Magnetics Business & Technology - November/December 2020 - 24

INDUSTRY NEWS

Magnetics Companies and Industry Suppliers Quantify Their Battle Against Covid-19
Just how hard has Covid-19
been on the magnetics industry
and what lies ahead? In recent
financial reporting, magnetics
and electrical manufacturing industry companies have
been quantifying their business
declines during the pandemic
and, in some cases, projecting
the months ahead. This article
summarizes the experiences
and outlooks of several not
previously covered.
Hitachi Metals, an $8 billion per year
company based in Tokyo that is a
major member of the Hitachi Group,
reported that its overall business
fell 34% in the three months ending
June 30 while its segment Magnetic
Materials and Applications/Power
Electronics suffered a slightly less decline of 27.9%. Revenues
for this segment were about $207 million compared to $264 for
the same period a year ago, generating an operating loss.
Breaking things down by business sector, Hitachi said that its
sales of rare earth magnets among magnetic materials and
applications decreased due to a decline in demand for various
manufacturing equipment and industrial machinery as well as
electronics-related products in the industrial equipment business
in addition to a downturn in demand for automotive electronic
components. Sales of ferrite magnets decreased year on year
due to a decrease in automotive electronic components. As a
result, overall sales of magnetic materials and applications decreased year on year.
Among power electronics materials, sales of soft magnetic materials and their applied products decreased year on year due to
a decline in demand for amorphous metals for transformers, despite an increase in demand related to telecommunications such
as server equipment. Meanwhile, sales of ceramic components
remained virtually unchanged year on year due to a decrease in
demand for use in telecommunications equipment and automotive electronic components, despite an increase in demand for
use in medical equipment.
The recent declines come on top of earlier ones. Back in March,
Hitachi Metals reported that for the previous 12 months its revenues in the Magnetic Materials and Applications segment had a
full-year decline of 14.8%.
Carpenter Technology,
a company not accustomed to being in the red,
registered a net loss of
$118 million for the three
months ended June 30 in reporting its fourth quarter and fiscal
year 2020 results. The company manufactures a broad range of
soft magnetic and other alloys, along with an aggressively grow-

24

ing capability in additive manufacturing.
Revenues for the most recent three months fell 32% from $641
million for its fourth quarter in 2019 to $437 million this year. For
the full 12-month period, the drop in revenues was about 8.5%,
falling from $2.38 billion in 2019 to $2.18 billion this year.
"We generated strong free cash flow in the quarter which further
strengthened our already healthy liquidity position via a significant reduction in inventory," said Tony Thene, president and
CEO. "The strategic decision to accelerate our inventory reduction plan to drive cash flow negatively impacted our operating
results in the quarter. We also continue to deal with the incremental operating costs and reduced productivity associated with
COVID-19 and its impact on our operations."
"Our facilities remain open which speaks to the dedication of our
employees and the benefit of our core safety values. Demand
patterns have been broadly impacted by Covid-19 and we are
working closely with customers across our end-use markets as
supply chains continue to adjust. While Covid-19 has created
headwinds for our industry, we have successfully enriched and
extended supply agreements with key aerospace, medical and
semiconductor customers who recognize the benefits of our
advanced material solutions and our demonstrated resilience in
being able to safely operate our facilities."
"While we currently expect demand patterns to remain subdued
during the first half of fiscal year 2021, the long-term outlook for
our key end-use markets remains strong and our supply chain
position remains resilient. We have ample liquidity to navigate
the current challenging environment and will continue to actively
manage our business and take additional actions if necessary.
We believe we will emerge from this crisis with even stronger
connections with our customers, as well as increased market
share across key aerospace and defense and medical platforms
and applications.
Our established core business and leadership in critical emerging
technologies including soft magnetics and additive manufacturing continue to support long-term sustainable growth and value
creation for our stakeholders."
Coil winding and electrical manufacturing
equipment maker Aumann AG of Germany, generated revenue of €84.7 million
in the first half of 2020, registering a
dramatic decline from the previous year's
level of €133.5 million. Revenue in its
Classic Segment plummeted by 61.4% to
€29.7 million, while revenue in its E-mobility Segment fell slightly
by 2.9% to €55.0 million. The E-mobility segment's revenue
share was 65.0%.
Due to COVID-19, order intake was weaker than expected in
the first half of the year, but at €83.1 million it was still roughly in
line with the previous year's level of €86.1 million, the company
said. A positive aspect is that order intake developed well in the
e-mobility segment, rising by 10.1% to €41.8 million despite the

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