Bühler reports good performance in 2019
In 2019, Bühler delivered good performance at Group level, increasing the EBIT margin to 7.6% (previous year: 7.1%). Turnover was stable at CHF 3.3 billion while order intake decreased by 4.6% to CHF 3.1 billion. The newly-formed Consumer Foods segment, which was created after the acquisition of the Haas Group, exceeded expectations and made a material contribution to the good Group results. Bühler increased its investments into innovation to a record high, and its financial position remained strong, improving equity ratio. “We are pleased with the 2019 achievements as they confirm our strategic set-up with the three businesses, which leveled out market volatility,” says CEO Stefan Scheiber. “With our broad portfolio, global position, and innovation strength, we are ready to tackle the challenges of an ongoing volatile global economy.”
The business development in the segments varied widely due to high volatility in some of Bühler’s key markets. While the food and feed markets showed continued demand – specifically, plant-based proteins for meat alternatives and malting experienced strong upswings – the automotive, consumer electronics, and architectural glass industries underwent downward trends. As a result, order intake for Grains & Food continued to grow at CHF 1.8 billion (+5.2 %), for Consumer Foods it declined slightly to CHF 775 million (-1.7 %), and Advanced Materials had to absorb a decline of 32.2 % in order intake to CHF 488 million. In regard to turnover, Grains & Food demonstrated robustness at CHF 1.8 billion (+0.9 %) and Consumer Foods was able to grow its turnover by 2.5% to CHF 774 million. At CHF 649 million, the turnover of Advanced Materials dropped by 8.0 %.
Improved profitability, strong financial position
By consistently managing resources and costs, Bühler improved its productivity and hence increased profitability. With a clear improvement of its profitability thanks to leveraging the Bühler organization, the new Consumer Foods segment compensated for the lowered profit contribution of Advanced Materials. “The new Consumer Foods segment clearly outperformed our expectations,” states Chief Financial Officer Mark Macus. With a Group tax rate of 19.5 % (previous year: 20.1 %) and a financial result of CHF 2.4 million (previous year: CHF 4.6 million), Bühler’s net profit grew by 7.2 % to CHF 202 million (previous year: CHF 188 million).
Bühler maintained a strong financial position in 2019. Net liquidity remained high at CHF 449 million (+0.3 %), and the equity ratio grew to 42.8% (previous year: 42.2 %). RONOA (return on net operating assets) remained on par with the previous year at 14%.
Stability as a result of a broad regional footprint
The broad regional footprint of Bühler with its operations in around 140 countries, nearly 100 service stations, and more than 30 manufacturing sites also supported the balancing of market variability. While Asia and Europe drove growth in the past year, in 2019 North America and Middle East & Africa took over this role. For the first time in years, Bühler recorded a standstill in China due to market saturation in the automotive segment and tariff conflicts. Regardless, the company’s geographic performance remains balanced: With regard to turnover, Asia makes up 34 %, Europe 30%, Americas 22 %, and Middle East & Africa 14 %. Structurally, the company was able to further improve the breadth of its portfolio in 2019. The long-cycle plant and project business now accounts for 70% of turnover, while the short-cycle Customer Services and Single Machine Business saw a total turnover of CHF 979 million, representing a 30 % share of total Group turnover.
Innovations for a better world
In 2019, Bühler elevated its innovation capabilities with the opening of its CUBIC innovation campus and new application centers, by increasing R&D spending to a record high of CHF 149 million, and developing new partnerships, such as with the Future Food Initiative and World Business Council for Sustainable Development. The company launched more than 20 new key solutions, with many in the area of digital applications. About 25% of the overall innovation spend focused on digital applications. With these innovations, Bühler aims to significantly decrease the ecological footprint of its industries: “We want to bring a 50% reduction in energy use, water consumption, and waste by 2025 in the value chains of our food, feed, and mobility customers,” says Chief Technology Officer Ian Roberts. To create impact in meeting these challenges, Bühler once again invited industry leaders, partners, customers, scientists, and start-ups to convene in Uzwil, Switzerland, and join the Bühler Networking Days 2019 event under the motto: “Creating tomorrow together”. The Networking Days 2019 participants represented companies that provide food for 4 billion people every day and contribute to the mobility of about 1 billion people. The attendees were in agreement that continuing the status quo is not an option for dealing with today’s global challenges, and that rapid action and broad scale collaboration is required to ensure that food and mobility industries become more sustainable.
Well positioned for the future with innovative solutions
The economic parameters for the current fiscal year are indicating ongoing – if not increasing – volatility and unpredictability. While Bühler does not expect a quick upturn of the automotive industry, prospects for consumer electronics and glass coating sectors look brighter. The food and feed markets seem to remain intact with some booming segments, such as plant-based proteins for meat alternatives. In all markets, the increasing ecological challenges demand new sustainable solutions, thereby creating new business opportunities. “By driving innovations in the food and feed markets – for example, in new applications in grain, cereal, and plant-protein processing and digital applications – as well as in applications for light metal applications, new battery-processing solutions, and coating applications, we are turning today’s challenges into tomorrow’s sustainable business opportunities,” says CEO Stefan Scheiber. In conjunction with its strategic set-up of the three segments and its global positioning, the company sees itself well positioned to benefit from these opportunities while managing risks. In 2020, Bühler plans for a stable and positive business development.