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SMT & Inspection | January 20, 2009

Mikron expects negative operating result (EBIT)

The Mikron Group posted an order volume of CHF 233.6 million (-25.0%) in the 2008 financial year and recorded net sales of CHF 263.9 million (-0.5%). The lower order intake volume is in line with expectations. Sales once again reached the good level of the previous year.
However, both order intake and sales were affected in the second half of the year by the global economic downturn and its impact on the automotive industry. Certain Mikron sites have already adjusted their capacity to the fall in volume. Over the weeks and months ahead, appropriate measures will be extended to virtually all sites in Europe and the United States. Operating profit (EBIT) forecasts will have to be corrected further downwards. EBIT will be negative. The Mikron Group is starting 2009 with a thin order backlog.

Drop in orders in 2008 in line with expectations
Order intake was significantly below the previous year (-25.0%). Although a drop was expected in view of the previous year's extremely high figure, it was greater than anticipated due to the economic downturn in the second half of 2008. After a very good first half, the Machining Technology division (-23.2%) was hardest hit by the downturn in the automotive industry. Both the new machines and cutting tool businesses were affected. The Assembly Technology division benefited from the largely stable economic environment in the Medical/Personal Care market segment and has as yet been less affected by the economic downturn. The division followed on from its record volume in 2007 with another good order volume in 2008 (-28.8%). Both divisions gained orders from large international customers. Some of these were in new market segments, including precision engineering and electrical engineering.

Healthy sales volume
Sales once again reached the good level of the previous year (-0.5%). Both divisions contributed to this achievement, even though the Machining Technology division (+1.4%) had to absorb a significant fall in demand from the automotive industry in the second half of the year. The Assembly Technology division once again achieved a healthy sales volume despite the slight fall-off (-4.0%).

Further correction of result forecasts
The Mikron Group expects a negative operating result (EBIT) for the 2008 business year. This is almost entirely due to the Machining Technology division for the following reasons. Two customer orders entailed major once-only expenditure. This is compounded by losses incurred by the Rottweil production site (Germany) and Namco SA (Switzerland), the company acquired in 2007. The weaker euro compared to the Swiss franc and the decline in volume caused by the global economic downturn also had a negative impact on operating profit (EBIT). Moreover, falling demand and delayed prospects of success meant that inventories and development costs had to be written down for certain product lines.

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