BIETIGHEIM-BISSINGEN (dpa-AFX) - The mechanical engineering company Dürr is likely to grow less strongly this year than previously forecast. The management expects sales growth of two to eight percent for 2024 instead of the previous forecast of five to ten percent, as the company announced on Tuesday in Bietigheim-Bissingen, Baden-Württemberg. The average analyst estimate is at the upper end of the forecast range.

Last year, the Swabian company fell short of market expectations in some areas. The planned job cuts at the Group subsidiary Homag, in which the woodworking machinery business is bundled, also weighed on profits.

Dürr shares, which are listed in the small-cap index SDax, nevertheless rose. In the early afternoon, the stock was trading almost four percent higher. However, the share is still significantly cheaper than before a profit warning, which accelerated the share price slide last fall.

In October, Dürr's profit warning caused the share price to plummet, creating a significant gap in the price chart. At the time, the share price fell to a low since May 2020, from which it has not yet made a sustained recovery. Despite the current gains, the share price has almost halved compared to the interim high around a year ago. Dürr is currently worth a good € 1.4 billion on the stock market.

The management is aiming for sales of between 4.7 and 5.0 billion euros in 2024. Experts at analyst firms and banks surveyed by the company recently forecast average proceeds of EUR 4.9 billion. According to the company, 4.5 to 6 percent of turnover should remain as operating profit before interest, taxes and special items.

In 2023, sales rose by 7.3 percent compared to 2022 to more than EUR 4.6 billion, a record figure according to Dürr. The growth was driven by all business units, according to the press release. Homag also achieved higher sales than ever before and improved its margin, explained Group CEO Jochen Weyrauch at the annual press conference. He spoke of an "operationally good year".

According to preliminary calculations, the company earned a good fifth more in day-to-day business at 280.4 million euros, which corresponds to an adjusted operating profit margin of 6.1 percent. Including extraordinary expenses, however, operating profit fell and the corresponding margin deteriorated to 4.1 percent, meaning that Dürr missed its own forecast. This was due to higher provisions for restructuring, for example for job cuts at Homag. Profit after tax fell by around 18 percent to a good 110 million euros.

Analysts such as Sven Weier from the Swiss bank UBS spoke of a "mixed set of figures". The earnings and profit targets disappointed him. His colleague Peter Rothenaicher, however, praised the free cash inflow of 129 million euros in the past year. In his opinion, the forecast issued by management for the current year should also be regarded as "cautiously optimistic" in view of the lower capacity utilization at Homag.

As already announced, around 600 of almost 7500 jobs at Homag are to be cut, 350 of them in Germany. According to CFO Dietmar Heinrich, slightly more than EUR 50 million of the provisions made are earmarked for amicable solutions such as termination agreements. The aim is still to avoid compulsory redundancies. However, when asked on Tuesday, the management could not rule this out.

In order for business with wood processing systems to pick up again, Dürr CEO Weyrauch believes that simplified approval procedures are needed, among other things. However, he was confident that the current weakness in demand in the furniture and construction sector would recover in the long term. The Management Board reported that Homag is currently working short-time in some areas. Although this cannot be ruled out in other business areas, it is not to be expected "on a large scale".

CEO Weyrauch held out the prospect of a largely stable dividend for shareholders. Dürr had paid EUR 0.70 per share in 2022, while experts at analyst firms and investment banks expect EUR 0.75 for the 2023 financial year. The manager said that he could not think of much to contradict the analysts' expectations. However, he emphasized that the distribution still had to be decided.

Dürr plans to present the full annual report with final figures on March 20./lew/tav/mis