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195. Bull, Bear & Beyond – Mikron: executive interview
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In this video, we speak with Marc Desrayaud, CEO of Mikron. Marc provides an introduction to the company, outlining the operations of the two divisions, Mikron Automation and Mikron Machining Solutions. He discusses the end markets they serve, highlighting the company’s strong position in the Pharma/Medtech market, and the trends Mikron is seeing. With FY25 results recently released, he discusses the company’s record performance over the last year. He outlines Mikron’s activities in digital and lifecycle services as well as how the company is using AI to enhance its product offering and improve internal efficiency. He provides an update on the manufacturing expansion project in Switzerland and wraps up with a discussion of the outlook for the company in the coming year and in the medium term.
Mikron (SIX: MIKN) develops, produces and markets highly precise, productive and adaptable automation solutions, machining systems and cutting tools.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
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Transcript
Introduction to Micron and Leadership
00:00:07
Speaker
Welcome to Edison TV. I'm Catherine Thompson, technology analyst at Edison, and I'm here today with Marc De Riaud, CEO of Micron. Micron is a Swiss headquartered and Swiss listed manufacturer of high precision automation solutions, machining systems and cutting tools.
Overview of Micron's Divisions
00:00:26
Speaker
um To kick us off, Marc, do you think you could give us a brief overview of the company? Thank you, Catherine, and we'll be very happy to do it. So Micron is a Swiss technology group with three strong divisions that are acting with similar values and positioning, but in different environments.
00:00:42
Speaker
So the biggest ah division of Micron is Micron Automation. We deliver automated assembly solution to assemble complex parts. Today we are focusing on medtech and pharma devices like injection pen or inhalators.
00:00:56
Speaker
Division automation represents approximately two-thirds of the turnover of microns, so it means around 250 million Swiss francs.
Global Operations and Market Focus
00:01:04
Speaker
We are going fast, thanks to our long-term positioning in the insulin and GLP-1 injection system, but also as the sensors, the blood sensors, and also the inhalators.
00:01:18
Speaker
Micro-automation is acting locally in all continents. It means that we are designing and delivering systems and solutions in the US, in Europe, in China, in Singapore, for the regional market.
00:01:33
Speaker
The second activity of Micron is a segment my machining solution, which is regrouping two divisions. This segment is up approximately 130 million, so are approximately one-third of the turnover.
00:01:46
Speaker
The first division is division Micron machining. We are leader in high-performance machining system. to manufacture complex and precise metal components in high volume. So if you need a volume, if you need a price per piece, which is low, if you need a high quality, high reliability, and if you need a machine, which is specially designed for units, we are the right partner.
00:02:08
Speaker
Our co-product is a so-called transfer machine. So CNC transfer machine means that you enter on the machine with a raw material bar and then you end at the at the end of the machine with a finished part. And the process can include up to 120 different operation stops. So very efficient.
00:02:25
Speaker
Division machining is producing centrally in Switzerland. And of course, we have some sales and service offices in US, in China, in Italy, and in Germany. And the third division of the group is a division Micron tool, which is a spin-off of machining.
00:02:40
Speaker
We are supplier of cutting solutions for high-performance machining of complex metal parts. So a part of the business is linked with Micron machining. Of course, we develop solutions with machining and tool, but tool is also acting independently on the market with other machine suppliers.
00:02:55
Speaker
And here we are focusing on small diameter cutting tools for difficult to cut material. Here we are speaking about Titan, special alloys, and we have ah ah good growth in the last years in medical and aerospace, where the efficiency gains are important.
00:03:11
Speaker
Division tool is operating from Switzerland and Germany, and we have some size offices in US and China and various countries of the world through the disruptors.
Micron's Workforce and Customer Partnerships
00:03:21
Speaker
So what these three visions have in common is the positioning as a leading partner for large customers for high performance production system to manufacture a complex and precise components in high volume. This is our position.
00:03:35
Speaker
As a world, the micron group is is a sweet group with more than 1,000 employees in Switzerland, in total 1,600 employees worldwide. We are present in the US, in Germany, in China, in Singapore, in Lithuania.
00:03:47
Speaker
We have a turnover of 325 or 380 million Swiss francs with more than 10% of it. Most of the functions of the group are at a division level, so we have a quite lean group.
00:04:01
Speaker
Great. And you touched on this in your answer already. um But could you talk a little bit more on the different end markets that each division serves and the trends that you're seeing there?
Industry Focus and Market Shifts
00:04:12
Speaker
Yes, Catherine, we are present in almost all the industry market and application where you need volume and precision. We have made a transfer fair of of industry. We were quite largely ah focusing on automotive some years ago. Today, we are mostly a medtech and pharma company. So more than 60% of turnover is coming from the medtech and pharma in the three divisions.
00:04:36
Speaker
We are developing today aerospace and semiconductors. And we are also quite a good position in in the luxury and the watch industry. where you need to have the quality and and the volume.
00:04:50
Speaker
So MedTech and Pharma continue to be our our focus because it grows. And now ah so the the industry is coming into a consolidation, needs some ah more efficient solution to produce. There is more competition, so price per piece is going down.
00:05:04
Speaker
And of course, the customer needs a partner which is ensuring the reliability of the process and also the standard to produce according to the different markets. Automotive is still important for us. so We are a niche player in automotive and very high-end application, for example, in injection system. But we know that automotive is in transition, so we do not have the volume in the new generation of cars because not all the brands are going to large volume.
00:05:34
Speaker
But we are positioned in the future for electrical vehicles. Aerospace is also ah an industry which is developing because there is a lot of production coming up.
00:05:45
Speaker
So there will be large volume in the coming years with 26 to 28 being the peak. And now the customer needs to have some solution to produce in high volume and high point. So we are quite well balanced between the industries and we have some area to develop.
Challenges and Resilience
00:06:00
Speaker
And you've just reported your FY25 results. Do you think you could talk us through the highlights? Yes, sure. So 2025 has been a hard year with a lot of surprises.
00:06:12
Speaker
Speaking about the tariffs, speaking about the strong Swiss funds, European industry is a quite in difficulty, especially Germany, which was always a ah leader. But the most important for us is that in 2025, we could manage to show resilience. So what I mean with resilience is that even if the market is going up and down, were hoping to have a lot of business in the U.S. The U.S. was introducing some tariff. So all this ah allowed us to keep the the performance.
00:06:42
Speaker
We improved even the performance. So we showed that we are datative and that... We don't know what warm tomorrow will be, but we are ready to adapt. The consequence of this uncertainty is that a lot of projects by our customers have been postponed or canceled.
00:06:57
Speaker
Some people have placed some orders ah in the USA, but with the new import rules, they decided to postpone because they don't want to pay additional tax to import the machines. Some others are thinking about moving some machines to the US. so we are We have the chance that we have global and that we are supporting our customers with different business models.
00:07:19
Speaker
The profitability was improved. I think we managed to get the benefit of the units which are performing well. So Boudry was running very well and had very high scalability of profit.
00:07:31
Speaker
And for the area where it was less performing, we managed to to reduce the cost and to adapt. So with that, we could overall improve the profitability. and Another highlight for 2025 is that despite this uncertainty and we had to add a lot of reactivity, we are working in parallel in a lot of investment for the future.
00:07:51
Speaker
So we have invested quite a lot in the infrastructure, in buildings. We are investing also a lot in ah improving our internal process, introducing a new HR platform. We are preparing a move on a new ERP system. So we have a lot of improvement project internally, which have been done in parallel to this so difficult market situation.
00:08:13
Speaker
So overall, the best performance of Micron since decades and a very strong solution. And we have a very solid financial situation. We are coming out of 2025 in a relatively strong position.
00:08:29
Speaker
And looking at your product and service offerings, and could you talk about how you're developing your digital and lifecycle services and um while these why these are so important to you and your customers?
Digitalization and AI Initiatives
00:08:41
Speaker
And then also, could you just comment on the role that you think AI will play in the business? Yes, of course, the digital solutions, so the the digital product that we sell to customers in addition to the production system, I think is coming today as a standard for the company we want to position as as as a solution supplier.
00:09:01
Speaker
and That's why today we speak about solutions, not anymore about machines. The traditional and industry needs to be digitalized. We know that today to improve the productivity, to improve the the the efficiency of the production, you will need digitization.
00:09:15
Speaker
We have also the pressure on on sustainability where you need to improve the energy consumption. You need to get to have a lot of data. And not all our customers are ready for that. So we are offering a complete solution.
00:09:28
Speaker
Micron has invested in the in the core competencies of digitalization. I think we are one of the only ones which is managing ah a good production system process know-how, so we know how the machine, how the tool, or the automated line are running.
00:09:44
Speaker
We have developed a very open and flexible data acquisition system that we can install on Micron machines, but also on machines which are not from Micron. We have developed some process applications, for example, control systems for tools.
00:09:57
Speaker
We are able to predict the lifetime of a tool. And then we have last year, in 2024, we have acquired a spin-off of a Swiss university, which has got knowledge in in AI and IoT. So we have today all the components to be able to offer an ecosystem, which is performing on micron machines, but we can also integrate some machines which are not for micron, for the customer to manage his energy consumption, to manage his production planning, to manage the maintenance of his machine.
00:10:29
Speaker
So I think that we are relatively complete in our profile. Another part of the digitalization is also digitalization of our internal process. Here we have developed a lot of applications in order to simplify the way we work, to gain in speed, to remove some non-added value functions.
00:10:49
Speaker
It's not about replacing people, it's to giving the the people the time to work on more important things. And here, artificial intelligence is playing a big role. We are just touching the surface face of what artificial intelligence can do because we need first to to develop also the process and and the data.
00:11:06
Speaker
But I'm convinced that in the future, ai will play a very big role if we want to stay competitive and if we want to open to the consumer a competitive product.
00:11:18
Speaker
And I know you're in the midst of expanding your production production facility in Boudry in Switzerland.
Expansion and Capacity Growth in Boudry
00:11:24
Speaker
um Could you give us an update on how this is progressing and also any other operational improvements underway or planned?
00:11:34
Speaker
Yes, so it's progressing well. We are on track. It has been a ah huge challenge. You have to imagine that we we we start with a museum zoom with a building or we start with a project in mid of 2025.
00:11:51
Speaker
And it was a huge, ah huge working place. So we are speaking here of doubling the capacity in Boudry. ah We are on track. We have the delivery of the first area in January. So it is a new production hall where we assemble the machine to be able to receive the customer to make the factory acceptance test. so it's So it's a big hall of 3,500 square meters.
00:12:15
Speaker
So this has been already delivered. We are working now to to have the delivery of the new storage for the customer parts. We are getting millions of parts of customers every year in a plant in order to to debug the process and then to make the factory acceptance test. So here we are making a new, very modern storage your location.
00:12:35
Speaker
And that last but not least, we are extending also the surface for employees because we have ah grown very fast. So we have with more than 50% extension in the employee surface face and also in the parking. And this will be delivered by the summer. So we hope that in September, October, we can have an official opening of these new plants.
00:12:55
Speaker
It has been a huge challenge because we are fortunately having a lot of business. So we had it in the meantime to to find some external locations where we can continue to assemble some machines. So we have today three locations around Boudry which are helping us.
00:13:11
Speaker
It's a little bit like ah when you are driving with 120 kilometers an hour on a motorway and you have to change the wheels. But we managed And to answer your question, we see already that with with the growth, we have increased ah the turnover. So we have a scale effect, which is making Boudry extremely profitable.
00:13:29
Speaker
But we think that the efficiency game will come in 2027. So we have official opening in October 2026. And in 2027, we will get the benefit of this efficiency game.
00:13:42
Speaker
great And finally, do you think you could talk about the company's outlook, both for the year ahead and also in the medium term?
Growth Goals and Market Strategy
00:13:51
Speaker
Yes, so we have got still a lot of ambitions. There are still a lot of things that we have to do when we want to do. We continue to modernize and to expand Micron business. um we We are a profitable niche player in very large markets, and the world is changing, so which is creating a lot of opportunity.
00:14:10
Speaker
So I think we have a a lot of of po potential. It will be up to us to to gain some market share and to enter into new markets. 2026 will be a transition year because ah we have some capacity limitation first. Secondly, we we know that the machining markets will be relatively weak.
00:14:28
Speaker
All type of machine with very high productivity is a little bit too late in cycles. So we see that the market is starting to move a little bit for the i which says ah the simple machines.
00:14:40
Speaker
But we will need some time until we recover in machining. So I don't think that 26 will bring a lot of costs. But we we have a good hopes that from 2027, with all what we do, we will continue to grow.
00:14:53
Speaker
We have a strategy since 2022 to have a 5% growth per year. We are on track since 2022. Our target is to come with this 5% growth per year until 2030.
00:15:05
Speaker
And we are starting in 2026 some new initiatives because we know that the market where we we we used to be are not the same. We know that there will be quite a lot of competition coming from ah Asia. We know that the automobility market will not be the same.
00:15:21
Speaker
So we have started in 2026 an ambitious initiative plan to gain some new market share, to enter into new market, but also to improve or internal efficiency. We will go on a new ERP in the coming years and we are investing quite a lot in order to make Micron a more efficient company.
00:15:42
Speaker
So I think Micron is a good investment for the future, for shareholders, but also for um employees, because we have a lot of things to offer and I think that we will have ah a good future.
00:15:53
Speaker
Great. Well, thanks so much, Mark, for speaking to me today. Thank you very much, Catherine.