Bühler closed 2014 with significant growth signals. The company's order intake grew organically by 9% to CHF 2.6 billion, while its orders on hand grew by 20% to CHF 1.6 billion – both record results in the company's more than 150-year history.
Due to long project durations, turnover remained stable at the previous year's level of CHF 2.3 billion. In 2014, Bühler once again invested heavily in research and development, with a total sum of just under CHF 100 million (4.2% of turnover), and launched a considerable number of new products into the market. The introduction of restructuring measures and capacity adjustments led to further improvements in profitability and all of the key financial performance indicators. The EBIT grew by 4% to CHF 145 million or by 40% to CHF 195 million, when adjusted for one-time effects. Net liquidity rose by 23% to CHF 464 million, while equity increased by 8% to CHF 1.1 billion (equity ratio: 45%). “These strong results confirm our strategic direction as an industrial solution and service provider,” says Bühler CEO Calvin Grieder. The company is approaching the significant appreciation of the Swiss franc from a position of strength. “I am proud of our employees, who worked with us, to quickly and pragmatically agree on the necessary immediate measures in order to safeguard our competitiveness,” says CEO Grieder. “Despite the changed circumstances, we are eager to continue our growth path and we look ahead to the 2015 fiscal year with cautious optimism.”
The organic growth of order intake by 9% to CHF 2.6 billion was broad-based, with all eight business areas and all regions contributing to the increase. The service business of the company also experienced positive development, increasing its share of turnover to around 23%. The business areas in Advanced Materials stood out, including Die Casting (order intake +13%), Grinding & Dispersion (+22%) and Leybold Optics (+41%), which was acquired in 2012. After major restructuring, Leybold Optics achieved its turnaround in the previous fiscal year. The Indian and Chinese markets also recorded substantial increases in order intake, with +73% and +23% respectively. Overall, Bühler has a very balanced set-up with its global presence in around 140 countries: Europe made up 29% of its order intake, Americas 23%, Asia 33%, and the Middle East/Africa 15%.
Stable turnover. Increase in operational profitability
The increase in order intake began in the second half of the year. Due to long durations of projects – up to 24 months – this growth has not yet had an impact on turnover, which remained stable in comparison with the previous year at CHF 2.3 billion. Bühler did, however, make significant progress with regard to operative profitability. The EBIT rose by 4% to CHF 145 million (EBIT margin: 6.2%). EBIT was affected by costs for low capacity utilization and restructuring totaling around CHF 50 million. In 2014, two production sites in Germany and Spain were either cut back or closed. Without these costs, EBIT would have been within the target range of 8-12%. In order to secure its earning power in the long term, Bühler will continue to optimize its global production network systematically. The number of employees worldwide dropped marginally to around 10,600.
Healthy group financing
Bühler once again improved its balance sheet ratios in 2014. With CHF 1.1 billion, or 45.2% (2013: 44.6%), the group has a healthy equity position. Thanks to disciplined management of the net working capital, the operative cash flow increased once again in 2014, to CHF 187 million (2013: CHF 124 million). The net liquidity therefore amounts to CHF 464 million (2013: CHF 377 million), providing the necessary financial flexibility for organic, acquisitive growth. “For over ten years, we have financed our growth from the operative cash flow, without incurring any debt – while strengthening our financial position at the same time,” says CFO Andreas R. Herzog.
Continuing growth path.
Outlook
Bühler's 2015 fiscal year began with a new challenge – counteracting the strengthened Swiss franc in order to safeguard the group's competiveness. In the meantime, important agreements were made with the employees in order to compensate for some of the resulting cost disadvantages – for example, the working week was increased to 45 hours. “We are approaching this situation from a position of strength,” says Calvin Grieder. Within this context, the current situation is a catalyst for growth and efficiency programs that have already been initiated. As a result, the company is able to look ahead to the current fiscal year with cautious optimism. “We are eager to continue our growth path,” says CEO Grieder.
(CHF = US$1.08)
