Miba Aktiengesellschaft

EANS-Adhoc: Miba Aktiengesellschaft
Annual Results for 2009-2010: Miba´s Strategy Stands the Test in the Crisis

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Miba Annual Results for 2009-2010

05.05.2010

Annual Results for 2009-2010: Miba´s Strategy Stands the Test in the Crisis

-       Miba focuses on technologically sophisticated key components for future
generations of drives
-       Positive EBIT of EUR 16.4 million despite sharp decline in demand
-       Equity ratio rises to 60.1 percent
-       Miba gains market share and invests in new business segments

Miba, a strategic partner to the international engine and automotive industry,
generated consolidated sales of EUR 311.8 million in the 2009-2010 business
year. With earnings before interest and taxes (EBIT) of EUR 16.4 million, Miba´s
performance was excellent in comparison to other companies in its sector. The
new business year is off to a strong start:
-       Miba takes over the British coatings specialist Teer Coatings Ltd. in
April
-       Miba Sinter Group opens a new site in McConnelsville, Ohio, USA in June
-       Miba Bearing Group starts production of high-performance engine bearings
for trucks in the USA 

"The business year 2009-2010 was one of the most challenging in the history of Miba," says Miba CEO Peter Mitterbauer. "We have proven that we can hold our own in hard times - Miba posted positive results in every quarter. At the beginning of the year we concentrated on the right things: quickly adjusting our cost structure to our customers´ call-off volumes and securing our liquidity for the long term. Our clear strategic orientation to technologically sophisticated products and technologies for the future is proving its worth."

The first three quarters of 2009-2010 were marked by the global recession. The fourth quarter, on the other hand, showed signs of an improving economic situation. In the 2009-2010 business year Miba generated group sales totaling EUR 311.8 million, a 16.8 percent decline from the previous year. Miba performed well in comparison to others in its industry. Thanks to quick and resolute action at the beginning of the business year, in 2009-2010, Miba was able to generate positive earnings before interest and taxes (EBIT) of EUR 16.4 million. The EBIT margin stands at 5.3 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled EUR 45.6 million.

Liquidity Secures Independence In 2009-2010, Miba particularly focused on strengthening liquidity for the long term. At EUR 50.8 million, cash and cash equivalents were significantly up from the previous year´s figure of EUR 24.6 million. Successful liquidity management is also reflected in Miba´s net cash of EUR 7.1 million as of the reporting date January 31, 2010. In comparison, the Miba Group posted net debt of EUR 19.3 million as of January 31, 2009. The equity ratio rose further, reaching 60.1 percent. This ratio underscores Miba´s robust capital structure and secures the company´s financial independence.

Growth Through Technology Expenditures to secure and expand our technology leadership remained high. In the 2009-2010 business year, Miba invested EUR 18.7 million in R&D despite a decrease in revenue. This represents a research budget of approximately six percent of the total sales volume. Miba focuses on the development of components for high-performance, efficient and alternative drives:

       Miba Bearing Group´s heavy-duty and fully lead-free engine bearing
solutions are used in modern and fuel-efficient diesel motors for trucks. The
features of new materials make it possible for future generations of bearings to
meet stricter environmental regulations. Beyond combustion engines, the area of
wind power stations offers major potential for the application of Miba engine
bearings technology; the first patents are pending.
       Miba is a strong technological partner in the development of smaller,
economical and energy-efficient motors and transmissions. Miba Sinter Group
components for double-clutch transmissions and servo synchronizers make a
crucial difference in increasing shifting comfort and fuel economy.
       Miba Friction Group scores with its developmental know-how in the area
of wind turbines. A new friction material with a higher energy load rating
contributes to the improved performance of wind power stations.
       The consistent further development of functional component coatings for
minimized friction also brings Miba a step closer to fulfilling our vision: No
power train without Miba technology. 

Strategically Targeted Investments A total of EUR 19.5 million was invested within the Miba Group in production capacity and product quality (compared with EUR 43.1 million the previous year). About 72 percent of investments in the past year went to the sites in the USA and China. These investments serve the further expansion of Miba´s position in these strategically significant markets.

Cash flow from operations fell to EUR 48.1 million, down from EUR 51.6 million a year earlier. This is essentially due to the decrease in operating income. Once again, Miba fully financed its capital investments out of the company´s own capital resources.

2009-2010       2008-2009
Sales (in million EUR)  311.8   374.6
EBIT (in million EUR)   16.4    34.5
EBT (in million EUR)    15.5    30.9
Investments in fixed assets (in million EUR)    19.5    43.1
Number of employees (yearly average)    2,613   2,855



Miba Holds Onto its Core Staff 

In 2009-2010, Miba had an average of 2,613 employees worldwide, compared with 2,855 the previous year. As of the reporting date of January 31, 2010, the headcount totaled 2,620 (compared with 2,825 on January 31, 2009). Staff cuts resulted from capacity adjustment measures. Personnel expenses in 2009-2010 totaled EUR 108.8 million, an 11 percent decrease from the previous year (EUR 121.7 million).

In the past five years, Miba has created approximately 750 new jobs. As a responsible employer, Miba set itself the declared goal of holding onto its qualified core staff despite the difficult months. The company reacted to the reduction in orders with a broad range of personnel policies such as reduced overtime and vacation time, educational leaves, reduced working hours and the introduction of new models for working hours. Reduced working hours were ended at the end of January 2010. Apprentice training remains highly significant: In 2009, 28 young men and women began their training as production technicians at Miba.

Miba Bearing Group Expands Sites in China and the USA Miba Bearing Group generated revenues of EUR 132.6 million in the past year. It thus accounted for 42.4 percent of total Miba Group sales, making it the leading business unit. Targeted capital investments in research and development, the retention of qualified core staff, and the unwavering commitment to continuing strategic projects were key reasons why expenditures did not decrease to the same extent as revenue. In 2009-2010, earnings before interest, taxes, depreciation and amortization (EBITDA) totaled EUR 24.1 million (compared to EUR 33.4 million the previous year). As a leading development partner for engine bearings, the Miba Bearing Group is there where the customer needs it. Series production of large bearings for boats and high-speed ferries started successfully in China in summer 2009. Production of high-performance engine bearings for diesel truck motors starts this June in McConnelsville, Ohio, USA.

Miba Sinter Group Raises Profitability At the end of the 2008-2009 business year, Miba Sinter Group became the first business unit hit by the effects of the financial and economic crisis. The economic stabilization measures introduced in many countries around the world (such as "cash for clunkers" programs), along with a series of new projects, made it possible for Miba Sinter Group, with revenues of EUR 125.7 million (compared to EUR 135.4 million the previous year), to post a decrease of only seven percent, relatively low in industry comparison. The consistent implementation of measures introduced ahead of schedule, such as the temporary shutdown of systems, led to an increase in profitability despite declining revenue. EBITDA improved from EUR 18.6 to 19.7 million. Miba Sinter Group is opening a new site in McConnelsville, Ohio, in June. The USA is a future market for Miba technology in the area of energy-efficient and low-emissions motors and transmissions.

Miba Friction Group Increases Research Budget The revenue of the Miba Friction Group totaled EUR 51.1 million in 2009-2010, a 33 percent decrease from the previous year. This business unit thus generated 16.2 percent of total Miba sales. The decline in revenue was in part responsible for a negative EBITDA of EUR 0.5 million (compared to positive EBITDA of EUR 9.2 million the previous year). Despite the turbulent economic conditions, the Friction Group consistently invested in R&D. Investment accounted for seven percent of revenue in the past year.

Outlook: New Opportunities for Miba Miba had a strong start in the 2010-2011 business year. In some segments the volume of new orders nearly reached pre-recession levels. Customers´ call-off volumes, however, are subject to major fluctuations, and the planning horizon remains very limited. "We have a good overview of the first half of the year, but at the moment it is difficult to foresee how the second half will develop," says CEO Peter Mitterbauer. Customer cancellations on short notice increase the complexity of planning and require a high level of flexibility from the company.

"Miba is well equipped for the challenges and opportunities it confronts. A high level of technological skills, a solid liquidity base and qualified employees are the crucial factors that will enable the company to emerge from this recession in stronger shape," Mitterbauer says. The situation on the markets abroad is positive, also in the USA. Markets such as China, India and Brazil also show major growth potential. Strategic investments in building and expanding the sites in China and the USA further strengthen Miba´s market position as a technology leader. In the area of coatings, the April takeover of the coatings specialist Teer Coatings in Droitwich, UK, has expanded Miba´s expertise and product portfolio.

In the current business year we are focusing on the topics of quality, flexibility and health. Activities in the area of Business Excellence reflect our constant efforts for high business quality. "One of Miba´s strengths is our good reputation with our customers. Customer satisfaction is a high priority and stands at the center of our relentless striving for the highest quality and reliability," Mitterbauer concludes.

end of ad-hoc-announcement ========================================== ====================================== The Miba Group With headquarters in Laakirchen, Upper Austria, Miba is a strategic partner to the international engine and automotive industry. Sintered components, engine bearings and friction materials for motor vehicles, railways, ships, aircraft and power stations are produced at eleven sites worldwide. Miba products make vehicles more efficient, safer and more environmentally friendly. Miba has around 2,600 employees, over half of whom work at the Austrian sites in Laakirchen, Vorchdorf and Roitham. In the 2009-10 business year, sales of the listed company totaled 311.8 million euros with an operating result (EBIT) of 16.4 million euros.

end of announcement                               euro adhoc
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Further inquiry note:

Press
Eva Almhofer-Amering
Corporate Communications
T: +43/7613/2541-1117
M: +43/664/3402108
eva.almhofer@miba.com

Investors/Analysts
Hannes Moser
Vice President Corporate Finance
T: +43/7613/2541-1471
hannes.moser@miba.com

Branche: Industrial Components
ISIN: AT0000734835
WKN: 872002
Index: Standard Market Auction
Börsen: Wien / official market

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