Bobst finishes solid first half

Bobst has grown its sales by 19 per cent in the first half of its financial year, reaching CHF 762.5m from CHF 643.2m in the previous corresponding period (pcp), a growth it partly attributes to increased China bookings.
 
At the same time, Earnings Before Interest and Tax (EBIT) fell from CHF 39.8m to CHF 35.2m. The net result for H1 also dropped slighting, coming to CHF 24.9m from CHF 27.7m in the pcp.
 
Order entries have increased by 13 per cent, while the backlog is up 14 per cent from the previous year.
 
Bobst has lowered its 2018 full year profit guidance and expects to achieve an operating result (EBIT) higher than CHF 90m for the full year 2018, some CHF 39m less than the 2017 FY result of CHF 119m.
 
During the first half of 2018, consolidated sales amounted to CHF 762.5m, an increase of CHF 119.3m, 18.6 per cent, compared to the pcp.
 
A spokesperson from Bobst says, “This evolution was mainly driven by a high backlog at the beginning of the year and an overall good level of activity in all three business units. Volume and price variances had a 14.5 per cent positive impact of CHF 93.2m.
 
“An improvement of CHF 0.2m came from the creation of two new entities in Vietnam and in the Netherlands.”
 
Bobst saw its highest growth in the sheet-fed division, in which sales grew by 29 per cent, from CHF 302.3m to CHF 391m. The web-fed division still hit double digit sales growth, improving 12.3 per cent from CHF 119.5m to CHF 134.1m.
 
Bobst says an unfavourable product mix, the ramp-up of the digital printing activities as well as further investments to strengthen its sales and service network, and capabilities in growing markets, more than compensated the positive contribution from higher sales, leading to the reduction of the operating result measured in EBIT.
 
A spokesperson explains, “Sheet-fed increased its operating result (EBIT) by CHF 17.1m to reach CHF 29.7m due to the strong increase in sales in the first half of the year. Business Unit Web-fed continues to have an unfavorable product mix and high pressure on margins. The ramp-up of the new site in China and of the product lines structure, as well as higher than expected restructuring efforts at one of our German entities, had also a negative impact on the Business Unit’s profitability. The operating result (EBIT) was CHF -20.2m in the first half of 2018 compared to CHF -5.3m in the first six months of 2017.  
 
“Total bookings follow a positive trend with an increase of 13 per cent compared to the same period in 2017 and a continuous good performance in the corrugated board industry, with 17 per cent increase; folding carton is at a similar level with good potential for the rest of the year. Mature markets continue to lead the growth, with North America showing better result than last year, with 25 per cent increase. China has improved bookings by more than 35 per cent, due to the new China 4.0 strategy implemented in the first quarter of this year, and expects good results for the months to come, with the last successful Open House held in June at the Shanghai premises.
 
“The Group expects to see continued good demand for its products and services, leading to an active second half of 2018 in nearly all plants.
 
“At current exchange rates, and barring unforeseen circumstances, the Group expects to improve its full year 2018 sales by 5-7 per cent compared to 2017, which is at the higher end of the guidance issued at the end of February 2018. The guidance for the full year operating result (EBIT) which was slightly higher than previous year of  CHF 119m, has to be reduced due to the aforementioned reasons. The Group expects to achieve an operating result (EBIT) higher than CHF 90m for the full year 2018.”