Sales increased by 6.9% to CHF 1 635 million
Operating result (EBIT) at CHF 87 million (CHF 119 million in 2017)
Net result at CHF 50 million (CHF 107 million in 2017)
Dividend of CHF 1.50 proposed (CHF 2.60 in 2017)
Order entries and backlog at a similar level as in 2017
Bobst Group, a Swiss-based worldwide leading supplier of equipment and services to the packaging and label industries, achieved in 2018 a strong growth in the corrugated board, label and film business. The Group reached sales of CHF 1.635 billion in 2018, an increase of CHF 106 million, or +6.9% compared to 2017.
The Business Unit Web-fed transformation, the large investments in digitalization and the China strategy for growth reduced significantly the Group results in 2018. The operating result (EBIT) was CHF 87 million (CHF 119 million in 2017), while the net result was CHF 50 million (CHF 107 million in 2017). The return on capital employed (ROCE) decreased to 14.2% compared to 23.2% in 2017 and the shareholders’ equity ratio decreased to 33.4% from 35.6% in the previous year.
The Board of Directors proposes to the Annual General Meeting of Shareholders the payment of a dividend of CHF 1.50 per share (CHF 2.60 in 2017). In 2019, the Group expects to reach a similar sales level as in 2018. The operating result (EBIT) margin is expected to be in the range of 6% to 7% in 2019 and 2020.
Order entries and backlog
The Group started 2018 with a more than 20% higher machine backlog than the year before. 2018 order entries were at the same level as the year before, with a small increase in Business Unit Sheet-fed. Order entries compared to the previous year remained stable at a high level in Europe. The Americas and Africa increased by around 15%, and Asia decreased by slightly more than 10%. The Group finished the reporting year with a similar machine backlog than in 2017.
Sales
For the full year 2018, consolidated sales increased by CHF 106 million, or 6.9%, to CHF 1 635 million. Adjusted for currency effects and acquisitions, organic sales were up CHF 82 million, or 5.4%, in 2018. Two new local entities created in 2018 contributed CHF 4 million to the sales increase. Exchange rate variances increased sales by CHF 20 million.
Sales reached CHF 872 million in the second half of 2018, compared with CHF 763 million in the first six months of the year, and to CHF 885 million in the second semester of 2017.
Sales of sheet-fed products increased by 8.0% to CHF 805 million. This growth was once more driven by a very strong demand for products for the corrugated industry. The demand for products for the folding carton industry remained stable. Sales of web-fed products increased by 3.9%, reaching CHF 343 million for the year 2018. All product lines contributed to this growth, and the demand for special machines and complex lines remained at a low level. Sales of services and spare parts increased by 7.4%, to CHF 486 million.
Results
The operating result (EBIT) was CHF 87 million, or 5.3% of sales compared to CHF 119 million, or 7.8% of sales in 2017. Based on the strong sales growth and a good overall market situation, the Group has accelerated measures to launch a range of digital printing products and strengthened its activities in Internet of Things (IoT). Quality upgrades on some products launched in recent years and additional transformation measures in the Business Unit Web-fed had a significant negative impact on the operating result (EBIT) of the reporting year.
Business Unit Web-fed was particularly impacted by the additional investments, and its operating result (EBIT) for the year 2018 showed a loss of CHF 37 million, compared to a loss of CHF 7 million in 2017. Business Unit Sheet-fed reached an operating profit (EBIT) of CHF 60 million, compared to CHF 64 million in 2017. Additional profit due to higher sales was more than offset by the investment in the new China 4.0 strategy implemented since March 2018. Business Unit Services further improved its profitability. Operating profit (EBIT) reached CHF 66 million, compared to CHF 63 million in previous year.
The net result reached CHF 50 million (CHF 107 million in 2017). The decrease came from lower operating result (EBIT), missing one-time favorable tax impact of CHF 15 million recognized in 2017 and due to losses, on which no deferred tax assets are recognized in 2018.
Balance sheet
The lower net result, and a disproportional temporary increase of the net working capital, resulted in a negative cash flow from operating activities of CHF 46 million, compared to the exceptionally high positive CHF 150 million in 2017. This had an impact on the cash ending in a net debt position of CHF 21 million at year end, compared to a net cash position of CHF 133 million in 2017. The return on capital employed (ROCE) decreased to 14.2% in the reporting year, compared to 23.2% in 2017, and the shareholders’ equity ratio decreased temporarily to 33.4%, from 35.6% in the previous year, due to the additional bond issued in September of the reporting year.
Dividend Proposal
The Board of Directors proposes to the Annual General Meeting of Shareholders the payment of a dividend of CHF 1.50 per share (CHF 2.60 in 2017). This proposal is in line with the Group’s dividend policy which recommends a payout ratio between 30-50% of the net consolidated profit after tax.
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