Equipment & Technology

Bühler Group EBIT Margin Rises; Consumer Foods Segment Tops Expectations

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Uzwil, Switzerland-headquartered Bühler on February 13 reported “good performance at group level” during 2019, as EBIT margin increased 7.6%, compared with 7.1% in 2018. Turnover was stable at CHF 3.3 billion, while order intake decreased by 4.6% to CHF 3.1 billion. The company’s newly formed Consumer Foods segment, which was created after acquiring the Haas Group, exceeded expectations and made a material contribution to the group’s results.

“We are pleased with the 2019 achievements, as they confirm our strategic setup with the three businesses, which leveled out market volatility,” said CEO Stefan Scheiber (pictured above at left with Chairman Calvin Grieder). “With our broad portfolio, global position, and innovation strength, we are ready to tackle the challenges of an ongoing volatile global economy.”

Business development in the segments varied widely due to high volatility in some of Bühler’s key markets. While the food and feed sectors 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%). Consumer Foods dipped slightly to CHF 775 million (-1.7%), and Advanced Materials declined 32.2% on order intake of CHF 488 million.

In regard to turnover, Grains & Food demonstrated robustness at CHF 1.8 billion (+0.9%) and Consumer Foods grew 2.5% to CHF 774 million. At CHF 649 million, the turnover of Advanced Materials fell by 8.0%.

Improved Profitability

“The new Consumer Foods segment clearly outperformed our expectations,” said 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).

CFO Mark Macus

The company maintained a strong financial position last year. 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%.

The broad regional footprint of Bühler, with its operations in approximately 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 accounts for 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 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 overall innovation spending focused on digital applications.

“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,” said Chief Technology Officer Ian Roberts.

CTO Ian Roberts

Endeavoring to create impact in meeting these challenges, the company once again invited industry leaders, partners, customers, scientists, and startups to convene at its headquarters in Switzerland, and join the Bühler Networking Days 2019 event under the motto: “Creating Tomorrow Together.” 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 contemporary 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 Future
The economic parameters for the current fiscal year are indicating ongoing – if not increasing – volatility and unpredictability. 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,” said CEO Scheiber.

In conjunction with its strategic setup of the three segments and its global positioning, the company sees itself well positioned to benefit from opportunities while managing risks. In 2020, Bühler is planning for stable and positive business development.