In the course of 2017 and for the first time in its history, BOBST has increased its market capitalization up to CHF 2 billion, with a share price moving up from CHF 70.– to CHF 130.–. We are proud to have achieved more than 8% EBIT (without restructuring costs) almost two years earlier than expected.
This performance secures us a strong financial position and reveals our real potential. It also demonstrates the increased level of confidence of our investors towards our industry. These good results are mainly due to three factors:
This performance is also the result of the work of good and dedicated people throughout the Group – congratulations to all of them.
Our strong strategy and consistent value creation effort is generating cash and a robust return on capital employed. We are focusing on creating a better customer experience and financial value for our stakeholders.
For decades, we have been pursuing with passion our quest for innovation and excellence. We are inventors and one of the world leaders in our industrial sector – in packaging and label solutions. Our expertise is not limited to producing the machines which have made our reputation, we have also developed a range of services which cover the entire conversion process and its optimization and furthermore increase competencies in the application, chemistry and software domains.
Digital printing is on all the lips around the world. It opens up good opportunities using pioneering digital technology in a variety of industrial applications. Nowadays, digital techniques can be used to print on a wide range of materials, such as glass, plastic, paper, aluminum and fabric. We find in our environment numerous objects including components printed using this technology such as dashboards, upholstery and so many other things.
Since July 6, 2017 our own vision of innovation has a name, Mouvent, Bobst Group’s new Swiss based start-up company. With a staff of around 100 employees, it covers the entire chain of design, integration and production of inkjet printing engines or clusters, chemicals, pre-coating, varnish, inks and software. BOBST will not have to rely on the strategy of just one supplier anymore. This venture will also become the digital printing Competence Center and solutions provider of Bobst Group.
Mouvent will operate independently allowing it to focus on new business models and new competitors’ landscapes. In terms of strategy, we will be able to move into new markets with unique products tailored for digital printing. The Mouvent technology’s USPs are numerous: innovative, compact, high print quality, reliable, easy to use and also impressively advantageous with regard to total cost of ownership.
At LabelExpo Europe 2017 in September, Mouvent revealed its new range of highly innovative digital label printers. They can print up to seven colors on a large variety of substrates – paper, self-adhesive and wet-glue labelstock and flexible materials – at production speeds of up to 100 m/min with a native resolution of 1 200x1 200 and optical 2 000 dpi. Central to the digital innovation of these machines is the Mouvent™ Cluster, an ingenious digital printing technology based on a highly integrated component cluster, which represents a quantum leap for the industry.
In November 2017 at ShanghaiTex, Mouvent made its textile debut and showcased its ground-breaking 8-color multi-pass digital textile printer TX801.
To boost productivity up to 200 m²/h, the TX801 also utilizes the Mouvent™ Cluster technology. This is associated with speed, precision and scalability, deploying up to 16 g/m² of ink in a single pass. The TX801 prints with an optical resolution of up to 2 000 dpi, resulting in the highest print quality of the finished product. The machine can process knitted, woven and non-woven textiles with a maximum fabric width of 1 820 mm with roll diameters of up to 400 mm. The TX801 is a very durable, compact and accessible printer and has a very competitive price performance ratio compared with basic digital printers, and unrivalled print quality.
To drive and lead innovation, we are focusing on a four step approach in our core business:
As a proof of our search for excellence in innovation, we are proud to say that BOBST was presented in October with the coveted FEFCO Gold Award for Best Innovation 2017 for its PREMIUM GAP CONTROL, an independent unit positioned after the counter ejector on the Flexo Folder-Gluers. It ensures that 100% of delivered boxes are folded with total quality and to exact specifications, bringing total control of the folding process and major resource savings.
MyBOBST, our online B2B services site, has revolutionized the way we do business. It is more than simple e-commerce, it will monitor all customer transactions, allowing us to become more knowledgeable about customers’ needs, anticipate them and reply faster. Each customer can find what he or she needs, be it a quote, equipment documentation or maintenance reports; he or she can monitor production performance remotely, or place an order and even make appointments for a technician to install ordered spare parts.
The Group started 2017 with a lower machine backlog than the year before and order entries during 2017 have been higher than in the previous year for both of the machinery Business Units and particularly for the Business Unit Sheet-fed. Globally, order entries increased by nearly 17% compared to the previous year, driven by very high activity in Europe. The Americas, Asia and Africa remained stable. The Group finished the reporting year with a more than 20% higher machine backlog than in 2016.
Consolidated sales for the full year 2017 amounted to CHF 1 529 million, representing an increase of CHF 82 million, or 5.7%, compared to 2016. All three Business Units have experienced good growth during 2017. Business Unit Services is up CHF 30 million, or 7.1%. Business Unit Web-fed sales increased by CHF 21 million, or 6.9%, and Business Unit Sheet-fed increased its sales by 31 million, or 4.4%.
The operating profit (EBIT) for the Group was CHF 119 million, representing an increase of CHF 15 million, or 14.5%, compared to the previous year. At CHF 107 million, our consolidated net result represents an increase of CHF 23 million, or 26.8%, compared to 2016. This includes a CHF 15 million favorable one-time impact due to tax law changes. The successful business operations, as well as continued efforts to optimize net working capital and capital employed, resulted in an increase of the net cash position of CHF 82 million in 2017. The return on capital employed (ROCE) increased to 23.2% compared to 19.9% in 2016 and consequently the Group has again created significant value for its stakeholders.
In line with the continued strong underlying performance of the Group, the Board of Directors proposes to the Annual General Meeting of Shareholders a dividend for 2017 of CHF 2.60 per share (CHF 1.70 for 2016).
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 28 March 2018, Alain Guttmann, Thierry de Kalbermatten, Jürgen Brandt, Gian-Luca Bona, Philip Mosimann and Patrice Bula will be proposed for re-election for a new period of one year.
The Board of Directors wishes to propose Alain Guttmann as Chairman.
We are living in a fast moving world and the markets are challenging. We need strong leaders to adapt to new business models and seize the many opportunities which constant change offers. The packaging and label industries keep good perspectives and will support the growth of BOBST markets in the coming years. We are tailoring our Group for the future as we adapt and innovate continuously to keep our place at the top, with the best products and services, while expanding our innovation in digital printing and software offering. To support our strategic ambition, we have developed a program called Ambition 2020 with the following priorities and focus:
Bobst Group’s new developments are reinforcing our position as a technical trendsetter and contributing to the expansion of our market presence in the packaging and label industries. Our vision is one of “leading innovation” for machines and services, while we are focusing strongly on future technical breakthroughs in digital printing applications, software and connectivity. Our vision will evolve into its final shape within the next two years and BOBST should become the preferred supplier for machines, services, digital print and software offerings. We prepare ourselves carefully for each challenging technology shift coming our way, with their ensuing opportunities and risks. Our success will strongly depend on our capabilities to reinvent BOBST with dedicated leadership while instilling value creation into our Group.
We wish to thank all our collaborators for their stalwart support, their dedication, professionalism and their determination to accomplish the company strategy in a constructive and progressive spirit. We also thank our shareholders, suppliers and financial partners for their unwavering, 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