BIETIGHEIM-BISSINGEN (dpa-AFX) - Mechanical engineering company Dürr has lowered its forecast for 2024 due to weak woodworking business. A positive margin development in the other business units will probably not be able to compensate for the decline in earnings in the woodworking business bundled at Homag, the group announced in Bietigheim-Bissingen on Thursday evening. Improvement is not expected for another year. Dürr therefore now wants to work out measures to reduce costs. The forecast for 2023 was confirmed, but this did not reassure investors. The stock sank by almost a fifth on Friday.

Due to a sharp decline in order intake as a result of the ongoing downturn in the woodworking machinery market, the group's margin as measured by earnings before interest and taxes (Ebit) before special items is expected to be 4.5 to 6.0 percent next year - with sales growth of 5 to 10 percent. The 8 percent margin previously forecast for 2024 assumes a business recovery in wood processing and is not expected until 2026 at the earliest, it said.

The MDax-listed stock fell in the morning to its lowest level since May 2020, with the most recent drop still amounting to almost a fifth. It is thus continuing its downward trend of recent months at an accelerated pace, after the share price reached its highest level so far this year at the end of February. The discount since the beginning of the year now amounts to almost 40 percent.

According to Dürr, additional measures are currently being developed for the wood processing business. The aim is to ensure that the operating margin in this business, adjusted for special effects, does not fall below two percent next year. In addition to the increased use of flexible working time instruments, management also plans to reduce capacities, it said. Talks with employee representatives are to be held in the coming weeks. According to Dürr, concrete information will be announced "in a timely manner."

Dürr thus intends to adjust Homag costs to low demand and cyclicality. In the nine months to the end of September, the subsidiary's order intake fell by almost a third, according to preliminary figures. Next year, there is likely to be underutilization of capacity and sales will fall by 15 percent. In addition to weak demand, Dürr has recently had to give up margins on newly signed deals. Demand is expected to recover from the end of 2024, it said. In a stable market environment, the Board of Management continues to see a margin potential of ten percent.

UBS analyst Sven Weier also sees the share's performance linked to this: it is only likely to improve sustainably if there are signs of an improvement in the order situation in wood processing and, at the same time, good momentum is maintained in the automotive-related business areas, he wrote in a study.

Dürr plans to present its full figures for the third quarter on November 9./jha/lew/tih/jha/