Mikron : Strong Swiss franc and volatile order intake hold back Mikron

Media release on semiannual results 2015

Biel, July 23, 2015, 7 a.m. - The strength of the Swiss franc, volatile order intake, and resulting uneven capacity utilization at individual sites held back the Mikron Group's performance in the first half of 2015. The Group reported an EBIT loss of CHF -2.7 million and a fall in net sales of 10% to CHF 107.8 million (first half of 2014: CHF 119.4 million). For the 2015 financial year, the Mikron Group now expects net sales slightly below the prior-year figure and EBIT just in positive territory.

In the first half of 2015, the Mikron Group recorded order intake of CHF 118.3 million, representing a decline of 15% compared to the figure reported in the first half of 2014 (CHF 139.2 million). Adjusted for currency effects, the decline would have amounted to 10%. As anticipated, the Automation business segment was unable to reach the very high year-back figure and reported a decrease of 35%. By contrast, the Machining business segment recorded an increase of 19% - compared, however, against the very low figure for the corresponding prior-year period. The Mikron Group reported a 10% decrease in net sales from CHF 119.4 million in the first half of 2014 to CHF 107.8 million in the first six months of 2015. Assuming no change in exchange rates, net sales would have been around CHF 9.2 million higher. Both business segments generated lower net sales than in the corresponding year-back period: Mikron Automation CHF 55.1 million (-3%) and Mikron Machining CHF 52.7 million (-16%). As at the end of June 2015, the Mikron Group has an order backlog of CHF 124.1 million (8% lower than at the end of June 2014). It is still distributed very unevenly over the different sites.

The Mikron Group reported an EBIT loss of CHF -2.7 million for the first half of the year. Mikron Automation posted an EBIT loss of CHF -0.4 million, and Mikron Machining CHF -3.8 million. Factoring out the negative impact of exchange rate developments, the Group would have achieved the anticipated balanced result and - despite a decline in net sales - the Automation business segment would have increased profitability.

Mikron Automation
In the first half of 2015, Mikron Automation's US sales market continued to perform positively. In Europe, on the other hand, pressure on margins increased - especially as a result of the decision by the Swiss National Bank to discontinue the minimum exchange rate against the euro. The business segment also came under intense pressure from competitors, mostly those from Germany. As expected, Mikron Automation was unable to repeat the previous year's exceptionally high order intake (CHF 86.9 million), reporting CHF 56.1 million for the first half of 2015. The order backlog level remained good at CHF 69.9 million (first half of 2014: CHF 89.9 million). As a number of projects were in an early or advanced development stage, sales fell to CHF 55.1 million in the first half of 2015 (first half of 2014: CHF 56.9 million). Factoring out the currency-related value adjustments on work in progress, the business segment would have achieved positive EBIT of CHF 0.8 million (previous year CHF -0.2 million).

Mikron Machining
Mikron Machining's business performance was again very mixed in the first half of 2015: While demand for tools and spare parts was still solid, the business segment faced a decline in the machinery business in the second quarter. Despite an encouraging, relatively steady flow of requests for quotes from customers, above all new orders for linear transfer machines manufactured in Germany remained well below expectations. Mikron Machining increased order intake from the low CHF 52.6 million seen in the first half of 2014 to CHF 62.5 million in the first six months of 2015. The business segment increased order backlog from CHF 46.3 million to CHF 54.1 million, although some orders will not generate sales revenue until 2016 or later. Net sales fell from CHF 63.1 million to CHF 52.7 million. Under the impact of the strong Swiss franc and due to the substantial decrease in net sales, profitability was also negative.

Outlook
In the second half of 2015, the Mikron Group expects to continue facing a challenging, uncertain and - particularly regarding order intake in the machinery business - volatile situation. The Swiss companies in particular will remain exposed to huge pressure on margins. Continuing stable demand for tools and services give Mikron grounds for optimism, as do the ongoing negotiations with existing and new customers on numerous projects. The situation of Mikron Automation in the US is also pleasing. On the whole, Mikron anticipates an increase in sales that will return the Group to the profit zone. Nonetheless, Mikron has to revise its expectations for full year 2015 downwards and is now projecting net sales slightly below the prior-year figure and EBIT that will unfortunately only just make positive territory.

Key figures for the Mikron Group in the first half year 2015

Brief profile of the Mikron Group
The Mikron Group markets machining and automation solutions, enabling customers around the world to master their precision manufacturing processes. Rooted in a culture of Swiss innovation, Mikron is a leading supplier to the automotive, medical devices, pharmaceutical, consumer goods, writing instruments and watch-making industries. The two divisions, Mikron Automation and Mikron Machining, are based in Boudry and Agno, Switzerland, with additional production facilities in Germany, Singapore, China and the United States. The Mikron Group employs approximately 1,200 people who work to provide Mikron customers with an experience that reflects over 100 years of leadership in high-performance and high-precision production. Mikron Holding AG is listed on SIX Swiss Exchange (MIKN).

Contact
Mikron Management AG, Martin Blom, CFO Mikron Group
Phone +41 62 916 69 60, ir.mma@mikron.com

Download Media Release
Semiannual results 2015 (pdf)

Investor Relations Calendar of Events
8 March 2016, 07.00 a.m. - Media release: Publication of the 2015 Annual Report
8 March 2016, 10.00 a.m. - Media and analysts conference
12 April 2016, 04.00 p.m. - Annual General Meeting 2016

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