Bühler delivers key innovations despite results revealing market challenges
The Bühler Group has completed delivery of a number of key technology innovations during the past year, despite challenging global conditions impacting on its annual results, writes Neill Barston.
As the company explained market uncertainty proved a notable factor in its latest figures, which revealed turnover of CHF 2.7 billion, down 17%, and an order intake of CHF 2.6 billion for 2020, as the world continues to grapple with the ongoing coronavirus crisis.
Despite its dip in results, the Swiss-based business cited an improved net liquidity increasing 66% to CHF 749 million, as an indicator of its robust finances, serving a number of key sectors including systems for the confectionery, snacks and bakery markets.
As the company explained, a key priority has been the health and safety of employees during the past year of the covid pandemic, as well as seeking to secure supply chains for customers, and keeping levels. of innovation high despite conditions.
There was key progress in 2020 including opening new application centres for food in Minneapolis, US, for malting and brewing in Beilngries, Germany, and a new training and education facility for cocoa processing in Abidjan, Ivory Coast. Furthermore, the business has set out on a joint venture with Givaudan, the global flavours and fragrances business for an Innovation Centre dedicated to plant-based foods in Singapore that is due to open next month.
Significantly, the company fulfilled all customer contracts and delivery agreements without interruptions, with a number of key innovations for key markets, with the business noting in its annual results presentation that there were notable gains in its Chinese operations, and closer to home in Italy, which recorded encouraging results in particular.
“With high agility we adapted quickly to the new situation to ensure continuity on all levels,” says CEO Stefan Scheiber. “In light of our global set-up and innovation power, we are looking into the future with bounded optimism.”
Notably, its supply chains proved remarkably solid, as Bühler was able to absorb the pandemic’s waves thanks to its global network of 33 factories, 100 service stations, and digital tools such as remote customer trials or commissioning, to bring much needed food capacities online worldwide.
“We have seen a sharp rise in customer demand for digital solutions, but also for sustainable solutions, such as CO2-reduced emissions, nutritious and healthy food, high-end deposition technologies, and clean mobility,” adds Stefan Scheiber.
“Protecting our liquidity had the highest priority over the course of last year,” says CFO Mark Macus. “Our target was to remain a very solid and strong partner for all our stakeholders, and we achieved this even in a challenging year like 2020.” Driven by diligent finance management, operating cash flow jumped 211% from CHF 151 million to CHF 470 million. Strict cost management allowed Bühler to offset a significant part of the adverse volume impact, resulting in EBIT of CHF 146 million (previous year: CHF 248 million), and an EBIT margin of 5.4% (7.6%).
Grains & Food (GF) proved resilient and agile, with a very solid business performance. Order intake was CHF 1.6 billion, 13.9% lower than the previous year. Turnover decreased 7.2% to CHF 1.7 billion.
With the implementation of innovative solutions such as Mill E3 and its Arrius integrated grinding system, GF further expanded its position as a technological leader in grain processing and human and animal nutrition. The Consumer Foods (CF) business was more affected by the pandemic, as customers in the industry suffered from much diminished traffic in duty-free shops, restaurants, and hotels – much less business originated for them because of reduced events. Order intake decreased 29.2% to CHF 549 million. Turnover decreased 25.8% to CHF 574 million.
The order intake of Advanced Materials (AM) came in at CHF 453 million, down 7.2%. Turnover shrank 31.7% to CHF 443 million, caused by the severe weakness of the global automotive industry.
However, the high-tech special deposition technology business of Bühler Leybold Optics grew substantially. Therefore, AM has improved its profitability, resulting from immediate and tight adjustments of structure costs to the new market conditions and the launch of innovations which were very positively absorbed by the markets.
Summing up, the highlights from the businesses were strong growth of the Value Nutrition business due to high interest in meat alternatives from plant-based proteins; the build-up of large food parks such as in Egypt where Bühler built complete industrial infrastructures comprising of mills, biscuit, wafer, chocolate, and pasta lines; and the strong growth of Bühler Leybold Optics’ optical coating solutions, addressing the high demand for computer chips.
Along with the divergent course of Bühler’s businesses, there was also a shift in regional development towards Asia. While all markets reported lower volumes, Bühler Asia managed to be stable driven by the strong growth of Bühler’s business in China.
Order intake in China rose sharply by 15% for the full year. Regarding turnover, Asia now makes up 35% (previous year: 31%), Europe 30% (30%), North America 16% (16%), Middle East & Africa 11% (14%), South America 5% (6%), and South Asia 3% (3%). Yet again, the global network of Bühler played a key role for Bühler in 2020, so that all customers on all continents were served without interruption.
Continuation of innovation roadmap
Despite the challenging environment, Bühler continued to execute its innovation roadmap, launching 86 new products and solutions. This is a tribute to its 160 years of existence, marked in 2020, and it is a reconfirmation of the company’s purpose of innovations for a better world.
With Canadian Premier Tech, Bühler formed a joint venture in China for new packaging solutions which started very successfully in 2020. Furthermore, Bühler drove latest innovations for digital platforms and solutions successfully into industrial applications globally with impressive success.
Speaking at the results presentation, Ian Roberts (pictured), chief technology officer welcomed the key innovations made in the past year.
He said: “Innovation is how we drive our differentiation, and support our industry to be successful. In 2019 we stood up in front of our customers at our Networking Days and we agreed that we would drive energy, waste and water consumption down by 50% in their value chains and would have solutions by 2025, which will take until then to roll them out.
“When your business comes under pressure, that’s when you decide whether sustainability is a fairweather strategy or is it at the core of the company – we sat down and said ‘this is what we do, who we are, we will not go back into our shells and slow down. We are going to strengthen our capability to deliver on this commitment.
“So we embedded our sustainability mission into the fundamentals of the company going forward. We will balance economy, nature and humanity in every decision we take. Our R and D spend will go on solutions that reduce energy waste and water (by 50%), and we are geared up for the next five years, and we’re ready map and monitor our progress. We have quantified the impact of our portfolio by each technology solution, on the value chains of our customers.”
He hailed the new Mill E3 as a major technological breakthrough, enabling significant production efficiencies, with its Arrius grinding solution, capable of 10% energy savings on conventional models.
In addition Roberts noted there had been a key surge in digital services delivering enhanced data transparency which is critical for its environmental and sustainability goals.
He explained that there are now 6,500 customers its system on a daily basis. In his view, the linked Buhler Insights platform, developed with Microsoft, is set to have a significant impact for delivering major productivity and environmental gains.