Despite volatile currencies, sales up in local currencies and stable in Swiss Francs - Higher net income than announced - Further restructuring measures announced end 2011 are on track.
Swiss-based Bobst Group achieved consolidated sales of CHF 1.27 billion in 2011 (2010: CHF 1.28 billion). Sales volumes were up CHF 109 million, but exchange rate movements reduced the final figure by CHF 119 million. Sales increased by 8.5% in local currencies. Operating results confirm the company’s continuing progress in implementing its new strategy and transforming processes to sustainably improve efficiency. Costs of raw materials and services as well as personnel expenditures were reduced by more than CHF 52 million, leading to an operating result of CHF +27.5 million (CHF +35.8 million when excluding one-time items and restructuring). The consolidated net result came to CHF +2.5 million (CHF +8.9 million before one-time items and restructuring costs), confirming the progress of the turnaround. Sales increased in all regions in local currency terms. Following the acquisition of Gordon Ltd , local-currency revenues in the Asia-Oceania region increased 11.8%, while in Europe and the Americas growth rates of 7.7% and 6.4% respectively were achieved in local currencies. Sales by the Sheet-fed and Web-fed Business Units continued to recover from the downturn. Both Business Units posted higher sales than last year. In the Services Business Unit, the increase in volume was offset by negative exchange rate developments. Incoming orders decreased, mainly because of the European debt crisis and exchange rate volatility, resulting in a backlog decrease of 5% in December 2011, compared to December 2010.
|in million CHF||2009||2010||2011|
|Underlying operating result||-106.1||-4.3||35.8|
|Underlying net result||-106.5||-1.8||8.9|
Given the ongoing challenging market environment and capital expenditures relating to the transformation of the Group, the Board of Directors will not be proposing a dividend to shareholders at the Annual General Meeting on April 26, 2012.
Transformation program contributing to CHF 85 million to operating result by end 2012 plus CHF 60 million by end 2013
The Group transformation program initiated in January 2010 is showing positive results. However, the ongoing impact of the strong Swiss franc necessitates continued action within this initiative. Bobst's Swiss entity will continue to adjust its structure and industrial footprint very significantly. Functions with low added value will be outsourced. Research, innovation, development and the manufacture of high-end products will be concentrated in Mex/Switzerland and in the Group's European facilities. Customers will also be offered very competitive entry level equipment made in China, India and Brazil. The Group transformation program expects to generate CHF 85 million of recurring savings by the end of 2012, and the additional actions launched in November 2011 will improve profitability by another CHF 60 million by end 2013.
Solid balance sheet
Bobst's balance sheet remains solid with a stable equity ratio of 34% and a cash position of CHF 288.5 million. In May 2011, the Group issued a CHF 150 million, 2.75% bond maturing on May 5, 2014, refinancing the CHF 120 million, 4.125% bond which was due to expire in July 2011.
Outlook and financial targets
The economic situation in industrialized countries remains uncertain for the foreseeable future. While emerging markets will keep growing, the Swiss franc situation will continue to put pressure on exports. As a consequence, Bobst Group, though not neglecting traditional markets, is turning to key growth drivers in Asia, namely China and India. Within a few years the positive trends in these markets are expected to offset volume reductions in industrialized countries. Service business will mature and continue to grow.
Bobst Group has set itself the following mid- to long-term financial targets: sales of CHF 1.3-1.4 billion due to organic growth at constant exchange rates, a return on capital employed (ROCE) of 9-12%, and an operating profit margin of at least 7%. The equity ratio should be around 35% and the dividend payout ratio between 30-50% of consolidated profit.
Board of Directors re-elections
At the forthcoming Annual General Meeting of Shareholders of April 26, 2012, the mandates of Michael W.O. Garrett, Alain Guttmann and Hans Rudolf Widmer will come to an end. All three will be proposed for re-election at the Annual General Meeting.
Today’s information meeting
A conference for financial analysts and the media will take place today, March 28, 2012, at 10.15 a.m. in Mex. The 2011 financial statements as well as the translations in French and German of this release will be available on the Group’s website from 06.30 a.m., and the presentation from 10.15 a.m.
Bobst Group SA, Lausanne/Prilly, March 28, 2012
Press release in German
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