Making great strides

03.04.2007 In fiscal 2006, the international Buhler Technology Group enjoyed vigorous growth. Sales (turnover) increased by 7% to CHF 1,613 million from a year ago, and the operating result (EBIT) by 24% to CHF 97 million. Net earnings increased by 60% to 116 million. For the current fiscal year, the Group expects continued sales and earnings growth. The sound economy and the positive development of markets allowed solid organic sales and earnings growth. The companies acquired in the past year accounted only marginally for this growth. Order bookings increased by 10% to CHF 1,691 million.

The main factors that contributed to growth were the targeted capital investments in the development of new technologies and markets, an intensified focus on the customer service business, and the brisk market development in Asia. The share of local manufacture in China is now as high as 50%. But revenues also increased appreciably in Buhler’s traditional markets in North and South America and in Europe. On the other hand, sales in Africa and the Middle East suffered from the political developments and fell markedly short of the previous year’s level.

Buhler has also made additional progress in trimming costs. Among other things, these reductions were achieved through a large number of efficiency increases, a higher level of standardization, and a reduction in cycle times. The sharp raw material price hikes in the past year were essentially offset by strategic supply chain management. The operating result reflects these efforts, having increased at a higher than proportional rate of 24%.

Appreciable increase in sales in all divisions
The Grain Processing division generated sales revenues of CHF 907 million, which translates into a rise of 7%. The sharpest growth in this division was achieved by the Feed Milling business unit with 37% to CHF 146 million. Buhler’s largest business unit, Milling, generated sales of CHF 516 million in a stable market. The Grain Handling unit grew by 6% to CHF 70 million. The Rice Milling business unit received fewer large-scale contracts. As a consequence, its sales revenues declined by CHF 10 million to CHF 29 million from a year ago. The Brewing/Malting business unit all but maintained its sales over last year.

The Engineered Products division increased its sales by 7% to CHF 495 million. Its best-performing business unit, Chocolate & Cocoa, once again grew by 20% to CHF 216 million from a year ago without any change in its number of employees. The Grinding & Dispersion business unit, though it suffered a decline in its traditional market for conventional printing inks, has gained a foothold in the market with its systems for producing color filter dispersions for coating LCDs and plasma display panels. Sales in the Thermal Process unit slipped slightly to CHF 43.8 million, but profitability was maintained. Pasta & Extruded Products generated revenues of CHF 153 million. The still young Nanotechnology business unit achieved a breakthrough last year with its tailor-made solutions for modifying the surfaces of nanoparticles.

The Die Casting division felt the difficult situation in the automobile industry. Nonetheless, its sales of CHF 190 million were 7% higher than the year before. However, part of this growth is attributable to an acquisition.

Major investments in the future
Spending on research & development in fiscal 2006 totaled CHF 65 million, which is equivalent to four percent of total sales. All the business units increased their innovation rate. Today, Buhler achieves some 35% of its total sales with products that are younger than five years. Moreover, the Group invested some CHF 70 million worldwide in the renewal of manufacturing capacities, which will continue to boost productivity. In addition, Buhler further strengthened its market leadership in the past year by making acquisitions in the U.S. (Die Casting) and China (Milling and Feed Milling).

Strong balance sheet structure
The Group has high liquidity reserves of CHF 394.4 million (previous year: CHF 392.7 million) of a short-term nature and CHF 32.2 million (previous year: CHF 27.9 million) in the form of long-term assets. In all, the short- and long-term liquidity reserves remained virtually unchanged due to the acquisitions made and to restructurings (increase of CHF 6.0 million compared with a year ago). With CHF 17.7 million (previous year: CHF 20.1 million) short- and long-term financial liabilities, Buhler is virtually debt-free. Its net liquidity decreased due to a reduction in liquid funds to CHF 240.4 million (previous year: CHF 263.5 million). One of the key figures in the plant engineering business, the net item of production orders in progress, shows an excess of liabilities of CHF 56.8 million (previous year: CHF 26.9 million) as of the end of the year. This means that down payments made by customers increased by CHF 29.9 million from the year before. This marked improvement in capital commitment and therefore of net working capital contributed substantially to the increase in the RONOA to 24.7% (previous year: 22.8 %). The short- and long-term provisions of CHF 78.1 million have remained virtually unchanged (previous year: CHF 77.6 million).

Outlook 2007
Buhler started the current fiscal year with an above-average order backlog of CHF 817 million. Providing the economy remains sound, further growth in sales and appreciably higher corporate earnings are to be expected.

Buhler is a global leader in the supply of process engineering solutions, especially production technologies for making foods and engineering materials. Buhler is present in over 140 countries and employs some 6,600 people. In fiscal 2006, the Group generated sales of CHF 1,613 million. Key figures (in million CHF)




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The bagging system of the Shanghai Tianxia Liangxiang rice mill: To meet trading standards, rice must be of high quality. <br /> The bagging system of the Shanghai Tianxia Liangxiang rice mill: To meet trading standards, rice must be of high quality.