Group business performance

Continued high order volumes and challenging supply chains mark the first half-year 2022

In the first half of 2022, Bystronic again achieved a solid order intake matching the previous year’s strong level. Although supply bottlenecks noticeably hampered sales growth, net sales increased by 2.8% (+6.2% at constant exchange rates) compared to the prior-year period. However, profitability was temporarily impacted by delayed sales recognition and higher procurement costs. As a result, the EBIT margin was 2.3%. Thanks to its strong market position and the sheet metal industry’s long-term growth drivers, Bystronic is confident that it will achieve its ambitious medium-term targets.

Order intake and sales development

Our customers exhibited positive investment patterns in the first six months of the 2022 financial year. Thus, at CHF 536.1 million, order intake was slightly below the strong prior-year level (–2.4%, at constant exchange rates +0.5%). Very positive growth was achieved in the Americas and Asia Pacific (APAC) regions. The gold segment in particular posted strong growth. In the EMEA region, orders remained at the prior-year level, while in China, the COVID lockdowns and the economic slowdown resulted in significantly lower order volumes. Accordingly, the entry-level segment as a whole recorded a decline.

Sales increased by 2.8% (6.2% at constant exchange rates) to CHF 453.2 million. The gold segment in particular performed well. Due to the unavailability of certain components, lead times increased significantly. As a result, it was not possible to realize the full sales potential in the first half of 2022. In order to nevertheless ensure its customers’ satisfaction, Bystronic continued to produce and ship systems to customers in spite of the unavailability of components. As soon as these were available again, our technicians installed them on site as quickly as possible. However, a number of systems are still awaiting final assembly at the customers’ sites, which means that these sales can only be recognized with a delay. As a result, inventories of finished products increased by CHF 49 million in the first half-year. This effect reduced recognized sales by approximately CHF 100 million with a corresponding profit contribution.

Operating result and profitability

The operating result (EBIT) decreased to CHF 10.5 million (H1 2021: CHF 30.3 million). The EBIT margin stood at 2.3% compared to 6.9% in the previous year. This is attributable to delayed sales recognition, expenses in connection with the growth strategy, and higher procurement and transport costs. Bystronic has responded to the increased input costs and repeatedly implemented higher prices. Due to the substantial order backlog, these measures will largely start to have an impact from 2023 onwards.

Result and cash flow

The half-year result for Bystronic amounted to CHF 7.0 million (H1 2021: CHF 23.3 million). This corresponds to earnings of CHF 3.37 per class A registered share. The targeted increase in inventories of key components as well as the high stock levels of finished products resulted in a negative operating free cash flow of CHF -52.5 million, although prepayments from customers continued to increase. The return on net operating assets (RONOA) was 6.6% (H1 2021: 20.0%).

Outlook

Bystronic’s very strong position in an attractive growth market promises further market share gains and profitable growth. During our strategy cycle from 2019 to 2025, we aim to achieve annual organic sales growth in excess of 5%. We also target an EBIT margin of over 12% and a return on net operating assets (RONOA) exceeding 25%.

Despite the limited visibility, Bystronic expects a better second half of 2022.

Discontinued operations

Net sales of discontinued operations amounted to CHF 183.6 million in the first half of 2021, with FoamPartner contributing CHF 76.3 million and Mammut CHF 107.3 million. The operating result (EBIT) of discontinued operations was CHF -85.5 million, of which CHF -80.1 million are attributable to the loss on sale of FoamPartner. This is a consequence of the goodwill recycling as prescribed by the Swiss GAAP FER accounting standards. In the context of the divestment of FoamPartner in 2021, Bystronic received the final contractually agreed payment of CHF 19.7 million in January 2022.

Total Group

Net sales of the entire Group amounted to CHF 453.2 million in the first half-year (H1 2021: CHF 624.3 million), which corresponds to a decrease of 27.4%. The operating result (EBIT) was CHF 10.5 million. In the previous year, the EBIT loss due to the divestment of FoamPartner amounted to CHF -55.2 million. Overall, the net result was CHF 7.0 million, compared to CHF -60.9 million in the previous year.