- Sales down 23.4 percent; EBIT nonetheless positive
- Tentative leveling-out of markets discernible in the third quarter
- Peak level of 140 apprentices in training at Miba
Miba, a strategic partner to the international engine and automotive industry, faced a worldwide decline in demand in its core markets in the first three quarters of 2009-2010 (February 1 to October 31, 2009): Sales totaled EUR 228.3 million, down 23.4 percent from the same period the previous year. As measures to increase efficiency and productivity proceeded full speed ahead, Miba achieved group-wide positive earnings before interest and taxes (EBIT) of EUR 5.4 million.
“We are noticing a slight leveling-out, albeit at a very low level. Miba has held its ground well up to now but we have to continue working intensely to master the crisis,” says Peter Mitterbauer, Chairman of the Board of Miba. Miba continues to place a strong emphasis on sustainable strengthening of liquidity.
The success of intensive working capital management can be seen in reduction of inventories. Inventories were lowered by 15.6 percent in comparison to the balance sheet date (January 31, 2009). A solid equity ratio of 55.7 percent ensures Miba’s financial independence. Net indebtedness was also reduced in the first nine months, totaling EUR 3.5 million as of October 31, 2009 (compared to EUR 19.3 million on the balance sheet date, January 31, 2009).
At EUR 29.4 million, operative cash flow lies well below the previous year’s figure (EUR 52.3 million), but is a positive sign in view of the drop in earnings. Capital expenditures (excluding financial investments) in the first three quarters of 2009-2010 totaled EUR 10.8 million and focused in large part on the development of the sinter site in the USA.
Sales (in million €)
Q1-Q3 2009-2010 228.3
Q1-Q3 2008-2009 298.0
EBIT (in million €)
Q1-Q3 2009-2010 5.4
Q1-Q3 2008-2009 32.4
Capital expenditures (excluding financial investments) (in million €)
Q1-Q3 2009-2010 10.8
Q1-Q3 2008-2009 32.8
Number of employees (as of October 31)
Q1-Q3 2009-2010 2,621
Q1-Q3 2008-2009 2,932
As of October 31, 2009, Miba had 2,621 employees worldwide. This figure represents a reduction of 10.6 percent or 311 employees in comparison to the previous year. The number of employees was reduced largely through expiration of temporary employment contracts at sites in Slovakia and non-replacement of departing employees.
At Miba sites in Austria personnel measures such as reduced working hours and educational leave were systematically continued in the third quarter. As of the reporting date there were 1,577 employees at the Austrian production and technology sites, a figure that represents 60 percent of Miba staff worldwide.
As a responsible long-term employer Miba is committed to training young people, even in economically challenging times. We place great importance on apprentice training, which we develop systematically. By investing in the qualified specialists of tomorrow, the company ensures junior staff from within its own ranks. As of October 31, 2009, Miba reported a new peak of 140 apprentices in training (compared to 131 apprentices the previous year).
Miba Bearing Group
As a development partner and supplier to the international heavy-duty engine market, Miba Bearing Group continues to face declining demand in its markets. Miba Bearing Group sales for the reporting period totaled EUR 100 million, down 17.4 percent or EUR 21.0 million from the same period the previous year. Demand is expected to drop further as the economic recession belatedly arrives in specific subdivisions of this segment. Capital expenditures totaled EUR 1.9 million, well below the previous year's level, and are being used primarily for the expansion of the sites in China and the USA.
Miba Sinter Group
As a supplier to the automotive industry the Miba Sinter Group is strongly affected by the worldwide economic crisis. Sales in the first nine months totaled EUR 89.9 million, down 20.4 percent from the same period in 2008-2009. This segment has shown slight tendencies towards recovery in recent months, with third quarter sales returning to the previous year’s level. It remains to be seen, however, whether this development will prove sustainable. As government programs such as “cash for clunkers“ incentives come to an end, demand will presumably decline again. The establishment of the US sinter site headquartered in McConnelsville, Ohio is forging ahead quickly. The capital expenditures of the Miba Sinter Group, totaling EUR 7.5 million (EUR 14.6 million the previous year), focused primarily on this site.
Miba Friction Group
Miba Friction Group is the segment confronted with the most severe decline in demand. There is not yet any evidence of stabilization in its target markets. Sales totaled EUR 35.7 million, down 41.0 percent from the same period the previous year. Negative earnings before interest and taxes (EBIT) of EUR -7.5 million resulted primarily from a massive decline in sales. Additionally, earnings were adversely affected by goodwill amortization of EUR 1.4 million in accordance with IAS 36 in the Slovak and American subsidiaries. This was necessary due to the continuing poor general economic conditions. Capital expenditures totaling EUR 1.1 million (EUR 2.9 million in the previous year) primarily financed measures to improve productivity.
Although some sectors and countries show a slight leveling-out, a sustainable recovery cannot yet be assumed. Call-offs at short notice by major customers reflect the ongoing, prevailing uncertainty in Miba's target markets and make it difficult to reliably forecast the further economic development of Miba Group.
Tentative leveling-out discernible
The Miba Management Board continues to assume that group sales for the current business year will lie about 20 to 25 percent below sales for business year 2008-2009. Nonetheless, a rapid and goal-oriented structural adaptation to quickly changing business conditions enabled Miba to perform comparatively well.