DMG Mori (6141) Q2 2024 earnings summary

Executive summary

• Consolidated orders turned positive year-over-year since May; full-year order forecast raised to JPY 530 bn.

• Strong demand from medical, commercial aircraft, space, die & mold, semiconductor, and defense sectors.

• Service & Parts business continued double-digit growth, stabilizing order intake.

• Process integration, automation, and digital transformation initiatives drove higher unit prices and gross profit.

Financial highlights

• 1H FY2024 sales revenue: JPY 263.7 bn (+6% YoY); operating profit: JPY 23.2 bn (+3% YoY); net profit from continued operations: JPY 14.4 bn (-4% YoY).

• Operating profit margin: 8.8% (vs. 9.0% prior year); net profit margin: -0.4% due to one-time loss.

• One-time EUR 91.8 mil. loss from deconsolidation of Russian subsidiary (UMT) in 1Q; insurance claim expected to offset loss.

• Free cash flow deficit of JPY 16.9 bn due to shipment delays; full-year FCF plan unchanged at JPY 40.0 bn.

• Shareholders' equity rose to JPY 326.8 bn; equity ratio improved to 39.5%; net debt/equity ratio declined to 0.20.

Outlook and guidance

• Full-year 2024 order forecast revised up to JPY 530.0 bn; sales revenue target JPY 550.0 bn (+2% YoY); operating profit JPY 58.5 bn (+6% YoY); net profit JPY 36.0 bn (+6% YoY).

• Operating profit margin projected at 10.6%; net profit margin at 6.5%.

• 2025 targets: sales revenue JPY 600.0 bn, operating profit JPY 72.0 bn, net profit JPY 48.0 bn, operating margin 12%, net margin 8%.

• Free cash flow expected at JPY 40.0 bn; annual dividend 100 yen/share (total JPY 13.5 bn).

• ROE projected over 10% for 2024 and at least 12% for 2025.