MIKRON HOLDING AG Media release on Annual Report 2019
Mikron Group's business segments affected to different degrees by market developments
Biel, March 16, 2020, 7.00 a.m. - In the 2019 financial year, the Mikron Group was able to increase sales and maintain EBIT at the previous year's level. By contrast, the Group saw a significant year-on-year decline in order intake and order backlog, especially in the Mikron Machining Solutions business segment. Overall, the Group achieved sales of CHF 327.6 million (prior year: 314.7 million, +4.1%) and order intake of CHF 288.5 million (prior year: CHF 362.3 million -20.4%). The order backlog of CHF 157.4 million on December 31, 2019, is markedly behind the record figure of December 31, 2018 (CHF 195.7 million, - 19.6%). With EBIT at CHF 14.1 million (prior year: CHF 13.9 million, +1.4%), the Group achieved an EBIT margin of 4.3% (2018: 4.4%).
The two business segments Mikron Automation and Mikron Machining Solutions have seen very different market developments and business performances in 2019. Mikron Automation made excellent use of the good order backlog at the beginning of the year and of the generally positive dynamics in its core market. The Machining Solutions segment suffered primarily from the sharp decline in demand in the machine business - especially from the automotive industry.
Order intake
The Mikron Group reported order intake of CHF 288.5 million in 2019, representing a decrease of 20.4% against the prior year (CHF 362.3 million). Europe remains Mikron's most important market, with approximately 51% of orders received in 2019 placed by European customers (previous year: 49%). The two strongest market segments are the pharmaceutical and medtech industries with 48% (previous year: 40%) and the automotive industry contributing 16% (prior year: 31%) to overall order intake. In North America, Mikron Automation did not quite reach the high level of the previous year, while Mikron Machining Solutions was able to make some gains at a low level. In Asia, on the other hand, Mikron Automation received more orders and Mikron Machining Solutions fewer than in the previous year.
Net sales and order backlog
Posting annual net sales of CHF 327.6 million, the Mikron Group exceeded the prior-year result (CHF 314.7 million) by 4.1%. While Mikron Automation succeeded in increasing sales by 14.2%, Mikron Machining Solutions posted a decrease of 5.5%. While the Mikron Automation business segment enjoyed good capacity utilization throughout the 2019 financial year, this was not the case for the Mikron Machining Solutions business segment. The Machining division already started to reduce capacity and introduce short-time working toward the end of 2019. During the year under review, the Mikron Tool division was mostly able to fill the available capacity thanks to an exceptionally high order backlog at the beginning of the year and reduced but relatively stable order intake.
At CHF 157.4 million, the Mikron Group's order backlog at the end of 2019 was 19.6% lower than the prior-year record figure. While the Machining Solutions business segment reported a year-on-year decline in order backlog of 44.0%, the same figure decreased by 6.9% in the Automation segment.
Profitability
In the 2019 business year, the Mikron Group reported EBIT of CHF 14.1 million (previous year: CHF 13.9 million). The Mikron Machining Solutions business segment posted EBIT of CHF 1.1 million (prior year: CHF 4.2 million). The decrease in profitability reflects the lower level of machine sales in 2019 as well as ongoing new product development costs, with the tools business achieving a pleasing result overall. Mikron Automation reported improved EBIT of CHF 12.9 million after the prior year's EBIT of CHF 8.4 million. The EBIT margin for this business segment increased to 7.3% (prior year: 5.4%).
Net earnings
Mikron's net earnings for 2019 were CHF 8.8 million, compared to CHF 12.2 million in the prior year. Net earnings per share for 2019 came to CHF 0.54 (prior year: CHF 0.74). Given the current economic situation, at the Annual General Meeting on April 15, the Board of Directors of the Mikron Group will propose a distribution from capital contribution reserves of CHF 0.03 per share and a dividend of CHF 0.03 per share.
Outlook
At Group level, the outlook is currently very difficult, not only for order intake, but also for sales and profitability in 2020. The lower capacity utilization at Mikron Machining Solutions and the necessary adjustments will have a significant impact on Mikron's results in 2020. The effects of the coronavirus cannot yet be estimated.
Key figures for the Mikron Group
2019 | 2018 | +/- | ||||
CHF million1) | ||||||
Order intake2) | 288.5 | 362.3 | -20.4% | |||
- Machining Solutions | 119.4 | 162.2 | -26.4% | |||
- Automation | 169.2 | 200.9 | -15.8% | |||
Net sales | 327.6 | 314.7 | 4.1% | |||
- Machining Solutions | 151.5 | 160.3 | -5.5% | |||
- Automation | 177.2 | 155.2 | 14.2% | |||
Order backlog2) | 157.4 | 195.7 | -19.6% | |||
- Machining Solutions | 38.1 | 68.0 | -44.0% | |||
- Automation | 119.4 | 128.2 | -6.9% | |||
Number of employees2) | 1,486 | 1,398 | 6.3% | |||
- Machining Solutions | 707 | 695 | 1.7% | |||
- Automation | 750 | 679 | 10.5% | |||
EBIT2) | 14.1 | 13.9 | 1.4% | |||
- Machining Solutions | 1.1 | 4.2 | -73.8% | |||
- Automation | 12.9 | 8.4 | 53.6% | |||
Profit for the year | 8.8 | 12.2 | -27.9% | |||
Operating cash flow | 7.3 | 20.1 | -63.7% | |||
Balance sheet total | 289.5 | 289.5 | 0.0% | |||
Equity ratio | 58.5% | 56.8% | 3.0% |
1) except number of employees and %
2) Alternative performance measures, see Annual Report 2019, pages 102 to 104, or www.mikron.com/apm
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