DMG Mori (6141) Q4 2024 earnings summary

Executive summary

• FY2024 sales revenue rose 0.3% year-over-year to JPY 540.9 bn, but operating profit fell 21% to JPY 43.7 bn and net profit dropped 77.3% to JPY 7.7 bn due to one-time losses from discontinued Russian operations.

• Order intake declined 4.6% year-over-year to JPY 496.0 bn, with a lower machine order backlog at year-end; average machine order unit price increased 15% to JPY 71.0 mil, driven by higher MX solution adoption and automation.

• Spare parts and services grew to 25% of order intake.

• Regional order intake: Asia (ex-China) up 8%, Americas flat, Europe down 4%, Japan down 8%, China down 24%.

• Major developments include near-complete acquisition of TAIYO KOKI, groundbreaking for European HQ in Munich, and Iga Campus winning the Deming Prize.

Financial highlights

• Operating profit margin decreased to 8.1% from 10.3% in FY2023.

• Dividend per share increased to JPY 100, with a plan to raise it to JPY 105 in FY2025.

• Shareholders' equity ratio improved to 39.4% due to CB conversion; net D/E ratio at 0.20.

• Cash flows from operating activities were JPY 44.6 bn; cash and equivalents at year-end were JPY 41.7 bn.

• Free cash flow in 4Q was JPY 21.9 bn, with FY2025 free cash flow planned at JPY 20.0 bn or more.

Outlook and guidance

• FY2025 forecast: sales revenue JPY 510.0 bn (-5.7% y-o-y), operating profit JPY 38.0 bn (-13.1% y-o-y), profit attributable to owners of the parent JPY 20.0 bn (up 159.7%), OP margin 7.5%, EPS 129.40 yen.

• Lower revenue expected due to reduced order backlog and slow order recovery; insurance claim for Russian plant seizure not included in forecast.

• Plan to convert order backlog of JPY 218.0 bn into sales and generate new orders.

• FY2030 targets: sales revenue JPY 800 bn, OP margin 15%, net profit margin 10%, dividend per share JPY 200.