Montupet SA Business report FY2009

Business Highlights

Financial Overview

(in million euros)
  FY2009 FY2008 Rate of
Change (%)
Sales 204.4 395.4 (48.3) -
Operating income (19.5) 17.3 - -

Business Overview

-The Group has had to deal with the crisis and the downturn, and to take significant steps to reduce staffing and to implement partial unemployment. The restructuring of its plants was continued.

-In the United Kingdom and North America, the activity was focused in the Belfast and Torreon (Mexico) factories.

-Calcast whose production had stopped and the equipment had been transferred to Montupet UK in 2008 was reclassified in as activities discontinued or for sale in the 2009 accounts after selling its stock of finished product in the first quarter, generating a turnover of 1.686 million euros.

-Montupet Limitee in Canada has also been reclassified as activities discontinued or for sale.

-In France, the "wheels" activity was transferred to a subsidiary retroactively from the date of January 1st 2009. The new company, Francaise de Roues SAS, recorded a net loss of 1.329 million euros. It is classified as activities discontinued or for sale in the 2009 accounts.

-In France (excluding wheels) the plants activity has been doubly affected by the decline in registrations and inventory reduction throughout the automotive supply chain. After a first quarter extremely low, calls for deliveries have recovered gradually over "small" engines cylinder-heads and structure parts, providing improved dynamics, in particular at Chateauroux. It is the heavy reliance on short-time which helped to partially adjust the volume of hours worked in this exceptional situation. At Laigneville an agreement on working arrangements was reached with the employee representative bodies, to improve the competitiveness of the site from 2010.

-The two manufacturing plants in Belfast have experienced opposite fates: the cylinder head 2 liters and more, depending on the version, dedicated to the Ford diesel engine, has been produced at only half the volume of the previous year, while the PSA diesel engine cylinder head "DV 1.6L" benefited from the dynamism of the lower mid-range car market, and saw its production down only very slightly. The adjustments of wages and hours negotiated with staff representatives, and a plan of 50 redundancies, enabled to adapt the organization and personnel to the circumstances.

-Meanwhile two carousels molding, available in the former factory Calcast were resettled in the Belfast plant, to produce the new Ford cylinder gasoline engine "Sigma", to start end of 2010.

-In Spain the 2009 activity was 35% lower than in 2008. The plant was still prepared for the future by managing a strong evolution of its product mix towards parts with higher added value, such as turbocharger bodies or bodies of the valve recycling exhaust gases. These high-growth components contribute to the reduction of engine capacity and emissions from new engines.

-With the support of the western European plants, the Bulgarian unit has continued to grow by starting four new products and adding two new customers in serial production, Audi (cylinder-heads for the V6 engine) and BMW (cylinder-head of the Mini). The monthly tonnage has been gradually increasing from 20 to 200 tons. After a full year of production, the plant received its certifications ISO / TS 16949 for quality and ISO14001 for environmental preservation.

-The Mexican unit has been successfully adapted to the low load of 2009, down by 40% as compared to 2008. It has preserved its productivity and developed new products for GM and Daewoo.

-The "wheels activity" was transferred to the Company's subsidiary Francaise de Roues SAS in 2009. It has continued its recovery in terms of quality and productivity, and was less affected by the crisis than the cylinder-heads activity, since the volume delivered is recessed by 15% as compared to 2008. The product mix has shifted towards wheels representing a higher added value.

-The proposed sale of the subsidiary to a group that could provide the necessary international exposure, has been continued. It accelerated in 2010 through serious discussions with the Indian Group Deltronix.


R&D Expenditure

(in thousand euros)
  FY2009 FY2008
Overall 10,645 7,852

-In FY2009, the research and development expenses were incurred up to 8.4million euros by the Company and Francaise de Roues SAS (expenditures eligible to Research tax credit), 0.73 million euros by Montupet UK, 0.73 million euros by Montupet Eood, 0.59 million euros by Alumalsa and 0,2 million euros by Montiac.

-The 2010 budget allocated to Research amounts to 4.8 million euros. As customers require cylinder-heads of higher performance, smaller and increasingly used, this budget includes a major project of 2.2 million euros in France at Laigneville aimed at improving the size and regularity of the sand used in making cast cylinder heads, of which core requires increasingly complex sand and resin casts. This sand will be reclaimed and recycled on site.

-In addition, the budget allocated to the development of new parts was 14.4 million (outside investments budgeted at 1.9 million euros). It does not include the budget of the new entity FDPA.

R&D Activities

-In 2009, the axes which have focused on research and development in France, eligible to the tax credit, are the development of new cylinder heads and associated processes, improving of the thermal fatigue bench, the development of new alloys, the improvement of simulation tools, of the coring process, the development of the new electric vehicle housing, the development of the supervision of low pressure casting process.

-The axes of the R&D abroad are aimed at developing new cylinder heads, and a new production process based on the gravity casting for the manufacture of brake components and high-tech turbocharger.