Feb 15, 2021
Annual results 2020: Looking forward with bounded optimism
In 2020, Bühler proved to be a reliable partner to all its stakeholders and showed robust business performance in 2020. Protection of the health of employees, securing supply chains for customers, and keeping the innovation rate high were the top priorities. Despite adverse conditions, Bühler fulfilled all customer contracts and delivery agreements without interruptions. And the company launched major innovations for key markets. The Group gained additional financial strength, with equity ratio reaching 44.2% (+1.4 percentage points) and net liquidity soaring to CHF 749 million (+66.8%). Turnover was CHF 2.7 billion (-17.0%), with order intake amounting to CHF 2.6 billion (-16.7%). “With high agility, we adapted quickly to the new situation to ensure continuity on all levels,” says CEO Stefan Scheiber. “In light of our global set-up and innovation power, we are looking into the future with bounded optimism.”
Bühler assured the health of its employees and its daily operations throughout the year. Supply chains proved remarkably solid, as Bühler was able to absorb the pandemic’s waves thanks to its global network of 33 factories, 100 service stations, and digital tools such as remote customer trials or commissioning, to bring much-needed food capacities online worldwide. “We have seen a sharp rise in customer demand for digital solutions, but also for sustainable solutions, such as CO2-reduced emissions, nutritious and healthy food, high-end deposition technologies, and clean mobility,” says Stefan Scheiber.
Increased financial strength
“Protecting our liquidity had the highest priority over the course of last year,” says CFO Mark Marcus. “Our target was to remain a very solid and strong partner for all our stakeholders, and we achieved this even in a challenging year like 2020.” Driven by diligent finance management, operating cash flow jumped 211% from CHF 151 million to CHF 470 million. Strict cost management allowed Bühler to offset a significant part of the adverse volume impact, resulting in EBIT of CHF 146 million (previous year: CHF 248 million), and an EBIT margin of 5.4% (7.6%).
Turnover was CHF 2.7 billion, down 17.0% from CHF 3.3 billion. The 2020 figures are impacted by the development of currency exchange rates, specifically of the Chinese yuan, euro, and US dollar against the Swiss franc. Adjusted for the impact of the foreign exchange rates, the reduction of the top line versus last year was 13%.
Robust business performances
Grains & Food (GF) proved resilient and agile, with very solid business performance. Order intake was CHF 1.6 billion, 13.9% lower than the previous year. Turnover decreased 7.2% to CHF 1.7 billion. With the implementation of innovative solutions such as Mill E3 and its Arrius integrated grinding system, GF further expanded its position as a technological leader in grain processing and human and animal nutrition. The Consumer Foods (CF) business was more affected by the pandemic, as customers in the industry suffered from much-diminished traffic in duty-free shops, restaurants, and hotels – much less business originated for them because of reduced events. Order intake decreased 29.2% to CHF 549 million. Turnover decreased 25.8% to CHF 574 million. The order intake of Advanced Materials (AM) came in at CHF 453 million, down 7.2%. Turnover shrank 31.7% to CHF 443 million, caused by the severe weakness of the global automotive industry. However, the high-tech special deposition technology business of Bühler Leybold Optics grew substantially. Therefore, AM has improved its profitability, resulting from immediate and tight adjustments of structure costs to the new market conditions and the launch of innovations that were very positively absorbed by the markets.
Summing up, the highlights from the businesses were strong growth of the Value Nutrition business due to high interest in meat alternatives from plant-based proteins; the build-up of large food parks such as in Egypt where Bühler built complete industrial infrastructures comprising of mills, biscuit, wafer, chocolate, and pasta lines; and the strong growth of Bühler Leybold Optics’ optical coating solutions, addressing the high demand for computer chips.
Success in China mitigated low volumes in other regions
Along with the divergent course of Bühler’s businesses, there was also a shift in regional development towards Asia. While all markets reported lower volumes, Bühler Asia managed to be stable driven by the strong growth of Bühler’s business in China. Order intake in China rose sharply by 15% for the full year. Regarding turnover, Asia now makes up 35% (previous year: 31%), Europe 30% (30%), North America 16% (16%), Middle East & Africa 11% (14%), South America 5% (6%), and South Asia 3% (3%). Yet again, the global network of Bühler played a key role for Bühler in 2020, so that all customers on all continents were served without interruption.
Continuation of innovation roadmap
Despite the challenging environment, Bühler continued to execute its innovation roadmap, launching 86 new products and solutions. This is a tribute to its 160 years of existence, marked in 2020, and it is a reconfirmation of the company’s purpose of innovations for a better world. The expenses for research and development were about at last year’s level at CHF 139 million (previous year: CHF 149 million), leading to an increase relative to Group turnover of 5.2% (previous year: 4.6%). Bühler has opened new application centers for food in Minneapolis, US, for malting and brewing in Beilngries, Germany, and a new training and education center for cocoa processing in Abidjan, Cote-d’Ivoire. With Givaudan, the global leader in flavors and fragrances, Bühler built an Innovation Center dedicated to plant-based foods in Singapore. The new facility is planned to open in March 2021. With Canadian Premier Tech, Bühler formed a joint venture in China for new packaging solutions which started very successfully in 2020. Furthermore, Bühler drove the latest innovations for digital platforms and solutions successfully into industrial applications globally with impressive success.
All innovation efforts of Bühler are aligned to the company’s commitment to lower energy use, water consumption, and waste in the value chains of its food, feed, and mobility customers by 50% until 2025. These sustainability goals have been anchored in the new Destination25 strategy, which was developed and agreed upon in 2020 and is valid until 2025. Furthermore, Bühler intensified its initiatives to provide training and education programs for customers and partners, as well as for employees worldwide. The global apprentice program was further developed, and the successes of the top apprentice talents at the 2020 SwissSkills competitions – with eight medals in four key disciplines – were lighthouses for the nearly 600 apprentices the company employs, coaches, and develops globally.
Outlook: bounded optimism
Bühler took all learnings from 2020 to increase business excellence and develop the “new normal”, for example, by switching to digital customer communication formats, such as the Bühler Virtual World. Based on a strong purpose as a family company and dedicated employees across the globe, with its innovation power, broad portfolio, and its global set-up, Bühler is looking into the future with optimism. “For 2021, we expect our business volume and profitability to stay stable, as the coronavirus crisis will have a longer-lasting effect on our businesses. At the same time, we are now laying ground to return to profitable growth in the future, by addressing new markets and adapting to new market conditions and opportunities with agility and determination,” says Stefan Scheiber.