Finishing & Screen Printing

Satisfactory 2012 for Bobst Group

Wednesday 20. March 2013 - Slightly improved results despite a difficult economic environment in Europe and a very unbalanced year - Overall sales stable with strong Asia & Oceania compensating for reductions in Europe and the Americas - Group Transformation is on track - Strong reduction of working capital achieved along with a good level of cash generation.

Bobst Group, the Swiss-based worldwide leading supplier of equipment and services to the packaging industry, achieved consolidated sales of CHF 1.26 billion in 2012, a decrease of CHF 6 million or -0.5% compared to 2011. The operating result (EBIT) reached CHF 31.0 million with a net result of CHF 4.3 million. Both results are slightly higher than in the previous year and confirm the company’s continuing progress in implementing its new strategy. Significant progress was made towards improving the Group’s balance sheet ratios. Cash flow from operating activities increased to CHF 114.2 million compared to CHF 32.6 million in 2011. This enabled the Group to reduce its net debt by CHF 65.8 million in 2012. The cash position increased to CHF 305.4 million from CHF 288.5 million in 2011. The Group transformation program is on track and the expected profitability improvements will be achieved.
Consolidated sales for the full year 2012 amounted to CHF 1.26 billion, a decrease of CHF 6 million or -0.5%, resulting from a volume decrease of CHF 16 million and a CHF 10 million increase due to exchange rate movements. The geographical distribution shows a positive sales trend for the Asia & Oceania zones, representing 25.2% of the total turnover (2011: 20.9%). Europe continued to suffer from the sovereign debt crisis and the Americas showed a decrease. Sales achieved by the Business Unit Sheet-fed declined due to lower activity in the folding carton sector, albeit partly compensated by stronger corrugated activities during the full year. Business Unit Web-fed sales remained at a good level with sales increases in Asia. Business Unit Services sales rose slightly, reflecting improved competitiveness over the later quarters of 2012.
Order entries were lower than usual before the drupa 2012 exhibition, but increased after May. Drupa was an accelerator of performance and the Group ended the year with 5% more backlog than in 2011.
In million CHF
 201020112012Sales1’280.21’270.31’263.7Operating result (EBIT)61.327.531.0Net result49.32.54.3
The Group’s 2012 results were heavily impacted by the very unbalanced year, leading to a sub-optimal utilization of production capacities, as well as by the major reorganization activities in Lausanne, Switzerland. Under the circumstances the Group’s results are considered satisfactory.
Group transformation program contributed CHF 128 million to operating result (EBIT) by end 2012
Between its launch in January 2010 and the end of 2012, the Group transformation program phase 1 generated CHF 85 million of recurring savings. The additional actions launched in November 2011 with the Group transformation phase 2 are on track. CHF 43 million of profitability improvements were achieved in 2012 and another CHF 20 million should be added by the end of 2013, leading to a slightly better result than initially announced. BOBST’s Swiss entity in Mex will continue to adjust its structure and industrial footprint as planned.
Solid balance sheet
Significant progress was made towards improving the Group’s balance sheet ratios. Cash flow from operating activities increased to CHF 114.2 million, compared to CHF 32.6 million in 2011. This enabled the Group to reduce net debt from CHF 256.2 million in 2011 to CHF 190.4 million in 2012, while the cash position increased to CHF 305.4 million (CHF 288.5 million in 2011). The equity ratio improved to 33.9% in 2012 from 32.5% in 2011.
Outlook and financial targets
The economic and political situation in industrialized countries is expected to remain difficult while the strength of the Swiss franc will continue to put pressure on machine exporting industries, impacting profitability over the mid-term. The Group will nevertheless continue to invest in innovation and business excellence. In the client markets, America remains willing to invest while Europe needs clear direction to support the economy and restore confidence. Bobst Group is turning to key growth drivers in Asia, namely China and India, including potential acquisitions. Service business will mature and continue to improve its profitability.
The Group remains prudent regarding top line evolution and expects to reach sales of CHF 1.20 to 1.26 billion in 2013. The priority remains for this year to improve overall profitability. Some headwinds will be seen in 2013 due to the adoption of the revised accounting norm on pensions, IAS 19. There are also still some decisions to be taken in order to finalize the transformation of the Mex activities as well as the adaptation of the industrial footprint of the Group (Group transformation phase 2). The Group will communicate the decisions taken and their eventual impact as they arise. At present, a published profitability for 2013 stable compared to 2012 is expected.
Bobst Group confirms the following mid- to long-term financial targets: sales of CHF 1.3-1.4 billion due to organic growth at constant exchange rates; a return on capital employed (ROCE) of 9-12%; and an operating result (EBIT) of at least 7%. The equity ratio should be around 35% (excluding the impact of IAS 19R) and the dividend payout ratio between 30-50% of consolidated profit.
Board of Directors elections
At the forthcoming Annual General Meeting of Shareholders to be held on April 24, 2013, the mandate of the Chairman, Charles Gebhard, and the mandates of Hans Rudolf Widmer and Ulf Berg will come to an end. Charles Gebhard and Hans Rudolf Widmer will not present themselves for re-election, as they have reached the age limit for Board members. Ulf Berg will be proposed for re-election for a new period of one year. Jürgen Brandt (currently CFO of Sulzer Group) will be proposed as a new Board member for a period of one year. The Board intends to designate Alain Guttmann as Chairman of the Board.