Facing up to realities in the power-press market.
The company has also welcomed veteran European auto-industry executive Rolf Zimmermann as its chairman. Muller Weingarten A.G. (Weingarten, Germany, www.mwag.de) has supplied some of the largest transfer presses--with ratings up to 9,000 tons--and most have gone to the world's automotive industries.
Muller Weingarten (MW) took in orders totaling 379-million [euro] in the most recent fiscal year (ending December), down 8% from the year before.
Sales were made to rise modestly (+2%) to 403.3-million [euro] (about $502-million at an average annual conversion rate), but total production output actually fell by 4 1/2%, and backlogs were down 7 1/2%.
Reflecting a worsening price and earnings situation, MW recorded a pre-income-tax loss of 1.5-million [euro]. Other problems included losses absorbed by MW's press tool-and-die manufacturing company, Muller Weingarten Werkzeuge and start-up costs at the French sales and service company.
New accountancy methods for asset valuation and profit realization also produced a fall in profits. Like more than 7,000 other publicly held EU companies, MW was required to switch over to IFRS (International Financial Accounting Standards) for the last fiscal year. The pressbuilder moved from the previous HGB, or Germany's "generally accepted accounting procedures," and it re-stated the previous year under IFRS (used here for comparisons).
In all, the net loss for 2005 stood at 5.3-million [euro], versus a net profit of 9.6-million [euro] in the previous year. However, on balance, MW has no bank debt.
The power-press business is seen to remain difficult. The MW board of management forecasts a substantial pre-tax consolidated loss for the current fiscal year. It envisions continued restraint in investment for the large-power-press sector, and it figures the performance of Muller Weingarten Werkzeuge again will have a negative impact on company results.
Available MW funds will be used for precisely targeted investment in high-growth markets. For example, MW is establishing a production facility in Dalian, China. Also, monies will go into its North American service company Bliss Clearing Niagara, Inc. (Hastings, Mich., www.blissclearingniagara.com). Profitable BCN provides remanufacturing, support, maintenance, and repair for presses originally made under those brands. Employing a workforce of around 60, BCN is expected to produce sales close to $20-million during 2006.
The aim of the BCN acquisition, says Muller Weingarten, is to develop successful service activities in North America and Europe, which in total generated orders approaching 100 million [euro], a first.
As well as substantially increasing the number of machines serviced by BCN, Muller Weingarten anticipates the acquisition will make a positive impact on its new-machines business.
Any market growth recorded for MW came from Asia in the form of demand for automatic blanking and forming presses and die-casting equipment. Traditional market demand for large hydraulic and mechanical presses remained subdued.
Management changes will have an impact, says the chairman of MW's Supervisory Board, Dr. Gerhard Wacker.
Commenting on Rolf Zimmermann joining from the automotive industry, Wacker says, "His proven expertise, vast experience, and many years spent at management level are precisely what we are looking for in order to further develop and efficiently implement our proposed restructuring programs, so that the company can quickly return to achieving the success to which it has been accustomed."
Zimmermann has held top management positions at Opel (Germany) and Skoda (Czech Republic), and he was chairman of the board at Ford Werke (Cologne, Germany) from 1997 to 2002. He is also managing partner at the investment company Atlantic European Partners, is a member of various supervisory bodies in Germany and overseas, and is currently in discussions over acquiring a stake in MW.
Muller Weingarten occupies a special position in producing machine tools for metalworking, forging, and die casting--with the main buyer being the automotive industry. Originally formed from the merger of Weingarten and Muller, the company in 2003 acquired Umformtechnik Erfurt, the once-vaunted pillar of the former East Germany's metal forming combine, and so has plants in Weingarten, Esslingen, Erfurt, and Remscheid. The MW Group has subsidiaries in China, the U.S., Mexico, Switzerland, the U.K., France, Spain, and the Czech Republic as well as worldwide service outlets.
In Western Europe and elsewhere, power-press markets are almost flooded with good-quality second-hand presses, following the closure of many subcontract press shops. There is also the steadily increasing use of plastics in vehicle structures and in power train and suspension applications.
Refurbished or "re-engineered" power presses are becoming a popular low-cost investment alternative in the some markets. Add to these factors that power presses tend to have long lives--up to 30-40 years--then the Western markets for new presses have arc experiencing pressure to decline. Some believe this is offset by a growing market for sheet-metal hydraulic presses, which tend to be "kinder" to tools and offer more flexibility in forming and drawing complex components.
From our European correspondent
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|Publication:||Metalworking Insiders' Report|
|Date:||Aug 30, 2006|
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