Dürr Aktiengesellschaft Q2 Earnings Call Highlights

Key Points

• Dürr confirmed its 2026 group guidance even as it launched a major restructuring of BBS Automation, where weaker demand has led to a reset of expectations and a new focus on cost savings and operational efficiency.
• The company expects EUR 140 million to EUR 150 million in extraordinary charges tied to BBS Automation in 2026, including a EUR 90 million to EUR 100 million goodwill impairment and EUR 40 million to EUR 50 million in restructuring costs, while the Vector program should eventually deliver about EUR 30 million in recurring annual savings.
• Automotive and Schenck helped offset weakness in BBS Automation and Woodworking, with Automotive posting strong order intake and improving execution, while Woodworking remained under pressure from weak furniture demand but still improved margins year over year.

Dürr Aktiengesellschaft ETR: DUE confirmed its group guidance for 2026 despite weaker-than-expected demand at BBS Automation and announced a broad restructuring program for the automation business that will include job cuts, restructuring charges and a further goodwill impairment.

Chief Executive Officer Jochen Weyrauch told analysts on a short-notice call that the company’s second-quarter performance was “quite solid” in its two largest divisions, Automotive and Woodworking, while BBS Automation continued to face a more difficult market environment. Group order intake rose 13% in the second quarter, driven mainly by year-over-year growth in Automotive. Consolidated sales were nearly unchanged from the prior-year period.

Weyrauch said the operating EBIT margin before extraordinary items improved despite a slight decline in sales and a negative earnings contribution from BBS Automation. He attributed the resilience to self-help measures and stronger performance in Automotive, Woodworking and the Schenck balancing business within Industrial Automation.

BBS Automation Program to Cut About 500 Jobs

Dürr outlined a new efficiency program for BBS Automation called “Vector,” designed to resize the business for current market conditions, improve operational performance and support future growth. The company said it plans to cut about 500 jobs worldwide, including 200 in Germany.

Weyrauch said BBS Automation’s mobility-related business has been hit by a mismatch in the automotive market. While electric-vehicle sales are rising, many assembly lines installed during the 2021 and 2022 capital spending wave are still not fully utilized, causing automakers and suppliers to delay new investments in production equipment for e-engines.

As part of the restructuring, Dürr will reorganize BBS Automation around two main business units: Life Science and Mobility. The Life Science business, which the company said offers the strongest growth potential, will focus mainly on Europe and the Americas and will be led by U.S. operations. The Mobility business will be led from Kunshan, China, near Shanghai, reflecting China’s importance in e-mobility.

Dürr expects BBS Automation sales to be below EUR 400 million this year and probably next year. The company now targets sales of at least EUR 600 million by 2030 with a sustainable margin of 8%, revising its earlier EUR 800 million sales target because market volumes are smaller than previously assumed.

Impairment and Restructuring Charges Weigh on 2026

The company expects unplanned extraordinary effects of EUR 140 million to EUR 150 million in 2026 related to BBS Automation. That includes a non-cash goodwill impairment of EUR 90 million to EUR 100 million, which will be reflected in second-quarter financial statements, and restructuring expenses of EUR 40 million to EUR 50 million, mostly expected in the second half.

Weyrauch said the impairment reflects weaker development in BBS Automation’s Mobility business than assumed last year. After the charge, BBS Automation’s goodwill will fall to about EUR 25 million, which he said will “significantly de-risk” the business in the future.

The Vector program is expected to generate recurring cost savings of about EUR 30 million. Dürr expects initial savings in the single-digit million-euro range in 2026 and nearly the full amount in 2027.

Automotive Strength Offsets Industrial Automation Weakness

In Automotive, Dürr reported order intake of more than EUR 500 million in the second quarter, above both the prior-year period and the first quarter. Weyrauch said the project pipeline remains solid, with increased activity in the United States as foreign original equipment manufacturers accelerate capital expenditure plans to increase local production and avoid tariffs.

Automotive sales also accelerated in the second quarter as customer-related delays in executing large projects were mostly resolved. Dürr expects a favorable sales pipeline and potential for further margin improvement in the second half, supported by order execution, higher sales and typical seasonal effects.

Industrial Automation showed mixed trends. The Schenck balancing business posted double-digit growth rates in order intake, sales and earnings in the first half, supported by demand from aerospace, energy and automotive markets. Weyrauch said the balancing business is also benefiting from energy demand tied to AI data centers.

By contrast, BBS Automation was hurt by low demand from the automotive industry, falling order intake and underutilization. Weyrauch also said earnings were burdened by extra project execution expenses in the second quarter, some tied to a conservative assessment of orders.

Woodworking Still Faces Weak Furniture Demand

Dürr said its Woodworking division remains exposed to weak demand in the furniture business, but improved its margin year over year in the second quarter. Weyrauch cited cost and capacity management, as well as a favorable business mix supported by the HOMAG INTELLIGENCE software platform.

HOMAG’s first-half earnings included EUR 6 million of operating one-off expenses tied to higher research and development spending, the ramp-up of a new factory in Poland and a major SAP conversion. Dürr said the division should benefit in the second half from execution of an almost EUR 100 million timber house contract received in late 2025, which is expected to support sales and profitability.

Weyrauch said Dürr remains focused on protecting HOMAG’s profitability and is prepared to take action if needed. During the question-and-answer session, he said he does not expect a “real upswing” in Woodworking order intake for the year and declined to provide a firm indication for 2027, saying the company is preparing for weaker conditions while hoping for improvement.

Guidance Confirmed, CFO Notes Upcoming Retirement

Dürr confirmed all group-level guidance key performance indicators for 2026, even as it adjusted the outlook for Industrial Automation. Weyrauch said the group is benefiting from Automotive resilience, the strength of Schenck’s balancing business, cost savings in administration and lower expenses for the OneDürrGroup program.

In response to an analyst question, Weyrauch said the Industrial Automation margin of minus 2.4% in the second quarter should represent a trough based on the revised divisional guidance of minus 1% to plus 1%. He also said the group margin may trend toward the lower end of the guidance range, but that the midpoint remains achievable depending on second-half performance in Automotive and Woodworking.

Weyrauch said tariff-related refunds had only a limited effect on profitability because, in some cases, Dürr must reimburse customers that had paid additional amounts for U.S. customs tariffs.

Chief Financial Officer Dietmar Heinrich closed the call with a personal note, saying it was his final quarterly call as CFO before retiring at the end of September. He thanked analysts and investors for their questions and engagement over the years.

About Dürr Aktiengesellschaft (ETR:DUE)

Dürr Aktiengesellschaft, together with its subsidiaries, operates as a mechanical and plant engineering company worldwide. The company's Paint and Final Assembly Systems segment plans, builds, and updates paint shops and final assembly lines for the automotive industry. It also provides products and systems for various process stages in paint shop technology; control and conveyor systems, air supply, and exhaust-air systems; DXQ software family, which includes solutions for plant monitoring, manufacturing execution systems, advanced analytics, and other digital solutions; conveyor technology, filling, and testing, as well as assembly technology and marriage stations for connecting the car body and power train; consulting services; and assembly and test stands and calibration stations for brakes, electronics, and chassis geometry.

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