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23
July
2012

Good order intake, less profit for Mikron

In the first half of 2012, the Mikron Group increased order intake and sales, while it suffered from a significant year-on-year decrease in earnings before interest and taxes (EBIT) to CHF 0.5 million.
For the Mikron Group, the first half of 2012 was characterized by a number of very different developments. While the Machining business segment increased both sales and earnings to a good overall level as anticipated, the corresponding figures for the Automation business segment fell far short of expectations.

Looking ahead to the entire financial year and on the basis of the current good order backlog, Mikron is anticipating an EBIT margin that is slightly superior to 2011.

In the first half of 2012, the Mikron Group posted an order intake of CHF 135.2 million (prior year: CHF 127.4 million, +6%). Compared to the corresponding prior-year period, the Group managed to increase sales from CHF 104.2 million to CHF 107.8 million (+3%). While the Machining business segment was able to exploit broad-based demand in Europe and Asia to increase sales by 11%, the Automation business segment fell substantially short of expectations with a decline in sales of around 8%.

A combination of currency-related competitive disadvantages, the challenges faced by Mikron Automation in the execution of a number of projects, and an unsatisfactory level of capacity utilization in certain areas have inevitably weighed on the result. By contrast, the segment succeeded in obtaining a gratifying number of major new orders in the second quarter, which will impact positively on sales and earnings in the second half of the year.

Earnings before interest and taxes (EBIT) amounted to an unsatisfactory CHF 0.5 million in the first half of 2012 (prior year: CHF 3.9 million). Due to the positive financial result and in consideration of the income taxes, the Mikron Group recorded a profit of CHF 0.6 million (prior year: CHF 2.6 million).

Mikron Machining

In the first half of 2012, Mikron Machining benefited from continued strong demand, particularly from the German automotive industry. An equally pleasing development for this business segment was the sales generated by the Swiss watchmaking industry.

Mikron Machining also continued to benefit from the ongoing industrialization of China, and succeeded in expanding its overall customer base. By contrast - attributable to the industry cycle and therefore not unexpected - this business segment generated significantly lower sales than in prior years with machines for the writing instruments industry.

Compared with Mikron Machining's competitors, however, the order volume of CHF 71.7 million stands up very well, and will ensure continuing good capacity utilization at all production sites and in most business areas. Mikron Machining was able to increase both sales and earnings in line with targets.

Mikron Automation

At the start of the year in particular, Mikron Automation's sales markets were still heavily overshadowed by uncertainty over economic developments. Many customers repeatedly postponed their investment decisions. After a weak first quarter, however, order intake then rebounded strongly in the second quarter, enabling Mikron Automation to report a pleasing order intake of CHF 63.6 million for the first half of the year. This healthy order volume was primarily attributable to demand from suppliers to the German automotive industry.

IMA Automation Berlin GmbH (now Mikron Berlin GmbH), the company acquired at the beginning of March, made an important contribution to the increased second-quarter order intake.

The insufficient backlog of orders at the start of the year and a general reluctance on the part of customers to place orders led to a first-half sales figure that fell considerably short of expectations. As a result of the low sales volume, high additional expenditures for a number of complex customer projects, and persistent currency-related pressure on margins, the business segment posted a significant operating loss for the first half of 2012.

Outlook

The general uncertainty caused by the overindebtedness of a number of European countries is likely to affect the second half of 2012 too. Assuming a stable currency situation, Mikron expects a slight flattening of demand throughout the Group as a whole.

Mikron expects the good level of capacity utilization at Mikron Machining to continue, while Mikron Automation should experience a significant improvement thanks to the healthy order intake in the second quarter. Overall, therefore, Mikron anticipates a significant improvement in second-half sales and earnings.

The Board of Directors and Group Management are adhering to the objective of generating sales of around CHF 240 million (inclusive the acquired company) for the 2012 financial year, along with a slight year-on-year increase in the EBIT margin.
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