VALUE THROUGH PROFITABLE GROWTH
2017 was a successful year for Bühler. We succeeded in creating sustainable value for customers, employees, and the environment, in growing organically in almost all regions and business areas, and in making a strategically significant acquisition.
Commissioning our newest production plant in China has helped us further expand our global production network. We also began modernizing our site in Switzerland. Significant progress was made in the implementation of our sustainability goals through the market launch of new technologies and process solutions, such as manufacturing battery slurry and the industrial processing of insects.
Our collaboration with partners in industry, science, and business start-ups has played a key role in developing such innovative solutions. We therefore plan to continue our Networking Days and have started building the CUBIC innovation campus in Uzwil − a networking venue. This effort includes remodeling our application centers. Digitalization is increasingly the focus of our innovations − not as an end in itself, but rather as a key technology to arrive at new, sustainable solutions in food manufacturing and materials processing. We are looking into the future with optimism and are confident that we will be able to further solidify our business development as we continue to work on improving profitability.
Double-digit organic growth
The most important indicator of growth for Bühler is order intake. We were able to raise these by 10% to CHF 2.80 billion compared to the previous year. Turnover increased by 9% to CHF 2.67 billion, which resulted in an order backlog of CHF 1.73 billion (+9%). All three figures are at record levels. We have succeeded in setting a new, clear course of growth – benefited by the overall positive world economy.
It is also gratifying to note that both businesses of Bühler have grown. Grains & Food (GF) increased its received order intake by 7% to CHF 2.1 billion and Advanced Materials (AM) by 21% to CHF 672 million.
GF turnover grew by 7% to CHF 2 billion, and AM by 19% toCHF 640 million. In terms of regions, Asia (+20%) and the Middle East & Africa (+12%) showed the strongest turn-over growth. Even Europe saw a reasonable increase of 4%. In terms of turnover, our geographic range is thus broad and well-balanced: Europe 29%, Asia 28%, North America 16%, Middle East & Africa 15%, South Asia 6%, and South America 6%.
Structurally, our portfolio mix showed progress as well. In 2017 we decided to independently capture and strengthen the single machines business sector in addition to projects and plants and services. Since then, we have shown strong growth of 32% in this area. Our growth in turnover for projects and plants is 8%, and for services 4%.
Our increase in profitability shows that we have established solid, profitable growth despite a challenging cost situation. EBIT increased in absolute terms by 18% to CHF 205 million, which represents an EBIT margin of 7.7% (previous year: 7.1%). Supported by a good financial result of CHF 13 million (previous year: CHF 6 million), net profit reached CHF 174 million (+22%).
Already at a solid level, Bühler's financial situation continued to strengthen. We had a strong increase in investment into the asset base of CHF 100 million (+41%). The operating cash flow dropped slightly to CHF 158 million. Net liquidity jumped to CHF 863 million (+87%) as a result of the cash inflow from the corporate bond of CHF 420 million. Despite this gain from external financing, the equity ratio remained high at 44.8% (previous year: 47.0%). The capital performance indicator RONOA (return on net operating assets) grew from 19.5% to 21.0%, indicating the efficient use of given resources and an ongoing high financial flexibility.
Corporate bond successfully launched
In order to finance our many strategic initiatives long-term, we decided to obtain capital from the financial market for the first time. The company bond of CHF 420 million is divided into two tranches with terms of five and nine years – CHF 180 million (Tranche A), and CHF 240 million (Tranche B). The bond gives us the needed company flexibility at favorable conditions to invest in modernizing our locations, our innovation centers, and the digital transformation of our company, in addition to acquisitions.