Gildemeister AG is a Germany-based company, engaged in the production of cutting machine tools. It offers machine technologies, services and software products. The Company’s activities comprise Machine Tools and Services segments. The Corporate Services segment constitutes the holding functions. The Machine Tools segment forms the Company’s machine business with the turning, milling, ultrasonic and laser technologies, as well as automation and electronics. The Services segment is operated by DMG Vertriebs und Service GmbH and its subsidiaries, which offers cross-functional services for the Company’s machines, as well as for the solar tracking systems of the the SunCarrier division of a+f GmbH. Gildemeister AG owns 11 production plants located in Germany, Austria, Poland, Italy and China. Gildemeister operates worldwide through its 69 national and international sales and service locations in 34 countries. 

http://www.gildemeister.com

Before the Executive Board reports on the financial year 2009 of GILDEMEISTER Aktiengesellschaft and on the current financial year, we would first of all like to present the development of the machine tool industry in the past year.
Industry development 2009
International development
The worldwide market of machine tools suffered its worst crisis ever. Global machine tool consumption decreased in the reporting year 2009 by 31% to € 36.1 billion (previous year: € 52.5 billion). Again, China was the largest sales market by far at €10.5 billion (29%). Far behind in second place was Germany at € 3.9 billion (11%). Third place was taken by the USA at € 2.4 billion (7%), followed by Japan and Italy. These five industrial nations account for 60% of the global consumption of machine tools.

According to calculations of the VDW (German Machine Tool Builders’ Association), global machine tool production also amounted to €36.1 billion. This means that production in 2009 declined by 31%. At € 7.5 billion (21%) Germany still ranks first in the world. For the first time, China proved to be second of the world‘s largest manufacturers of machine tools at € 7.0 billion (19%). Japan occupied third place with € 5.1 billion (14%). Italy was in fourth place with € 3.8 billion (10%). South Korea achieved fifth place with € 1.9 billion (5%). These five countries account for 69% of the global machine tool production.

German Machine Tool Industry

Order intake of the German machine tool industry slumped by 55% to € 6.2 billion (previous year: € 13.7 billion). Domestic demand fell by 61% (previous year: -17%). International demand decreased by 50% (previous year: -12%).

Production fell by 30% to € 9.9 billion and was thus clearly below the previous year’s figure (€ 14.2 billion). Of the machine tools produced in Germany, 61% were exported.

Financial year 2009 of the GILDEMEISTER Group

The financial year 2009 was, due to the economic crisis, was one of the most difficult years for the machine tool industry and also one of the most difficult for GILDEMEISTER in its corporate history. This dramatic situation demanded a lot of us. However, compared to the industry we’ve done well! Mastering the challenges of the international economic crisis and overcoming them requires strong alliances. In March 2009, we signed a cooperation with the leading Japanese builder of machine tools, Mori Seiki (Nagoya), which has allowed us to combine our resources and to achieve joint efficiency advantages. Our strategic cooperation covers the areas of production, purchasing, research and development, sales and services in specific markets, as well as customer financing.

Sales revenues

Sales revenues fell by € 722.8 million (-38%) to € 1,181.2 million (previous year: € 1,904.0 million); it was possible to avoid a greater decline through the good order backlog at the start of the year. Domestic sales revenues fell to € 496.5 million (-40%); international sales revenues decreased to € 684.7 million (-36%). The export share amounted to 58% (previous year: 56%).

Segmental Reporting

Our business activities include the Machine Tool segment with a sales revenue share of 64% (previous year: 63%) and the Service business with about 36% (previous year: 38%) and Corporate Services with less than 1%.

The Machine Tools segment includes the new machines business. Sales revenues fell by 36% or € 426.5 million to € 757.7 million (previous year: € 1,184.2 million). The milling technology of DECKEL MAHO contributed 42% (previous year: 41%); Ultrasonics / lasering technologies accounted for 3% (previous year: 2%). The turning technology of GILDEMEISTER totalled 19% (previous year: 20%). The Services segment was also marked by the economic downturn. Sales revenues decreased by 41% or € 296.3 million to € 423.3 million (previous year: € 719.6 million). The Solar Technology division – which belongs to the Services segment in the reporting year – contributed to this with € 88.5 million. The original service business recorded a decline of 36% or € 185.3 million compared to the previous year.

Order intake

Order intake declined by 39% and reached € 1,145.9 million (previous year: € 1,882.0 million). In the first three quarters, order intake developed analogously to the difficult market environment in that it declined sharply. In the fourth quarter, order intake reached a turning point at € 327.7 million (previous year: € 289.2 million). The machine tool business decreased over the entire year by 51% to € 568.0 million. The service business amounted to € 577.7 million (-21%); in which the solar business proceeded proportionately positively at 
€ 299.8 million (+85%).

In Germany, in line with the market environment, orders declined considerably, by 59% to € 343.9 million (previous year: € 843.4 million). In Europe, order intake slowed down noticeably yet remained above the trend in the industry. In America, business declined according to the market development. In Asia, orders increased slightly. Particular signs of growth were recorded in China. The export share amounted to 70% (previous year: 55%).

Order backlog

As of 31 December 2009, the order backlog amounted to € 586.7 million; it was thus clearly below (19%) the previous year’s figure (€ 727.4 million). This represents a utilisation period of an average of some three months.

Profitability 2009

We reached our target of achieving positive result (EBT). Despite the massive losses, by consistently initiating operational and structural measures, we have been able to achieve overall positive earnings. Net profit in the group amounted to € 4.7 million (previous year: 
€ 81.1 million). EBITDA amounted to € 60.9 million (previous year: € 188.9 million); EBIT totalled € 31.8 million (previous year: € 158.2 million). EBT was positive at € 7.1 million (previous year: € 126.7 million).

Earnings per share rose to € 0.10 (previous year: € 1.87). The Executive Board and the Supervisory Board of GILDEMEISTER Aktiengesellschaft will propose to the Annual General Meeting of Shareholders, to be held on 14 May 2010, that the net profit achieved should be distributed with a dividend of € 0.10 per share for the financial year 2009....