Fiscal Year 2009: Leadership Maintained
The Buhler Technology Group successfully maintained its position in fiscal 2009 in an extremely challenging environment and in the face of individual markets which developed along widely varying lines, also gaining further market share. With sales (turnover) of CHF 1721 million, the Group increased its profit adjusted for exchange rates by even 5% to CHF 104 million despite restructuring costs and goodwill write-offs. The corresponding margin increased to 6%. The return on operational assets (RONOA) rose to 34%. Process improvements, a firm local presence in growing markets, and a positive financial result contributed to this outstanding result. Buhler faces the current fiscal year with confidence. The order backlog as of the end of 2009 amounted to CHF 962 million, which is 7% above the level of the previous year.
The Group’s reliance on a diversified portfolio of products and services once again paid off especially in the critical year 2009. Almost all business units in the basic foods segment grew. On the other hand, the weakening of nonfood activities, which had already emerged in the final quarter of 2008, continued in the year under review. Considering the situation of industry as a whole, Buhler’s overall business performance can be said to be good, which is borne out by the fact that the Group gained further market share.
Sales slipped 9% to CHF 1721 million (adjusted for exchange rates minus 6%) from the record level of the previous year. The order intake with CHF 1784 million was just under 6% lower than a year ago; adjusted for exchange rates, the decline was merely 3%, a result that no competitor matched.
In geographical terms, markets developed along widely varying lines. Sales growth was strongest in South America (+10%) and Africa (+7%). Asia also developed very encouragingly. East Asia grew 29%, followed by India (+10%), China (+8%), and Southeast Asia (+4%). North America suffered a contraction in sales revenue of 6%. In Western Europe (-19%) and Eastern Europe (-12%), turnover dropped sharply due to the reluctance of customers to invest capital. Buhler was therefore forced by weak demand to adjust its capacities in Europe and especially in Switzerland to the shrinking business volume or to move capacities to the growing regions and corporate units.
Earnings power maintained – very sound balance sheet
In the year under review, EBITDA reached CHF 182 million, which compared with 2008 corresponds to a slighlty higher margin of 10.6%. The EBIT margin reached respectable 7.7% despite restructuring costs and goodwill write-offs. Without these costs, EBIT was 9%, a result achieved thanks to operational improvements. The Group’s profit rose by 3% to CHF 104 million thanks to a good financial result, and adjusted for exchange rates by 5%. The corresponding margin increased from 5.3% to 6.0%. The return on operational assets (RONOA) was a high 33.5%, which was made possible by careful management of the operating capital.
Buhler has thus succeeded in raising its earnings power in an exceptionally adverse environment. Process improvements, management of customer projects, capacity balancing in the engineering and manufacturing departments, and a positive financial result contributed to this excellent result. In addition to increased productivity, appreciable investments were also made in the Group’s market presence and in innovation. With CHF 79 million, spending on research and development accounted for a high 4.6% of total sales.
The operating cash flow was maintained at the respectable level of 9.4% of turnover. As in the previous year, also 2009 closed with an absolutely sound balance sheet. Net liquidity increased to CHF 400 million, which means that the Group is well equipped for additional non-organic growth.
Outlook for 2010
As some business units registered a revival of orders received toward the end of 2009, the Group Management face the current fiscal year with confidence. This assessment is also supported by the encouraging order backlog, which at the end of the year under review amounted to CHF 962 million and was thus 7.5% higher than at the end of 2008. Moreover, Buhler has made very good use of the past year to make structures leaner, to streamline processes, and thus to enhance productivity on a sustainable basis. The Group can thus take up future challenges from a stable position of strength.