April 30, 2019 Updated 4/30/2019
Milacron Holdings Corp. Milacron’s Uniloy unit produces blow molding machines for a variety of end markets. It has owned by business for 20 years.
Milacron Holdings Corp. is exiting the Uniloy blow molding machinery business, 20 years after buying the operation.
Milacron announced the news in its first quarter financial report, issued April 30.
Uniloy’s line of blow molding machines includes reciprocating screw blow molders, injection blow molding presses, shuttle machines and accumulator head blow molding machines. The business also is a major manufacturer of blow molds, for dairy and other markets.
Milacron will keep the structural foam business, which it acquired at the same time as the blow molding machinery operations.
“We’ve decided to exit the blow molding business,” said Bruce Chalmers, chief financial officer. Working with Milacron’s board of directors, he said officials have decided to focus on the injection molding and extrusion machinery businesses, which are better suited to deliver “consistent 5 percent top-line growth and 20 percent EBITDA margins.”
The company has also been focusing on its “consumables” businesses for growth, which includes spare parts, service, hot runners and mold components.
It reported first quarter sales of $248.7 million, a decline of 13.9 percent from the same period a year ago. The financial numbers do not include Uniloy, which is now considered a discontinued operation.
Milacron entered blow molding in 1998 when it bought Johnson Controls Inc.’s Uniloy blow molding and structural foam molding business.
Uniloy’s line of blow molding machines includes reciprocating screw blow molders, injection blow molding presses, shuttle machines and accumulator head blow molding machines. The business also is a major manufacturer of blow molds, for dairy and other markets.
Uniloy Milacron is based in Tecumseh, Mich. The machinery maker moved production of Uniloy blow molding machines and structural foam presses to Milacron’s main assembly plant in Batavia, Ohio, in 2002.
In 2015, Milacron consolidated European manufacturing of its blow molding machines into Policka, Czech Republic, and ended manufacturing in Italy. Uniloy molds are made in Tecumseh.
The first-quarter 2019 results showed declines in sales and new orders compared to the first quarter of 2018, but orders increased when viewed sequentially, from the fourth quarter of 2018.
In the conference call, CEO Tom Goeke said the comparable numbers from a year ago reflect the strong start to 2018.
Goeke called 2018 a “tale of two halves,” as last year started well, but financial results in the second half of the year were hit by tariffs and global trade tensions. Those headwinds continued in the first quarter, he told analysts.
Chalmers, the CFO, said Milacron leaders think the trade problems will subside in mid-year, and business will recover in the second half.
First quarter orders of $275.3 million were a bright spot, increasing by 7 percent from the fourth quarter. From the year-ago first quarter, however, orders declined 10.8 percent.
“The markets are still working their way through the residual effects of the policy headwinds,” Goeke said.
Backlog grew in double digits from the fourth quarter. The company reported modest backlog growth in automotive and medical over the prior-year first quarter, as automotive was up by double digits. Goeke said the higher automotive backlog made Milacron an exception to the broader industry.
Goeke said business in India remains strong, up double digits vs. the prior year and in high single digits from the fourth quarter. Medical is up double digits from the year-ago period.
The Melt Delivery and Control Systems unit, which includes hot runners, mold bases and components, parts service, retrofit and remote monitoring, fell 14 percent to $100 million of sales in the first quarter, compared with the first quarter of 2018. Automotive and electronics were down by double digits. Asia — excluding China — posted moderate growth vs. the prior year and sequentially.
Answering a question from an analyst, Goeke said MDCS saw a “more robust” number of inquiries from China in the first quarter, as investment deals with larger companies and multinationals were being initiated, but not closed. He said Milacron anticipates positive results for the end of the second quarter and into the third quarter.
The machinery segment, called Advanced Plastic Processing Technologies, reported first-quarter sales declined 15 percent, to $119 million, from the year-earlier first quarter.
Milacron had strong first quarter orders in North America, up by double digits from both the year-ago first quarter and the fourth quarter. The company reported double-digit sales growth in India, measured on a constant-currency basis.
Margins improved because of the discontinued product lines, the company said.
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