February 14, 2017
Bühler: Reinvestment of profits elevates performance in 2016
Bühler showed a positive performance in 2016 as it continues its policy of reinvesting profits to secure future development, the company says.
Order intake in 2016 was up 3% to CHF2.54 billion (US$2.5 billion), compared to a decline of 4% in 2015. Turnover rose by 2% to CHF2.45 billion (US$2.4 billion), and profitability remained stable at 7.1% (EBIT margin). R&D investments were significantly increased. "For a company based in Switzerland, 2016 marked a real proof point considering the Euro/Swiss franc shift a year ago," says CEO Stefan Scheiber. "In this context, we can be satisfied with these results."
Both businesses of Bühler, Grains & Food and Advanced Materials, contributed to the success of the group in 2016. The strategy of two businesses that are both based on leading process technologies and services, has proven successful. The group's performance was strongly supported by its customer service business. According to Bühler, customers appreciate the local network of 92 service stations worldwide. Consequently, the service business showed higher growth and recorded a turnover of CHF578 million (US$575 million), which is 7% higher than last year. The service share of turnover now accounts for 24% (previous year: 22%). On a regional level, growth in North and South America, Europe, and China overcompensated the downturns in the Middle East, Africa and South East Asia. Overall, Bühler holds a very balanced position with its global presence: Europe reported a turnover share of 30%, Asia at 25%, Middle East and Africa at 15%, North America at 17%, South America at 6%, and South Asia at 6%.
Strengthened financial position
Net profit remained stable at CHF143 million (US$142 million). Despite ongoing high investments of CHF71 million (US$71 million) into the worldwide asset base, net liquidity grew significantly by 18% to CHF462 million (US$459 million). With an equity ratio of 47% (previous year 46%), the group is free from all bank liabilities. The return on net operating assets (RONOA) stayed on a high level of 19% (previous year: 22%). "With this strong financial position, Bühler is well equipped to continue investing into its own future", says Scheiber.
Sustainability further enhanced
Bühler is fully committed to sustainability with the ambition of contributing to a safe and secure global nutrition system as well as a responsible usage of natural resources to limit the effects of climate change, the company states in its recent press statement.
The key lever to support these efforts is innovation: With new technologies and solutions, Bühler transforms global challenges and trends into new business opportunities. With around 40 new products and technologies, the company proved to be a true innovation accelerator in 2016 and maintained its position as the leading technology and solution provider in its industries. R&D investments were increased significantly by CHF7 million (US$7 million) to CHF109 million (US$108 million), corresponding to a share of turnover of 4.4%.
Bühler signed a partnership with Bosch to develop future IoT (Internet of Things) solutions. The company engaged with the start-up accelerator MassChallenge and won the prestigious Nestlé Research Award. With its Networking Days held in August 2016, Bühler brought together 750 leaders of the global grain and feed industry to discuss and develop sustainable solutions that address global challenges such as malnutrition and energy efficiency.
Strong investment in new technologies, applications, and markets
In line with its strategy of operating "in the region for the region", Bühler also invested substantial sums in 2016 to enter new markets, developed decentralised applications centers, and further expanded and updated its global manufacturing network. Eight new service stations were added to the global network for a total of 92 locations with 60 workshops. This move further increases Bühler's proximity to customers. In Vietnam, a new factory for rice equipment was opened. New regional applications centers were established, for example, in North America, and the buildup of a new production site in China is ongoing. In Switzerland, the company launched a modernisation programme. In the fields of battery manufacturing and insect processing, Bühler is set to capture the massive growth potential.
Positive outlook for 2017
Regardless of day-to-day variations, Bühler
is well positioned in global growth markets - the processing of basic foods and feeds and advanced materials. With a global setup, Bühler has achieved real customer proximity and lives up to the motto of being "locally relevant and globally leveraged", the company says. Today's megatrends such as the growing global population, increasing urbanisation, or enhanced environmental awareness further benefit the strategic setup of the group and unlock additional growth potential.
"With the accomplishments of 2016, and a strong order backlog, Bühler has a positive outlook for 2017," Scheiber remarks. The dynamic nature of market and technology trends, regional developments, and political conditions make predicting potential business outcomes increasingly challenging.
Bühler has adjusted to new developments with flexibility, a collaborative innovation model, and strong partnerships with customers, the science community, and technology and industry. Based on its leading technologies and solutions, Bühler aims to increase its growth rate and profitability in 2017.