- Positive EBIT in spite of sharp declines in demand in the first half of the year
- Order situation stabilizes at low level in the second quarter
- Thirty new apprentices in September
Miba, strategic partner to the international engine and automotive industry, faced sharp drops in demand in its core markets in the first half of fiscal year 2009-2010 (February 1 to July 31). Group sales fell to 148.5 million euros, a 26 percent decline compared with the excellent results in the prior-year period. As the result of measures introduced early on at all locations, Miba was able to achieve a positive result contrary to industry trends, posting earnings before interest and taxes (EBIT) of 2.4 million euros.
"Incoming orders stabilized in the course of the second quarter at a much lower level. But it would be premature to interpret this as a sign that the crisis is over”, points out Peter Mitterbauer, Miba's CEO. Despite the difficult market environment, Miba has held its own because of its clear strategic focus on high-tech, heavy-duty powertrain components.
The focus in times like these is on sustained liquidity enhancement. Net indebtedness was reduced by more than half in the first six months of this year – to 9.3 million euros. Cash flow from operations totaled 21.6 million euros, about 30% below the previous year's figure (31.6 million euros), but is a positive sign given the sharp drop in earnings. Capital expenditures came to 7.9 million euros in the first half of 2009-2010.
Boosting liquidity over the long term
The equity ratio of 57.6 percent is only slightly below the balance sheet date figure on January 31, 2009 (57.9 percent). Adequate liquidity, low net indebtedness and a solid equity ratio ensure the financial autonomy and independence of Miba AG.
Sales (in million €)
First Half of 2009-2010 148.5
First Half of 2008-2009 199.7
EBIT (in million €)
First Half of 2009-2010 2.4
First Half of 2008-2009 23.6
Capital expenditures (in million €)
First Half of 2009-2010 7.9
First Half of 2008-2009 25.9
Number of employees (as of July 31)
First Half of 2009-2010 2,541
First Half of 2008-2009 2,854
Miba AG had a total of 2,541 employees worldwide as of July 31, 2009. This represents a decrease of 313 employees or 11 percent compared with the headcount a year earlier. The reduction in employees affected the Slovakian locations primarily. At the Austrian plants, personnel measures such as reduced working hours or educational leaves are being systematically continued. At the end of July 2009, there were 1,583 employees at the Austrian sites (compared with 1,655 employees a year earlier).
Miba's goal as a long-term and responsible employer is to retain most of its qualified permanent staff through flexible work schedules and salary models.
Even in economically challenging times, Miba is giving young people good prospects for the future by providing first-class training: it took on around 30 new apprentices at its Laakirchen, Vorchdorf and Roitham plants in September.
Miba Bearing Group
Miba Bearing Group sales for the reporting period totaled 67.3 million euros, down 14 percent from the same period the previous year. Miba Bearing Group accounts for 45.3 percent of group sales. The weak demand is typical of all of this segment's target markets – from commercial vehicles to ships to locomotives. Capital expenditures totaled 2.7 million euros, well below the previous year's level, and are being used primarily for expansion of the plant in China. Production of large bearings was started up at this facility towards the end of the second quarter. Standard production will begin in the fall in order to be able to best meet local demand.
A wide range of government programs such as the "cash for clunkers" programs in Western Europe have stimulated positive demand. Miba Sinter Group has profited from this development. Sales in the second quarter rose by about 12 percent over the first quarter. Nonetheless, sales for the first six months totaled 56.0 million euros, which was still 29 percent below the prior-year level. Miba Sinter Group accounted for 37.7 percent of group sales. Capital investment totaled 4.2 million euros (down from 12.0 million a year earlier) and focused primarily on expansion of the U.S. sintering plant in McConnelsville, Ohio.
Miba Sinter Group
For the second year in a row, Miba Sinter Group received the "Supplier of the Year" award from ixetic, a leading manufacturer of vacuum and hydraulic pumps for the auto industry.
Miba Friction Group
Miba Friction Group continues to be the segment most affected by the economic crisis and has faced a dramatic decline in demand. This has had a significant adverse effect on sales and earnings. The business unit posted sales of 23.5 million euros in the first half of the year, 42 percent below the figure for the comparable period in 2008-2009. Active efforts to counteract decreased demand in core markets involve shutting down production capacities temporarily and extending short-time work schedules at the Roitham location until the end of the year. Miba Friction Group accounted for 15.8 percent of group sales.
Stronger post-recession position
The prevailing uncertainty in Miba's target markets makes it difficult to reliably forecast future economic development. However, the business trend in the first half year and our customers' current release volumes indicate that the sales level in fiscal year 2009-2010 will be about 20 to 25 percent lower than in 2008-2009. By expanding and maintaining product and technology leadership in its core segments, Miba will emerge from this deep recession in a stronger position.