148.0					(JPY bn)
140.0				12.8				136.4	14.0
	Sales (left-axis)121.4		120.6
120.0	118.0		118.1			12.0
113.8				110.7
					10.4
		9.7
100.0					9.6		8.8	10.0
							8.6
80.0	OP		7.7						8.0
	(right-axis)
60.0	6.1								6.0
40.0									4.0
20.0	5.4	8.0	6.6	8.6	8.6	8.1	7.7	6.4	2.0
OP margin
%	%	%	%	%	%	%	%
0.0									0.0
	2018Q1	Q2	Q3	Q4	2019Q1	Q2	Q3	Q4
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2019 Result / Operating profit bridge -2018 vs 2019

（JPY bn）	FY2018	FY2019	+/-
Sales	501.2	485.8	-15.4
Sales excluding energy business	487.3	459.2	-28.1
(JPY bn)	+7.7

	FY2018	FY2019
USD/JPY	110.4	109.1
EUR/JPY	130.4	122.1

-6.7

		R&D, Others
Margin	Supply chain	Business efficiency	Volume
improvements
improvement	+3.0	+0.2	-4.3	Forex
+4.5				-2.4
				0
36.3				37.3

FY2018	FY2019	0
Operating profit	Operating profit

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2020 Plan / Operating profit bridge -2019 vs 2020

（JPY bn）	FY2019	FY2020E	+/-
Sales	485.8	400.0	-85.8
Sales excluding energy business	459.2	400.0	-59.2

(JPY bn)

+4.0

Margin	Supply chain
improvement
+1.5
+2.5

37.3

	FY2019	FY2020E
USD/JPY	109.1	110.0
EUR/JPY	122.1	120.0

-21.3

Volume

-21.3

20.0

		0
FY2019	FY2020 Plan
Operating profit	Operating profit

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Cash flows

（JPY bn.）			FY2018								FY2019
Q1	Q2	Q3	Q4	FY	Q1		Q2		Q3		Q4	FY
Cash flow from operation	7.8	13.5	10.5			17.5	49.4	13.0		3.8		4.3		22.5	43.6
Profit before taxes	5.0	8.7	6.5			11.2	31.3	8.8		8.2		7.1		7.4	31.5
Depreciation & amortization	4.5	4.5	4.5			5.0	18.5	5.5		5.3		5.9		6.4	23.1
+/- in working capital	5.8	1.8	-0.3			-2.7	4.6	3.5		-4.8		-5.1		2.2	-4.2
Others	-7.5	-1.5	-0.1			4.0	-5.0	-4.8		-4.9		-3.6		6.5	-6.8
Cash flow from investments	-3.2	-3.1	-3.0			-9.7	-19.0	-3.6		-1.6		-9.6		-8.7	-23.5
（thereof, acquisition of	-3.0	-3.7	-3.2			-9.3	-19.3	-3.1		-5.3		-4.3		-8.5	-21.2
fixed assets）
FCF	4.7	10.3	7.5			7.8	30.4	9.4		2.2		-5.2		13.7	20.1
+										Less down payment due to reduced order intake
			FY2018								FY2019

Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4

-	Quarterly free cash flows

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Financial position summary

-Increase of total assets due to application of lease account standards

Assets

Liability & Equity

Short-term	JPY 528.4 bn	JPY 524.6 bn	JPY 528.4 bn	JPY 524.6 bn
34.2	33.2	56.8	54.9	Payables
Financial assets
Trade receivables	69.4	55.3	61.7	37.5	Advance
			payments

(Interest-bearing debt -

Net Debt Short-term financial asset)

（JPY bn)

		130.7	120.9		108.7	Interest-bearing	Ended Dec 2018	82.8
Inventories	117.0
		debts
					92.3	Obligation of
Fixed assets
			AG share	Ended Dec 2019	75.5
	149.0	94.7
(Reflected new	128.7		purchase
standard for lease)				Other
					103.4
				84.0	Liabilities
Goodwill	68.9	66.5		(New standard
		for lease:15.5)
						Shareholders'	Ending Dec 2020 70.0 or less
Intangibles	65.4	62.8	111.1	124.0	equity
Shareholders'
		31.1	36.9
Other assets			equity ratio: 23.6%
		Dec 2018	Dec 2019	Dec 2018	Dec 2019

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Dividend policy

Target: stable increase in line with the free cash flows' performance

Annual dividend per share (JPY)

(JPY)

70

60

50

40

30

20

10

0

6060

50

40

26

FY2016

FY2017

FY2018

FY2019

FY2020E

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Agenda

1. FY2019 Financial Summary
2. Business Environment
3. Key topics
4. • Open House Pfronten (Feb 11th-15th)
   • R&D：Automation & Digitization
   • Production：Efficient in-house production & TULIP
   • SSEP：5-axis machine promotion & digital service
   • SDGs (Carbon footprint neutral & Trainings)

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Consolidated order composition (by region)

※Value basis

(JPY Mil.)

160,000

120,000

9%

5%

80,000

20%

31%

40,000

22%

13%

0

				9%
			8%	7%
			8%
5%	8%	8%		18%
5%	7%	16%
7%
17%
	17%
	20%
			36%	31%
38%
31%	34%
18%			20%	19%
22%	19%
17%	12%	15%	12%	16%

8%

6%

17%

33%

20%

16%

8%

5%

18%

32%

18%

19%

8%

6%

17%

33%

20%

16%

11%

6%

18%

29%

18%

18%

9% 3%

5% 6%

20% 17%

27% 37%

21%

18%

18% 19%

7%
7%
14%	10%	8%
6%
	5%

19%	22%
37%
33%	32%

22%

17% 19%

13% 15% 14%

6% China

6% Asia

21% Americas

EMEA*

38% Russia

Turkey

14% Germany

15% Japan

*Europe, the Middle East and Africa

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DMG MORI quarterly consolidated machine order intake

JPY-basis

(JPY 100 Mil.)

Euro-basis

(Euro Mil.)

FX USD (JPY) EUR

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Average order price per unit (machine body)

(JPY Mil.)								(Euro K)
40.0									400
35.0									350
		JPY-basis(left-axis)
30.0									300
25.0									250
20.0		EUR-basis(right-axis)					200
15.0									150
10.0									100
5.0									50
0.0										0
		FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019
EUR/JPY	102.63	129.70	140.42	134.32	120.34	126.68	130.44	122.08

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Order composition

※Value basis

FY2019 Full year

		by industry			by customer's number
						of employee
	Construction Others
			1,001 or more
Energy, Power
Medical	Machinery	501~1,000	1~20
Electronics,
Precision,
Semicon					current＋
		JPY 409.4 bn
Die &			potential users
(Jan-Dec)			Approx.
Mold
		300K
		Aerospace	101~500
	SMEs*			21~100

Automotive

Motorcycle

*Small and medium-sized enterprises

by product type

	Advanced
Vertical MC	technologies
Turning Center
CMX	5-axis
V series

JPY 409.4 bn (Jan-Dec)

MillTurn

Horizontal MC

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Demand by region & industry

Region

Industry

DOWN

Flat

UP

DOWN

Flat

UP

Japan								Machinery
Europe								Automotive
North								SMEs
Americas
China								Aircraft
Asia								Die & Mold
(excl. China)
								Electronics
								Energy
								Medical
								Construction
								Machinery

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Agenda

1. FY2019 Financial Summary
2. Business Environment
3. Key topics
4. • Open House Pfronten (Feb 11th-15th)
   • R&D：Automation & Digitization
   • Production：Efficient in-house production & TULIP
   • SSEP：5-axis machine promotion & digital service
   • SDGs (Carbon footprint neutral & Trainings)

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Major events in 2020 (incl. DMG MORI locations)

Feb	Jun
Pfronten	Seebach
Open house	Open house
(2/11-2/15)	(6/16-6/19)
	Tortona
	Open house
	(6/24-6/27)

Dec

Tokyo JIMTOF(12/7-12/12)

		Sep	Oct
		Milan
		Chicago
Mar		BIMU (10/14-10/17)
May	IMTS (9/14-9/19)
Seoul	Iga
SIMTOS	Innovation Days	Stuttgart
(3/31-4/4)	(5/19-5/23)	Oct
	AMB
		FAMOT
	Bergamo	(9/15-9/19)
	Open house
	Open house
		(10/20-10/23)
	(5/13-5/16)
DMG MORI locations

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Pfronten Open House Feb 11-15

Digital Factory		Automation		World premiere		Additive manufacturing

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Pfronten OH - DMU/C 65 H monoBLOCK

World

premiere

DMU/C 65 H

monoBLOCK

Work：Electric motor housing (Automotive)

Work size：280 x 300 x 450 mm

Work：Access Door (Aerospace)

Work size：560mm x 290mm x 60mm

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Pfronten OH - LASERTEC 200/400 Shape

World

premiere

LASERTEC 400

Shape

Work：Reflector

(Die and Mold /Automotive) Work size：400×500×300mm

Work：Motor cover

(Die and Mold /Automotive) Work size: 400×320×60mm

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Pfronten OH

Additive Manufacturing / LASERTEC 30 Dual SLM

World

premiere

LASERTEC 30

Dual SLM

80% productivity improvement

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AM Lab & Fab

Build-to-order production starts from Q3

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R&D (1)

Promotion of automation

Robot

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R&D (2)
Automation - Work handling	Automation - Pallet handling
DMU 200 Gantry with WH210	PH-AGV 50

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Production (1)

DMG MORI FABTECH introduced robot welding system by TRUMPF

Robot welding system

Used for welding of NTX2000Ge2 lower turret's cover

Lead time down by 80%

	Lead time
Manual welding	100 min.
Robot welding	20 min.

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Production (2)

Iga Campus introduced TULIP

Purpose

Digitization of all the processes to improve operability, skill, and quality

■ All DMG MORI plants' processes to be digitized

■ Agile development for faster digital conversion ■ Employees trained before introduction

Workbench+TULIP		Sample in assembly process

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Sales service engineering parts (SSEP) (1)

Promotion of 5-axis machines

• 1-yearanniversary of 5-axis Technology Research & Study Group
• 788 private lessons (Aug 2, 2018-Dec 31, 2019) for 2,277 operators

5-axis machine's	2018	2019
share in order intake
Japan	13%	→ 20％
Global	34％ → 38％

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Sales service engineering parts (SSEP) (2)

my DMG MORI portal 5,000 customers registered since the release at EMO in Sep 2019

40,000 customers to be registered in total (target)

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SDGs

Carbon footprint zero by 2020 in Europe

Japan following the Europe's lead

1. Use renewable energy

2. Reduce carbon footprint

3. Launch carbon projects (DMG MORI Forest)

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DMG MORI Academy

• No. of trainees in 2019: Approx. 330 customers 1,600 employees
• Train over 100 young application engineers
• 81 units available for training

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TQM competition (Dec 16)

• 7 teams competed at the final (out of 85 teams enrolled)
• Visualized challenges and defined solutions

Select a	Understand		Analyze
current	Set goals
theme	main factors
status

Plan, carry out, and measure impact of a solution

Plan

ActDo

Check

標準化・管理	振り返り、
Standardize	Review
theの定着solution
今後

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Work style reform

• Maximum office hours: 10 hours

Minimum interval between two working days: 12 hours (Jan 2020-)

• Maximum annual working hours in 2020: 1,998 hours
• Employees more likely to use all the paid-days off

【Change in rules】

Annual working hours /person

(-Dec 2019)

								(hours)
max. 12 hrs at office		Minimum interval: 12 hrs		max. 12 hrs
		2,100
								2,080
								2,060
								2,040
(Jan 2020-)							2,020
						2,000
								1,980
max. 10 hrs		Minimum interval: 12 hrs		max. 10 hrs		1,960
			1,940
								1,920

2016 2017 2018 2019 2020

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Paternal leave

• Started in Jan 2020
• For fathers with a child/children younger than 1 year old
• The first 20 days of the paternal leave counted as paid-days off

Child-care support available for male employees

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Disclaimer

This material contains targets, plans, etc. concerning the future of DMG MORI CO., LTD. and the DMG MORI Group. All predictions concerning the future are judgments and assumptions based on information available to DMG MORI at the time of writing. There is a possibility that the actual future results may differ significantly from these forecasts, due to changes in management policy or changes in external factors.

There are many factors which contain elements of uncertainty or the possibility of fluctuation including, but not limited to, the following:

• Fluctuations in exchange rates
• Changes to the laws, regulations and government policies in the markets where DMG MORI CO., LTD. conducts its business
• DMG MORI CO., LTD.'s ability to develop and sell new products in a timely fashion
• Instability of governments in the markets where DMG MORI CO., LTD. conducts its business
• Operational changes by the competent authorities or regulations related to anti-trust, etc.

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