Bühler CEO hails significant results upturn despite global supply chain disruption
Bühler CEO Stefan Scheiber has welcomed an upturn in annual results, delivering an order intake increase of 8.7% to CHF 3.3 billion, 10% turnover rise to CHF 3 billion, and net profits up 37.5% to CHF 154 million, despite challenging market conditions, reports Neill Barston.
The head of the Swiss-headquartered equipment and industry systems business commented on the Uzwil-based firm’s progress during the last 12 months, which has seen growth driven by factors including a 40% upturn in its advanced materials interests, to CHF 871 million.
However, the company conceded there was a ‘volatile business environment’ due to a number of factors including the ongoing conflict in Ukraine, which had impacted on the company, and its wider supply chains. Despite this, the company noted it had mitigated for conditions, including soaring energy and raw materials prices, with the company making a recent key repayment on its bonds that had been used to expand the business including acquiring the Haas brand of bakery equipment.
Significantly, the company explained that itsGrains & Food business, Bühler’s largest segment (which has recently incorporated the previously separate Consumer Foods division) had delivered a solid performance, though impacted supply chains and a slow feed market in China saw order intake of CHF 1,663 million, down 6.5%, while turnover grew by 2.6% to CHF 1,696 million.
As the company noted, there has also been a renewed focus on innovation, new partnerships, and education and training. With numerous opportunities in its markets and a high order backlog of over CHF 2.1 billion, the company’s ambition is to continue its positive development in 2023.
“The impressive dedication of our employees worldwide helped us to be agile, resilient, and creative, even in the face of increasing volatility and uncertainties,” says Bühler CEO Stefan Scheiber, who explained at the media briefing in Switzerland today that food security in light of disrupted markets was now even more vital in its operations.
He added: “2022 has been a very turbulent, dynamic year. We have been experiencing a bouncing back of economies after Covid-19, but then also some setbacks in the economy later in the year, as we have had very unreliable supply chains because of the attack of Russia into Ukraine. That has sent shockwaves through the industry, the business, and businesses of our customers.
“As a result, we have seen inflation coming back, something which we had almost forgotten in the past decade. The Ukraine war and world of politics has been very dynamic over the past 12 months, in fact over the past 36 months.
“As a reaction to inflation, we are seeing interest rates going up, and the cost of capital is in the investment goods business is very important for our customers when they take their investment decisions. We also had energy shortages – something we saw two years ago in China, but we have seen that here in the whole of Europe, and that had an effect on suppliers, and customers, and to our own organisation. There are many other trends that we needed to manage – one of the key changes as a result of the fact that supply chains have fundamental grains have been sending waves of changes in grain logistics – there are massive interdependencies around the world,” noting that the vulnerability of existing supply chains had witnessed governments increasing storage capacities, as grain prices ‘increased massively’ in the past year.
He added that one of its key areas of focus has in maintaining market leading positions in a number of its equipment and systems segments including chocolate processing, as well as wafer machinery, which are among core lines for the company.
Notably, all regions contributed to Bühler’s turnover growth, with the Americas and Middle East Africa & India standing out. Regional growth rates and turnover shares were as follows: Asia 6% growth to 32% of the total share of turnover; Europe 3% growth to 30%; North America 17% growth to 17% and South America 26% growth to 5%; Middle East Africa & India 24% growth to 16%. With these successes in important markets, Bühler’s global distribution of turnover is very robust and balanced.
Bühler’s Customer Service business (including Single Machines) also grew by 3.4% and added substantially to the 2022 results with turnover amounting to CHF 955 million, representing a 32% share of Group turnover. Bühler offers a holistic service portfolio with seven modules from hardware, components, and spare parts to upgrading, maintenance, software and process optimizations for systems, with the objective of improving the performance of the existing customer asset base in terms of efficiency, safety, and sustainability. Sustainability gained importance in 2022, as services are the fastest lever to reduce energy, waste, and water in existing plants. “We judge the good business performance in 2022 as a confirmation of our strategy to be a provider of sustainable solutions and services, and to be a reliable and innovative partner in creating value for our customers,” says CEO Stefan Scheiber.
2022 also marked an important milestone for Bühler in terms of sustainability as it announced the next level of targets with more tangible goals and action plans. Bühler has developed a pathway to achieve a 60% reduction of greenhouse gas emissions in its operations by 20301 and has committed to having solutions ready to multiply by 2025 that reduce energy, waste, and water by 50% in the value chains of its customers.
To keep the pace of innovation high, expenses for research and development (R&D) remained stable at CHF 141 million representing 4.7% of Group turnover in line with the Bühler strategy to be the technology leader of the selected industry segments. Continuing its innovation promise to sustainably transform value chains, Bühler launched some 40 new products, including six new core products, in 2022.
To accelerate the positive development of Bühler’s service business, Samuel Schär, who held the positions of CEO Advanced Materials and Chief Services & Sales Officer, will fully focus on leading the global Services & Sales organization going forward. The Advanced Materials business will be led by Marcel Natterer, who successfully managed Bühler’s Value Nutrition business area in the past 10 years. He has also been appointed Member of Bühler’s Executive Board.
In the company’s concluding outlook, it added that conditions in 2023 would continue to be challenging, but the business is starting from a solid position financially, with notable opportunities for the business to grow its market presence.
Despite all the uncertainties, Bühler’s ambition is to continue its positive development. “Overall, we are convinced that Bühler is well prepared to take another positive step in developing the business successfully in 2023, even in a very dynamic market environment,” says CEO Stefan Scheiber.