Bühler group records upturn in profits amid key sustainability focus
The Swiss-based Bühler group has reported a stable level of turnover for 2019, at CHF 3.3 billion, driven by a notable contribution from its recently formed consumer foods division over the past year, against challenging global economies.
According to its latest annual figures, the company’s net profit grew by 7.2 % to CHF 202 million (previous year: CHF 188 million), with EBIT margins at 7.6% (against 7.1% the previous year), while order intakes decreased by 4.6% to CHF 3.1 billion.
As the business noted, the Consumer Foods segment, which was created after the acquisition of the Haas Group, exceeded expectations, increasing its turnover by 2.5% to CHF 774 million during the financial year, as the group increased its investments into innovation to a record high.
“We are pleased with the 2019 achievements as they confirm our strategic set-up with the three businesses, which levelled 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, which has a core range of equipment with broad application for confectionery and bakery sectors, has sought to expand it overall portfolio of interests due to what it described as high volatility in some of its 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 %). At CHF 649 million, the turnover of Advanced Materials dropped by 8.0 %.
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 organisation, 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. 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 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.
However, the business noted challenges in some market segments – for the first time in ten years it 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.
In 2019, Bühler elevated its innovation capabilities with the opening of its CUBIC innovation campus and new application centres, 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.
“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. The company added that it projected further positive business development throughout 2020.