Editorial
Strategic milestones in the areas of digitalization and customer service
Macroeconomic uncertainties, geopolitical tensions, and high inflation shaped the market environment in the 2023 financial year. Despite these challenges, Bystronic made good progress in the three strategic growth areas of systems, software and service. The high order backlog at the beginning of the year worked in favor of sales, while the strong Swiss franc had a negative impact. Thanks to targeted measures, we increased profitability with overall slightly decreased sales and lower order intake. A highlight of the reporting year included the successful opening of a major European customer’s Smart Factory, equipped with Bystronic systems and software. We also continued the successful expansion of our service business.
Lower demand due to macroeconomic uncertainties
Globally, economic growth came to a halt in 2023. Rising interest rates led to cautious investment behavior and consumption declined in many markets. Since sheet metal is in demand in a variety of industries, our customers generally continued to have high-capacity utilization. They also produce parts for everyday goods, which stabilized demand to a certain degree. Nevertheless, our customers were cautious when it came to implementing expansion plans or upgrading their production facilities. We felt this effect in Asia and Europe primarily.
Healthy growth was seen in the Americas region, where we have expanded our presence in recent years. One milestone was the construction of the new production location and Experience Center in Hoffman Estates in the greater Chicago area. This allows us to be perceived increasingly as a capable local partner by US customers. Due to this solid market position, we were able to benefit from the trend of reshoring in the United States and the large-scale infrastructure programs of the US government. The numbers prove this: Over the last five years, we increased sales in the region by an average of 10% per year. In 2023, we were able to realize a high order intake – equal to the previous year’s level – at constant exchange rates, whereas this declined in the other regions. Globally, we recorded a decrease of 21% (–16% at constant exchange rates) to CHF 794 million.
Solid sales volume with higher profitability
Thanks to a good order backlog at the beginning of the year, sales at constant exchange rates remained at the previous year’s solid level. Due to the strong Swiss franc, reported sales dropped by about 8% to CHF 930 million. The operating result (EBIT) increased by 13% to over CHF 54 million. The improved profitability underscores that the measures adopted earlier, which included price increases, improved efficiency, and reduced operating costs, made an impact.
Development of strategic growth areas
The trends of automation and digitalization continued to gain momentum in the 2023 financial year. We benefit from this because in addition to selling machines, we support our customers with automation solutions, software and service. We made healthy progress in all three strategic growth areas – systems, software and service.
In the systems business, we strengthened our market-leading position with additional product innovations. Among other things, we launched the Intelligent Cutting Process (ICP), a new smart feature. With this, a camera films the cutting process through a nozzle. So the system automatically detects interruptions in the cut and recuts the area if necessary.
A highlight in the area of software was the start-up of our Dutch customer VDL’s Smart Factory. We worked together for two years to develop solutions to fully automate production and to digitally control it using our BySoft Suite. The productivity gains they have achieved are exemplary.
In the area of service, we again achieved double digit sales growth. More than 90% of our new machines in the gold and silver segments were sold with a service contract.
Focus on sustainability
In the last year, we established medium term sustainability goals for the first time. Among other things, we committed ourselves to significantly reduce emissions. In this regard, we are aligning ourselves with the Science Based Targets (SBT) and thus the CO2 reduction targets of the Paris Agreement. By 2030, we want to lower direct and indirect CO2 emissions (Scope 1 and 2) by 42%. The reduction target for CO2 emissions resulting from the value chain (Scope 3) is set at 25%.
Dividends
The Board of Directors will propose to the Annual General Meeting on April 17, 2024, that a dividend of CHF 12.00 per class A registered share and of CHF 2.40 per class B registered share be distributed. In total, CHF 24.8 million will be distributed to shareholders. The proposal reflects the solid company performance in the reporting year and is in accordance with the dividend policy. This sets aside a payout range of between one third and one half of the net result, taking into account the company's liquidity situation and future needs.
Change in company leadership
After more than ten years as CEO, Alex Waser has chosen to step down from his role. In that time, he successfully led the transformation of the company from a producer of individual sheet metal machines to a provider of complete solutions to our customers. The Board of Directors thanks him for his valuable contributions. Domenico Iacovelli, an experienced and successful leader in our industry, will assume the role of CEO mid-year.
Special appreciation
The high level of engagement and the team spirit of our employees made the progress in this reporting year possible. Our thanks also go to our business partners and our shareholders. We thank you for your trust and support.
Zurich, February 29, 2024
Dr. Heinz O. Baumgartner
Chairman of the Board of Directors
Alex Waser
CEO