It is sometimes essential to celebrate good performance and positive accomplishments. Since 2011, when the currency turmoil was at its most acute, BOBST has used every appropriate measure to continuously improve, resulting in the progression of our share price from CHF 16.05 to today’s CHF 70+.
With good people, a strong strategy and consistent values, we have worked hard, and continue to do so, focusing on one objective: creating more human and financial value for our customers and stakeholders.
In December 2011, we communicated that we wanted to achieve sustainable profitability across business cycles, ensuring “value creation” for our Group – which we see as achieving an operating result (EBIT) above 7% and a return on capital employed (ROCE) in the range of 9–12%. We also acquired 65% of Gordon Ltd to reinforce Bobst Group’s strategy and presence in China.
In 2012 we completed the BOBST headquarters relocation from Prilly to Mex and substantially reduced our net working capital.
In 2013, our Group transformation picked up speed with the aim of BOBST becoming the industry benchmark in terms of innovation, services, worldwide footprint and productivity.
In 2015, we enlarged our offering with the acquisition of 65% of Nuova Gidue, solidified our Asian presence and enhanced our facilities in India. This growth path continues. And now, at the end of 2016, we can see that we have gone a long way towards transforming our Group into the benchmark for our industry, while keeping our technical and innovation leadership. Congratulations to all our employees and partners. Life being an ever-changing cycle, we shall continue to build a long-lasting and prosperous future for the Company.
In a challenging environment, we are pleased to report the results for 2016. Our turnover increased by CHF 116 million in 2016, compared to 2015, reaching CHF 1.447 billion. This represents a strong performance – backed by all three Business Units. The operating profit grew to CHF 103.7 million in 2016 (CHF 83.9 million in 2015). We aim to ensure stability throughout 2017 and we are considering more growth in 2018.
To achieve this, we have reinforced our technological leadership and our position as a key player in the packaging and label industry. Our strategy to develop an industrial product range for film, label, corrugated and folding carton applications has translated into new products. At drupa, the world’s leading trade fair devoted to graphic arts and industrial printing, six world premieres were on our booth. We took this opportunity to position our products and services in relation to new market trends, showing brand owners, packaging designers, cartonmakers and label manufacturers what requirements they will be expected to meet in the future in terms of traditional processes, digital technology and services. Drupa 2016 was a very good vintage, as BOBST surpassed its expectations.
For the folding carton industry, BOBST has developed hot foil stamping, folding and die-cutting solutions featuring exceptional performance. Fast, versatile, efficient and accurate, they have technology which ensures the highest productivity and optimal operating costs.
One of the great innovations was our M6 narrow- to midweb UV flexo press for reel-fed cartonboard and flexible packaging. Its Digital Flexo automation technology offers a powerful alternative to offset printing, with remarkable set-up times of about one minute. It achieves high production rates on folding carton and flexible materials.
In the flexible packaging sector, the Group has unveiled innovative solutions with the new MW 85 and MW 125, the K5, and the M6 Digital Flexo equipment, which open up new markets to customers, while in the field of laminating a new compact model is responding to the market need for shorter runs.
While our strong innovation pace is visible in our new products, we have also drastically quickened our service response and transformed the interaction with our customers. BOBST today has made available to its clients a specific tool design application, capable of covering a very broad range of high-performance cutting dies. Our new Service Navigator application helps customers more easily find the service they need to improve the productivity, quality, safety and profitability of their equipment. We have also introduced our new web portal MyBobst, a real online dashboard, where customers can do their e-shopping at leisure, searching the catalog, finding the parts they need and getting access to international peer benchmarking that highlights improvement options.
Staying close to, and growing with, our markets is a necessity. We have established our own subsidiary in the Turkish market, BOBST Istanbul, inaugurated at the beginning of the year and, late in the year, we also opened a new office in Nigeria, BOBST Lagos, to improve technical and commercial support for customers and reinforce our presence in Central and Western Africa. As of 2017, a team of technicians for the installation and maintenance of machines, as well as a group of salesmen, will be on-site.
2016 started with a higher level of backlog than at the beginning of 2015. Bookings during 2016 have been higher than in the previous year for the Business Unit Web-fed, while the Business Unit Sheet-fed ended 2016 somewhat lower. Globally, order entries were at the same level as last year. As we had expected and communicated, Asia improved significantly, while Central and North America improved once again on the previous year. Not surprisingly, Europe experienced a slowdown and activity remained low in South America.
Consolidated sales for the full year 2016 amounted to CHF 1.447 billion, representing an increase of CHF 116 million, or 8.7%, compared to 2015. Business Unit Services has experienced strong growth during 2016, up CHF 48 million, or 12.8%. This represents the best year since the creation of the Business Unit Services. In a year of major fairs, the drupa and K, Business Unit Web-fed achieved an improved turnover of CHF 309 million (CHF 297 million in 2015) and Business Unit Sheet-fed exceeded expectations by achieving a turnover of CHF 714 million (CHF 658 million in 2015).
The operating profit for the Group was CHF 103.7 million. Once again, sales were stronger in the second half-year than in the first. At CHF 84.3 million, our consolidated net result represents an increase of CHF 17.2 million, or 26%, compared to 2015. The successful business operations, as well as continued efforts to optimize net working capital and capital employed, resulted in an increase in cash of CHF 46.3 million leading to a net cash position of CHF 51.3 million in 2016. The Bobst Group is now debt free. The return on capital employed (ROCE) increased to 19.9% compared to 16.0% in 2015 and consequently the Group has again created significant value for its stakeholders. As a consequence of the continued strong underlying performance, the Board of Directors proposes a dividend for 2016 of CHF 1.70 per share (CHF 1.25 in 2015).
The mandates of all the members of the Board of Directors become due for renewal for a one-year period. At the forthcoming Annual General Meeting of Shareholders, on 6 April 2017, Alain Guttmann, Thierry de Kalbermatten, Jürgen Brandt, Gian-Luca Bona and Philip Mosimann will be proposed for re-election for a new period of one year. Ulf Berg will not be standing for re-election, as he has decided after eleven years as a director of the Company not to enroll for another year. We express our warmest thanks for his outstanding contribution and for the innovative business approach he has brought to the Group since 2006.
Mr. Patrice Bula (1956), member of the Executive Board of Nestlé SA since 2011, and a member of the Board of Directors of Schindler Holding Ltd, will be proposed as a new member of the Board. He will enrich the Group with his experience and competencies in the consumer goods industry and his long experience of Far East countries. The Board of Directors wishes to propose Alain Guttmann as Chairman.
Change is all around and 2017 will be another “unpredictable year”. The way that countries are run under new political leaderships may influence global trade and change its dynamics. Although the markets will remain unpredictable, there will still be plenty of opportunities.
Our journey, and our targets, embrace innovation and the development of new machines, new services and an increase in market share. In support of our strategy, we re-emphasize our focus on customer satisfaction, which is a vital source of the Company’s well-being. We aim for growth in all Business Units and some targeted markets, demonstrated by the future opening of our third Chinese production site in early 2018. We continue to invest in innovation through the future development of a competence center for digital printing technology and we will continue to streamline our operation, be it looking for synergies within the Group, implementing lean processes or developing common practices.
Since its creation 125 years ago, BOBST has continuously adapted and innovated to keep its place at the top, with the best products and services. Our strategy for 2017 will unfold as follows:
In 2016, the Company turned 125 years old. The celebrations held throughout the Group will remain in our memory as unique moments of sharing and rallying around our legacy and current successes, around our values, and around our capacity to build an even better future: “the best is yet to come”. During the course of the year, we defined our key core values, namely Trust, Respect, Passion and Performance. These values will serve as a basis and a guide for our leadership and they will give our corporate culture a fresh boost. In a world where behaviors are no longer meaningful, and where it is easier to push away the human element from the core of our success, values prove their true meaning and relevance. In our Company, we deliver services and manufacture machines: we need the best people for that. We have these people – more than 5 000 wonderful and committed employees around the world to whom we owe our past, current and future successes.
We wish to thank all our collaborators for their professionalism and their determination to put the Company strategy into practice in a constructive, forward-looking spirit. We also thank our shareholders, suppliers and financial partners for their unfailing, and long-standing support. They can count on our commitment to further strengthening the position of Bobst Group during the years to come.
Chairman of the Board
Chief Executive Officer