Fiscal 2008: High Operating Performance

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In fiscal 2008, the Buhler Technology Group increased its sales (turnover) by about 7% to CHF 1893 million, and with an EBIT margin of 8.4% achieved an excellent operating result. Due to the negative financial result, the Group’s overall result declined by 22% from a year ago, to CHF 101 million. Order bookings increased by approximately 3% to CHF 1891 million (previous year: CHF 1838 million). The backlog of orders as of the end of 2008, which rose by 9% to CHF 948 million, and the existing portfolio together form a strong foundation for fiscal 2009. However, in individual business units, volumes are expected to be lower than a year before.

In the year under review, the business units providing systems and technologies for processing basic foods and grain developed beyond expectations and reached record values. In the various nonfood units, business developed along different lines. Demand for solutions in Die Casting and Grinding & Dispersion dropped sharply as a result of the slump in the automotive and electronics industries. But overall, this was balanced by growth in the other units. The fourth quarter was weaker throughout than the first nine months. The high volatility of the U.S. dollar in the past year had a significant impact on sales revenues: Adjusted for currencies, the Group’s sales would have been some CHF 88 million or 11.7% higher than in the previous year. Without the acquisition of the Barth and Aeroglide companies, revenues would have increased by 6.4% adjusted for currencies.

The highmargin Customer Service business was once again very successful, growing by a total of 12%. With the exception of Die Casting, all the divisions substantially expanded their service business. Today, customer services account for over 20% of Group sales.

In addition to the diversified portfolios of the food and nonfood units, the Group’s broad geographical spread once again proved to be a major strategic advantage in the past year. In Western Europe, sales rose by more than 9%; in Eastern Europe, the intense expansion efforts led to growth of 7%. Sales developed in a highly positive manner also in Central and South America and in Africa. Business in China soared by an encouraging 35% and in India by 19%. In these Asian markets, Buhler is increasingly acting as a provider of locally developed solutions and products. In North America, business remained at roughly the level of a year ago. In the Middle East, sales revenues slipped by 33%, due to a number of missing largescale projects in Saudi-Arabia. Project postponements were also the reason for the decline in business in Southeast Asia.
In the year under review, Buhler once again improved its profitability. EBITDA (CHF 195 million) as well as EBIT (CHF 158 million) developed at a higherthanproportional rate relative to sales. EBITDA improved by 15% from a year ago and EBIT by 14%. Relative to sales revenues, EBIT amounted to 8.4% (previous year: 7.8%). The continuous improvement of internal processes contributed significantly to this increase. Other contributing factors were efficient project cost management and substantial procurement cost reductions, although the cost of raw materials and energy remain at high levels. In line with its longterm strategy, the Group invested some CHF 85 million in expanding and updating its global production sites last year and spent about CHF 82 million on research and development.

Staff changes
The number of employees increased in the year under review to 7700 (previous year 6900), of which 300 came from the acquired companies. Another 300 new employees were hired in China.
Dr. Erwin Schurtenberger has been a member of the board of directors of Bühler AG since 1994 as well as a member of administrative and consulting bodies of our China organization. With his profound knowledge of the culture and economy of China, he has contributed significantly to building and strengthening Buhler’s market position in this country. In the future, he will further intensify his commitment to Buhler’s operations in China as part of his existing mandates for our company, but will withdraw from the board to reduce his duties. Buhler thanks him for his long years of valuable efforts, with which he contributed substantially to the successful further development of the Group.

Strong equity base
The Group has high liquidity reserves. Despite the acquisition of the Aeroglide company and the consistently high investment level, the short- and longterm assets declined by merely CHF 38 million to CHF 444 million. All capital investments were made without outside financing. With CHF 16.5 million in short- and longterm financial liabilities, the Group is all but debtless. The Group’s net liquidity increased in the year under review by a little under 14% to CHF 345 million (previous year: CHF 303 million). In the year under review, the decision was made as part of the owner family’s succession planning to separate two nonoperating companies from the Group. The balance sheet values of these companies amount to CHF 155 million.

Outlook for 2009
With its broadly diversified product portfolio, its global presence, and the continuous improvement of its corporate structures and processes, Buhler is well equipped to face the challenges of the future. The solid backlog of orders at the start of the year and the acquisitions made in 2007 and 2008 are expected to support the development of business. In all, Buhler assumes that sales revenues in 2009 will shrink by 10 to 15%. Also the Group’s profitability is likely to diminish due to its lower capacity utilization.

About Buhler Buhler is a global leader in the field of process engineering, especially production technologies for producing foods and engineering materials. Buhler is active in over 140 countries and employs about 7700 persons worldwide. In fiscal 2008, the Group generated sales of CHF 1.9 billion.


Supplier Profile: <link _top external-link-new-window>Bühler Druckguss AG